March 12, 2003 316( b) Memorandum Date: March 12, 2003 To: The § 316( b) Record From: Lynne Tudor, OW/ OST; Ryan Wardwell, Elena Besedin, Robert J. Johnston, Abt Associates Subject: Comparison of Non use and Use Values from Surface Water Valuation Studies Including both use and non use values when estimating the benefits of an environmental resource provides the most comprehensive estimate of the value of the resource, so that total value can be compared to total social cost. Use values alone may seriously understate total social value.   Nonuse values, like use values, have their basis in theory of individual preferences and the measurement of welfare changes. According to theory, use values and non use values are additive  ( Freeman, 1993). 1 Recent economic literature provides substantial support for the hypothesis that non use values are greater than zero. When small per capita non use values are held by a substantial fraction of the population, they can be very large in the aggregate.  ... there is a real possibility that ignoring non use values could result in serious misallocation of resources  ( Freeman, 1993). Stated preference methods, or benefits transfers based on stated preference studies, are the only generally accepted techniques for estimating non use values. Stated preference methods rely on surveys, which ask people to state their willingness to pay for particular ecological improvements, such as increased protection of fishery resources. Benefits transfer involves adapting research conducted for another purpose in the available literature to address the policy questions in hand. Because benefits analysis of environmental regulations rarely affords enough time to develop original stated preference surveys that are specific to the policy effects, benefits transfer is often the only option for providing information to inform a policy decision.

The first step in developing a benefits transfer approach to estimating non use values of environmental regulations is systematic analysis of the available economic studies of non use values. In response to public comments regarding the analysis of non use values in the proposed rule, the U. S. Environmental Protection Agency ( EPA) continues to review and analyze information from empirical studies of non use values, including studies of option, existence, and preservation values. The purpose of this review is to 1 According to Freeman ( 1993), this additive property holds under traditional conditions related to resource levels and prices for substitute goods in the household production model.

 1 March 12, 2003 report on the range of non use values for water resources in the economic literature, to compare estimates of use and non use values for users and nonusers, and explore the feasibility of deriving non use values based on these comparisons. The Agency intends to use results from this literature review to develop approaches that are more consistent with the recent economic literature for estimating the non use value of aquatic resources that are potentially affected by impingement and entrainment ( I& E).

The Agency s review of the relevant economic literature showed that available surface water valuation studies that separate use and non use values focus primarily on water quality changes. Although all reviewed studies focusing on water quality improvements indicated these improvements would affect recreational fishery resources, the non use values from such improvements may reflect additional services provided by surface water bodies. One key challenge in making the results of this analysis applicable to estimating non use benefits of the 316( b) regulation is to develop an adjustment factor for total non use values from water quality improvements to reflect non use values for fishery resources only.

The rest of this document is organized as follows:

Section 1: Literature Review Procedure and Organization  Describes the literature review procedure, the organization of studies, and the selection of studies to be used in the analysis;

Section 2: Value Concepts and Valuation Techniques  Provides a brief review of the concept of value and valuation techniques;

Section 3: Description of Studies  Presents characteristics of studies that could be used in a future meta analysis;

Section 4: Methods of Measuring Non Use Value  Reviews methods of isolating use and nonuse value and provides examples of each;

Section 5: Summary of Non Use and Use Values for Water Resources Describes the calculation and presentation of mean and median use values;

Section 6: Regression Based Meta Analysis  Discusses further steps in analyzing non use values for water resources using a regression based meta analysis, methodology, and potential model specifications;

Appendix A: Compendium of Non Use Analysis Studies and Characteristics  Contains a compendium of the selected studies that estimate WTP for quality changes that affect aquatic habitat and or recreational fishing.

Appendix B: Summary Descriptions of Valuation Studies  Presents publication information and provides summary descriptions of the studies that could be used in a future meta analysis.

 2 March 12, 2003 1.0 Literature Review Procedure and Organization EPA performed an in depth search of the economic literature to identify valuation studies that estimate both use and non use portions of WTP for quality changes that affect aquatic life habitats and/ or recreational fishing. As a starting point, the Agency selected several surface water valuation studies from a meta analysis conducted by Brown ( 1993). In addition, the Agency conducted extensive additional research to identify potentially relevant studies published since the publication of Brown s research and any that were not included in his meta analysis. EPA used a variety of sources and search methods to identify relevant literature:

< Review of EPA s research and bibliographies dealing with non market benefits associated with water quality changes; < Systematic review of the tables of contents of recent issues of resource economics journals ( e. g. Land Economics, Marine Resource Economics, Journal of Environmental Economics and Management, etc.); < Searches of online reference and abstract databases ( e. g. Environmental Valuation Resource Inventory ( EVRI), Benefits Use Valuation Database ( BUVD), AgEcon Search, etc.); < Visits to homepages of authors known to have published contingent valuation studies and or water quality research; < Searches of Web sites of agricultural and resource economics departments at several colleges and universities; < Searches of Web sites of organizations and agencies known to publish environmental and resource economics valuation research ( e. g., Resources for the Future ( RFF), National Center for Environmental Economics ( NCEE), Natural Resource Conservation Service ( NRCS), National Bureau of Economic Research ( NBER), etc.).

Based on this review, EPA identified approximately 250 surface water valuation studies that are potentially relevant for this analysis, and compiled a bibliographic database to organize the literature review process. Eighteen of these studies met the three specific criteria identified for inclusion in a future meta analysis, detailed below:

< Specific Amenity Valued: Environmental quality change being valued affects aquatic life and or habitat in a water body that provides recreational fishing uses; hypothetical improvement ( degradation) results from a change in water quality or from a program that affects recreational fishing ( e. g., improvements in recreational catch rates or changes in aquatic use designation); < Non Use Value: Study provides isolated estimates of both use and non use value or allows estimation of non use and use values from the data provided; < U. S. Studies: Selected studies were limited to those that surveyed U. S. populations in order to value domestic resources; < Research Methods: Study uses research methods supported by journal literature.

 3 March 12, 2003 The Agency obtained the full text articles of those studies that seemed most relevant for benefits transfer and compiled key information from the selected studies. Appendix A contains a compendium of selected studies that will support EPA s estimation of the non use value of aquatic habitat improvements. EPA compiled the following information from the selected studies:

< full study citation < study location < affected water body type < environmental quality changes ( i. e., 50% increase in catch rates or water quality change from boatable to fishable) < study values updated to 2002 dollars 2.0 Value Concepts and Valuation Techniques The basic approach for estimating the benefits of a policy event is to evaluate the changes in consumer and producer surplus, as an approximation of the change in social welfare. In the case of nonmarket goods, such as aquatic habitat, only consumer surplus is measured. The increase in consumer surplus due to an improvement in environmental quality is measured as the change in the area under the shifted aggregate demand curve, given an increase in the quality of a commodity. The consumer surplus value of environmental changes is estimated using non market valuation methods.

