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Integrating Property Value and Local Recreation Models to Value Ecosystem Services in Urban Watersheds

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  • Daniel J. Phaneuf
  • V. Kerry Smith
  • Raymond B. Palmquist
  • Jaren C. Pope

Abstract

This paper outlines a new revealed preference method to estimate the effects of changes in land use associated with residential development on water quality and the implied ecosystem services at the watershed level. The analysis integrates data describing several types of behavior and uses hedonic property value and random utility models for local recreation to consider the multiple impacts of ecosystem services on household well-being. Several policy examples drawn from changes in Wake County, North Carolina, are used to demonstrate how spatial differences in residential development are reflected in the model’s estimates of the economic costs of deterioration in watershed quality.

Suggested Citation

  • Daniel J. Phaneuf & V. Kerry Smith & Raymond B. Palmquist & Jaren C. Pope, 2008. "Integrating Property Value and Local Recreation Models to Value Ecosystem Services in Urban Watersheds," Land Economics, University of Wisconsin Press, vol. 84(3), pages 361-381.
    • Handle: RePEc:uwp:landec:v:84:y:2008:i:3:p:361-381
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    2. Boyd, James & Banzhaf, Spencer, 2007. "What are ecosystem services? The need for standardized environmental accounting units," Ecological Economics, Elsevier, vol. 63(2-3), pages 616-626, August.
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    Cited by:

    1. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2010. "The New Economics of Equilibrium Sorting and its Transformational Role for Policy Evaluation," NBER Working Papers 16349, National Bureau of Economic Research, Inc.
    2. Liu, Fangge & Zhang, Wendong, 2018. "The Value of Lake Restoration to Homeowners: Evidence from Iowa using a Difference-in-Difference Approach," 2018 Annual Meeting, August 5-7, Washington, D.C. 274032, Agricultural and Applied Economics Association.
    3. Hyun No Kim, 2021. "Economic Evaluation of Water Resource Management in South Korea Based on Benefit–Cost Analysis," SAGE Open, , vol. 11(2), pages 21582440211, April.
    4. Hackbart, Vivian C.S. & de Lima, Guilherme T.N.P. & dos Santos, Rozely F., 2017. "Theory and practice of water ecosystem services valuation: Where are we going?," Ecosystem Services, Elsevier, vol. 23(C), pages 218-227.
    5. Neuman, Amber D. & Belcher, Ken W., 2011. "The contribution of carbon-based payments to wetland conservation compensation on agricultural landscapes," Agricultural Systems, Elsevier, vol. 104(1), pages 75-81, January.
    6. V. Kerry Smith & Carlos Valcarcel Wolloh, 2012. "Has Surface Water Quality Improved Since the Clean Water Act?," NBER Working Papers 18192, National Bureau of Economic Research, Inc.
    7. Anne T. Byrne & David R. Just, 2023. "What is free food worth? A nonmarket valuation approach to estimating the welfare effects of food pantry services," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(4), pages 1063-1087, August.
    8. Patrick J. Walsh & J. Walter Milon & David O. Scrogin, 2011. "The Spatial Extent of Water Quality Benefits in Urban Housing Markets," Land Economics, University of Wisconsin Press, vol. 87(4), pages 628-644.
    9. Melstrom, Richard & Lupi, Frank, 2012. "Using a Control Function to Resolve the Travel Cost Endogeneity Problem in Recreation Demand Models," MPRA Paper 48036, University Library of Munich, Germany, revised May 2013.
    10. Kuwayama, Yusuke & Olmstead, Sheila & Zheng, Jiameng, 2022. "A more comprehensive estimate of the value of water quality," Journal of Public Economics, Elsevier, vol. 207(C).
    11. Anfal Al-Ali & Praveen Maghelal & Khaled Alawadi, 2020. "Assessing Neighborhood Satisfaction and Social Capital in a Multi-Cultural Setting of an Abu Dhabi Neighborhood," Sustainability, MDPI, vol. 12(8), pages 1-16, April.
    12. Costanza, Robert & de Groot, Rudolf & Braat, Leon & Kubiszewski, Ida & Fioramonti, Lorenzo & Sutton, Paul & Farber, Steve & Grasso, Monica, 2017. "Twenty years of ecosystem services: How far have we come and how far do we still need to go?," Ecosystem Services, Elsevier, vol. 28(PA), pages 1-16.
    13. Stephen Newbold & R. David Simpson & D. Matthew Massey & Matthew T. Heberling & William Wheeler & Joel Corona & Julie Hewitt, 2018. "Benefit Transfer Challenges: Perspectives from U.S. Practitioners," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(3), pages 467-481, March.
    14. Kim, Hyun No & Boxall, Peter C. & Adamowicz, W.L.(Vic), 2019. "Analysis of the economic impact of water management policy on residential prices: Modifying choice set formation in a discrete house choice analysis," Journal of choice modelling, Elsevier, vol. 33(C).
    15. Li Li & Qidi Yu & Ling Gao & Bin Yu & Zhipeng Lu, 2021. "The Effect of Urban Land-Use Change on Runoff Water Quality: A Case Study in Hangzhou City," IJERPH, MDPI, vol. 18(20), pages 1-12, October.
    16. Janne Artell & Anni Huhtala, 2017. "What Are the Benefits of the Water Framework Directive? Lessons Learned for Policy Design from Preference Revelation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(4), pages 847-873, December.
    17. David Wolf & Sathya Gopalakrishnan & H. Allen Klaiber, 2022. "Staying afloat: The effect of algae contamination on Lake Erie housing prices," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(5), pages 1701-1723, October.
    18. H. Allen Klaiber & V. Kerry Smith, 2013. "Developing general equilibrium benefit analyses for social programs: an introduction and example," Chapters, in: Scott O. Farrow & Richard Zerbe, Jr. (ed.), Principles and Standards for Benefit–Cost Analysis, chapter 6, pages 194-246, Edward Elgar Publishing.
    19. Patrick J. Walsh & J. Walter Milon, 2016. "Nutrient Standards, Water Quality Indicators, and Economic Benefits from Water Quality Regulations," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(4), pages 643-661, August.
    20. Moeltner, Klaus & Blinn, Christine E. & Holmes, Thomas P., 2017. "Forest pests and home values: The importance of accuracy in damage assessment and geocoding of properties," Journal of Forest Economics, Elsevier, vol. 26(C), pages 46-55.
    21. Tang, Chuan & Heintzelman, Martin D. & Holsen, Thomas M., 2018. "Mercury pollution, information, and property values," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 418-432.
    22. Kuminoff, Nicolai V. & Parmeter, Christopher F. & Pope, Jaren C., 2010. "Which hedonic models can we trust to recover the marginal willingness to pay for environmental amenities?," Journal of Environmental Economics and Management, Elsevier, vol. 60(3), pages 145-160, November.
    23. Kroetz, Kailin & Kuwayama, Yusuke & Vexler, Caroline, 2019. "What is a Fish Out of Water? The Economics Behind the Joint Management of Water Resources and Aquatic Species in the United States," RFF Working Paper Series 19-09, Resources for the Future.

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    More about this item

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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