IDEAS home Printed from https://ideas.repec.org/p/nev/wpaper/wp201205.html
   My bibliography  Save this paper

Water Quality Index Aggregation and Cost Benefit Analysis

Author

Listed:
  • Patrick J. Walsh
  • William Wheeler

Abstract

The water quality index (WQI) has emerged as a central way to convey water quality information to policy makers and the general public and is regularly used in US EPA regulatory impact analysis. It is a compound indicator that aggregates information from several water quality parameters. Several recent studies have criticized the aggregation function of the EPA WQI, arguing that it suffers from “eclipsing” and other problems. Although past papers have compared various aggregation functions in the WQI (usually looking at correlation), this is the first paper to examine these functions in the context of benefit-cost analysis. Using data from the 2003 EPA CAFO rule, the present paper examines four aggregation functions and their impact on estimated benefits. Results indicate that the aggregation method can have a profound effect on benefits, with total benefit estimates varying from $82 million to $504 million dollars. Furthermore, a sensitivity analysis does not find convincing evidence to substitute the current aggregation function, although several changes to the underlying WQI methodology may be warranted.

Suggested Citation

  • Patrick J. Walsh & William Wheeler, 2012. "Water Quality Index Aggregation and Cost Benefit Analysis," NCEE Working Paper Series 201205, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jul 2012.
    • Handle: RePEc:nev:wpaper:wp201205
    as

    Download full text from publisher

    File URL: https://www.epa.gov/environmental-economics/working-paper-water-quality-index-aggregation-and-cost-benefit-analysis
    File Function: First version, 2012
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Van Houtven, George & Powers, John & Pattanayak, Subhrendu K., 2007. "Valuing water quality improvements in the United States using meta-analysis: Is the glass half-full or half-empty for national policy analysis?," Resource and Energy Economics, Elsevier, vol. 29(3), pages 206-228, September.
    2. Robert J. Johnston & Elena Y. Besedin & Richard Iovanna & Christopher J. Miller & Ryan F. Wardwell & Matthew H. Ranson, 2005. "Systematic Variation in Willingness to Pay for Aquatic Resource Improvements and Implications for Benefit Transfer: A Meta‐Analysis," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(2‐3), pages 221-248, June.
    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. Daissy Milena Díaz-Casallas & Mario Fernando Castro-Fernández & Elvira Bocos & Carlos Enrique Montenegro-Marin & Rubén González Crespo, 2019. "2008–2017 Bogota River Water Quality Assessment Based on the Water Quality Index," Sustainability, MDPI, vol. 11(6), pages 1-17, March.
    2. Minjuan Zhao & Robert Johnston & Eric Schultz, 2013. "What to Value and How? Ecological Indicator Choices in Stated Preference Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(1), pages 3-25, September.
    3. Ivana I. Mladenović-Ranisavljević & Lj. Takić & Đ. Nikolić, 2018. "Water Quality Assessment Based on Combined Multi-Criteria Decision-Making Method with Index Method," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 32(7), pages 2261-2276, May.
    4. Margaret W. Gitau & Jingqiu Chen & Zhao Ma, 2016. "Water Quality Indices as Tools for Decision Making and Management," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(8), pages 2591-2610, June.