Values associated with public goods, such as aquatic habitat quality, are generally divided among three categories:

1. use value 2. non use value 3. option value Use value reflects the value of all current direct and indirect physical uses of a good or service ( Mitchell and Carson, 1989). Use value of surface water resources is largely derived from recreational uses, which include activities such as fishing, boating, swimming. These uses may also include such   terrestrial  activities as hiking and picnicking, if the value of these activities is at least partially influenced by the quality or existence of nearby surface water.

Non use value, often referred to as passive use value, is based on the concept that individuals may obtain utility without actually using a particular resource. Non use value consists of existence and bequest values. Existence value is the value that individuals may hold for simply knowing that a particular good exists regardless of their present or expected use. Bequest value exists when someone gains utility  4 March 12, 2003 through the knowledge that an amenity will be available for others ( family or future generations) in the future ( Fisher and Raucher, 1984). 2 Option value is often considered a third type of value, apart from both the use and non use components of total value, and is held by individuals who expect to use a resource in the future. Fisher and Raucher ( 1984) define option price for such an individual as   the sum of the expected value of consumer surplus from using the resource plus an option value or risk premium that accounts for uncertainty in demand or in supply.  Mitchell and Carson ( 1989) argue that on theoretical grounds this risk premium should be small for non unique resources. Option value, which may exist regardless of actual future use, has been classified as both non use value and use value in older published studies. Recent years, however, have seen a shift toward including the willingness to pay ( WTP) to secure an individual s option or access to use a resource in the use category of value. Following Brown s ( 1993) methodology, EPA treats option value as a component of total use value in the following analysis where specific or combined estimates are available.

Quasi option value is the benefit associated with delaying a decision when there is uncertainty about the payoffs of various policy choices and when at least one the choices involves the irreversible commitment of resources ( Freeman, 1993). This value does not relate to the values ( e. g., option value) that individuals attach to a specific resource. It is a social gain associated with improved decision making strategies under uncertainty.

A variety of non market valuation methods exist for estimating use value, including both   revealed  and   stated  preference methods ( Freeman, 1993). Where appropriate data are available or may be collected, revealed preference methods typically represent the preferred set of methods for estimating use values. These methods use actual observed behavior to infer users  value for environmental goods and services. Examples of revealed preference methods include travel cost and hedonic pricing. Compared to non use values, use values are often considered relatively easy to estimate, due to their relationship to observable behavior, the variety of revealed preference methods available, and public familiarity with the recreational services provided by surface water bodies.

In contrast, non use values are often considered more difficult to estimate. Stated preference methods, or benefits transfers based on stated preference studies, are the only generally accepted techniques for estimating these values. Stated preference methods rely on carefully designed surveys, which either ( 1) ask people to state their willingness to pay for particular ecological improvements, such as increased protection of aquatic species or habitats with particular attributes, or ( 2) ask people to choose between 2The term   existence value  is sometimes used interchangeably with or in place of   non use value.  In this case, where the whole of non use benefits is represented, existence value has been described as including vicarious consumption and stewardship values. Vicarious consumption reflects the value individuals may place on the availability of a good or service for others to consume in the current time period, and stewardship includes inherent value as well as bequest value. In this case inherent value may be considered the existence value individuals hold for knowing that a good exists ( described above), and bequest value is the value individuals place on preserving or ensuring the availability of a good or service for family and others in the future.

 5 March 12, 2003 competing hypothetical   packages  of ecological improvements and household cost. In either case, analysis of survey responses allows estimation of values.

Non use values may be more difficult to assess than use values for several reasons. First, non use values are not associated with easily observable behaviors. Second, non use values may be held by both users and non users of a resource, and non users may be less familiar with particular services provided by water resources. Third, the development of a defensible stated preference survey that meets the NOAA blue ribbon panel requirements is often a time and resource intensive process. 3 Fourth, even carefully designed surveys may be subject to certain biases associated with the hypothetical nature of survey responses ( Mitchell and Carson, 1989).

Given EPA s regulatory schedule, developing and implementing stated preference surveys to elicit total value ( i. e., non use and use ) of environmental quality changes resulting from environmental regulations is often not feasible. However, the Agency routinely estimates changes in use values of the affected resources as part of regulatory development. The following analysis develops a method for obtaining an approximate estimate of non use and thus total value of aquatic habitat improvements when only use values are estimated.

3.0 Description of Studies EPA identified 18 surface water valuation studies using stated preference surveys that allow estimation of non use values associated with aquatic habitat improvements. 4,5 These 18 studies, listed in Table 3.1, include 10 journal articles, six reports, one book, and one unpublished Ph. D. dissertation. The publication year of these studies ranges from 1978 to 2000. Two studies ( Whitehead et al., 1995 and 3In 1992, the National Oceanic and Atmospheric Administration convened a panel of economic and survey research experts, who had no vested interest in stated preference methods, to conduct hearings on the validity of the contingent valuation ( CV) method ( form of stated preference) ( Arrow et al. 1993; see also FR 58: 19, 4601 14, 1993). This panel issued proposed guidelines, consisting of a number of recommendations about survey design and implementation, " compliance with which would define an ideal CV survey." The panel's general guidelines address the following issues: sample type and size; minimizing non responses; use of personal interviews; pretesting for interviewer effects; reporting; careful pretesting of a CV questionnaire; conservative design; elicitation format; referendum format; accurate description of the program or policy; pretesting of photographs; reminder of undamaged substitute commodities; adequate time lapse from the accident; temporal averaging; " no answer" option; yes/ no follow ups; cross tabulations; checks on understanding and acceptance; alternative expenditure possibilities; deflection of transaction value; steady state or interim losses; present value calculations of interim losses; advance approval; burden of proof; and reliable reference surveys.

4 Farber and Griner ( 2000) conducted a conjoint analysis study that estimated use and non use values for water quality improvements, but the Agency did not include this study in the analysis of use and non use values because non use WTP estimates were not statistically significant.

5The Agency also excluded a study by Bockstael et al. ( 1989) that estimated total use and non use value of enhanced swimming opportunities due to improved water quality in Chesapeake Bay. EPA excluded this study from the analysis of use and non use values presented in this report because the study did not consider water quality effects on fishery resources.

 6 March 12, 2003 Whitehead and Groothuis, 1992) had the same primary author and three studies ( Sanders, Walsh, and Loomis, 1990; Sutherland and Walsh, 1985; and Walsh et al., 1978) had a common author.

Table 3.1 presents the characteristics of each study, including survey administration information and the type of water body associated with the environmental change or amenity being valued. All selected studies focus on environmental quality changes that affect surface water resources. All surveys occurred in the contiguous U. S., with surveyed populations representing 14 states and all U. S. Census Bureau regions. These studies, however, vary in several respects, including the specific environmental change valued, the types of values estimated, the geographic region affected by environmental changes, the scale of environmental improvement, and survey administration methods.

