A review of ten published studies examined the effect of lead exposure on the BP of women, relative to the effect on men ( Schwartz, 1992). All of the reviewed studies included data for men; some included data for women. Schwartz used a conco rdance p roced ure that comb ined data from each study to p redict the decre ase in diastolic BP associated with a d ecrease Thi This value is based on WT Anot Therefore, the A Equation 14.19 14 26 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits from 10   g/ dL to 5   g/ dL PbB ( Schwartz, 1992). The results suggest that when PbB is decreased, women experience a BP change that is 60 percent of the change seen in men. Equation ( 14.10) can be rewritten for women as:

( 14.19)

where:

  DBPwomen = the change in women's diastolic BP expected from a change in PbB;

PbB1 = PbB level in the baseline scenario; and PbB2 = PbB level in the post compliance scenario.

b. Changes in CHD   Quantif ying th e re la tionsh ip be tw ee n BP and CH D Elevated BP in women results in the same effects as for men ( CHD, two types of stroke, and premature death). However, the general relatio nships betwe en B P an d these health e ffects are n ot identical to the dose  respo nse func tions estim ated fo r men .

All relatio nships prese nted h ere ha ve be en estim ated fo r wom en age d 45 to 74 years o ld using inform ation fro m Sh urtleff ( 1974). A estimated first time CHD related to an increase in BP in women using the following equation:

( 14.20)

where:

  Pr( CHDwomen) = change in 2 year probability of occurrence of CHD event for women aged 45 74;

DBP1 = mean diastolic BP in the baseline scenario; based on the Phase 2 NHANES III, mean diastolic BP for wo men in subsiste nce and re creatio nal ho useho lds age d 45 to 74 is 76.5 and 7 4.8, re spec tively;

and DBP2 = mean diastolic BP in the post compliance scenario.

EPA estimated non fatal CHD events by assuming that two thirds of all estimated CH D events are not fatal ( Shurtleff, 1974).

  Valuing redu ctions in CH D events The Agency first calculated the number of avoided CHD events for women using Equation 14.20. EPA assumed that values of red ucing C HD events fo r wom en eq ual those calc ulated for me n ( ab ove): $ 76 ,347 ( 2001$ ) per C HD event.

c. Changes in BI and initial CBA   Quantifying the relationship between BP and first time stroke EPA predicted the relationship between BP and initial CBA for women using the following equation:

( 14.21)

where:

  Pr( CBAwomen) = change in two year probability of cerebrovascular accident in women aged 45 to 74;

DBP1 = mean diastolic BP in the baseline scenario; and DBP2 = mean diastolic BP in the post compliance scenario.

The following equation illustrates the relationship between BI and initial BI in women:

( 14.22) EP 14 27 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits where:

  Pr( BIwomen) = change in 2 year probability of brain infarction in women aged 45 to 74;

DBP1 = mean diastolic BP in the baseline scenario; based on the Phase 2 NHANES III, mean diastolic BP for women in subsistence and recreational households aged 45 to 74 is 76.5 and 74.8, respectively; and DBP2 = mean diastolic BP in the post compliance scenario.

EP A multiplied the pre dicted incidences o f avoid ed B I and CB A by 7 0 pe rcent to estimate only no n fatal strok es ( Shurtleff,

1974).

  Valuing reductions in strokes EPA calculated the value of avoiding an initial CBA or an initial BI for women in the same way as for men ( see above). EPA predicted lead related stroke for women in the United States between the ages of 45 and 74, of whom 38.2 percent are aged 45 to 54 and the remaining 61.8 percent are aged 55  74. ic values in Taylor et al. ( 1996),

EPA estimated the average value of avoiding a stroke among women aged 45 to 74 to be about $ 25 1,351 ( 200 1$).

d. Changes in premature mortality   Qu antify ing th e relatio nship betw een BP and prem ature m ortality The following equation estimates the risk of premature mortality in women ( Shurtleff, 1974):

( 14.23)

where:

  Pr( MORTwomen) = the change in two year probability of death for women aged 45 to 74;

DBP1 = mea n diasto lic BP in the ba seline scenario ; based on the Pha se 2 N HA NE S III, m ean d iastolic BP for women in subsistence and recreational households aged 45 to 74 is 76.5 and 74.8,

respectively; and DBP2 = mean diastolic BP in the post compliance scenario.

  Valuing redu ctions in pre m ature m ortality EPA predicted changes in lead related premature mortality for women in the same way as for men ( see above).

the value of reducing premature mortality in women to be equal to that estimated for all premature mortality, $ 6.5 million ( 2001$ ) per incident ( see Section 13.2.1).

14.4 LEAD RELATED BENEFIT RESULTS This section describes the estimated benefits of reduced lead exposure from consumption of fish in three populations: ( 1)

preschool age children, ( 2) pregnant women, and ( 3) adult men and women. Benefit estimates for pregnant women appear with those for preschool age children, because the beneficiaries in this category are children under the age of one who suffer in utero fetal lead exposure from maternal lead intake during pregnancy. inal regulation will yield no benefits to children or adults from reduced exp osure to lead. ive regulatory options considered by EPA w ere estimated to yield be nefits from reduce d expo sure to lead. he following discussion reviews the estimated b enefits from these alternative op tions.

14.4.1 Preschool Age Children Lead Related Benefit Results EP A analyzed the mone tary value of health bene fits to children from reduc ed lead e xposure in four categories:

  redu ced neo n atal mo rtality,

  avoided IQ lo ss,

  reduced incidence of IQ below 70, and   reduced incidence of PbB levels above 20   g/ dL. Using the gender and age specif EPA assumed EPA estimated that the f Alternat T 14 28 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits From this analysis, EPA estimated that the final rule will yield no lead related benefits to children.

Other regulatory options considered by EPA were found to yield lead related benefits to children. Table 14.5 summarizes lead related benefits estimated for the 433 Upgrade Options. EPA estimated that the Directs + 413 to 433 Upgrade Option and the Directs + All to 433 Upgrade Option would reduce 0.15 and 0.17 cases of neonatal mortality, and avoid the loss of 32 and 36 IQ points, respectively. The Directs + 413 to 433 Upgrade Option and the Directs + All to 433 Upgrade Option would result in $ 1.3 and $ 1.5 million ( 2001$) in annual lead related benefits for children, respectively.

Table 14.5: National Annual Benefits from Reduced Lead in Children ( 2001$)   433 Upgrade Options a Category Directs + 413 to 433 Upgrade Directs + All to 433 Upgrade Reduced Cases or IQ Points Benefit Value ( 2001$) Reduced Cases or IQ Points Benefit Value ( 2001$)

Neonatal mortality 0.15 $ 995,630 0.17 $ 1,109,294 Avoided IQ Loss 31.99 $ 301,323 36.19 $ 340,845 Reduced IQ < 70 0.11 $ 6,637 0.13 $ 7,501 Reduced PbB > 20   g/ L 0.00 $ 0 0.00 $ 0 Total Benefits $ 1,303,590 $ 1,457,640 a Based on the Traditional Extrapolation.

Source: U. S. EPA analysis.

Table 14.6 summarizes lead related benefits estimated for the Proposed/ NODA Option. EPA estimated that the Proposed/ NODA Option would reduce 1.60 cases of neonatal mortality and avoid the loss of 1,078 IQ points. Annual lead

related benefits for children equal $ 20.8 million ( 2001$) under the Proposed/ NODA Option, which substantially exceeds estimated lead related benefits for children under the two 433 Upgrade Options.

Table 14.6: National Annual Benefits from Reduced Lead in Children ( 2001$)   Proposed/ NODA Option a Category Reduced Cases or IQ Points Benefit Value ( 2001$)

Neonatal mortality 1.60 $ 10,417,781 Avoided IQ Loss 1,078.38 $ 10,157,286 Reduced IQ < 70 3.72 $ 216,007 Reduced PbB > 20   g/ L 0.00 $ 0 Total Benefits $ 20,791,073 a Based on the Traditional Extrapolation.

Source: U. S. EPA analysis.

The results from the estimated lead related benefits for children are conservative, because this analysis omits other lead

related impacts, such as the cost of group homes and other special care facilities. Table 14.1 presents other omitted benefits categories. Section 14.5 discusses uncertainty and limitations inherent in this analysis.

14.4.2 Adult Lead Related Benefit Results As discussed previously, EPA quantified only the lead related health effects in adults that relate to lead s effect on BP. These health effects include increased incidence of hypertension, initial non fatal CHD, non fatal stokes ( CBA and BI), and premature mortality. EPA used COI estimates ( i. e., medical costs and lost work time) to estimate monetary values for 14 29 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits reduced incidence of hypertension, initial CHD , and strokes. EPA based monetary values for changes in risk of premature mortality on estimates of the value of a statistical life saved. The results are conservative estimates, because this analysis does not include other health effects associated with elevated BP or with lead. Other effects of lead in adults can include nervous system disorders, anemia, and possible cancer effects.

From this analysis, EPA estimated that the final rule will yield no lead related health benefits to adults.

Other regulatory options considered by EPA were found to yield lead related benefits to adults. Table 14.7 summarizes lead

related benefits estimated for the 433 Upgrade Options. EPA estimated that the Directs + 413 to 433 Upgrade Option and the Directs + All to 433 Upgrade Option respectively would reduce hypertension among males by 53 and 60 cases annually. Both the 433 Upgrade Options would also reduce the annual incidence of premature mortality among men and women by approximately 0.1 cases. EPA estimated annual lead related benefits for adults under the Directs + 413 to 433 Upgrade Option at $ 0.70 million ( 2001$) and under the Directs + All to 433 Upgrade Option at $ 0.79 million ( 2001$).

Table 14.7: National Adult Lead Annual Benefits ( 2001$)   433 Upgrade Options a, b Category Directs + 413 to 433 Upgrade Directs + All to 433 Upgrade Reduced Cases Mean Value of Benefits Reduced Cases Mean Value of Benefits Men Hypertension 53.47 $ 61,004 59.58 $ 67,982 CHD 0.05 $ 4,155 0.06 $ 4,631 CBA 0.02 $ 5,698 0.02 $ 6,350 BI 0.01 $ 3,226 0.01 $ 3,596 Mortality 0.07 $ 474,735 0.08 $ 529,125 Women CHD 0.02 $ 1,662 0.02 $ 1,853 CBA 0.01 $ 2,417 0.01 $ 2,694 BI 0.01 $ 1,487 0.01 $ 1,658 Mortality 0.02 $ 150,190 0.03 $ 167,417 Total Benefits $ 704,574 $ 785,304 a Based on the Traditional Extrapolation.

b National Level Exposed Population:

( 1) Directs + 413 to 433 Upgrade Hypertension: 139,745 men ages 20 to 74;

CHD, CBA, BI, and mortality: 56,564 men and 62,666 women ages 45 74.

( 2) Directs + 413 + 50% LL Upgrade Hypertension: 139,745 men ages 20 to 74;

CHD, CBA, BI, and mortality: 56,564 men and 62,666 women ages 45 74.

Source: U. S. EPA analysis.

Table 14 8 summarizes lead related benefits estimated for the Proposed/ NODA Option. EPA estimated that this option would reduce hypertension among males by approximately 545 cases and the incidence of premature mortality among men and women by 0.96 cases annually. Lead related benefits for adults under the Proposed/ NODA Option would be $ 7.05 million annually, which substantially exceeds estimated benefits under the two 433 Upgrade Options.

14 30 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits Table 14.8: National Adult Lead Annual Benefits ( 2001$)   Proposed/ NODA Option a, b Category Reduced Cases Mean Value of Benefits Men Hypertension 545.25 $ 622,126 CHD 0.54 $ 41,564 CBA 0.17 $ 56,907 BI 0.10 $ 32,197 Mortality 0.73 $ 4,750,132 Women CHD 0.22 $ 16,472 CBA 0.10 $ 23,928 BI 0.06 $ 14,714 Mortality 0.23 $ 1,489,984 Total Benefits $ 7,048,025 a Based on the Traditional Extrapolation.

b National Level Exposed Population:

Hypertension: 539,142 men ages 20 to 74;

CHD, CBA, BI, and mortality: 218,226 men and 241,768 women ages 45 74.

