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Water Management and the Valuation of Indirect Environmental Services


  • Brooks Kaiser
  • James A Roumasset

    () (Department of Economics, University of Hawaii at Manoa)


Comprehensive water basin and watershed planning and management require valuation of the intermediate ecological services provided to the water resources themselves. Valuation of forest cover in the augmentation of water resources is discussed in the context of aggregate economic planning, water-basin or sectoral planning, and conservation project evaluation. The importance of valuing intermediate non-market goods is illustrated for each planning tool in the context of an illustrative example of the Pearl Harbor/Ko'olau watershed in Hawaii. In the context of water allocation and investment in waterworks, considerations of full income valuation imply that the value of water should incorporate the risk of watershed degradation contingent on the expected conservation effort. What appear to be new objectives of economic planning, such as sustainable development, do not require new criteria but rather the augmentation of existing methods of income accounting and project valuation to include the values on non-market goods. We also show that measurement of non-market valuation does not necessarily require the use of contingent-valuation methods, even when the usual alternatives (hedonics, household production, etc.) are not directly applicable.

Suggested Citation

  • Brooks Kaiser & James A Roumasset, 1999. "Water Management and the Valuation of Indirect Environmental Services," Working Papers 199905, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:199905

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    Cited by:

    1. Burnett, Kimberly M. & Kaiser, Brooks A. & Pitafi, Basharat A.K. & Roumasset, James A., 2006. "Prevention, Eradication, and Containment of Invasive Species: Illustrations from Hawaii," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 1), pages 1-15, April.
    2. Brooks Kaiser & Kimberly Burnett & James Roumasset, 2006. "Control of Invasive Species: Lessons from Miconia in Hawaii," Working Papers 200608, University of Hawaii at Manoa, Department of Economics.

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