Ten studies focused on rivers, three dealt with estuaries, one study focused on wetlands, and one study valued a quality change involving a river lake system. In addition, three studies analyzed WTP for environmental quality changes concerning all freshwater in a given region.

 7 March 12, 2003 Table 3.1 ected for Non Use Benefits Meta Analysis Authors ( year) Admin Method Response Rate State( s) /

Region Water body Type Elicitation Method Method for Estimating Non Use Value Clonts & Malone ( 1990) phone unknown AL river iterative bidding value categories  user / non user Croke et al. ( 1986 87) phone 85% IL river iterative bidding user / non user total values Cronin ( 1982) personal interview 82% DC river open ended user / non user total values Desvousges et al. ( 1983) personal interview 81% PA river payment card assume non use  value categories Huang et al. ( 1997) phone 75% NC estuary dichotomous choice revealed & stated preference data Kaoru ( 1993) mail 49% MA estuary open ended allocation  entire sample Lant & Roberts ( 1990) personal interview 41% IA, IL river payment card value categories  entire sample Magat et al. ( 2000) personal interview unknown CO, NC all freshwater iterative bidding assume non use Mitchell & Carson ( 1981) personal interview 73% National all freshwater payment card user / non user total values Olsen et al. ( 1991) phone 73% ID, MT,

OR, WA river open ended user / non user total values Roberts & Leitch ( 1997) mail 62% MN, SD wetland payment card value categories  entire sample Rowe et al. ( 1985) mail 50% CO river open ended revealed & stated preference data and allocation  entire sample Sanders et al. ( 1990) mail 51% CO river open ended allocation  entire sample Sutherland & Walsh ( 1985) mail 61% MT river & lake open ended allocation  entire sample Walsh et al. ( 1978) personal interview unknown CO river iterative bidding assume non use  value categories Welle ( 1986) mail 76% MN all freshwater open ended value categories  user / non user Whitehead & Groothuis ( 1992) mail 61% NC river open ended user / non user total values Whitehead et al. ( 1995) phone 71% NC estuary iterative bidding user / non user total values Characteristics of Studies Sel a. Response rates are unknown for Clonts and Malone ( 1990), Magat et al. ( 2000), and Walsh ( 1978).

 8 March 12, 2003 Surveys in seven studies were administered by mail; six studies gathered information through personal interviews in the home, on site, or in a centralized location; and five surveys were conducted by telephone. Survey response rates ranged from 27 to 85 percent, with a median rate of 66 percent.

The two most common methods for eliciting WTP values were the open ended response, used in eight studies. and the iterative bidding method, used in five studies. Four studies used the payment card approach, and one used the dichotomous choice method. Most surveys used higher taxes and/ or prices as the payment vehicle for funding the specified quality change, with voluntary contributions and earmarked funds the next most common methods.

The 18 valuation studies translate into 27 observations of non use and use values associated with various aquatic habitat improvements, because five studies generated more than one usable non use value estimate. Multiple estimates of non use and use value from a single study are available due to the following variations in study design:

< The quantity of the amenity provided ( Sanders, 1990); < The level of the quality change ( Croke et al., 1986; Lant and Roberts, 1990); < The technique employed to estimate non use value ( Huang et al. 1997; Rowe et al. 1985).

Appendix A presents key information from each study, including characteristics of the resource( s) valued, the geographic scale of resource improvements, elicitation method, estimated use and non use values, and other specifics of each study.

4.0 Methods of Measuring Non Use Value EPA s procedure for looking at non use and use values associated with water resources is based on the approach developed by Brown ( 1993). Based on this approach, the Agency first isolated non use and use values from each study as follows:

  Non use values were isolated in the studies based on the following five methods: ( 1) total WTP for nonuser sub samples of respondents; ( 2) a separate non use value question in the survey, ( 3) apportionment of total WTP among categories of value ( e. g., use, option, existence, bequest) by survey respondents, ( 4) total WTP of a survey sub sample who were asked to assume they would not use the resource being valued; and ( 5) total WTP of the sample of users minus WTP for the direct use of the resource estimated based on revealed preference data.

  Corresponding use values were obtained using similar methods: ( 1) total WTP of the sample of users minus total WTP of the sample of non users, ( 2) a separate use value question, ( 3) apportionment by the respondent, ( 4) total WTP of the sample of actual or potential users minus total WTP of the sample asked to assume zero use, ( 5) recreational use value estimated based on revealed preference data.

Table 4.1 presents these methods and their frequency across the meta analysis studies. A detailed description of each method is provided below. Several studies included multiple valuation methods/ questions and/ or divided samples into various groups based on recreational use or other  9 March 12, 2003 characteristics. EPA selected the most appropriate method for estimating non use value for this analysis from each study.

Table 4.1 Method Number Non Use Method Number of Studiesa Number of Studies with User Non Use Value 1 Total WTP Values for User and 6  2 WTP for Value Components  Separate Questionsb 4 3 WTP for Value Components  Allocation 4  4 Assume Non Use of Resource 3 2 5 Revealed & Stated Preference Techniques 2  Total 19 4 Methods of Isolating Non Use Value Non User Groups 2 a. Rowe et al. used several valuation methods, resulting in two methods of isolating non use value that are used in this analysis: combination of revealed and state preference techniques, and allocation of WTP among value categories. Therefore, EPA lists a total of 19 instances of isolating non use value. b. In addition to asking separate questions to elicit use and non use values, two studies using this method also distinguished between users and non users of the resources. Both studies estimated non use value for users. This approach is a combination of methods 1 and 2.

Method 1: Total WTP Values for User and Non User Groups Method 1, used in six surveys, is the most common method of isolating non use value among stated preference studies. This method estimates total WTP for user and non user sub samples of respondents, with definitions of   user  and   non user  varying across studies. As Freeman ( 1993) notes:   By definition non users of a resource can hold only non use values, but users may hold both use and non use value for a resource.  Respondents were generally characterized as non users of the resource if the respondent ( 1) did not use the resource during some defined historical period, or ( 2) does not expect to use the resource during some defined future period. Studies included in this analysis used a range of definitions to distinguish between users and non users with various levels of stringency for determining that a respondent does not have a history of resource use, and/ or will not become a user in the future.

Olsen et al. ( 1991) defined resource users as individuals who have been involved in the commercial fishing industry or who have participated in sport fishing during the past two years, and non users as those who had not or were uncertain of their participation. They also defined a third category of respondents as those who stated they did not expect to fish in the next five years. These individuals were considered to have some probability of future use. 6 Whitehead et al. ( 1992) and Whitehead and Groothuis ( 1992) used a more explicit definition of future use by defining a user as a respondent who stated that he or she would use the resource for fishing after the specified environmental improvement, and non users as those who would not. In theory, this method accounts for ex ante non users who become users following the improvement.

