IDEAS home Printed from https://ideas.repec.org/a/cup/jagaec/v24y1992i02p63-71_01.html
   My bibliography  Save this article

Estimating the Benefits of Groundwater Contamination Control

Author

Listed:
  • Sun, Henglun
  • Bergstrom, John C.
  • Dorfman, Jeffrey H.

Abstract

In this paper, a conceptual model for estimating option price for groundwater quality protection is developed, and the effects of subjective demand and supply uncertainty and other variables on option price are examined. A contingent valuation study to measure option price for groundwater quality protection was conducted in southwestern Georgia. Valuation results suggest that the monetary benefits to citizens of protecting groundwater supplies from agricultural chemical contamination are quite large.

Suggested Citation

  • Sun, Henglun & Bergstrom, John C. & Dorfman, Jeffrey H., 1992. "Estimating the Benefits of Groundwater Contamination Control," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 24(2), pages 63-71, December.
    • Handle: RePEc:cup:jagaec:v:24:y:1992:i:02:p:63-71_01
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0081305200018380/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Douglas A. Greenley & Richard G. Walsh & Robert A. Young, 1981. "Option Value: Empirical Evidence from a Case Study of Recreation and Water Quality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(4), pages 657-673.
    2. J. M. Bowker & John R. Stoll, 1988. "Use of Dichotomous Choice Nonmarket Methods to Value the Whooping Crane Resource," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 372-381.
    3. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
    4. Mark L. Plummer, 1986. "Supply Uncertainty, Option Price, and Option Value: An Extension," Land Economics, University of Wisconsin Press, vol. 62(3), pages 313-318.
    5. Brookshire, David S. & Ives, Berry C. & Schulze, William D., 1976. "The valuation of aesthetic preferences," Journal of Environmental Economics and Management, Elsevier, vol. 3(4), pages 325-346, December.
    6. Richard C. Bishop, 1982. "Option Value: An Exposition and Extension," Land Economics, University of Wisconsin Press, vol. 58(1), pages 1-15.
    7. Kahneman, Daniel & Knetsch, Jack L., 1992. "Valuing public goods: The purchase of moral satisfaction," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 57-70, January.
    8. Nielsen, Elizabeth G. & Lee, Linda K., 1987. "The Magnitude And Costs Of Groundwater Contamination From Agricultural Chemicals: A National Perspective," Staff Reports 277938, United States Department of Agriculture, Economic Research Service.
    9. Graham, Daniel A, 1981. "Cost-Benefit Analysis under Uncertainty," American Economic Review, American Economic Association, vol. 71(4), pages 715-725, September.
    10. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
    11. Timothy Park & John B. Loomis & Michael Creel, 1991. "Confidence Intervals for Evaluating Benefits Estimates from Dichotomous Choice Contingent Valuation Studies," Land Economics, University of Wisconsin Press, vol. 67(1), pages 64-73.
    12. A. Myrick Freeman III, 1985. "Supply Uncertainty, Option Price, and Option Value," Land Economics, University of Wisconsin Press, vol. 62(2), pages 176-181.
    13. Edwards, Steven F., 1988. "Option prices for groundwater protection," Journal of Environmental Economics and Management, Elsevier, vol. 15(4), pages 475-487, December.
    14. Bohm, Peter, 1975. "Option Demand and Consumer's Surplus: Comment," American Economic Review, American Economic Association, vol. 65(4), pages 733-736, September.
    15. Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
    16. David S. Brookshire & Larry S. Eubanks & Alan Randall, 1983. "Estimating Option Prices and Existence Values for Wildlife Resources," Land Economics, University of Wisconsin Press, vol. 59(1), pages 1-15.
    17. Sellar, Christine & Chavas, Jean-Paul & Stoll, John R., 1986. "Specification of the logit model: The case of valuation of nonmarket goods," Journal of Environmental Economics and Management, Elsevier, vol. 13(4), pages 382-390, December.
    18. Smith, V. Kerry, 1992. "Arbitrary values, good causes, and premature verdicts," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 71-89, January.
    19. Bergstrom, John C. & Stoll, John R. & Titre, John P. & Wright, Vernon L., 1990. "Economic value of wetlands-based recreation," Ecological Economics, Elsevier, vol. 2(2), pages 129-147, June.