Source: U. S. EPA analysis.

14.5 LIMITATIONS AND UNCERTAINTIES This section discusses limitations and uncertainties in the lead related benefits analysis. Developing dose response functions depends on relating lead exposure to PbB levels, then evaluating PbB levels in relation to specific health outcomes.

Quantitative dose response functions for most health effects associated with lead exposure currently do not exist. For this reason, the analysis does not provide a comprehensive estimate of health benefits from reduced lead discharges from MP& M facilities.

Table 14.1 summarizes quantified and non quantified health effects. Economic research does not always yield a complete evaluation, even for those effects that can be quantified. This uncertainly is likely to bias the estimate of lead related benefits of the MP& M regulation downward. The analysis methodologies used here also involve significant simplifications and uncertainties. Section 13.3 discusses similar limitations and uncertainties associated with the assessment of risk associated with non lead related human health hazards and the possible direction of bias associated with sample design and benefits analysis by:

  occurrence location,

  estimated in waterway concentrations of MP& M pollutants, and   estimated exposed fishing population.

The next five sections discuss other omissions, biases, and uncertainties in the lead benefit analysis. Table 14.9 provides a summary of this discussion.

14.5.1 Excluding Older Children Recent research on brain development among 10 to 18 year old children shows unanticipated and substantial growth in brain development, mainly in the early teenage years ( Giedd et al., 1999). This growth appears to be a second   burst  of cell development in some brain areas, in addition to the previously recognized period of rapid growth during early childhood.

One of lead s fundamental effects is to disrupt the protective coating ( myelin) on nerve cells. This disruption can lead to permanent impairment if it occurs during development. New research suggests that older children may be a hypersensitive 14 31 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits sub population, along with children aged 0 to 7. Excluding this sub population from the analysis may significantly underestimate benefits from reduced lead discharges.

14.5.2 Compensatory Education Costs This analysis assumes that compensatory education is required only for children with IQs less than 70, and that part time special education costs are assumed to be incurred only from grades 1 through 12 ( Section 14.2.4). This assumption underestimates compensatory education costs for the following reasons:

  Children with IQ scores between 70 and 85 will likely be assigned to special education or   slow  classes that will likely be smaller than regular classes and require more teacher attention. Children in this IQ range may frequently require more than 12 years to graduate and are more likely to drop out of school. Such children therefore require additional education costs.

  Compensatory education may begin before grade one. Some states ( e. g., Connecticut) offer compensatory education programs for disadvantaged children beginning at age three.

This analysis is based on a study that measured the increased cost to educate children with low IQs attending a regular school,

not a special education program ( Kakalik et al., 1981). The cost to attend a special education program is generally much higher than that for regular schooling.

Some overlap may exist between estimates of the avoided costs of compensatory education due to reduced incidence of children with IQ below 70 and PbB levels above 20   g/ dL because children with PbB levels may also have low IQ scores.

Estimating the magnitude of this overlap is, however, not feasible due to data paucity. In addition, the estimated avoided cost of compensatory education due to reduced incidence of children with PbB levels above 20   g/ dL is negligible compared to other benefits from reduced exposure to lead. Thus, this overlap does not introduce a significant bias in the estimate of total benefits from reduced exposure to lead to children.

14.5.3 Dose Response Relationships The dose response functions described for each health outcome considered above generally quantify the adverse health effects expected from increased lead exposure. For children, these effects are defined in terms of changes in PbB. For adults, these effects are estimated in terms of changes in BP, which are in turn related to changes in PbB levels. Uncertainty is inherent in the dose response functions, which are typically expressed in terms of the standard deviations of the dose response coefficients used in the analysis. Any uncertainty affecting the dose response coefficients will also indirectly affect the accuracy of this analysis.

14.5.4 Absorption Function for Ingested Lead in Fish Tissue Numerous research groups have evaluated lead absorption under a variety of conditions. ATSDR reports a range of three percent to 45 percent in the studies they present, which consider lead intake with and without food ( ATSDR, 1997).

Absorption appears to be affected by total lead intake, with some studies showing a higher absorption proportion with higher doses. Animal studies show a saturation effect, which modifies absorption.

Lead s chemical form also determines its absorption rate. For example, lead sulfide has approximately 10 percent of the bioavailability of lead acetate ( ATSDR, 1997). Particle size and solubility are also important absorption factors. EPA could not obtain data to describe lead s precise chemical form, particle size, and other physical parameters in fish tissue, which would allow more refined absorption estimates. These characteristics vary because MP& M facilities produce lead using different processes and release it in different forms.

An individual s nutritional status also affects lead absorption rates. People who are malnourished, particularly with respect to calcium and iron, have high absorption rates ( ATSDR, 1997). EPA assumed that anglers were not malnourished, and made no adjustment for their nutritional status. See the section on lead absorption in Maddaloni ( 1998) for a discussion of factors influencing absorption. In the absence of data on lead incorporated into food, EPA considered data from studies of lead absorption during meals to be the most appropriate data to use in estimating absorption.

14 32 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits 14.5.5 Economic Valuation This analysis used IQ differentials to represent cognitive damage to children resulting from lead exposure. The economic analysis relates IQ level to annual earnings, which serve as the basis for valuing benefits from reduced lead exposure. IQ differentials are used rather than WTP, the preferred measure to use, because WTP values to avoid cognitive damage are not available. This analysis likely underestimates the value of an IQ point because special education and lost wages form only a portion of the costs associated with lost cognitive functioning. A simple IQ change analysis does not capture all the ways in which a child, family, and society are affected by the effects of lead induced cognitive damage.

Dollar values associated with most of the adult health and welfare endpoints represent only some components of society s WTP to avoid these health effects. EPA used COI estimates to value reductions in CHD events, strokes, and hypertension.

These values are likely to be downward biased because the value of pain and suffering avoided is not included. Employed alone, these monetized effects will underestimate society's WTP.

14 33 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits Table 14.9: Key Omissions, Biases, and Uncertainties in the Lead Benefit Analysis Omissions/ Biases/

Uncertainties Directional Impact on Benefits Estimates Comments Excluding older children downward New research suggests that older children may be a hypersensitive sub

population, as children aged 0 to 7 are now considered. Excluding this sub population from the analysis may significantly underestimate benefits from reduced lead discharges.

Compensatory education costs uncertain Assuming that compensatory education is required only for children with IQs less than 70 and that part time special education costs are incurred from grades 1 through 12 underestimates the special education costs because:

  Children with IQ scores between 70 and 85 will likely be assigned to special education or   slow  classes, requiring more teacher attention, and taking longer to graduate or dropping out altogether.

  Compensatory education may begin before grade one.

  The cost to attend a special education program is generally much higher than that for regular schooling.

A potential overlap exists between estimates of the avoided costs of compensatory education due to reduced incidence of children with IQ below 70 and PbB levels above 20 g/ dL because children with PbB levels may also have low IQ scores. This overlap may introduce an upward bias in the estimate of the lead related benefits to children. This bias is, however, negligible due to the magnitude of the avoided compensatory education cost estimates.

Dose response relationship uncertain Uncertainty is inherent in the dose response functions ( expressed in changes in PbB for children, changes in BP for adults). response coefficients will also indirectly affect the accuracy of this analysis.

Absorption factor for lead in fish tissue uncertain Absorption rate appears to be affected by:

  total lead intake, with some studies showing a higher absorption proportion with higher doses;

  lead s chemical form. Because MP& M facilities produce lead using different processes and release it in different forms, EPA could not obtain data to describe lead s precise chemical form, particle size, and other physical parameters in fish tissue, which would allow more refined absorption estimates;

  an individual s nutritional status; and   time of lead ingestion. absence of data on lead incorporated into food, EPA considered data from studies of lead absorption during meals to be the most appropriate data to use in estimating absorption.

Economic valuation downward The values associated with cognitive damage to children and adult health effects are likely to be downward biased. children, a simple IQ change analysis does not capture all effects of lead induced IQ loss on a child, family, and society. luation of adults  health effects from lead exposure do not include the value of avoided pain and suffering.

monetized effects will underestimate society's WTP.

Overall impact downward Any uncertainty affecting the dose

In the For The va Employed alone, these Source: U. S. EPA analysis.

14 34 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits GLOSSARY absolute gastrointestinal absorption fraction: the fraction of lead in food ingested daily that is absorbed from the gastrointestinal tract.

acute toxicity: the ability of a substance to cause severe biological harm or death soon after a single exposure or dose.

Also, any poisonous effect resulting from a single short term exposure to a toxic substance.

( http:// www. epa. gov/ OCEPAterms/ aterms. html)

angina pectoris: a syndrome characterized by paroxysmal, constricting pain below the sternum, most easily precipitated by exertion or excitement and caused by ischemia of the heart muscle, usually due to a coronary artery disease, as arteriosclerosis. ( www. infoplease. com)

arithmetic mean: the mean obtained by adding several quantities together and dividing the sum by the number of quantities. ( www. infoplease. com)

atherothrombotic brain infarctions ( BI): scientific name for a stroke.

bioavailability: degree of ability to be absorbed and ready to interact in organism metabolism.

( http:// www. epa. gov/ OCEPAterms/ bterms. html)

biokinetics: the study of movements of or within organisms. ( www. infoplease. com)

biomarker: a physical, functional, or biochemical indicator of a certain process or event. It is commonly used to measure the progress of a disease, the effects of treatment, or the status of a condition.

blood lead ( PbB): concentration level of lead in blood stream; usually expressed in   g/ dL.

blood pressure: the pressure of the blood against the inner walls of the blood vessels, varying in different parts of the body during different phases of contraction of the heart and under different conditions of health, exertion, etc.

( www. infoplease. com)

central tendency estimate: major trend in group of data.

cerebrovascular accident ( CBA): stroke.

coronary heart disease ( CHD): disorder that restricts blood supply to the heart; occurs when coronary arteries become narrowed or clogged due to the build up of cholesterol and fat on the inside walls and are unable supply enough blood to the heart.

diastolic: pertaining to or produced by diastole, or ( of blood pressure) indicating the arterial pressure during the interval between heartbeats. ( www. infoplease. com)

discounting: degree to which future dollars are discounted relative to current dollars. Economic analysis generally assumes that a given unit of benefit or cost matters more if it is experienced now than if it occurs in the future. The present is more important due to impatience, uncertainty, and the productivity of capital. This analysis uses a three percent discount rate to discount future benefits. ( http:// www. damagevaluation. com/ glossary)

dose response: shifts in toxicological responses of an individual ( such as alterations in severity) or populations ( such as alterations in incidence) that are related to changes in the dose of any given substance.

dose response assessment: 1. Estimating the potency of a chemical. 2. In exposure assessment, the process of determining the relationship between the dose of a stressor and a specific biological response. 3. Evaluating the quantitative relationship between dose and toxicological responses.

14 35 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits dose response curve: graphical representation of the relationship between the dose of a stressor and the biological response thereto.

dose response functions: see dose response relationship.

dose response relationship: the quantitative relationship between the amount of exposure to a substance and the extent of toxic injury or disease produced. ( http:// www. epa. gov/ OCEPAterms/ dterms. html)

encephalopathy: any brain disease. ( www. infoplease. com)

GDP price deflator: measure of the percentage increase in the average price of products in GDP over a certain base year published by the Commerce Department. ( http:// www. damagevaluation. com/ glossary. htm)

genotoxic: may cause chromosomal damage in humans leading to birth defects.

geometric mean ( GM): for a set of n numbers { x1, x2, x3, ..., xn} it is the n th root of their product: ( x1 * x2* x3 ... xn) 1/ n.

geometric standard deviation ( GSD): a measure of the inter individual variability in blood lead concentrations in a population whose members are exposed to the same environmental lead levels. For a lognormal distribution, GSD is the exponential of the standard deviation of the associated normal distribution.

half life: time required for a living tissue, organ, or organism to eliminate one half of a substance which has been introduced into it.

health endpoints: an observable or measurable biological event or chemical concentration ( e. g., metabolite concentration in a target tissue) used as an index of an effect of a chemical exposure.

heme synthesis: creation of heme; an iron compound of protoporphyrin which constitutes the pigment portion or protein

free part of the hemoglobin molecule and is responsible for its oxygen carrying properties.