6This analysis does not use the WTP for these   non users  who may have a potential future use in order to be consistent with the two group method of developing non use to use WTP ratios.

 10 March 12, 2003 Cronin ( 1982) applied a rather strict definition of a non user by considering a respondent a user if he or she or any member of his or her household uses the river in question, the seashore, or any other river, lake, or local pool, for swimming, boating, fishing, hiking, camping, or picnicking.

Mitchell and Carson ( 1981) also employed a narrow definition of non users by considering any respondent who had boated, fished, or gone swimming within the past two years to be a resource user.

Croke et al. ( 1986) questioned respondents on their frequency of river use and the types of activities in which they had engaged. Respondents who currently use the rivers for outing, boating, or fishing were identified as users. 7 The Agency used best professional judgement to select the most consistent definitions of user and nonuser groups across the relevant studies to approximate use and non use value. EPA notes that this method for estimating non use may underestimate non use values for users of aquatic resources ( Whitehead and Blomquist, 1991). As shown in Tables 5.1 and 5.2, the non use values for users tend to be significantly higher compared to the non use values held by non users of these resources.

Method 2: WTP for Value Components  Separate Questions Four studies used method 2, in which respondents reported separate WTP bids for different components of total value. Each respondent usually answered a set of valuation questions, designed to estimate value for separate components of total value ( i. e., use, option, existence, bequest). Lant and Roberts ( 1990) obtained bids from each respondent for both recreational value and   intrinsic  value. 8 For the purposes of this analysis, EPA interpreted these values as those for total use and total non use, respectively ( see section 5 for further detail). The fundamental difference between this method of isolating non use value and the user/ non user method ( method 1) is that, in this case, users  non use value is captured in intrinsic value, and non users  option value is captured in recreational ( use) value, although the latter concept is arguable and dependent upon the framing of the valuation question.

Roberts and Leitch ( 1997) used a similar method to that employed by Lant and Roberts ( 1990), but elicited separate estimates of recreation, option, and existence values. To determine use value, respondents answered the question,   If Mud Lake was managed primarily for water related recreation and fish/ wildlife habitat, what would you be willing to pay through an annual use permit to participate in recreational activities at Mud Lake?  The authors intended the following valuation question to measure existence value:   What is the maximum amount you would be willing to pay through an annual voluntary donation to ensure that recreational activities and fish/ wildlife habitat at Mud Lake are available for other people, even if you do not intend to visit the Mud Lake area?

7Only about 10 percent were users.

8Lant and Roberts define ' intrinsic values' as the nonrecreational values of local water resources ( i. e., based on their definition intrinsic values equal to non use values).

 11 March 12, 2003 Stated preference surveys that use method 2 to isolate non use value may also distinguish between users and non users to obtain estimates of the different value components for both groups. This approach combines the approaches taken in methods 1 and 2. Welle ( 1986) represents one of two such studies in this analysis that use this approach. Welle conducted a survey that characterized respondents by their certainty of future use, to distinguish between non users and users. Welle then estimated existence values for both population groups, enabling a comparison of non users  and users  non use value.

Clonts and Malone ( 1990) also combined methods 1 and 2, using separate bidding procedures to estimate values for recreational use, option, existence, and bequest values. Respondents were asked three times to verify the individual and summed values. Respondents were also defined as members of user or non user households, where user households had at least one member who had visited a relevant river for the purpose of outdoor recreation within the past three years.

The main limitation of method 2 is that users may include their personal use values in non use values, which could potentially result in double counting of use values ( Silberman et al. 1992). The Agency, however, notes that non use values for users are not included in the regression based meta analysis presented in Section 6.0 to prevent an upward bias in coefficient estimates.

Method 3: WTP for Value Components  Allocation With method 3, used in four studies, respondents reported their total WTP and were then asked to allocate this value among categories of value ( e. g., use, option, existence, bequest). Sanders et al. ( 1990) asked respondents to state their total WTP for river protection, and then asked them to allocate that value across four categories. The researchers used the following four part question to capture recreational, option, existence, and bequest values, respectively:

People value the protection of rivers for several purposes. What proportion ( percent of 100) of the highest dollar value you reported above would you assign to each of the following purposes? Read the entire question first, then answer each of the four parts together, they should total 100 percent.

a. Payment to actually visit these rivers for recreation use. ________%

b. In addition to your actual recreation use value, how much of an   insurance premium  would you be willing to pay each year to guarantee your choice of recreation use of these rivers in the future? ________%

c. Payment to protect these rivers for reason other than your own personal use.

1) The value to you from just knowing these rivers exist as natural habitats for plants, fish, wildlife, etc. ________%

2) The value to you from knowing that these rivers will be protected for future generations. ________%

 12 March 12, 2003 Sutherland and Walsh ( 1978) employed a similar method of isolating non use value where respondents stated total WTP and then allocated this figure among the recreation, option, existence, and bequest components of total value.

Kaoru ( 1993) and Rowe et al. ( 1985) both used comparable methods but did not elicit estimates for each of the four categories above. For example, Kaoru ( 1993) estimated recreational use, option, and existence values, and Rowe et al. ( 1985) estimated use, existence, and bequest values without an explicit inclusion of respondents' option value.

Method 4: Assume Non Use of Resource Method 4, used in three studies, asked respondents to assume they would not use the resource being valued. For example, Walsh et al. ( 1978) asked the following question of each respondent to measure existence value:   If it were certain you would not use the South Platte River Basin for water based recreation, would you be willing to add ____ cents on the dollar to present sales taxes every year, just to know clean water exists at level A as a natural habitat for plants, fish, wildlife, etc.?  Respondents answered similar questions to determine their option and bequest values. This example incorporates the central concept of method 2 of asking separate questions to elicit different types of value. The key concept distinguishing method 4 is that respondents must assume non use of the resource regardless of their true user status. Magat et al. ( 2000) also asked respondents to assume they would not use the resource, but WTP was only elicited for total non use value. Desvousges et al. ( 1983) estimated WTP values using a combination of methods. In order to estimate use and option values, respondents apportioned their option price bid between present and expected use, respectively. The authors used a separate question to obtain existence values, where respondents were asked to assume they would never use the river.

Method 5: Revealed & Stated Preference Techniques Method 5, used in two studies, is distinct in that it combines revealed and stated preference data to estimate the non use value of a resource. The main advantage of this method is that revealed preference data can provide reliable estimates of recreational use value( s). Huang et al. ( 1997) combined revealed and stated preference data from a single survey to estimate non use value without explicitly posing a question concerning potential non use values associated with the resource. Survey questions determined recreation participation; the authors compared the recreational value from the resulting travel cost model to an estimate of total consumer surplus from the Stated Preference portion of the survey to estimate non use value. Only one other study ( Rowe et al., 1985) included in this meta analysis combined revealed and stated preference data, but this approach to estimating non market values is becoming more widely used.

