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Valuing Water Quality as a Function of Water Quality Measures

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  • Egan, Kevin J.
  • Herriges, Joseph A.
  • Kling, Catherine L.
  • Downing, John A.

Abstract

Employing a unique and rich data set of water quality attributes in conjunction with detailed household characteristics and trip information, we develop a mixed logit model of recreational lake usage and undertake thorough model specification and fitting procedures to identify the best set of explanatory variables, and their functional form for the estimated model. Our empirical analysis shows that individuals are responsive to the full set of water quality measures used by biologists to identify the impaired status of lakes. Thus, changes in these quality measures are not simply a scientific exercise, but they also translate into changes in the recreational usage patterns and well-being of individual households. Willingness-to-pay (WTP) estimates are reported based on improvements in these physical measures.

Suggested Citation

  • Egan, Kevin J. & Herriges, Joseph A. & Kling, Catherine L. & Downing, John A., 2009. "Valuing Water Quality as a Function of Water Quality Measures," ISU General Staff Papers 200901010800001393, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genstf:200901010800001393
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    References listed on IDEAS

    as
    1. Daniel J. Phaneuf & Catherine L. Kling & Joseph A. Herriges, 2000. "Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 83-92, February.
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    3. Joseph A. Herriges & Daniel J. Phaneuf, 2002. "Inducing Patterns of Correlation and Substitution in Repeated Logit Models of Recreation Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1076-1090.
    4. von Haefen, Roger H., 2003. "Incorporating observed choice into the construction of welfare measures from random utility models," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 145-165, March.
    5. Herriges, Joseph A. & Kling, Catherine L., 2003. "Recreation Demand Models," Staff General Research Papers Archive 10211, Iowa State University, Department of Economics.
    6. Edward R. Morey & Robert D. Rowe & Michael Watson, 1993. "A Repeated Nested-Logit Model of Atlantic Salmon Fishing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 578-592.
    7. Herriges, Joseph A. & Phaneuf, Daniel J., 2002. "Inducing Patterns Correlation and Substitution in Repeated Logit Model of Recreation Demand," Staff General Research Papers Archive 5035, Iowa State University, Department of Economics.
    8. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
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