    20. Desvousges, William H. & Smith, V. Kerry & Fisher, Ann, 1987. "Option price estimates for water quality improvements: A contingent valuation study for the monongahela river," Journal of Environmental Economics and Management, Elsevier, vol. 14(3), pages 248-267, September.
    21. Bergstrom, John C. & Stoll, John R., 1987. "A Test Of Contingent Market Bid Elicitation Procedures For Piecewise Valuation," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 12(2), pages 1-5, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Charles F. Mason & Lucija A. Muehlenbachs & Sheila M. Olmstead, 2015. "The Economics of Shale Gas Development," Annual Review of Resource Economics, Annual Reviews, vol. 7(1), pages 269-289, October.
    2. Olivier Beaumais & Anne Briand & Katrin Millock & Céline Nauges, 2010. "What are Households Willing to Pay for Better Tap Water Quality ? A Cross-Country Valuation Study," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00497453, HAL.
    3. Hrubovcak, James & Vasavada, Utpal & Aldy, Joseph E., 1999. "Green Technologies for a More Sustainable Agriculture," Agricultural Information Bulletins 33721, United States Department of Agriculture, Economic Research Service.
    4. Gregory Poe & Richard Bishop, 1999. "Valuing the Incremental Benefits of Groundwater Protection when Exposure Levels are Known," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 13(3), pages 341-367, April.
    5. John Bergstrom & Kevin Boyle & Mitsuyasu Yabe, 2004. "Trading Taxes vs. Paying Taxes to Value and Finance Public Environmental Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 28(4), pages 533-549, August.
    6. Peterson, Jeffrey M. & Boisvert, Richard N., 1998. "Optimal Voluntary "Green" Payment Programs To Limit Nitrate Contamination Under Price and Yield Risk," Research Bulletins 122687, Cornell University, Department of Applied Economics and Management.
    7. Poe, Gregory L. & Boyle, Kevin J. & Bergstrom, John C., 2000. "A Meta Analysis Of Contingent Values For Groundwater Quality In The United States," 2000 Annual meeting, July 30-August 2, Tampa, FL 21871, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Ribaudo, Marc & Bouzaher, Aziz, 1994. "Atrazine: Environmental Characteristics and Economics of Management," Agricultural Economic Reports 34011, United States Department of Agriculture, Economic Research Service.
    9. Zhang, Fan & Fogarty, James, 2015. "Nonmarket Valuation of Water Sensitive Cities: Current Knowledge and Issues," Working Papers 207694, University of Western Australia, School of Agricultural and Resource Economics.
    10. Peter A. Groothuis & George Van Houtven & John C. Whitehead, 1998. "Using Contingent Valuation to Measure the Compensation Required to Gain Community Acceptance of a Lulu: the Case of a Hazardous Waste Disposal Facility," Public Finance Review, , vol. 26(3), pages 231-249, May.
    11. Mukherjee, Sacchidananda, 2008. "Factors influencing farmers\u2019 willingness to protect groundwater from nonpoint source of pollution in the Lower Bhavani River Basin, Tamil Nadu," Conference Papers h041886, International Water Management Institute.
    12. John C. Whitehead & George Van Houtven, "undated". "Methods for Valuing the Benefits of the Safe Drinking Water Act: Review and Assessment," Working Papers 9705, East Carolina University, Department of Economics.
    13. Souter, Ray A. & Bowker, James Michael, 1996. "A Note On Nonlinearity Bias And Dichotomous Choice Cvm: Implications For Aggregate Benefits Estimation," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 25(1), pages 1-6.
    14. Francesco Jacopo Pintus, 2023. "Valuing drinking water quality after a PFAS contamination event: results from a meta-analysis benefit transfer," "Marco Fanno" Working Papers 0308, Dipartimento di Scienze Economiche "Marco Fanno".
    15. Allen, James C. & Bergstrom, John C., 2003. "Measuring Values For Wetlands Protection In A Developing Country From Domestic And International Citizen Groups," 2003 Annual meeting, July 27-30, Montreal, Canada 22009, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Thomas, Arthur C. & Boisvert, Richard N., 1995. "The Bioeconomics Of Regulating Nitrates In Groundwater From Agricultural Production Through Taxes, Quantity Restrictions, And Pollution Permits," Research Bulletins 122999, Cornell University, Department of Applied Economics and Management.
    17. Painter, Kathleen M. & Young, Douglas L., 1994. "Environmental And Economic Impacts Of Agricultural Policy Reform: An Interregional Comparison," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(2), pages 1-12, December.