5.0 Summary of Non Use and Use Values from Surface Water Valuation Studies As noted above, the primary purpose of this analysis is to identify a set of new studies that may contain information about the relative magnitude of use and non use values for environmental changes that affect aquatic habitat and/ or water quality.

 13 March 12, 2003 Table 5.1 presents the 27 observations of non use and use value estimates from the 18 studies used in EPA s analysis to calculate the mean and median non use and use values. To calculate the mean and median of ratios of non use to use values, EPA first assigned a weight to each observation in Table 5.1. Weights are defined such that each unique study is given identical weight ( i. e., weights on multiple observations within each study sum to one; for studies with only one observation, the weight is equal to one). The mean and median water resource use values based on the 18 surface water valuation studies are $ 68.61 and $ 33.33 ( 2002$) per household per year. The mean and median non use values of the water resources are $ 79.51 and $ 74.41 ( 2002$) per household per year, respectively. EPA s analysis of non use and use value presented in Table 5.1 shows that non use values for water resources are substantial.

 14 March 12, 2003  15 Table 5.1 Total Non Use and Use Values ( per Household, 2002$) a Author Survey Year Non Use Valueb Mean Use Valuec Clonts & Malone ( 1990) 1987 $ 55.43 $ 30.88 Croke et al. ( 1986) 1986 $ 53.31 $ 17.61 Croke et al. ( 1986) 1986 $ 60.91 $ 11.11 Croke et al. ( 1986) 1986 $ 75.11 $ 6.35 Cronin ( 1982) 1973 $ 59.37 $ 23.75 Desvousges et al. ( 1983) 1981 $ 111.41 $ 89.65 Huang et al. ( 1997) 1995 $ 59.02 $ 158.25 Huang et al. ( 1997) 1995 $ 119.52 $ 97.75 Kaoru ( 1993) 1989 $ 112.57 $ 77.04 Lant & Roberts ( 1990) 1987 $ 68.56 $ 57.30 Lant & Roberts ( 1990) 1987 $ 88.40 $ 77.04 Lant & Roberts ( 1990) 1987 $ 85.29 $ 78.34 Magat et al. ( 2000) 1997 $ 11.49 $ 22.98 Mitchell & Carson ( 1981) 1980 $ 242.34 $ 275.09 Olsen et al. ( 1991) 1989 $ 38.48 $ 69.12 Roberts & Leitch ( 1997) 1996 $ 2.09 $ 5.17 Rowe et al. ( 1985) 1985 $ 69.15 $ 47.88 Rowe et al. ( 1985) 1985 $ 12.46 $ 6.54 Sanders et al. ( 1990) 1983 $ 46.91 $ 24.96 Sanders et al. ( 1990) 1983 $ 87.60 $ 46.62 Sanders et al. ( 1990) 1983 $ 111.99 $ 59.61 Sanders et al. ( 1990) 1983 $ 115.35 $ 63.45 Sutherland & Walsh ( 1985) 1981 $ 91.53 $ 35.78 Walsh et al. ( 1978) 1976 $ 132.63 $ 250.66 Welle ( 1986) 1985 $ 113.69 $ 20.06 Whitehead & Groothuis ( 1992) 1991 $ 27.74 $ 18.49 Whitehead et al. ( 1995) 1990 $ 68.08 $ 29.83 Median Valued, e $ 74.41 $ 33.33 Mean Valued, e $ 79.51 $ 68.61 a. All values are adjusted to 2002$ using the Consumer Price Index ( U. S. Bureau of Labor Statistics 2002). b. Represents the mean of non users total value, including option value in some cases. c. Represents users' mean total value minus non users' mean non use value for 8 observations. d. EPA calculated the mean and median non use and use values by assigning a weight to each observation based on the number of values taken from each study. For example, use values from a study that provided three total use WTP were each assigned a weight of 1/ 3. The number of values used to calculate the mean non use and use values for the sample was the sum of the weights.

Similarly, EPA calculated mean and median non use and use values for users using information from four studies that provide separate non use values for users. The mean and median water resource use values based on these four studies are $ 97.81 and $ 60.27 ( 2002$) per household per year. The mean and median non use values for users are $ 155.83 and $ 164.78 ( 2002$) per household per year, respectively. As shown in Table 5.2, the non use values for users of aquatic resources are significantly higher than the non use values for non users. This may result from additional information about water resources associated with past or expected future use, which is likely to enhance non use value ( Whitehead and Blomquist, 1991). March 12, 2003  16 Other studies ( e. g., Silberman et al. 1992), however, suggest that users may include their personal use values in non use values, which could potentially result in double counting of use values.

Table 5.2 Total Use and Non Use Values for Resource Users ( per Household, 2002$) a, b Author Survey Year Non Use Value for Users Mean Use Value Clonts & Malone ( 1990) 1987 $ 82.35 $ 30.88 Desvousges et al. ( 1983) 1981 $ 130.59 $ 89.65 Walsh et al. ( 1978) 1976 $ 211.42 $ 250.66 Welle ( 1986) 1985 $ 198.96 $ 20.06 Median Valuec $ 164.78 $ 60.27 Mean Valuec $ 155.83 $ 97.81 a. All values are adjusted to 2002$ using the Consumer Price Index ( U. S. Bureau of Labor Statistics 2002). b. All four studies that provided estimates of users  non use value were published before the publication of the National Oceanic and Atmospheric Administration Panel on Contingent Valuation report. c. Calculated using empirical estimates of user non use value only.

EPA is considering applying the results of this review and analysis to estimate non use value for aquatic resources potentially affected by impingement and entrainment for the final rule analysis. Specifically, the Agency is considering estimating non use values that are based on ( 1) a percent or fraction of use values per households and ( 2) specific user and nonuser populations affected by the 316( b) regulation.

6.0 Regression Based Meta Analysis EPA recognizes that approach benefits transfer of non use values from existing studies requires careful accounting of factors that are likely to affect non use values of aquatic resources such as the geographic scale of environmental improvements, regional or national importance of the affected resources, and the magnitude of environmental quality changes. In addition to simply reviewing available information about the relative magnitudes of non use and use values EPA is also considering regression based meta analysis of non use WTP for water resources. Glass ( 1976) characterizes meta analysis as   the statistical analysis of a large collection of results for individual studies for the purposes of integrating the findings. It provides a rigorous alternative to the casual, narrative discussion of research studies which is commonly used to make some sense of the rapidly expanding research literature ( p. 3; cited in Poe et al. ( 2001), p. 138).