Integrated Exposure, Uptake, and Biokinetics ( IEUBK): the IEUBK model is an exposure response model that uses children s environmental lead exposure to estimate risk of elevated blood lead ( typically> 10   g/ dL) through estimation of lead body burdens in mass balance framework.

least squares regression: a tool of regression analysis that computes a best fit line to represent the relationship between two ( or more) variables based on the principle that the squared deviations of the observed points from that line are minimized ( see also: regression analysis).

lognormal distribution: a distribution of a random variable for which the logarithm of the variable has a normal distribution. ( www. infoplease. com)

lognormally distributed random variable: same as lognormal distribution.

marginal cost: the increase in total costs as one more unit is produced. ( http:// www. damagevaluation. com/ glossary. htm)

multivariate: ( of a combined distribution) having more than one variate or variable. ( www. infoplease. com)

nephropathy: any kidney disease. ( www. infoplease. com)

neurobehavioral deficits: neurologic effects as assessed by observation of behavior. These effects may include behavioral and attentional difficulties, delayed mental development, lack of motor and perceptual skills, and hyperactivity.

neurobehavioral function: see neurobehavioral deficits.

non cancer health risks: include systemic effects, reproductive toxicity, and developmental toxicity.

normal distribution: a random variable X is normally distributed if its density is given by f x ( x) = f( x;   ,   ) , where   and   are the mean and the variance of the distribution.

14 36 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits opportunity cost: the highest valued sacrifice needed to get a good or service.

( http:// www. damagevaluation. com/ glossary. htm)

p value: the probability of obtaining a given outcome due to chance alone. For example, a study result with a significance level of p< 0.05 implies that 5 times out of 100 the result could have occurred by chance.

( http:// www. teleport. com/~ celinec/ glossary. htm)

pharmacokinetics: the study of the way drugs move through the body after they are swallowed or injected.

( http:// www. epa. gov/ OCEPAterms/ pterms. html)

probability distribution: a distribution of all possible values of a random variable together with an indication of their probabilities. ( www. infoplease. com)

probit regression: a regression model, where the dependent variable is set up as a 0 1 dummy variable and regressed on the explanatory variables. The predicted value of the dependent variable could be interpreted as the probability that a certain event will take place ( e. g., an individual will buy a car, visit a particular location, or get a specific disease).

quasi steady state: almost not changing state.

regression analysis: a procedure for determining a relationship between a dependent variable, such as predicted success in college, and an independent variable, such as a score on a scholastic aptitude test, for a given population. The relationship is expressed as an equation for a line. ( www. infoplease. com)

risk based remediation goals ( RBRG): target human health and environmental risk levels to be achieved via remedial actions at Superfund sites.

Technical Review Workgroup ( TRW): a workgroup formed in 1994 to evaluate methodologies for adult lead risk assessment.

  g/ L: microgram per liter   g/ dL: microgram per decaliter willingness to pay ( WTP): maximum amount of money one would give up to buy some good.

( http:// www. damagevaluation. com/ glossary. htm)

14 37 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits ACRONYMS ATSDR: Agency for Toxic Substances and Disease Registry BI: atherothrombotic brain infarction BP: blood pressure CARB: California Air Resources Board CBA: cerebrovascular accidents CDC: Centers for Disease Control CEPA: California Environmental Protection Agency CHD: coronary heart disease COI: cost of illness GM: geometric mean GSD: geometric standard deviation IEUBK: Integrated Exposure, Uptake, and Biokinetics NHANES: National Health and Nutrition Examination Surveys NLSY: National Longitudinal Survey of Youth PbB: blood lead PPRG: Pooling Project Research Group RBRG: risk based remediation goals TRW: Technical Review Workgroup WTP: willingness to pay 14 38 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits REFERENCES Anwar, Wagida A. 1994.   Monitoring of Human Populations at Risk by Different Cytogenetic End Points.  Environmental Health Perspectives, 102 ( Supplement 4), October: 131 134.

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14 42 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits Ward N., R. Watson, and D. Bryce Smith. 1987. " Placental Element Levels in Relation to Fetal Development for Obstetrically Normal Births: A Study of 37 Elements: Evidence for the Effects of Cadmium, Lead, and Zinc on Fetal Growth and for Smoking as a Source of Cadmium.  Int J Biosoc Res 9: 63 81.

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14 43 MP& M EEBA Part III: Benefits Chapter 14: Lead Related Benefits THIS PAGE INTENTIONALLY LEFT BLANK 14 44 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits INTRODUCTION The final Metal Product and Machinery ( MP& M)

regulation is expected to provide ecological benefits through improvements in the habitats or ecosystems ( aquatic and terrestrial) that are affected by the MP& M industry discharges. Society is expected to value such ecological improvements by a number of mechanisms, including increased frequency and value of use of the improved habitat for recreational activities. In addition, individuals may also value the protection of habitats and species that are adversely affected by effluent dischargers even when they do not use or anticipate future use of the affected waterways for recreational or other purposes.

This chapter presents EPA s analysis of ecological benefits from reduced effluent discharges to the nation s waterways as a result of the final MP& M regulation, the 433 Upgrade Options, and the Proposed/ NODA option. EPA assessed ecological benefits in terms of reduced occurrence of pollutant concentrations in excess of AWQC protective of aquatic life and human health. For this analysis, EPA estimated the in waterway pollutant concentrations of MP& M facility discharges for the baseline and the final rule and identified those reaches in which MP& M facility discharges would cause one or more pollutant concentrations to exceed ambient water quality criteria ( AWQC) for aquatic species and human health. 1, 2 The change in the number of reaches with concentrations in excess of AWQC from the baseline to post compliance scenarios provides a quantitative measure of the improvement in aquatic species habitat expected to result from the final regulation. Chapter 15: Recreational Benefits CHAPTER CONTENTS 15.1 al Improvements from the MP& M Regulation ................. ..... 15 3 15.1.1 iew of Ecological Improvements ..... 15 3 15.1.2 ication of Ecological Improvements . . 15 3 15.1.3 ................. ... 15 4 15.1.4 of MP& M Reaches15 6 15.2 onomic Recreational Benefits ........ 15 6 15.2.1 ferring Values from Surface Water Valuation Studies ................. ...... 15 6 15.2.2 ational Fishing ................. .. 15 9 15.2.3 e Viewing ................. .... 15 13 15.2.4 ational Boating ................. . 15 17 15.2.5 nefits ................. ..... 15 20 15.3 ary of Recreational Benefits ............ 15 20 15.4 itations and Uncertainties Associated with Estimating Recreational Benefits .......... 15 22 Glossary ................. ................. ... 15 26 Acronyms ................. ................. .. 15 28 References ................. ................. . 15 29 Ecologic Overv Quantif Benefiting Reaches Geographic Characteristics Valuing Ec Trans Recre Wildlif Recre Nonuse Be Summ Lim As discussed in Chapter 12, EPA performed all benefits analysis on a basis of the sample facility data. The Agency then extrapolated findings from the sample facility analyses to the national level using two alternative extrapolation methods: ( 1)

traditional extrapolation and ( 2) post stratification extrapolation. EPA also used the differential extrapolation technique in addition to both traditional and post stratification approaches when a sample reach was estimated to receive discharges from multiple facilities. Appendix G provides detailed information on the extrapolation approaches used in this analysis.

Reducing concentrations of MP& M pollutants to below AWQC limits for protection of aquatic species and human health will generate benefits to users of water resources for recreation, including anglers, boaters, and viewers. These benefits include:

  increased value of the recreational trip or day, and   increased number of days that consumers of water based recreation choose to visit the cleaner waterways.

1 For this analysis, a reach is a length of river, shoreline, or coastline on which a pollutant discharge may be expected to have a relatively uniform effect on concentrations. The typical length of a reach in this analysis was five to ten kilometers, although some were considerably longer.

2 AWQC set limits on pollutant concentrations that are assumed to be protective of aquatic life. Pollutant concentrations that exceed AWQC can harm organisms that live in or consume water. MP& M pollutants can also harm other organisms that consume these organisms. These organisms at risk include humans who may recreate in contaminated waters or consume aquatic organisms living in them.

15 1 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits EPA estimated national annual recreational use benefits for three water based recreation activities ( i. e., recreational fishing,

boating, and viewing) and nonuse benefits, but did not estimate national swimming benefits due to data limitations. 3 EPA estimated the following recreational use benefits of the final MP& M rule ( 2001$):

  recreational fishing benefits range from $ 287,220 to $ 923,988 and from $ 187,123 to $ 601,976, based on the traditional and post stratification extrapolation, respectively;

  near water recreation ( viewing) benefits range from $ 185,172 to $ 334,315 and from $ 120,639 to $ 217,805, based on the traditional and post stratification extrapolation, respectively; and   boating benefits range from $ 114,111 to $ 316,078 and from $ 74,343 to $ 205,924, based on the traditional and post

stratification extrapolation, respectively.

EPA also estimated nonuse benefits from improved water quality in the nation s surface water resulting from the final rule.

Empirical estimates from surface water valuation studies indicate that nonuse values for water resources may be substantial because people who do not use or expect to use affected waterways for recreational or other purposes may still value protecting habitats and species impacted by effluent discharges ( Harpman, et al., 1993; Fisher and Raucher, 1984; Brown,

1993). The Agency estimated that nonuse benefits will range from $ 293,252 to $ 787,190 and from $ 191,053 to $ 512,852,

based on the traditional and post stratification extrapolation, respectively.

EPA calculated the total value of enhanced water based recreation opportunities by summing over the three recreation categories and nonuser value. Since recreational trips corresponding to fishing, boating, and wildlife viewing considered in this analysis are stochastically independent ( i. e., only the primary activity is counted on each trip occasion), benefits from improved recreational opportunities corresponding to these activities are additive. The total annual recreational benefit based on the traditional extrapolation is estimated at $ 879,755 to $ 2,361,570 ( 2001$), with a midpoint estimate of $ 1,499,756 ( 2001$). Likewise, total annual recreational benefit based on the post stratification extrapolation is estimated at $ 573,158 to $ 1,538,557 ( 2001$), with a midpoint estimate of $ 977,087 ( 2001$).

The analysis of recreational benefits presented in this chapter uses the National Demand Study ( NDS) data to estimate the number of participants in wildlife viewing and boating in the counties affected by MP& M discharges. 4 To estimate the number of recreational fishermen, EPA used fishing license data. The NDS survey asked respondents to report the number of recreational trips taken annually for the primary purpose of boating and wildlife viewing. The Agency used these data to estimate the number of participants and the number of recreational trips taken annually by state and activity type.

Appendix N summarizes this information.

EPA chose to use fish license data rather than the NDS data to estimate the number of recreational anglers fishing the MP& M reaches because these data are often available at the county level and therefore provide location specific information.

Although the use of the NDS and fish license data yields similar estimates of the number of recreational anglers at the state level ( see Chapter 21) fish license data are likely to be more accurate at the county level. The use of the fish license data in the recreational fishing benefit analysis also provides consistency with other parts of the benefits analysis ( see Chapters 13 and 14 for detail).

Benefit categories examined in this chapter are different from and generally do not overlap with benefits associated with reduced risk to human health discussed in Chapter 13. Nevertheless, there is some likelihood that the valuation of ecological benefits based on enhanced recreational fishing overlaps to a degree with the valuation of human health benefits from reduced cancer risk via fish consumption.

3 Fewer water bodies are designated for primary contact recreation, such as swimming, than for secondary contact recreation, such as boating and fishing. Assessing recreational swimming benefits requires first obtaining information on designated uses of the sample MP& M reaches from the 305( b) database. This analysis was not feasible due to resource and time constraints.