    18. Parveen Setia & Bengt Hyberg & Daniel Ugarte & Daryll Ray, 1997. "Planting flexibility: Implications for agricultural sustainability," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 3(3), pages 299-311, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    2. Poe, Gregory L. & Bishop, Richard C., 1992. "Measuring the Benefits of Groundwater Protection from Agricultural Contamination: Results from a Two-Stage Contingent Valuation Study," Staff Papers 200549, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    3. Smith, V. Kerry, 2000. "JEEM and Non-market Valuation: 1974-1998," Journal of Environmental Economics and Management, Elsevier, vol. 39(3), pages 351-374, May.
    4. Aric P. Shafran, 2014. "Equivalent Option Price With Supply Uncertainty," Bulletin of Economic Research, Wiley Blackwell, vol. 66(S1), pages 1-16, December.
    5. Echeverria, Jaime & Hanrahan, Michael & Solorzano, Raul, 1995. "Valuation of non-priced amenities provided by the biological resources within the Monteverde Cloud Forest Preserve, Costa Rica," Ecological Economics, Elsevier, vol. 13(1), pages 43-52, April.
    6. Catherine Kling, 1993. "An assessment of the empirical magnitude of option values for environment goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 3(5), pages 471-485, October.
    7. Carmelo Javier León, 1995. "El método dicotómico de valoración contingente: una aplicación a los espacios naturales en Gran Canaria," Investigaciones Economicas, Fundación SEPI, vol. 19(1), pages 83-106, January.
    8. Whittington, Dale & Hua Wang, 2000. "Willingness to pay for air quality improvements in Sofia, Bulgaria," Policy Research Working Paper Series 2280, The World Bank.
    9. Glenk, Klaus & Colombo, Sergio, 2013. "Modelling Outcome-Related Risk in Choice Experiments," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(4), pages 1-20.
    10. Chien, Yu-Lan & Larson, Douglas, 1991. "Measuring Supply-Side Option Price: Estimates for Preserving the Northern Spotted owl," WAEA/ WFEA Conference Archive (1929-1995) 321472, Western Agricultural Economics Association.
    11. Graham-Tomasi, Theodore & Myers, Robert J., 1989. "On Supply Side Option Value," Staff Papers 13341, University of Minnesota, Department of Applied Economics.
    12. Asafu-Adjaye, John & Adamowicz, Wiktor & Phillips, William, 1989. "Nonmarket Valuation under Uncertainty," Staff Paper Series 232438, University of Alberta, Department of Resource Economics and Environmental Sociology.
    13. Soliño, Mario & Vázquez, María X. & Prada, Albino, 2009. "Social demand for electricity from forest biomass in Spain: Does payment periodicity affect the willingness to pay?," Energy Policy, Elsevier, vol. 37(2), pages 531-540, February.
    14. Lockwood, Michael & Carberry, David, 1999. "Stated preference surveys of remnant native vegetation conservation," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 123831, Australian Agricultural and Resource Economics Society.
    15. Paul Mwebaze & Jeff Bennett & Nigel W. Beebe & Gregor J. Devine & Paul Barro, 2018. "Economic Valuation of the Threat Posed by the Establishment of the Asian Tiger Mosquito in Australia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 357-379, October.
    16. Johnston, Robert J. & Swallow, Stephen K. & Weaver, Thomas F., 1999. "Estimating Willingness to Pay and Resource Tradeoffs with Different Payment Mechanisms: An Evaluation of a Funding Guarantee for Watershed Management," Journal of Environmental Economics and Management, Elsevier, vol. 38(1), pages 97-120, July.
    17. Wang, Hua, 1997. "Treatment of "Don't-Know" Responses in Contingent Valuation Surveys: A Random Valuation Model," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 219-232, February.
    18. Wang,Hua & Laplante, Benoit & Xun Wu & Meisner, Craig, 2004. "Estimating willingness-to-pay with random valuation models : an application to Lake Sevan, Armenia," Policy Research Working Paper Series 3367, The World Bank.
    19. Lee, Choong-Ki & W. Mjelde, James, 2007. "Valuation of ecotourism resources using a contingent valuation method: The case of the Korean DMZ," Ecological Economics, Elsevier, vol. 63(2-3), pages 511-520, August.
    20. Ronald Cummings & Glenn Harrison, 1995. "The measurement and decomposition of nonuse values: A critical review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 5(3), pages 225-247, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jagaec:v:24:y:1992:i:02:p:63-71_01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/aae .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.