Valuing water quality improvements in the United States using meta-analysis: Is the glass half-full or half-empty for national policy analysis?

Authors

George Van Houtven, RTI International, 3040 Cornwallis Road, P.O. Box 12194, Research Triangle Park, NC 27709-2194, United States
John Powers, U.S. Environmental Protection Agency, 1200 Pennsylvania Ave., NW, Washington, DC 20460, United States
Subhrendu K. Pattanayak, RTI International, 3040 Cornwallis Road, P.O. Box 12194, Research Triangle Park, NC 27709-2194, United States

Document Type

Article

Date of this Version

2007

Comments

Published in Resource and Energy Economics 29 (2007) 206–228.

Abstract

The literature estimating the economic value for water quality changes has grown considerably over the last 30 years, resulting in an expanded pool of information potentially available to support national and regional policy analysis. Using 131 willingness to pay estimates from 18 studies that use a similar definition of water quality, we performed a meta-regression analysis and found mixed results. We find that WTP varies in systematic and expected ways with respect to factors such as the size of the water quality changes, average household income, and use/nonuse characteristics of respondents. As a whole, we conclude that our metaregression results provide a reasonable basis for estimating expected WTP values for defined changes in water quality. However, despite a large number of existing economic valuation studies, relatively few could be meaningfully combined through meta-analysis due to heterogeneity in the commodities being valued in the original studies. Based on these findings, we provide recommendations for future research, including suggestions regarding more standardized approaches for defining water quality and reporting information in valuation studies.