4 Additional information on the NDS survey can be found in Chapter 21.

15 2 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits 15.1 ECOLOGICAL IMPROVEMENTS FROM THE MP& M REGULATION 15.1.1 Overview of Ecological Improvements Many M P& M pollutants can adversely affect the survival, growth, and reproduction of aquatic organisms. Such effects are ecologically significant when they affect the size, structure, or function of populations:

  MP& M pollutants can affect population size by reducing prey, and by affecting development or reproduction in sensitive life stages of target species;

  MP & M pollutants can alter population structure by impairing sensitive age groups or affecting the development or maturation rates of target species; and   MP& M pollutants can impact population function by decreasing genetic diversity and changing interactions among different populations in the affected areas.

MP& M pollutants may also contaminate fish tissue and therefore decrease the value of fishery resources. Thus, the final MP& M regulation may generate a broad range of ecological effects by reducing MP& M pollutant discharges. Ecological effects associated with reductions in MP& M discharges may include:

  recovery of populations of aquatic species that are particularly sensitive to MP& M pollutants;

  decreases in noxious algae, which affect the taste and odor of the receiving waters;

  increases in the concentrations of dissolved oxygen ( DO) in the water column;

  improvements in the natural assimilative capacity of the affected waterways;

  decreases in fish tissue contamination; and   terrestrial life benefits.

Improvements in aquatic species habitat are expected to improve the quality and value of water based recreation and nonuse values of the affected resources. Recent studies valuing recreational fishing showed that the value of water resources for recreational fishing increases as the level of toxic contamination in fish tissue decreases ( Lyke, 1993; Phaneuf et al., 1998;

and Jakus et al., 1997). Thus, knowing that the water is cleaner and does not contain any or contains fewer pollutants that harm humans and aquatic life, increases individuals  enjoyment of their recreational experience. The value of a recreational fishery also increases from increased number, size, diversity, and health of recreational fish species.

Participants in other water based recreation, such as boating and wildlife viewing, will also benefit from improved abundance and diversity of aquatic and terrestrial species. For example, wildlife viewers may benefit from improved abundance of piscivorous birds ( e. g., osprey and cormorants) whose population is likely to increase due to an increase in the forage fish populations. Boaters may benefit from enhanced opportunities for companion activities, such as fishing and wildlife viewing ( e. g., piscivorous birds) and from improved water clarity and smell. Reducing conventional pollutant loadings will also improve visual aesthetics, thereby enhancing all water based recreation experiences.

15.1.2 Quantification of Ecological Improvements EPA evaluated potential impacts to aquatic life from the final MP& M regulation by estimating in waterway concentrations of pollutants discharged by MP& M facilities and comparing those concentrations within AWQC limits for protection of aquatic species. Pollutant concentrations in excess of AWQC limits indicate a significant detriment to the aquatic species habitat.

EPA expects that eliminating these exceedances as the result of the MP& M regulation will significantly improve aquatic species habitat and thus provide a quantitative measure of ecological benefit for this regulatory analysis.

15 3 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits For this analysis, EPA estimated in waterway concentrations for all MP& M pollutants for which AWQC limits are available.

Of the 132 MP& M pollutants of concern, AWQC values are available for 114 pollutants. 5 Table I. 3 in Appendix I lists the pollutants evaluated in this analysis and their acute and chronic aquatic life AWQC. The acute value is the maximum allowable one hour average concentration at any time at which aquatic life can survive. The chronic value is the average concentration of a toxic pollutant over a four day period at which aquatic life is not unacceptably affected. The endpoints of concern are one or more sub lethal responses, such as changes in reproduction or growth in the affected organisms. The chronic levels should not be exceeded more than once every three years.

EPA used the mixing and dilution methods outlined in Appendix I to estimate the in waterway concentrations resulting from MP& M facility discharges. Acute and chronic exposure concentrations for each pollutant are calculated on the basis of 7Q10 and 1Q10 stream flow rates, where 7Q10 is the lowest consecutive seven day average flow with a recurrence interval of ten years, and 1Q10 is the lowest one day average flow with a recurrence interval of ten years. For reaches to which more than one sample MP& M facility discharge, EPA summed the discharge values by pollutant for all known sample facilities discharging to the reach.

EPA first identified the MP& M discharge reaches in which MP& M discharges alone caused one or more pollutant concentrations to exceed AWQC limits for aquatic species under the baseline discharge level. If concentrations of all MP& M pollutants exceeding the limits in the baseline fell below AWQC limits as a result of the final rule, then aquatic species habitat conditions on that discharge reach would likely improve significantly as a result of the final regulation. The final regulation would result in partial aquatic habitat improvements if concentrations of some, but not all, MP& M pollutants fell below their AW QC limits. Although not explicitly accounted for in this analysis, species habitat conditions are likely to improve whenever in waterway concentrations are reduced, regardless of whether or not they fall to levels below aquatic AWQC.

EPA s analysis based on the traditional extrapolation method indicates that pollutant concentrations at current industry discharge levels exceed acute exposure criteria for protection of aquatic species on 18 receiving reaches, and exceed chronic exposure criteria for protection of aquatic species on 353 receiving reaches. 6 EPA estimates that the final rule would eliminate concentrations in excess of the acute aquatic life exposure criteria on nine reaches, and would eliminate concentrations in excess of the chronic aquatic life exposure criteria on nine reaches.

Similarly, EPA s analysis based on the post stratification extrapolation method indicates that baseline pollutant concentrations at current industry discharge levels exceed acute exposure criteria for protection of aquatic species on 15 reaches, and exceed chronic exposure criteria for protection of aquatic species on 350 reaches. EPA estimates that the final rule would eliminate concentrations in excess of the acute aquatic life exposure criteria on six reaches, and would eliminate concentrations in excess of the chronic aquatic life exposure criteria on six reaches. Table 15.1 summarizes these results.

15.1.3 Benefiting Reaches As a first step in estimating the monetary value of improvements in the aquatic habitats affected by MP& M discharges from the final MP& M rule, EPA identified reaches that are likely to experience significant water quality improvements from reduced MP& M discharges due to the final MP& M rule ( hereafter, benefiting reaches). A reach is considered to benefit from the MP& M rule if at least one AWQC exceedance is eliminated due to reduced MP& M discharges. This approach differs from some past approaches where EPA took credit for pollution reductions only in cases where all AWQC exceedances are eliminated. EPA believes that the latter approach significantly underestimates benefits from reduced pollutant discharges.

This analysis combines two AWQC calculation procedures:

  analysis of in waterway concentrations relative to human health AWQC limits described in Chapter 13,7 and 5 Facilities in the Oily Wastes subcategory discharge 122 of the 132 POCs evaluated. See Chapter 12 for detail.

6 This analysis used baseline pollutant loads for direct and indirect dischargers belonging to all subcategories considered for regulation.

7 Although EPA estimated the value of reduced cancer risk from consumption of contaminated fish tissue, the Agency was unable to estimate the value of reduced systemic risk from consumption of fish caught in the reaches affected by MP& M discharges ( see Chapter 13).

The recreational benefits analysis presented in the following sections assumes that some of the value of reduced systemic health risk is implicitly captured in the increased value of water resources from reduced occurrence of human health based AWQC exceedances. For 15 4 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits   analysis of in waterway concentrations relative to aquatic life AWQC limits described in the preceding section of this chapter.

Table 15.1 summarizes the number of reaches with estimated baseline concentrations that exceed AWQC limits for either human health or aquatic species, and the number of those reaches where the regulation is estimated to eliminate or reduce exceedances. Based on the traditional extrapolation, the combined analysis over all AWQC limit categories ( i. e., acute and chronic aquatic life and human health) indicates that MP& M pollutant concentrations would exceed at least one AWQC limit on 395 reaches as the result of baseline MP& M discharges. The expected discharge reductions from the final rule eliminate exceedances on nine of these discharge reaches, leaving 386 reaches with concentrations of one or more pollutants that exceed AW QC limits.

Likewise, based on the post stratification extrapolation, the combined analysis indicates that MP& M pollutant concentrations would exceed at least one AWQC limit on 426 reaches as the result of baseline MP& M discharges. The expected discharge reductions from the final rule eliminate exceedances on six of these discharge reaches, leaving 420 reaches with concentrations of one or more pollutants that exceed AWQC limits.

EPA assigned full benefits in situations where the rule eliminates all AWQC exceedances and partial benefits where the rule eliminates one or more, but not all, AWQC exceedances. EPA calculates partial benefits as the ratio of the AWQC exceedances removed by reducing MP& M discharges to the total number of AWQC exceedances caused by MP& M facilities in the baseline. For example, if the MP& M rule removes seven out of a total ten baseline AWQC exceedances on a benefiting reach, the Agency attributes a 70 percent benefit to the MP& M regulation, where 100 percent would represent an   AWQC exceedance free  level.

Table 15.1: Estimated MP& M Discharge Reaches with MP& M Pollutant Concentrations in Excess of AWQC Limits for Protection of Aquatic Species or Human Health Regulatory Status Number of Reaches with Concentrations Exceeding AWQC Limits Total Number of Reaches with Concentrations Exceeding AWQC Limits Number of Benefiting Reaches AWQC Limits for Aquatic Species AWQC Limits for Human Health All AWQC Exceedances Eliminated Reaches with Some Exceedances EliminatedAcute Chronic H20 and Organisms Organisms Only Selected Option: Traditional Extrapolation Baseline 18 353 78 21 395 N/ A N/ A Final Option 9 344 78 21 386 9 0 Selected Option: Post Stratification Extrapolation Baseline 15 350 112 21 426 N/ A N/ A Final Option 9 344 112 21 420 6 0 Note: In the baseline, the total number of reaches with concentrations exceeding AWQC limits does not equal the sum of the numbers in the separate analysis categories because some reaches were estimated to have concentrations in excess of AWQC limits for more than one analysis category.

Source: U. S. EPA analysis Surface water valuation studies show that benefits from partial improvements are likely to be considerable. For example,

Carson and M itchell ( 1993) found that almost nine out of ten individuals indicated that   halfway  improvements are worth the same as a complete improvement in water quality. The remaining one out of ten individuals were willing to pay a reduced amount for partial improvements in water quality.

example, some studies showed that anglers place a much higher value on fishery resources that are safe for consumption ( Lyke, 1993 and Phaneuf, 1997).

15 5 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits The effects of partially removing AWQC exceedances, however, are difficult to generalize. The overall improvement in surface water quality from reduced toxic loadings will depend on the amount and duration of exceedances, together with the kinds of chemical( s) that are removed from the mixture by regulatory action. AWQC are developed on a chemical by chemical basis; they are not designed to assess the toxicity of multiple chemicals. In most cases, the toxicities of chemicals in a mixture are considered additive ( i. e., the total toxicity is the sum of the toxicities of the individual chemicals).

Total toxicity decreases by the amount of a chemical removed from the mixture. Benefits to sensitive aquatic species ( i. e.,

amphibians, fish, benthic invertebrates, zooplankton) could occur if the concentration of one chemical fell below its AWQC even when two or more other chemicals still were at or exceeding their respective AWQC. The reason is that the total toxic pressure in the receiving water decreases so that a smaller fraction of the most sensitive species remain affected. For example, consider a case in which three chemicals exceeding their chronic AWQC adversely affect 7 percent of all aquatic species in a receiving water. If certain species are particularly sensitive to one of the three chemicals, then eliminating the AWQC exceedance for this chemical would lower the percentage of sensitive species being adversely affected.

15.1.4 Geographic Characteristics of MP& M Reaches EPA cannot identify all of the specific reaches affected by MP& M facilities that reduce discharges under the final rule because location is known only for the facilities included in the random stratified sample. EPA assumes that facilities represented by the sample facility have the same environmental and geographic characteristics that affect benefits from the final rule. These characteristics include water body type and physical characteristics ( e. g., stream flow conditions),

populations residing near the water body, and the number of potential recreational users affected.

The analysis of the sample reach locations indicates that sample MP& M reaches tend to be located in heavily populated areas.

