Estimating the Benefits of Stream Water Quality Improvements in Urbanizing Watersheds: An Ecological Production Function Approach

EPA Grant Number: R836165
Title: Estimating the Benefits of Stream Water Quality Improvements in Urbanizing Watersheds: An Ecological Production Function Approach
Investigators: von Haefen, Roger , Gerst, Michael , Kenney, Melissa , Obenour, Daniel Redd , Taylor, Laura , Van Houtven, George L.
Institution: North Carolina State University , Desert Research Institute , University of Maryland - College Park
EPA Project Officer: Packard, Benjamin H
Project Period: June 1, 2016 through May 31, 2019
Project Amount: $799,728
RFA: Water Quality Benefits (2015) RFA Text |  Recipients Lists
Research Category: Water


To support EPA’s efforts to advance knowledge for conducting economic evaluations of environmental policies, the main objective of our proposed research is to develop and demonstrate methods for valuing the use and nonuse benefits of improving water quality in wadeable streams in urbanizing watersheds. These streams provide valuable ecosystem services and are subject to a combination of anthropogenic stressors that have led to pervasive degradation referred to as “urban stream syndrome.”  Understanding how the general public perceives and values improvements in stream conditions is necessary to support EPA’s efforts to quantify the public’s willingness to pay (WTP) for water quality improvements.

To address this objective, we employ an “ecological production function” approach for streams in urbanizing watersheds in the Southeastern U.S.  We begin by conducting focus groups with the general public to identify ecological endpoints, i.e., attributes of urban stream conditions that are most meaningful and salient. We use expert elicitation to develop functional mappings between quantifiable, biophysical measures of water quality and these endpoints. We then develop a stated preference survey containing a series of choice experiments that allow us to estimate households’ WTP for improvements in these endpoints. Design features of the survey will allow us to examine how differences in the spatial scale and scope of water quality changes affect WTP.  We illustrate our methods with a detailed case study of the Upper Neuse watershed which includes the rapidly growing Raleigh-Durham area. Importantly, the case study includes a novel water quality modeling approach that leverages limited data from across multiple urban sub-watersheds to predict biophysical water quality measures.

The project will generate the following key outputs:

  • A valuation function that predicts households’ WTP for defined changes in the ecological endpoints in urban streams.  By incorporating spatial scale and scope effects for water quality changes as well as respondent heterogeneity, the functional relationship is intended to be flexible and transferable for benefits estimation across the Southeast.
  • A set of ecological production functions providing critical links between biophysical measures of water quality and ecological endpoints. These functions will be transferable to wadeable streams in Southeastern urbanizing watersheds. We will also formalize an expert elicitation protocol for quantifying these ecological production relationships.
  • A water quality modeling framework designed to provide probabilistic and defensible assessments of water quality and biodiversity in streams with limited sampling data, under existing and alternative loadings scenarios conditional on data from a limited subset of streams with more frequent sampling.


Supplemental Keywords:

Stated preference methods, choice experiments, expert elicitation, urban wadeable streams

Progress and Final Reports:

  • 2016 Progress Report
  • 2017