Depending on the suitability of available data, a meta analysis can provide a superior alternative to the calculation and use of a simple arithmetic mean over the 27 observations, as it allows estimation of the relative influence of various study, economic, and natural resource characteristics on non use willingness to pay. The primary advantage of a regression based approach is that it may account for differences among study sites that may contribute to changes in non use values, to the extent permitted by available data.

Meta analysis is typically a data driven process. Given a reliance on information available from the underlying studies that comprise the meta data, meta analysis models most often represent a middle ground between model specifications that would be most theoretically appropriate and those specifications that are possible given available data. Poe et al. ( 2001) provide excellent insight into the March 12, 2003 mechanics of specifying and estimating such meta equations. EPA intends to match its general approach regression based meta analysis, to as great an extent as possible, to that of Poe et al. ( 2001) and others ( e. g., Bergstrom et al. 2001; Desvousges et al. 1998).

The dependent variable in the following meta analysis can be either the estimated non use value or total value ( including use and non use value) for water quality improvement. The total or non use values can be modeled as a function of independent variables characterizing specifics of the resource( s) valued such as whether they are estuarine or freshwater, the geographic scale of resource improvements ( e. g., single water body versus multiple water bodies), elicitation method, estimated use and non use values, and other specifics of each study. Following Poe et al. ( 2001), these variables may be categorized into core economic variables and study design effects. Core economic variables describe the resource policy and resulting resource change, resulting use values, the geographic scale over which changes occur, and respondent income. Study design variables characterize features of the survey and question format ( Poe et al. 2001).

Core economic variables available from the 18 studies considered for this analysis include:

< Estimated use values for water quality improvements, reported by the same studies from which non use values were estimated. < The geographical region of the nation in which the original study was conducted. The rationale behind this variable is that non use values may differ systematically from region to region. < The type of water body in which water quality would be improved. These include estuaries, wetlands, and lakes/ rivers. < The geographical scale over which water quality would improve ( e. g., over a single water body, statewide, etc.) < The estimated mean income of survey respondents ( or of the geographical region in which the survey was conducted, if the original survey did not report income).

Study design effects characterize:

< The year in which a study was conducted. < The elicitation format of the survey ( e. g., telephone, mail, etc.) < The elicitation method ( e. g., open ended WTP method).

Based on the regression based meta analysis results, EPA could predict non use WTP for water resource changes as a function of both core economic and study design attributes. This, in general, would provide a superior alternative to the calculation of non use benefits, as it allows WTP to be adjusted to account for the characteristics of the transfer site.

The Agency considers using the estimated regression model in estimating non use values of aquatic habitat improvements from the 316( b) rule. The use ( and interpretation) of the value estimates to predict WTP in specific cases will follow the methodologies from the benefits transfer literature ( e. g., Vandenberg et al. 2001; Desvousges et al., 1998).

EPA also notes potential limitations of this approach. Limitations of the regression analysis approach specifically stem from the number of studies that meet criteria for inclusion, the number of variables that could be included in the regression analysis ( which depends on the number of and information available  17 March 12, 2003 from the original studies), as well as degrees of freedom and statistical significance. For example, study differences often prevent the use of a single measure of the degree of environmental quality improvements. Prior meta analyses of this type, including Woodward and Wui ( 2001) and Poe et al. ( 2001), lack a continuous and quantified measure of environmental quality improvement. The use of other economic variables that might be desirable from a theoretical perspective ( e. g., information on substitute goods) may complicate extraction of suitable data from the underlying studies. EPA also recognizes that clear and objective criteria are needed to determine which studies are suitable for inclusion in meta analysis; criteria should acknowledge issues related to potential bias associated with stated preference studies, and steps that the researchers should take to minimize bias. One key challenge in this analysis is to determine the applicability of study results to the policy case of interest ( i. e., fish impacts due to impingement and entrainment in this rule) because of significant variations in study objectives and methodologies.

 18 March 12, 2003 References Arrow, Kenneth, R. Solow, P. R Portney, E. E. Leamer, R. Radner, and H. Schuman. 1993. Report of the NOAA Panel on Contingent Valuation. National Oceanic and Atmospheric Association, Damage Assessment and Restoration Program.

Bergstrom, J. C., K. J. Boyle and G. L. Poe. 2001. The Economic Value of Water Quality. Northampton, MA: Edward Elgar.

Bockstael, N. E., McConnell, K. E., Strand, I. E. 1989. Measuring the Benefits of Improvements in Water Quality: The Chesapeake Bay. Marine Resource Economics. 6, 1 18.

Brown, Thomas C. 1993. Measuring Nonuse Value: A Comparison of Recent Contingent Valuation Studies. W 133 Sixth Interim Report University of Georgia, Department of Agriculture and Applied Economics. Athens, GA.

Clonts, Howard A., and Malone, Joy W. 1990. Preservation attitudes and consumer surplus in free flowing rivers. In: Social Science and Natural Resource Recreation Management, Joanne Vining, editor. Westview Press, Boulder, CO. Vol. pp. 301 317.

Croke, Kevin, Fabian, Robert G., and Brenniman, Gary. 1986 1987. Estimating the Value of Improved Water Quality in an Urban River System. Journal of Environmental Systems. Vol. 16, No. 1. pp. 13 24.

Cronin, Francis J. 1982. Valuing nonmarket goods through contingent markets. Pacific Northwest Laboratory, PNL 4255, Richland, WA.

Desvousges, William H., Smith, V. Kerry, and McGivney, Matthew P. 1983. A Comparison of Alternative Approaches for Estimating Recreation and Related Benefits of Water Quality Improvements. U. S. Environmental Protection Agency, Economic Analysis Division, Washington, D. C. pp. 345.

Desvousges, W. H., F. R. Johnson, and H. S. Banzhaf. 1998. Environmental Policy Analysis with Limited Information: Principles and Applications of the Transfer Method. Northampton, MA: Edward Elgar Publishers.

Farber, Stephen, and Griner, Brian. 2000. Valuing Watershed Quality Improvements Using Conjoint Analysis. Ecological Economics. Vol. 34, No. 1. pp. 63 76.

Fisher, A. and R. S. Raucher. 1984.   Intrinsic Benefits of Improved Water Quality: Conceptual and Empirical Perspectives.  Advances in Applied Microeconomics Vol. 3, V. K. Smith ( ed.), JAI Press.

Freeman, A. Myrick III. 1993.   Nonuse Values in Natural Resource Damage Assessment  in Valuing Natural Assets, Raymond J. Kopp and V. Kerry Smith ( eds). Resources for the Future, Washington, D. C.

Glass, G. V. 1976. Primary, Secondary, and Meta Analysis of Research. Educational Researcher 5( 10): 3 8.

 19 March 12, 2003 Huang, Ju Chin, Haab, Timothy C., and Whitehead, John C. 1997. Willingness to Pay for Quality Improvements: Should Revealed and Stated Preference Data Be Combined? Journal of Environmental Economics and Management. Vol. 34, No. 3. pp. 240 255.