For example, approximately 35 percent of sample reaches receiving discharges from sample MP& M direct dischargers are located adjacent to counties with populations of at least 500 thousand residents. These reaches have a greater number of potential recreational users than do reaches in less populated areas.

15.2 VALUING ECONOMIC RECREATIONAL BENEFITS The final MP& M rule will improve aquatic habitats by reducing concentrations of priority ( i. e., toxic), nonconventional,

and conventional pollutants in water. In turn, these improvements will enhance the quality and value of water based recreation, such as fishing, wildlife viewing, camping, waterfowl hunting, and boating. The Agency used the estimated increase in the monetary value of recreational opportunities for fishing, boating, and wildlife viewing as a partial measure of the economic benefit to society from the improvements to aquatic species habitat expected to result from the final MP& M regulation. The Agency also estimated nonuse benefits from improvements in aquatic habitats and ecosystems that are affected by the MP& M industry discharges.

This analysis uses a benefits transfer approach to monetize changes in water resource recreational values for reaches affected by MP& M discharges. 8 This approach builds upon an analysis of applicable surface water valuation literature to estimate the total WTP value ( including both use and nonuse values) for improvements in surface water quality.

15.2.1 Transferring Values from Surface Water Valuation Studies EPA identified several surface water evaluation studies that quantified the effects of water quality improvements on various water based recreational activities. The Agency used the following technical criteria for evaluating study transferability ( Boyle and Bergstrom, 1990):

  The environmental change valued at the study site must be the same as the environmental quality change caused by the rule ( e. g., changes in toxic contamination vs changes in turbidity);

  The populations affected at the study site and at the policy site must be the same ( e. g., recreational users vs nonusers);

8 Benefits transfer involves the application of value estimates, functions, and/ or models developed in one context to address a similar resource valuation question in another context.

15 6 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits   The assignment of property rights at both sites must lead to the same theoretically appropriate welfare measure ( e. g.,

willingness to pay vs willingness to accept compensation).

In addition to the above criteria, the Agency considered authors' recommendations regarding robustness and theoretical soundness of various estimates.

Existing studies are unlikely to meet all of the above criteria. Boyle and Bergstrom ( 1990) reported that most researchers will likely encounter problems with at least one criterion. This analysis is no exception. The major limitation in performing the national analysis is the comparability of the water quality changes considered in the original studies with the water quality changes considered in this analysis. These comparisons are discussed below.

The Agency used eight of the most comparable studies and calculated the changes in recreation values resulting from water quality improvements ( as a percentage of the baseline value) implied by those studies. EPA took a simple mean of upper and lower bound estimates from these studies to derive a range of percentage changes in the water resource values due to water quality improvements. The studies used for benefits transfer in the MP& M regulatory analysis included Lyke ( 1993), Jakus et al. ( 1997), Montgomery and Needelman ( 1997), Phaneuf et al. ( 1998), Desvousges et al. ( 1987), Lant and Roberts ( 1990),

Farber and Griner ( 2000), and Tudor et al. ( 2002). Appendix K presents WTP values for various water quality improvements and summarizes EPA s reasoning for selecting specific WTP estimates for benefits transfer. Each of the eight studies and the WTP values selected for benefits transfer are discussed briefly below.

Lyke s ( 1993) study of the Wisconsin Great Lakes open water sport fishery showed that anglers may place a significantly higher value on a contaminant free fishery than on one with some level of contamination. Lyke estimated the value of the fishery to Great Lakes trout and salmon anglers if it were improved enough to be " completely free of contaminants that may threaten human health," and found that this value would add between 11 and 31 percent of the fishery s current value.

Jakus et al. ( 1997) used a repeated discrete choice travel cost ( TC) model to examine the impacts of sport fishing consumption advisories in eastern Tennessee. The model controlled for anglers  knowledge of advisories, the type of angler ( i. e., fish consumption vs. catch and release), and catch rate. The estimated welfare gain ( as a percentage of baseline) from cleaning up six reservoirs and removing these advisories ranges from six to 8 percent. These estimates are below Lyke s estimated 11 to 31 percent range, due to the difference in methodology used. The TC method captures use values only, while the combined TC and stated preferences method used in Lyke captures both the use and nonuse components of the resource value to users. Differences in the fisheries and user populations may also affect the estimated percentage changes in the resource value.

Montgomery and Needelman ( 1997) estimated benefits from removing   toxic  contamination from lakes and ponds in New York State. They used a binary variable as their primary water quality measure, which indicates whether the New York Department of Environmental Conservation considers water quality in a given lake to be impaired by toxic pollutants. The model controls for major causes of impairments other than   toxic  pollutants to separate the effects of various pollution problems that affect the fishing experience. The estimates from Montgomery and Needelman imply that removing   toxic

impairments in all New York lakes and ponds would increase recreational fishing value by 13.7 percent.

Phaneuf et al. ( 1998) studied angling in the Wisconsin Great Lakes. They estimated changes in recreational fishing values resulting from a 20 percent reduction of toxin levels in lake trout flesh. The study uses a TC model to value water quality improvements when corner solutions are present in the data. Corner solutions arise when consumers visit only a subset of the available recreation sites, setting their demand to zero for the remaining sites. Phaneuf et al. found that improved industrial and municipal waste management results in general water quality improvement. This improvement leads in turn to a 20 percent decrease in fish tissue toxin levels, yielding a welfare gain of $ 166.21 ( 2001$) per angler per year. 9 This estimate implies that recreational fishing values would increase by approximately 27.5 to 34.3 percent from reduced toxin levels. This analysis estimates use values only.

Desvousges et al. ( 1987) used findings from a contingent valuation ( CV) survey to estimate WTP for improved recreational fishing from enhanced water quality in the Pennsylvania portion of the Monongahela River. In a hypothetical market, each survey respondent was asked to provide an option price for different water quality changes, including   raising 9 The study used the 1989 survey data on recreational angling in Wisconsin s Great Lakes. Therefore, this analysis assumes that all estimates in the original study are in 1989 dollars.

15 7 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits the water quality from suitable for boating ( hereafter,   boatable  water) to a level where gamefish would survive ( hereafter,

  fishable  water).

In applying Desvousges et al. for the MP& M analysis, EPA assumed that reaches with AWQC exceedences under the baseline conditions are likely to support rough fishing but may not be clean enough to support gamefishing. Removing AWQC exceedences is therefore comparable to shifting water quality from " boatable" to " fishable." This is a relatively conservative assumption. Desvousges et al. found that improving water quality from   boatable  to   fishable  would yield a 5.9 to 7.9 percent increase in water resource value to recreational anglers.

Lant and Roberts ( 1990) used a CV study to estimate the recreational and nonuse benefits of improved water quality in selected Iowa and Illinois river basins. River quality was defined by means of an interval scale of   poor,    fair,    good,  and   excellent.  The authors defined   fair  water quality as adequate for boating and rough fishing and   good  water quality as adequate for gamefishing.

For the MP& M analysis, EPA assumes that eliminating AWQC exceedences is roughly equivalent to shifting water quality from " fair" to " good." The estimates from this study imply an increase of 9.7 to 13.1 percent in recreational fishing value from improving water quality from   fair  to   good.

Farber and Griner ( 2000) used a CV study to estimate changes in water resource values to users from various improvements in water quality in Pennsylvania. The study defines water quality as   polluted,    moderately polluted,  and   unpolluted

based on a water quality scale developed by EPA Region III:   Polluted  streams are unable to support aquatic life;

  moderately polluted  streams are somewhat unable to support aquatic life; and   unpolluted  streams adequately support aquatic life. Streams unable to support aquatic life ( i. e., " polluted") are likely to be affected by environmental stressors unrelated to MP& M discharges, such as acidity or severe oxygen depletion.

The MP& M analysis assumes that most streams affected by MP& M facility discharges are moderately polluted; i. e., these streams support aquatic life, but sensitive species may be adversely affected by MP& M pollutants that exceed AWQC values protective of aquatic life. Removing all AWQC exceedences would make such streams unpolluted. The estimates from this study imply that improving water quality from   moderately polluted  to   unpolluted  would yield an increase in recreation fishery value ranging from 3.9 to 9 percent.

Tudor et al. ( 2002) used a TC model to estimate changes in water resource recreation values resulting from eliminating 10 MP& M pollutant concentrations in excess of AWQC limits at recreation sites in Ohio. The study involves four recreation activities  fishing, boating, near water recreation, and swimming  and covers most recreationally important water bodies in all Ohio counties. The study considers two types of water quality effects from MP& M pollutants on consumers  decisions to visit a particular water body:

( 1) visible or otherwise perceivable effects ( e. g., turbidity and odor); and ( 2) " toxic" effects that are not directly perceivable by consumers.

Because priority and nonconventional pollutants at high enough concentrations may adversely affect aquatic species,   toxic

effects may be indirectly observable via species abundance and diversity. The study uses a dummy variable to account for effects of " toxic" MP& M pollutants, identifying recreation sites at which estimated concentrations of one or more MP& M pollutants exceed AWQC for protection of aquatic life. The study estimated that eliminating AWQC exceedances and reducing TKN concentrations would yield per trip benefits of $ 1.34, $ 1.78, $. 60, and $ 0.33 ( 2001$) from improved fishing,

boating, wildlife viewing, and swimming opportunities, respectively. The estimated changes in the recreational use value of Ohio water resources, are 0.77, 1.67, and 0.77 percent for fishing, boating, and wildlife viewing, respectively. This analysis estimates use values only.

With the exception of the Tudor et al. ( 2002) study, the types of water quality changes assessed in these studies are only roughly comparable to those studied in the MP& M analysis. Whereas the analysis of the final MP& M regulation and Tudor et al. ( 2002) assessed the impact of eliminating AWQC exceedances, the other studies used other measures of water quality improvement. EPA addressed the differences in measurement between the other studies and the MP& M analysis by linking 10 Preliminary results of this study were presented at the annual American Agricultural Economic Association meeting ( Tudor et al., 1999a) and at the annual Northeastern Agricultural and Resource Economic Association Meeting ( Tudor et al., 1999b). EPA subjected this study to a formal peer review by experts in the natural resource valuation field. The peer review concluded that EPA had done a competent job, especially given the available data. This study can be found in Chapter 21. The peer review report is in the docket for the rule.

15 8 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits water quality changes expected from the MP& M regulation to the type of water quality changes assessed in the other studies.

EPA assumed that eliminating AWQC exceedances is roughly comparable to the following discrete water quality changes: 11     achieving a contaminant free fishery;

  reducing the level of toxins in fish tissue;

  removing fish consumption advisories ( FCA); and   improving water quality from   boatable  to   fishable,  from   fair  to   good,  and from   moderately polluted  to   unpolluted.

The MP& M analysis uses the estimates derived from the eight surface water evaluation studies described above to calculate a range of national WTP values. The following sections present the methodology and relevant values used to estimate the value of improved fishing, wildlife viewing, and boating opportunities resulting from the MP& M regulation.

15.2.2 Recreational Fishing The MP& M rule will improve the recreational angling experience by reducing concentrations of priority, nonconventional,

and conventional contaminants in water. EPA estimated the benefits of these reductions by estimating:

  the number of recreational fishing days on benefiting reaches;

  the baseline fishery value of each benefiting reach; and   changes in recreational fishery value, using values from the available surface water valuation studies.

a. Number of recreational fishing days EPA calculated the annual number of person days of recreational fishing for each benefiting reach using a two step approach:

  Participating population The geographic area from which anglers would travel to fish a reach is assumed to include only those counties that abut a given reach. As noted in Chapter 13, this assumption is based on the finding in the 1991 N ational Survey of Fishing, Hunting,

and W ildlife Associated Recreation that 65 percent of anglers travel less than 50 miles to fish ( U. S. Department of the Interior, 1993). ND S data showed that recreational anglers travel from 20 to 66 miles to their destination, with an average one way travel distance of 30 miles. 12,13 EPA estimated the population participating in recreational fishing using the number of licensed fishermen in counties bordering MP& M discharge reaches using the following steps:

  assume that fishing activity among these anglers is distributed evenly among all reach miles within those counties;

  compute the length of the MP& M reach as a percentage of total reach miles within corresponding counties;

  multiply the estimated ratio by the total fishing population in counties abutting the reach to estimate the number of anglers who may fish an MP & M reach; and 11 Section 15.1.3 discusses a method used for estimating partial water quality improvements.