    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. Moeltner, Klaus, 2019. "Bayesian nonlinear meta regression for benefit transfer," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 44-62.
    2. Newbold, Stephen C. & Johnston, Robert J., 2020. "Valuing non-market valuation studies using meta-analysis: A demonstration using estimates of willingness-to-pay for water quality improvements," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    3. Abbie A. Rogers & Fiona L. Dempster & Jacob I. Hawkins & Robert J. Johnston & Peter C. Boxall & John Rolfe & Marit E. Kragt & Michael P. Burton & David J. Pannell, 2019. "Valuing non-market economic impacts from natural hazards," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 99(2), pages 1131-1161, November.
    4. Weber, Matthew A. & Meixner, Thomas & Stromberg, Juliet C., 2016. "Valuing instream-related services of wastewater," Ecosystem Services, Elsevier, vol. 21(PA), pages 59-71.
    5. Rolfe, John & Brouwer, Roy, 2011. "Testing for value stability with a meta-analysis of choice experiments: River health in Australia," Research Reports 107744, Australian National University, Environmental Economics Research Hub.
    6. Robert J. Johnston & Elena Y. Besedin & Ryan Stapler, 2017. "Enhanced Geospatial Validity for Meta-analysis and Environmental Benefit Transfer: An Application to Water Quality Improvements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(2), pages 343-375, October.
    7. Lindhjem, Henrik & Navrud, Ståle, 2008. "How reliable are meta-analyses for international benefit transfers?," Ecological Economics, Elsevier, vol. 66(2-3), pages 425-435, June.
    8. Heather Klemick & Charles Griffiths & Dennis Guignet & Patrick Walsh, 2018. "Improving Water Quality in an Iconic Estuary: An Internal Meta-analysis of Property Value Impacts Around the Chesapeake Bay," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(2), pages 265-292, February.
    9. Cai, Zhen & Aguilar, Francisco X., 2013. "Meta-analysis of consumer's willingness-to-pay premiums for certified wood products," Journal of Forest Economics, Elsevier, vol. 19(1), pages 15-31.
    10. Londoño, Luz M. & Johnston, Robert J., 2012. "Enhancing the reliability of benefit transfer over heterogeneous sites: A meta-analysis of international coral reef values," Ecological Economics, Elsevier, vol. 78(C), pages 80-89.
    11. Tuan, Tran Hu & Lindhjem, Henrik, 2008. "Meta-analysis of nature conservation values in Asia & Oceania: Data heterogeneity and benefit transfer issues," MPRA Paper 11470, University Library of Munich, Germany.
    12. Heather Klemick & Charles Griffiths & Dennis Guignet & Patrick Walsh, 2015. "Explaining Variation in the Value of Chesapeake Bay Water Quality Using Internal Meta-analysis," NCEE Working Paper Series 201504, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Nov 2015.
    13. Kovacs, Kent F. & Polasky, Stephen & Keeler, Bonnie & Pennington, Derric & Nelson, Erik & Plantinga, Andrew J. & Taff, Steven J., 2012. "Evaluating the Return in Ecosystem Services from Investment in Public Land Acquisitions," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124660, Agricultural and Applied Economics Association.
    14. Fitzpatrick, Luke & Parmeter, Christopher F. & Agar, Juan, 2017. "Threshold Effects in Meta-Analyses With Application to Benefit Transfer for Coral Reef Valuation," Ecological Economics, Elsevier, vol. 133(C), pages 74-85.
    15. de Ayala, Amaia & Mariel, Petr & Meyerhoff, Jürgen, 2014. "Transferring landscape values using discrete choice experiments: Is meta-analysis an option?," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 14(01), pages 1-16, June.
    16. Ojea, Elena & Loureiro, Maria L., 2011. "Identifying the scope effect on a meta-analysis of biodiversity valuation studies," Resource and Energy Economics, Elsevier, vol. 33(3), pages 706-724, September.
    17. Hjerpe, Evan & Hussain, Anwar & Phillips, Spencer, 2015. "Valuing type and scope of ecosystem conservation: A meta-analysis," Journal of Forest Economics, Elsevier, vol. 21(1), pages 32-50.
    18. Daniel A. Brent & Lata Gangadharan & Allison Lassiter & Anke Leroux & Paul A. Raschky, 2016. "Valuing Environmental Services Provided by LocalStormwater Management," Monash Economics Working Papers 35-16, Monash University, Department of Economics.
    19. Ge, Jiaqi & Kling, Catherine L. & Herriges, Joseph A., 2013. "How much is clean water worth? Valuing water quality improvement using a meta analysis," ISU General Staff Papers 201302250800001050, Iowa State University, Department of Economics.
    20. Walsh Patrick J. & Wheeler William J., 2013. "Water quality indices and benefit-cost analysis," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(1), pages 81-105, March.

    More about this item

    Keywords

    water quality; valuation; cost-benefit analysis;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    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:nev:wpaper:wp201205. 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: Cynthia Morgan (email available below). General contact details of provider: https://edirc.repec.org/data/nepgvus.html .

    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.