Drought -- National Drought Mitigation Center


Date of this Version



Liu, T.; Krop, R.; Haigh, T.; Smith, K.H.; Svoboda, M. Valuation of Drought Information: Understanding the Value of the US Drought Monitor in Land Management. Water 2021, 13, 112. https://doi.org/10.3390/w130 20112




Droughts affect recreation and tourism, grazing, forests, and timber, and can have important indirect effects for the ecosystems and species that rely on water. Despite its importance, the effect of drought in the land management sector is less understood than in other water-intensive sectors, such as agriculture and public water supplies. This study presents the first-ever estimates of the economic valuation of the information provided by the U.S. Drought Monitor using the avoided cost method. These estimates are based on the time and labor saved by using the U.S. Drought Monitor rather than compiling drought-related information from other sources, or using other sources for tracking/monitoring droughts, communicating drought conditions, and dealing with drought-related issues. The results reflect rational behavior—the more time needed to compile or collect drought information provided by the U.S. Drought Monitor, the higher the dollar value in avoided cost. This dollar amount also varies by institution and organization, which indicates respondents from different organizations value the information from the U.S. Drought Monitor differently. For example, compared to the state offices, the field offices in the Bureau of Land Management value more of the information provided by the U.S. Drought Monitor. These estimates can be used to estimate the societal benefits and help policy makers evaluate the U.S. Drought Monitor in different sectors.