12 See Chapter 21 for detail on the NDS data.

13 These estimates exclude outliers.

15 9 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits   reduce the number of anglers by 20 percent in reaches where MP& M and other pollutants have required a fish consumption advisory. This reduction is an estimate of angler response to the presence of a fish consumption advisory. 14   Average number of fishing days Anglers generally participate in recreational fishing several times a year. The U. S. Fish and Wildlife Service ( FWS)

provides estimates of the average number of fishing days per angler in each state. The FWS estimates range from 10.5 days per angler in Arizona to 21.1 days per angler in Alabama for freshwater fishing, and 7.3 days per angler in Louisiana to 18.7 days per angler in Virginia for saltwater fishing. 15 EPA calculated the total number of angler days by multiplying the number of recreational anglers for each benefiting reach by the average number of fishing days for the reach ( based on the state in which the reach is located).

b. Baseline fishery value The net value of a recreational fishing day is the total value of the fishing day exclusive of any fishing related costs ( e. g.,

license fees, travel costs, bait, tackle, charter boats, etc.) incurred by the angler.

EPA used two recreational fishing valuation studies ( Bergstrom and Cordell ( 1991) and Walsh et al. ( 1992)) to calculate the net economic value per recreational fishing day under the baseline conditions. Both studies used a meta analysis of recreational fishery valuation studies to estimate per day values of the three types of recreational fishing: warmwater,

coldwater, and anadromous. Based on the two studies, EPA developed an average per day value for each type of recreational fishing. This analysis uses low and high average benefit values for fishing days of $ 28.11 and $ 60.43 ( 2001$) to estimate a range of the baseline fishery values.

Table 15.2: Baseline Values of Fishing Fishery Type Per day Value ( 2001$) a Average Per day Value ( 2001$) Bergstrom and Cordell ( 1991) b Walsh et al.

( 1992) c Warmwater $ 19.52 $ 36.70 $ 28.11 Coldwater $ 27.77 $ 47.71 $ 37.74 Anadromous $ 36.73 $ 84.15 $ 60.43 Range of above $ 28.11  $ 60.43 a Original study values were adjusted to 2001 dollars based on the relative change in CPI from 1987 to 2001.

b Study location: various U. S. locations. Estimating approach: meta analysis of TC studies. Study location: various U. S. locations. Estimating approach: meta analysis of CV and TC studies.

Source: U. S. EPA analysis EPA calculated the total baseline value for each fishery located on a benefiting reach by multiplying the estimated net value of a recreational fishing day by the total number of fishing days calculated in subsection ( a) above. Applying facility weights and summing over all benefiting reaches provides a total baseline recreational fishing value for MP& M reaches expected to benefit from the elimination of pollutant concentrations in excess of AWQC limits.

14 See Belton et al. ( 1986), Knuth and Velicer ( 1990), Silverman ( 1990), West ( 1989), Connelly et al. ( 1992), and Connelly and Knuth ( 1993) for more information on angler response to fish advisories.

15 These averages reflect participation levels in the 48 contiguous states. No sample facility is located in Hawaii or Alaska.

15 10 c MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits c. Changes in recreational fishery value Expected benefits from the final MP& M regulation include an increase in the quality of an angler s recreational opportunities and/ or the number of days an angler chooses to fish each season.

EPA assumes that the expected welfare gain for recreational anglers is a function of changes in the overall quality of all recreational opportunities available to each angler. Recreational anglers residing in the counties abutting MP& M reaches will therefore benefit from improved recreational opportunities whether or not they actually visit an MP& M reach.

EPA used the eight studies discussed above to calculate the changes in recreation values from water quality improvements ( as a percentage of baseline) implied by those studies. Table 15.3 compiles information on the baseline values, values of changes in water quality, and percentage changes in values reported or implied by these studies.

15 11 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits Table 15.3: Studies Estimating Changes in Value of a Recreational Fishery Study Type of Water Quality Change Valued Baseline Value of Recreational Angling ( 2001$) Value of Water Quality Change ( 2001$) Value of Change as % of Baseline Type of Benefits Included Lyke ( 1993) Fish tissue is completely free of toxic contaminants that may threaten human health $ 95.0$ 119.0 million per year a $ 10.5$ 37.1 million per year a 11%  31% a Use and nonuse values for recreational anglers Jakus et al.

( 1997) Lifting FCAs $ 26.0$ 52.6 per trip $ 2.0$ 3.2 per trip 6.0%  8.0% Use values for recreational anglers Montgomery and Needelman ( 1997) Elimination of toxic impairment $ 656.6 per angler per year b $ 90.3 per angler per year 13.7% Use values for recreational anglers Phaneuf at al.

( 1998) 20% reduction of toxic contamination in trout flesh $ 484.5  $ 605.8 per angler per year a $ 166.2 per angler per year 27.5%  34.3% Use values for recreational anglers Desvousges et al. ( 1987) Improvement from   boatable  to   fishable  $ 28.11 $ 37.73 per trip c $ 2.21 per trip d 5.9%  7.9% Recreational and nonuse values to users Lant and Roberts ( 1990) Improvement from   fair  to   good  $ 28.11 $ 37.73 per trip c $ 3.67 per trip e 9.7%  13.1% Recreational and nonuse values to users Farber and Griner ( 2000) Improvement from   moderately polluted

to   unpolluted  $ 28.11 $ 37.73 per trip c $ 1.49$ 2.55 per trip f 3.9%  9.0% Recreational use values to users and nonusers Tudor et al. ( 2002) g Elimination of AWQC exceedances $ 173.34 per trip $ 1.34 per trip 0.77% Use values for recreational anglers Average percentage change in recreational fishery value ( based on above studies) h 9.8%  14.7 % Recreational and nonuse values to users a The baseline fishery value for the study site location is based on the baseline fishery value reported in Lyke ( 1993). The study used data from two mail surveys conducted in 1989 at the University of Wisconsin Madison. These surveys were originally used by Lyke ( 1993).

b Based on the average value for a coldwater fishing day of $ 37.74 ( see Table 15.2), multiplied by the average number of freshwater ( non Great Lakes) angling days per year in New York State ( 17.4 days, USFWS, 1996).

Range based on the range of values for a fishing day used in this analysis ( see Table 15.2);

d Based on the value of water quality improvement of $ 36.79 per year ( updated from 1987 dollars reported in Desvousges et al., 1987).

divided by the average number of freshwater angling days per year in Pennsylvania ( 16.6 days, USFWS, 1996).

e Based on the value of water quality improvement of $ 57.81 per year ( updated from 1990 dollars reported in Lant and Roberts) divided by the average number of freshwater angling days per year in Iowa and Illinois ( 16.6 and 15.5 days, USFWS, 1996).

f Based on the values of water quality improvements ranging from $ 24.55 to $ 41.93 per year reported in Farber and Griner ( 2000),

divided by the average number of freshwater angling days per year in Pennsylvania ( 16.6 days, USFWS, 1996).

g See Chapter 21 of this report for detail. The baseline value of recreational fishery is based on the estimated mean value of water resources for recreational anglers reported by Tudor et al. ( 2002). The estimated median value of recreational fishing is $ 175.48. These values were derived from a September 23, 2002 analysis.

h EPA took a simple mean of lower and upper bound estimates from the eight studies to calculate a range of percentage changes in the recreational fishery value from improved water quality conditions. When only one value is available from the study ( i. e., Tudor et al.,

2002), EPA used this value in calculating both the lower and upper bound estimates.

Source: U. S. EPA analysis EPA used the percentage change in the fishery value implied by the eight studies to estimate increased recreational fishing values for all MP& M reaches in which the regulation eliminates AWQC exceedances of one or more MP& M pollutants. That is, the Agency estimated benefits for all MP& M discharge reaches where at least one AWQC exceedance is eliminated due to reduced MP& M discharges. As noted above, EPA took a simple mean of lower and upper bound estimates from the eight studies described above to calculate a range of percentage changes in the recreational fishery value from reduced MP& M discharges. These studies yielded estimates of increased value ranging from 9.8 to 14.7 percent. Multiplying these 15 12 c MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits percentages by the baseline value of fisheries located on benefiting reaches yielded a range of benefits from eliminating pollutant concentrations in excess of AWQC limits.

Table 15.4 below summarizes the results of EPA s recreational fishing benefits analysis.

Table 15.4: Summary of Recreational Fishing Benefits ( 2001$)

Number of Benefiting Reaches Participating Population ( millions) Average Number of Fishing Days Total Angler Days ( millions) Baseline Fishery Value/ Rec.

Day Baseline Fishery Value ($ millions) % Change in Fishery Value MP& M Benefits Selected Option: Traditional Extrapolation Low Estimate 9 0.98 17.3 16.98 $ 28.11 $ 477 9.8% $ 287,220 High Estimate 9 0.98 17.3 16.98 $ 60.43 $ 1,026 14.7% $ 923,988 Selected Option: Post Stratification Extrapolation Low Estimate 6 1.08 17.2 18.61 $ 28.11 $ 523 9.8% $ 187,123 High Estimate 6 1.08 17.2 18.61 $ 60.43 $ 1,125 14.7% $ 601,976 Source: U. S. EPA analysis 15.2.3 Wildlife Viewing EPA expects that water quality improvements from the MP& M regulation will decrease the uptake of pollutants through aquatic food chains. These changes are expected to increase the health and reproductive success of sensitive wildlife species that feed on fish and other aquatic organisms. In particular, Piscivorous ( i. e., fish eating) bird species such as the osprey ( Pandion haliaetus), bald eagle ( Haliaeetus leucocephalus), great blue heron ( Ardeidae herodias), mergansers ( Merginae sp.), and cormorants ( Phalacrocorax sp.) will benefit from increased numbers, size, and health of forage fish. Increased food and lower pollutant levels in fish flesh will improve reproduction in these birds, leading to healthier and larger bird populations. Reducing conventional pollutant loadings will also improve visual aesthetics, thereby enhancing wildlife viewing and other near water based recreation experiences, such as photography, camping, picnicking, and waterfowl hunting ( hereafter, this discussion refers to all of these activities as   wildlife viewing ).

As with the recreational fishing analysis, EPA assumes that the expected welfare gain for consumers of viewing activities is a function of changes in the overall quality of all recreational opportunities available to each consumer. Consumers of water

based recreation residing in the counties abutting MP& M reaches are therefore likely to benefit from improved recreational opportunities whether or not they actually visit an MP& M reach.

EPA estimated wildlife viewing benefits using an approach similar to that used in estimating recreational fishing benefits.

EPA estimated:

  the number of wildlife viewing days on benefiting reaches;

  the baseline value of wildlife viewing for each benefiting reach; and   changes in wildlife viewing value, using values from the available surface water valuation studies.

15 13 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits a. Number of wildlife viewing days EPA calculated the annual number of person days of wildlife viewing for each benefiting reach using a two step approach:

  Participating population The analysis of the NDS data showed that participants in viewing activities travel from 16 to 117 miles to their destination,

with an average one way travel distance of 34 miles. 16 EPA therefore assumes that improvements in recreational opportunities will benefit only recreational users residing within the counties abutting MP& M reaches. EPA estimated the population participating in viewing activities using the number of water based recreation consumers residing in the counties traversed by benefiting reaches using the following steps:

  estimate resident populations in the counties traversed by the benefiting reaches using Census data;

  calculate the number of wildlife viewing participants based on the percent of the population engaged in wildlife viewing activities;

  estimate the percentage of individuals that participate in wildlife viewing in each state using NDS data. The total state population participating in wildlife viewing ranges from 8.6 percent in New Mexico to 44.4 percent in Maine;

and   adjust the number of wildlife viewing participants within the affected county based on the ratio of the affected reach length to the number of total reach miles in the affected county to calculate the population potentially benefiting from the rule. 17,18   Average number of viewing days Recreators generally participate in wildlife viewing several times a year. The Agency used NDS data on the number of wildlife viewing trips to estimate the average number of user days in each state. The NDS data show that the number of wildlife viewing trips in the 48 states range from 1.8 days per user in South Dakota to 24.2 days per user in Mississippi. 19 EPA multiplied the number of wildlife viewing consumers by estimates of the average number of days per user in each state to estimate the annual number of user days for each benefiting MP& M reach.

b. Baseline value of wildlife viewing EPA estimated the baseline value of wildlife viewing for the benefiting reaches based on the estimated annual person days calculated in subsection ( a) above and the estimated value per person day of wildlife viewing.