Kaoru, Yoshiaki. 1993. Differentiating Use and Nonuse Values for Coastal Pond Water Quality Improvements. Environmental and Resource Economics. Vol. 3. pp. 487 494.

Lant, Christopher L., and Roberts, R. S. 1990. Greenbelts in the Cornbelt: Riparian Wetlands, Intrinsic Values, and Market Failure. Environment and Planning. Vol. 22. pp. 1375 1388.

Magat, Wesley A., Huber, Joel, Viscusi, Kip W., and Bell, Jason. 2000. An Iterative Choice Approach to Valuing Clean Lakes, Rivers, and Streams. Journal of Risk and Uncertainty. Vol. 21, No. 1. pp. 7 43.

Mitchell, Robert Cameron, and Carson, Richard T. 1981. An experiment in determining willingness to pay for national water quality improvements. Preliminary Draft of a report to the U. S. Environmental Protection Agency. Resources for the Future, Inc., Washington, D. C.

Mitchell, Robert Cameron, and Carson, Richard T. 1989. Using Surveys to Value Public Goods: The Contingent Valuation Method. Resources For the Future, Washington D. C.

Olsen, D., Richards, Jack, and Scott, R. D. 1991. Existence and Sport Values for Doubling the Size of Columbia River Basin Salmon and Steelhead Runs. Rivers. Vol. 2, No. 1. pp. 44 56.

Poe, G. L., K. J. Boyle, and J. C. Bergstrom. 2001. A Preliminary Meta Analysis of Contingent Values for Ground Water Quality Revisited, in J. C. Bergstrom, K. J. Boyle and G. L. Poe, eds. The Economic Value of Water Quality. Northampton, MA: Edward Elgar Publishers.

Roberts, Lisa A., and Leitch, Jay A. 1997. Economic Valuation of Some Wetland Outputs of Mud Lake. Agricultural Economics Report No. 381, Department of Agricultural Economics, North Dakota Agricultural Experiment Station, North Dakota State University.

Rowe, Robert D., Schulze, William D., Hurd, Brian, and Orr, Douglas. 1985. Economic Assessment of Damage Related to the Eagle Mine Facility. Energy and Resource Consultants, Inc., Boulder, CO.

Sanders, L. B., Walsh, Richard G., and Loomis, John B. 1990. Toward Empirical Estimation of the Total Value of Protecting Rivers. Water Resources Research. Vol. 26, No. 7. pp. 1345 1357.

Silberman, J., D. A. Gerlowski, and N. A. Williams. 1992. Estimating existence value for users and nonusers of New Jersey beaches. Land Economics 68 ( 2): 225 236.

Sutherland, R. J., and Walsh, Richard G. 1985. Effect of Distance on the Preservation Value of Water Quality. Land Economics. Vol. 61, No. 3. pp. 282 291.

U. S. Bureau of Labor Statistics. 2002. Consumer Price Index, All Urban Consumers. URL: http:// data. bls. gov/ servlet/ SurveyOutputServlet? data_ tool= latest_ numbers& series_ id= CUUR0000SA0& o utput_ view= pct_ 12mths. Accessed December 2002.

 20 March 12, 2003 U. S. Census Bureau. 2002. Table H 8, Median Household Income by State: 1984 to 2001. Current Population Survey, Annual Demographic Supplements. http:// www. census. gov/ hhes/ income/ histinc/ h08. html. Last revised: September 30th, 2002.

U. S. Census Bureau. 2003a. Table C1, Median Household Income by County: 1969, 1979, 1989. 1970, 1980, and 1990 Censuses of Population and Housing. http:// www. census. gov/ income/ ftp/ decennial/ historical/ county/ c1. prn. Accessed January 2003.

U. S. Census Bureau. 2003b. Table MSA1, Median Household Income by Metropolitan Statistical Areas ( MSA): 1969, 1979, and 1989. 1970, 1980, and 1990 Censuses of Population and Housing. http:// www. census. gov/ income/ ftp/ decennial/ historical/ msa/ msa1. prn. Accessed January 2003.

VandenBerg, T. P., G. L. Poe, and J. R. Powell. 2001. Assessing the Accuracy of Benefits Transfers: Evidence from a Multi Site Contingent Valuation Study of Ground Water Quality, in J. C. Bergstrom, K. J. Boyle and G. L. Poe, eds. The Economic Value of Water Quality. Northampton, MA: Edward Elgar Publishers.

Walsh, Richard G., Greenley, Douglas A., Young, Robert A., McKean, John R., and Prato, Anthony A. 1978. Option values, preservation values and recreational benefits of improved water quality: a case study of the South Platte River Basin, Colorado. EPA 600/ 5 78 001, Socioeconomic Environmental Studies Series, Office of Research and Development, U. S. Environmental Protection Agency, Research Triangle Park, NC.

Welle, Patrick G. 1986. Potential Economic Impacts of Acid Deposition: A Contingent Valuation Study of Minnesota. Dissertation, University of Wisconsin Madison.

Whitehead, John C., and Groothuis, Peter A. 1992. Economic Benefits of Improved Water Quality: a case study of North Carolina's Tar Pamlico River. Rivers. Vol. 3. pp. 170 178.

Whitehead, John C., Blomquist, Glenn C. 1991. A Link Between Behavior, Information, and Existence Value. Leisure Sciences 13: 97  109.

Whitehead, John C., Blomquist, Glenn C., Hoban, Thomas J., and Clifford, William B. 1995. Assessing the Validity and Reliability of Contingent Values: A Comparison of On Site Users, Off Site Users, and Non users. Journal of Environmental Economics and Management. Vol. 29. pp. 238 251.

Woodward, Richard T., and Yong Suhk Wui. 2001. " The Economic Value of Wetland Services: A Meta Analysis," Ecological Economics 37: 257 270.

 21 March 12, 2003 A 1 Appendix A  Non Use Analysis Studies and Characteristics Table A  Non Use Analysis Studies and Characteristicsa Author &

Year Amenity Valued Sampled Population Admin Method &

Response Rate Elicitation Method, b Non Use Method; Mean Annual Non

Use WTP/ hh ( 2002$);

Sample Sizec Mean Annual Use WTP/ hh ( 2002$) d Mean Annual User Non

Use WTP/ hh ( 2002$) Mean Annual Household Income ( 2002$) e Water Body Type Geographic Scale of Improvement Year Indexf Clonts &

Malone ( 1990) preservation of 15 AL rivers in a free flowing state, free of alterations by dams,

infrastructure, diversion, or extraction random sample of AL households phone ( na) IB m= 2 $ 55.43 N= 733g $ 30.88 $ 82.35 $ 39,591 rivers statewide 20 Croke et al.

