Grantee Research Project Results
Final Report: Estimating the missing benefits of water quality by nesting recreation demand and hedonic modeling
EPA Grant Number: R840466Title: Estimating the missing benefits of water quality by nesting recreation demand and hedonic modeling
Investigators:
Institution:
EPA Project Officer:
Project Period: September 1, 2022 through May 2, 2025
Project Amount: $741,054
RFA: Water Quality Benefits (2022) RFA Text | Recipients Lists
Research Category: Water Quality , Water
Objective:
(1) Implement innovative models to estimate the effects on property values of water quality changes from nutrient pollution in 3 under-studied coastal regions, separately estimating local amenity and regional recreation impacts. (2) Monetize the aggregate property value impact of long-run changes in dissolved oxygen in each region. (3) Describe regional differences in the extent of the market for and variation by waterbody type in the recreational and amenity value of water quality. (4) Describe intra- and inter-regional variation in recreational and amenity values of water quality by race, income, and other socioeconomic indicators. (5) Disseminate results widely. (6) Train a diverse set of graduate students.
Summary/Accomplishments (Outputs/Outcomes):
Our findings in three sub-projects suggest that property prices increase significantly when water quality improves in all three study regions: Long Island Sound, Puget Sound, and the Texas Gulf Coast. In the first project, we separately identify impacts on property prices from both improvements in local water quality very close to homes (likely an amenity value arising from how local streams look or smell, for example), and those from improvements in regional recreational waterbodies (like those used for fishing). Our results suggest that the traditional hedonic property approach, which omits the impacts of regional recreation benefits, generates substantial underestimates of the benefits of water pollution control. Regional recreation benefits represent 55% of the property-price impacts of a 10% increase in dissolved oxygen in the Long Island Sound region, 20% of the impacts in the Texas Gulf Coast, and 34% of the impacts in Puget Sound.
In the second project, we find that a water pollution control regulation limiting nitrogen flows into Long Island Sound that began in 2000 has substantially increased property values in the region (by about 3%, on average). Benefit-cost analysis suggests that the property-value benefits of this regulation exceed compliance costs for the regulated municipal sewage treatment plants. The third project, for which results are delayed by the unexpected early termination of the grant, uses mobility data to estimate the benefits of water quality improvements in Long Island Sound in a recreation demand framework, focusing on beaches.
Conclusions:
References:
Working papers in progress
- Cha, Yoojin. 2025. The property market impacts of water pollution trading. Working paper.
- Cha, Yoojin, Dimitris Friesen, Jiameng Zheng, Yusuke Kuwayama, Sheila Olmstead, and Daniel Phaneuf. 2025. Estimating water quality benefits in three U.S. regions. Working paper.
- Friesen, Dimitris, Yoojin Cha, Jiameng Zheng, Yusuke Kuwayama, Sheila Olmstead, and Daniel Phaneuf. 2025. Using mobility data to estimate water quality benefits. Working paper.
Journal Articles:
No journal articles submitted with this report: View all 16 publications for this projectSupplemental Keywords:
water pollution, recreation demand, hedonic property model, property prices, amenity values, dissolved oxygen, mobility dataProgress and Final Reports:
Original AbstractThe perspectives, information and conclusions conveyed in research project abstracts, progress reports, final reports, journal abstracts and journal publications convey the viewpoints of the principal investigator and may not represent the views and policies of ORD and EPA. Conclusions drawn by the principal investigators have not been reviewed by the Agency.