EPA used two recreational activity valuation studies ( Bergstrom and Cordell ( 1991) and Walsh et al. ( 1992)) to calculate the net economic values per wildlife viewing day. These studies estimate net benefit values for four recreational activities:

wildlife viewing, waterfowl hunting, camping, and picnicking. Based on the two studies, EPA developed an average per day value for three of the four activities. 20 EPA s MP& M benefits analysis uses the lowest average benefit value, $ 22.73, for the low estimate of wildlife viewing benefits and the highest average value, $ 28.73, for the high estimate. Table 15.5 presents information on the relevant values reported in these studies.

Using facility sample weights and summing over all benefiting reaches provides the total baseline value of wildlife viewing for MP& M reaches that EPA expects to benefit by eliminating pollutant concentrations in excess of AWQC limits.

16 These estimates exclude outliers.

17 Information in EPA's Reach File 1 indicates that the ratio of affected reach length to the total number of reach miles within a county ranges from 0.02 to 0.39.

18 This analysis assumes that recreation activities among residents of the counties affected by MP& M discharges are distributed evenly across all reach miles within those counties.

19 See Chapter 21 for details on the NDS data.

20 EPA excluded the per day value of waterfowl hunting ($ 55.53) from the activities included in this analysis, because this activity is limited to designated hunting areas only.

15 14 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits Table 15.5: Baseline Values of Wildlife Viewing Recreational Activity Per day Value ( 2001$) a Average Per day Value ( 2001$) Bergstrom and Cordell ( 1991) b Walsh et al.

( 1992) c Camping $ 27.10 $ 30.38 $ 28.73 Picnicking $ 18.46 $ 27.00 $ 22.73 Near water Activities $ 20.07 $ 34.59 $ 27.33 Range of above $ 22.73  $ 28.73 a Original study values were adjusted to 2001 dollars based on the relative change in CPI from 1987 to 2001.

b Study location: various U. S. locations. Estimating approach: meta analysis of TC studies. Study location: various U. S. locations. Estimating approach: meta analysis of contingent valuation ( CV) and TC studies.

Source: U. S. EPA analysis c. Changes in wildlife viewing value EPA selected a subset of the candidate benefits transfer studies discussed in Section 15.2.1 to estimate changes in water resource value to wildlife viewers due to the MP& M rule. The four selected studies include Tudor et al. ( 2002), Desvousges et al. ( 1987), Lant and Roberts ( 1990), and Farber and Griner ( 2000) 21 . Table 15.6 compiles information on the baseline values of wildlife viewing, values of changes in water quality, and percentage change in values reported or implied by these studies.

21 The remaining four studies value changes in the value recreational fishing only.

15 15 c MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits Table 15.6: Studies Estimating Changes in Value of Wildlife Viewing Study Water Quality Change Valued Baseline Value of Wildlife Viewing ( 2001$) Value of Water Quality Change ( 2001$) Value of Change as % of Baseline Type of Benefits Included Desvousges et al. ( 1987) Improvement from   boatable  to   fishable  $ 22.8  $ 28.7 per trip a $ 5.00 per trip b 17.4%  22.0% Recreational and nonuse values to users Lant and Roberts ( 1990) Improvement from   fair  to   good  $ 22.8  $ 28.7 per trip a $ 8.60 per trip c 29.9%  37.8% Recreational and nonuse values to users Farber and Griner ( 2000) Improvement from   moderately polluted

to   unpolluted  $ 22.8  $ 28.7 per trip a $ 3.33  $ 5.69 per trip d 11.6%  25.0% Recreational and nonuse values to users Tudor et al. ( 2002) Elimination of AWQC exceedances $ 77.99 per trip e $ 0.60 per trip 0.77% Recreational use values to users Average percentage change ( based on the above studies) f 14.9%  21.3%

a Based on the range of median values for a near water recreation day ( updated to 2001 dollars) reported in Walsh et al. ( 1992) and Bergstrom and Cordell ( 1991) ( see Table15.5).

b Based on the value of water quality improvement of $ 36.79 per person per year ( updated from 1987 dollars reported in Desvousges et al.) divided by the average number of near water recreation days per year in Pennsylvania ( 7.37 days, NDS, 1993). Based on the value of water quality improvement of $ 57.79 per year ( updated from 1990 dollars) reported in Lant and Roberts divided by the average number of near water recreation days per year in Iowa and Illinois ( 9.58 and 5.04 days, NDS, 1993).

d Based on the value of water quality improvements ranging from $ 24.55 to $ 41.93 per person per year reported in Farber and Griner ( 2000) divided by the average number of near water recreation days per year in Pennsylvania ( 7.37 days, NDS, 1993).

e The baseline value of viewing is based on the estimated mean value of water resources for wildlife viewers reported by Tudor et al. ( 2002). The estimated median value of recreational fishing is $ 82.77. These values were derived from a September 23, 2002 analysis.

f EPA took a simple mean of lower and upper bound estimates from the four studies to calculate a range of percentage changes in the wildlife viewing value from improved water quality conditions. When only one value is available from the study ( i. e., Tudor et al.,

2002), EPA used this value in calculating both the lower and upper bound estimates.

Source: U. S. EPA analysis This analysis uses the change of 14.9 percent for the low benefits estimate and 21.3 percent for the high benefits estimate to calculate benefits from reduced M P& M facility discharges to users of water based recreation. These values represent the average of the low and high values, respectively, estimated in the four studies.

Table 15.7 below summarizes the results of EPA s wildlife viewing benefits analysis.

15 16 c MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits Table 15.7: Summary of Wildlife Viewing Benefits ( 2001$)

Number of Benefiting Reaches Participating Population ( millions) Ave.

Number of Viewing Days Total Viewing Days ( millions) Baseline Value/ Rec.

Day Total Baseline Value ($ millions) % Change in Value Benefit from MP& M Selected Option: Traditional Extrapolation Low Estimate 9 3.12 7.5 23.52 $ 22.73 $ 535 14.9% $ 185,172 High Estimate 9 3.12 7.5 23.52 $ 28.73 $ 676 21.3% $ 334,315 Selected Option: Post Stratification Extrapolation Low Estimate 6 3.17 7.5 23.91 $ 22.73 $ 544 14.9% $ 120,639 High Estimate 6 3.17 7.5 23.91 $ 28.73 $ 687 21.3% $ 217,805 Source: U. S. EPA analysis.

15.2.4 Recreational Boating Improvements in water quality from the final MP& M rule may enhance recreational boating by ( 1) providing more opportunities for companion activities ( e. g., fishing and wildlife viewing) and ( 2) improving visual aesthetics. EPA assumes that the expected welfare gain for boaters is a function of changes in the overall quality of all recreational opportunities available to each boater on a given day.

This analysis estimates recreational boating benefits the same way as recreational fishing and wildlife viewing benefits. The analysis estimates:

  the number of recreational boating days on benefiting reaches,

  the baseline value of boating for each benefiting reach, and   changes in recreational boating value.

a. Number of recreational boating days EPA calculated the annual number of recreational boating days for each benefiting reach using two steps:

  Participating population The analysis of the NDS data showed that boaters travel from 10 to 108 miles to their destination, with an average one way travel distance of 32 miles. 22 This analysis therefore considers only boaters residing in the counties abutting MP& M reaches.

EPA estimated the number of boaters residing in the counties traversed by benefiting reaches by combining information from Census data and NDS data on the proportion of individuals participating in boating in each state. The percent of the total state population in the 48 states participating in boating ranges from 8.0 percent in Colorado to 28.7 percent in Washington.

EPA further adjusted the number of boaters likely to use MP& M reaches within the affected county based on the ratio of the affected reach length to the number of total reach miles in the affected county. 23 22 These estimates exclude outliers.

23 See section 13.1.1 for detail.

15 17 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits   Average number of boating days People using benefiting reaches for boating generally participate in this activity several times per year. The NDS data show the number of boating trips in the 48 states ranging from 3.2 days per user in New Hampshire to 14.6 days per user in Colorado.

EPA estimated the annual number of user days for recreational boating activities by multiplying the number of boaters by the average number of boating days per user in each state.

b. Baseline value of boating EPA estimated the baseline value of boating on benefiting reaches using the estimated annual person days of boating per reach and estimated values per person day of various types of boating. EPA calculated a range of net economic values per recreation day of boating based on studies by Bergstrom and Cordell ( 1991) and Walsh et al. ( 1992). Mean net benefit values for motorized and non motorized boating are $ 37.30 to $ 59.26 in 2001 dollars. Table 15.8 compiles information on the relevant values reported in these studies.

Table 15.8: Baseline Values of a Boating Day Recreational Activity Per day Value ( 2001$) a Average Per day Value ( 2001$) Bergstrom and Cordell ( 1991) b Walsh et al. ( 1992) c Motorized $ 25.43 $ 49.18 $ 37.30 Non motorized $ 42.67 $ 75.85 $ 59.26 Boating ( any type) $ 37.30  $ 59.26 a Original study values were adjusted to 2001 dollars based on the relative change in CPI from 1987 to 2001.

b Study location: various U. S. locations. Estimating approach: meta analysis of TC studies. Study location: various U. S. locations. Estimating approach: meta analysis of CV and TC studies.

Source: U. S. EPA analysis Weighting by facility sample weights and summing over all benefiting reaches provides a total baseline value of boating for MP& M reaches expected to benefit by eliminating pollutant concentrations in excess of AWQC limits.

c. Changes in recreational boating values The Agency used the same four studies discussed in Section 15.2.3 to calculate the change in per day boating value as a result of water quality improvements. EPA expressed this change as a percentage of the baseline value. Table 15.9 compiles information on the baseline values of boating, values of changes in water quality, and percentage change in boating values reported or implied by these studies.

15 18 c MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits Table 15.9: Studies Estimating Changes in Value of Recreational Boating Study Water Quality Change Valued Baseline Value of Boating ( 2001$) Value of Water Quality Change ( 2001$) Value of Change as % of Baseline Type of Benefits Included Desvousges et al. ( 1987) Improvement from   boatable  to   fishable  $ 37.30  $ 59.26 per trip a $ 3.92 per trip b 6.6%  10.5% Recreational and nonuse values to users Lant and Roberts ( 1990) Improvement from   fair  to   good  $ 37.30  $ 59.26 per trip a $ 7.91 per trip c 13.3%  21.2% Recreational use values to users and nonusers Farber and Griner ( 2000) Improvement from   moderately polluted  to   unpolluted  $ 37.30  $ 59.26 per trip a $ 2.62  $ 4.48 per trip d 4.4% 12.0% Recreational and nonuse values to users Tudor et al.

