A Comparison of Direct Methods for Valuing Environmental Policies: A Case Study in New Hampshire's White Mountains

EPA Grant Number: R825824
Title: A Comparison of Direct Methods for Valuing Environmental Policies: A Case Study in New Hampshire's White Mountains
Investigators: Halstead, John M. , Hill, L. Bruce , Stevens, Thomas H.
Institution: University of New Hampshire - Main Campus , University of Massachusetts
EPA Project Officer: Lee, Sonja
Project Period: October 1, 1997 through September 30, 1999 (Extended to December 31, 2000)
Project Amount: $159,071
RFA: Decision-Making and Valuation for Environmental Policy (1997) RFA Text |  Recipients Lists
Research Category: Economics and Decision Sciences

Description:

It has been speculated that deregulation of the electric industry in New Hampshire and other states throughout the country may lead to a degradation in air quality levels in the northeastern United States and other regions. This study examines means of determining how one aspect of air quality change--visibility--affects consumer surplus and the regional economy, and provides a direct comparison between two of the primary methods of direct valuation, the contingent valuation method (CVM) and conjoint analysis (CA).

Objectives:

(1) To compare and contrast two frequently used methods of valuation of nonmarket commodities such as visibility (the contingent valuation method and conjoint analysis) to provide insight into which (if either) might be the more appropriate technique to address the problem at hand; (2) To derive estimates of the impacts of visibility changes in the White Mountains region of New Hampshire on visitors to the region; and (3) To use these estimates to determine part of the potential economic impact of deregulation of the electric industry in New Hampshire.

Approach:

A theoretical model is constmcted drawing and expanding upon recent research in the field to construct a setting where CA and CVM can be directly compared. This model is then applied in a case study in the White Mountains of New Hampshire to estimate the impacts of visibility degradation on the consumer surplus of users of the area's recreational resources. By testing the two methods in the same area with the same survey tools and sampling pool, direct comparisons between the techniques can be made.

Expected Results:

First, the project will provide additional information on the usefulness of two major approaches for direct valuation of non-market goods, contingent valuation and conjoint analysis. The second major contribution of this study is the policy relevant information on visibility valuation which will be obtained. VisibiJity conditions have been declining in many Class I airsheds in recent years and may degrade further with deregulation of the electric industry. Information related to the potential economic impact of these changes in visibility can be used in examining the cost savings which may result from deregulation.

Publications and Presentations:

Publications have been submitted on this project: View all 19 publications for this project

Supplemental Keywords:

Air quality, valuation, benefits, RFA, Economic, Social, & Behavioral Science Research Program, Scientific Discipline, Geographic Area, State, Economics, decision-making, Ecology and Ecosystems, Economics & Decision Making, Psychology, Social Science, New Hampshire (NH), air pollution policy, contingent valuation, ecosystem valuation, empirical validation, community involvement, direct valuation method, electric industry deregulation, environmental values, New Hampshire's White Mountains, non-market valuation, nonmarket choice, psychological attitudes, public values, benefits assessment, conjoint analysis

Progress and Final Reports:

  • 1998 Progress Report
  • 1999 Progress Report
  • 2000
  • Final Report