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Valuing Environmental Quality Changes Using Averting Expenditures: An Application to Groundwater Contamination

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  • Abdalla, Charles W.
  • Roach, Brian A.
  • Epp, Donald J.
  • Shortle, James S.

Abstract

Public decision-makers require information on the benefits and costs of policies for groundwater quality protection. The averting expenditures method for valuing environmental improvements is examined and used to approximate the economic costs of groundwater degradation to households in a southeastern Pennsylvania community. Regression results indicate that averting expenditures vary with households' knowledge of contamination, perceptions of a contaminant's health risk and presence of young children in the household. The estimates obtained through averting expenditures analysis have a sound basis in theory and are of sufficient empirical magnitude that they merit consideration in federal, state and local groundwater policy decisions.

Suggested Citation

  • Abdalla, Charles W. & Roach, Brian A. & Epp, Donald J. & Shortle, James S., "undated". "Valuing Environmental Quality Changes Using Averting Expenditures: An Application to Groundwater Contamination," 1990 Annual meeting, August 5-8, Vancouver, Canada 271021, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea90:271021
    DOI: 10.22004/ag.econ.271021
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    References listed on IDEAS

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    2. Sarnat, Carol L. & Willis, Cleve E. & Harper, Carolyn R., 1987. "Choosing Alternatives To Contaminated Ground Water Supplies: A Sequential Decision Framework Under Uncertainty," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 16(2), pages 1-11, October.
    3. Timothy J. Bartik, 2008. "Evaluating the Benefits of Non-marginal Reductions in Pollution Using Information on Defensive Expenditures," Book chapters authored by Upjohn Institute researchers, in: Joseph Herriges & Catherine L. Kling (ed.),Revealed Preference Approaches to Environmental Valuation, volume 0, pages 459-475, W.E. Upjohn Institute for Employment Research.
    4. David G. Swartz & Ivar E. Strand, Jr., 1981. "Avoidance Costs Associated with Imperfect Information: The Case of Kepone," Land Economics, University of Wisconsin Press, vol. 57(2), pages 139-150.
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