( 2002) Elimination of AWQC exceedances $ 106.60 per trip e $ 1.78 pr trip 1.67% Recreational values for users Average percentage change ( based on the above studies) f 6.5%  11.4%

a Based on the average value for a boating day ( updated to 2001 dollars) reported in Walsh et al. ( 1992) and Bergstrom and Cordell ( 1991).

b Based on the value of water quality improvement of $ 36.79 per person per year ( updated from 1987 dollars) reported in Desvousges et al. divided by the average number of boating days per year in Pennsylvania ( 9.37 days, NDS, 1993). Based on the value of water quality improvement of $ 57.79 per person per year ( updated from 1990 dollars) reported in Lant and Roberts divided by the average number of boating days per year in Iowa and Illinois ( 9.58 and 5.04 days, NDS, 1993).

d Based on the value of water quality improvements ranging from $ 24.55 to $ 41.93 per person per year reported in Farber and Griner ( 2000) divided by the average number of boating days per year in Pennsylvania ( 9.37 days, NDS, 1993).

e The baseline value of boating is based on the estimated mean value of water resources for boaters reported by Tudor et al. ( 2002). The estimated median value of recreational boating is $ 112.55. These values were derived from a September 23, 2002 analysis.

f EPA took a simple mean of lower and upper bound estimates from the four studies described to calculate a range of percentage changes in the recreational boating value from improved water quality. When only one value is available from the study ( i. e., Tudor et al., 2002), EPA used this value in calculating both the lower and upper bound estimates.

Source: U. S. EPA analysis This analysis uses the change of 6.5 percent for the low benefits estimate and 11.4 percent for the high benefits estimate to calculate benefits to boaters from reduced M P& M facility discharges. These values represent the average of the low and high values, respectively, estimated in the four studies.

Table 15.10 summarizes the results of EPA s recreational boating benefits analysis.

15 19 c MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits Table 15.10: Summary of Recreational Boating Benefits ( 2001$)

Number of Benefiting Reaches Participating Population ( millions) Ave.

Number of Boating Days Total Boating Days ( millions) Baseline Value/ Rec.

Day Total Baseline Value ($ millions) % Change in Value MP& M Benefits Selected Option: Traditional Extrapolation Low Estimate 9 2.53 8.3 21.06 $ 37.30 $ 786 6.5% $ 114,111 High Estimate 9 2.53 8.3 21.06 $ 59.26 $ 1,249 11.4% $ 316,078 Selected Option: Post Stratification Extrapolation Low Estimate 6 2.57 8.4 21.47 $ 37.30 $ 801 6.5% $ 74,343 High Estimate 6 2.57 8.4 21.47 $ 59.26 $ 1,272 11.4% $ 205,924 Source: U. S. EPA analysis.

15.2.5 Nonuse Benefits EPA estimated changes in nonuse values for this analysis because nonuse value is a sizeable portion of the total value of water resources. Individuals who never visit or otherwise use a natural resource may still be affected by changes in its status or quality. Empirical estimates indicate that such " nonuse values" may be substantial for some resources ( Harpman et al., 1993;

Fisher and Raucher, 1984; Brown, 1993). Most studies have found that nonuse values exceed use values. Brown reviewed 31 CV studies in which both use and nonuse values were estimated, and calculated the ratio of nonuse values to use values ( Brown, 1993). The goal of Brown s study was to assess consistency of ratios of use to nonuse value and to develop a basis for obtaining a rough estimate of nonuse value, and therefore total values, for the many studies that measured only use values.

His 31 estimated ratios range from 0.1 to 10, with the median ratio of 1.92. The ratios of nonuse to use values reported by Brown for the studies that valued environmental improvements in water resources range for users of those resources from 0.85 to 2.56. The estimated average ratio is 1.57. That is, for every dollar of annual use benefit value to users of the subject environmental resource, the annual nonuse value to resource users for the subject environmental resource is $ 1.57.

Carson and Mitchell suggested that nonuse benefits account for 19 to 39 percent of total WTP values for water quality improvements depending on the definition of nonuse values ( Carson and Mitchell, 1993). The ratio of nonuse to use value ranges from one fourth to two thirds based on the Carson and Mitchell study ( 1993). Fisher and Raucher ( 1984) found that nonuse benefits comprise one half of recreational use benefits.

EPA used findings from the Fisher and Raucher ( 1984) study in which nonuse values are estimated to be equal to 50 percent of use values to estimate nonuse benefits from the final MP& M regulation. The method has long been used by EPA as a pragmatic alternative to omitting nonuse values entirely. EPA acknowledges that this method is crude and nonuse values estimated by the 50 percent of use value approach are quite low given the applicable literature discussed above.

The Agency estimates that nonuse benefits from the final MP& M rule will range from $ 293,252 to $ 787,190 and from $ 191,053 to $ 512,852, based on the traditional and post stratification extrapolation, respectively.

15.3 SUMMARY OF RECREATIONAL BENEFITS EPA assumes that eliminating concentrations of MP& M pollutants in excess of AWQC limits will achieve water quality protective of aquatic life and human health. This improved water quality then generates benefits for both users and nonusers of water based recreation. These benefits can be seen as an increase in the value of each day spent on or near the waterway,

as well as an increase in the number of days spent on or near the waterway. EPA estimated the monetary value of improved water based recreational opportunity for the 9 discharge reaches based on the traditional extrapolation ( 6 reaches based on the post stratification extrapolation) for which concentrations in excess of AWQC limits would be eliminated.

15 20 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits EPA first estimated the number of recreational days on benefiting reaches for each water based activity. The Agency then calculated the baseline value of these activities and then calculated the percentage changes in this value stemming from water quality improvements.

EPA calculated partial benefits for reaches with reduced numbers of AWQC exceedances by adjusting the percentage increase in the recreational value of these reaches. EPA made these adjustments based on the ratio of the number of AWQC exceedances eliminated post compliance to the number of AWQC exceedances occurring at baseline.

Table 15.11 summarizes benefit estimates by recreational category for the final rule based on the traditional and post

stratification extrapolation methods. The activities considered in this analysis are stochastically independent; EPA calculated the total value of enhanced water based recreation opportunities by summing over the three recreation categories. EPA also estimated the changes in nonuse value resulting from reduced MP& M discharges based on the ratio of use to nonuse values implied by the Fisher and Raucher study ( Fisher and Raucher, 1984). Based on the traditional extrapolation, the estimated increase in nonuse value ranges from $ 0.29 to $ 0.79 million ( 2001$), with a midpoint value of $ 0.50 million ( 2001$). The resulting increased value of recreational activities to consumers ( users and nonusers) of water based recreation ranges from an estimated $ 0.59 to $ 1.57 million ( 2001$) annually. The estimated mean value of recreational benefits is $ 1.00 million ( 2001$) annually. Likewise, based on the post stratification extrapolation, the estimated increase in nonuse value ranges from $ 0.19 to $ 0.51 million ( 2001$), with a midpoint value of $ 0.33 million ( 2001$). The resulting increased value of recreational activities to consumers ( users and nonusers) of water based recreation ranges from an estimated $ 0.38 to $ 1.03 million ( 2001$) annually. The estimated mean value of recreational benefits is $ 0.65 million ( 2001$) annually.

Tables 15.12 and 15.13 summarize benefit estimates for the 433 Upgrade Options and Proposed/ NODA Option, respectively.

Recreational use and nonuse benefits are almost 200 times higher under the two 433 Upgrade Options, and over 430 times higher under the Proposed/ NO DA O ption.

Table 15.11: Estimated Recreational Benefits from Reduced MP& M Discharges ( Thousands, 2001$)

Recreational Activity Traditional Extrapolation Post Stratification Extrapolation Low Value Midpoint Value High Value Low Value Midpoint Value High Value Fishing $ 287 $ 537 $ 924 $ 187 $ 350 $ 602 Boating $ 114 $ 203 $ 316 $ 74 $ 132 $ 206 Viewing and near water activities $ 185 $ 260 $ 334 $ 121 $ 169 $ 218 Total Recreational Use Benefits $ 587 $ 1,000 $ 1,574 $ 382 $ 651 $ 1,026 Nonuse Benefits ( ½ of the Recreational Use Benefits) $ 293 $ 500 $ 787 $ 191 $ 326 $ 513 Total Recreational Benefits $ 880 $ 1,500 $ 2,362 $ 573 $ 977 $ 1,539 Source: U. S. EPA analysis.

15 21 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits Table 15.12: Estimated Recreational Benefits from Reduced MP& M Discharges ( Thousands, 2001$) a Recreational Activity Directs + 413 to 433 Upgrade Directs + All to 433 Upgrade Low Value Midpoint Value High Value Low Value Midpoint Value High Value Fishing $ 28,713 $ 53,703 $ 92,369 $ 29,052 $ 54,337 $ 93,460 Boating $ 36,511 $ 64,854 $ 101,134 $ 36,652 $ 65,103 $ 101,523 Viewing and near water activities $ 56,584 $ 79,434 $ 102,158 $ 56,657 $ 79,536 $ 102,290 Total Recreational Use Benefits $ 121,808 $ 197,990 $ 295,661 $ 122,360 $ 198,976 $ 297,272 Nonuse Benefits ( ½ of the Recreational Use Benefits) $ 60,904 $ 98,995 $ 147,831 $ 61,180 $ 99,488 $ 148,636 Total Recreational Benefits $ 182,712 $ 296,986 $ 443,492 $ 183,541 $ 298,464 $ 445,908 a Based on the Traditional Extrapolation.

Source: U. S. EPA analysis.

Table 15.13: Estimated Recreational Benefits from Reduced MP& M Discharges ( Thousands, 2001$) a Recreational Activity Proposed/ NOD A Optionb Low Value Midpoint Value High Value Fishing $ 53,897 $ 100,805 $ 173,386 Boating $ 75,847 $ 134,724 $ 210,089 Viewing and near water activities $ 140,623 $ 197,410 $ 253,884 Total Recreational Use Benefits $ 270,366 $ 432,939 $ 637,360 Nonuse Benefits ( ½ of the Recreational Use Benefits) $ 135,183 $ 216,469 $ 318,680 Total Recreational Benefits $ 405,550 $ 649,408 $ 956,040 a Based on the Traditional Extrapolation.

b The estimated recreational benefits of the Proposed/ NODA Option are not directly comparable to the final option alternatives. The total number of facilities reported for the Proposed/ NODA Option analysis differs from the facility count reported for the final rule and the two upgrade options. After deciding in July 2002 not to consider the NODA option as the basis for the final rule, EPA performed no more analysis on the NODA option, including not updating facility counts and related analyses for the change in subcategory and discharge status classifications.

Source: U. S. EPA analysis.

15.4 LIMITATIONS AND UNCERTAINTIES ASSOCIATED WITH ESTIMATING RECREATIONAL BENEFITS EPA assessed recreational benefits in terms of reduced occurrence of pollutant concentrations exceeding acute and chronic toxic effect levels for aquatic species. EPA also attached a monetary value to ecological improvements expected to result from the MP& M regulation, in the form of the increased value of three water based recreation activities recreational fishing,

wildlife viewing, and boating plus the increase in nonuse value. The estimated increase in value detailed in this chapter constitutes only a partial measure of the value to society of improving aquatic habitats and aquatic life. This benefits analysis is limited because it ignores improvements to recreational activities other than fishing, boating, and wildlife viewing ( e. g.,

swimming), as well as non recreational benefits, such as increased assimilative capacity and improvements in the taste and odor of the affected waters.

15 22 MP& M EEBA Part III: Benefits Chapter 15: Recreational Benefits The methodologies used to assess ecological benefits also involved significant simplifications and uncertainties, whose combined effect on the estimated benefits is not known. Estimated economic values may be under or overestimated. Some of these simplifications and uncertainties also apply to the human health benefits analysis, and have been discussed at length in the previous chapter, including those associated with:

  developing the sample of MP& M facilities analyzed in the EEBA,

  estimating in waterway concentrations of MP& M pollutants,

  considering background concentrations of MP& M pollutants, and   considering downstream effects.

Table 15.14 summarizes the additional elements of uncertainty that are specific to the recreational benefits analysis.

Table 15.14: Key Omissions, Biases, and Uncertainties in the Analysis for Improved Recreational and Nonuse Benefits Assumption/ Limitation Direction of Impact on Benefit Estimates Scope of Recreational Benefits Analysis Only the receiving reach itself is estimated to provide benefits. ()

Water quality in reaches downstream of the reaches affected by MP& M discharges may also improve, generating additional benefits to society. luding these benefits from the analysis biases benefits estimates downward.

Only recreational users living in the counties abutting MP& M reaches are assumed to benefit from water quality improvements due to the MP& M rule. ()