( 1986) water quality improvement from unusable to a level suitable for outings in urban Chicago rivers households in Chicago and suburbs phone ( 85%) IB m= 1 $ 53.31 N= 296h $ 17.61 $ 47,402 urban rivers local/ regional 16 Croke et al.

( 1986) water quality improvement from unusable to a level suitable for outings & boating in urban Chicago rivers households in Chicago and suburbs phone ( 85%) IB m= 1 $ 60.91 N= 279h $ 11.11 $ 47,402 urban rivers local/ regional 16 Croke et al.

( 1986) water quality improvement from unusable to a level suitable for outings, boating, & fishing in urban Chicago rivers households in Chicago and suburbs phone ( 85%) IB m= 1 $ 75.11 N= 280h $ 6.35 $ 47,402 urban rivers local/ regional 16 Cronin ( 1982) prevent the degradation of water quality in the Potomac River from boatable to unusable for recreation representative sample of Washington D. C.

residences personal interview ( 82%) OE m= 1 $ 58.45 N= 1432 $ 48.62 $ 56,896 river single water body 12 Desvousges et al. ( 1983) prevent the degradation of water quality in the Monongahela River from boatable to unusable for recreation households in five counties in PA personal interview ( 81%) PC m= 4 $ 111.41 N= 205 280i $ 89.65 $ 130.59 $ 38,664 river single water body 13 Huang et al.

( 1997) program to restore quality of Pamlico and Albemarle Sounds to 1981 level in terms of increased fish catches and shellfish beds eastern NC households phone ( 75%) DC m= 5 $ 59.02 N= 511 $ 158.25 $ 37,498 estuary single water body 27 Huang et al.

( 1997) program to restore quality of Pamlico and Albemarle Sounds to 1981 level in terms of increased fish catches and shellfish beds eastern NC households phone ( 75%) DC m= 5 $ 119.52 N= 511 $ 97.75 $ 37,498 estuary single water body 27 Kaoru ( 1993) improvement in water quality of 3 coastal ponds on Martha's random sample of Martha's Vineyard mail ( 49%) OE m= 3 $ 112.57 $ 77.04 $ 137,693 estuaries multiple water bodies 23 March 12, 2003 Table A  Non Use Analysis Studies and Characteristicsa Author &

Year Amenity Valued Sampled Population Admin Method &

Response Rate Elicitation Method, b Non Use Method; Mean Annual Non

Use WTP/ hh ( 2002$);

Sample Sizec Mean Annual Use WTP/ hh ( 2002$) d Mean Annual User Non

Use WTP/ hh ( 2002$) Mean Annual Household Income ( 2002$) e Water Body Type Geographic Scale of Improvement Year Indexf A 2 Vineyard, MA to allow them to be open year round for shell fishing ( poor to fair) property owners N= 145 Lant & Roberts ( 1990) improvement in local river water quality from poor to fair in selected river basins in IA & IL residents in 14 towns in IA and IL,

drawn from telephone listings personal interview ( 41%) PC m= 2 $ 68.56 N= 195 $ 57.30 $ 016 rivers local/ regional 20 Lant & Roberts ( 1990) improvement in local river water quality from fair to good in selected river basins in IA & IL residents in 14 towns in IA and IL,

drawn from telephone listings personal interview ( 41%) PC m= 2 $ 88.40 N= 195 $ 77.04 $ 016 rivers local/ regional 20 Lant & Roberts ( 1990) improvement in local river water quality from good to excellent in selected river basins in IA & IL residents in 14 towns in IA and IL,

drawn from telephone listings personal interview ( 41%) PC m= 2 $ 85.29 N= 195 $ 78.34 $ 016 rivers local/ regional 20 Magat et al.

( 2000) 15% increase in " good" water quality in lakes and rivers in the region where a respondent may hypothetically live various populations in CO and NC personal interview ( na) IB m= 4 $ 11.49 N= 348 $ 22.98 $ 283 all freshwater ( lakes &

rivers) local/ regional 30 Mitchell &

Carson ( 1981) improvement in nation's water quality from boatable to a level that " supports game fish such as bass" national probability sample of persons 18 or older personal interview ( 73%) PC m= 1 $ 242.34 N= 695 $ 275.09 $ 549 all freshwater national 11 Olsen et al.

( 1991) doubling the Columbia River Basin salmon & steelhead runs with the assurance of ecological Pacific Northwest residents with phones phone ( 73%) OE m= 1 $ 38.48 N= 1177j $ 69.12 $ 475 river single water body 21 39, 39, 39, 45,

43,

39, March 12, 2003 Table A  Non Use Analysis Studies and Characteristicsa Author &

Year Amenity Valued Sampled Population Admin Method &

Response Rate Elicitation Method, b Non Use Method; Mean Annual Non

Use WTP/ hh ( 2002$);

Sample Sizec Mean Annual Use WTP/ hh ( 2002$) d Mean Annual User Non

Use WTP/ hh ( 2002$) Mean Annual Household Income ( 2002$) e Water Body Type Geographic Scale of Improvement Year Indexf A 3 stability and diversity Roberts &

Leitch ( 1997) water related recreation and fish and wildlife habitat at Mud Lake,

MN SD random sample of households within 30 mile radius of Mud Lake mail ( 62%) PC m= 2 $ 2.09 N= 575k $ 5.17 $ 396 wetland single water body 27 Rowe et al.

( 1985) clean up and protection of the Eagle Mine area of the Eagle River, CO from very poor quality ( watering lawn, industrial use) to excellent quality ( swimming,

washing) residents of Eagle County, CO mail ( 50%) OE m= 5 $ 69.15 N= 507l $ 47.88 $ 606 river single water body 15 Rowe et al.

( 1985) clean up Eagle Mine hazardous waste site, which may currently preclude safe recreation use CO households mail ( 27%) PC m= 3 $ 12.46 N= 570m $ 6.54 $ 978 river single water body 15 Sanders et al.

( 1990) program to protect 3 of 11 most valuable wild and scenic CO rivers CO residents; representative of state mail ( 51%) OE m= 3 $ 46.91 N= 214 $ 24.96 $ rivers multiple water bodies 20 Sanders et al.

( 1990) program to protect 7 of 11 most valuable wild and scenic CO rivers CO residents; representative of state mail ( 51%) OE m= 3 $ 87.60 N= 214 $ 46.62 $ rivers multiple water bodies 20 Sanders et al.

( 1990) program to protect 11 wild and scenic CO rivers CO residents; representative of state mail ( 51%) OE m= 3 $ 111.99 N= 214 $ 59.61 $ 674 rivers statewide 20 Sanders et al.

( 1990) program to protect 11 wild and scenic CO rivers plus an additional 4 other rivers CO residents; representative of state mail ( 51%) OE m= 3 $ 115.35 N= 214 $ 63.45 $ 674 rivers statewide 20 Sutherland &

Walsh ( 1985) protection of water quality in Flathead Lake and River, MT, to avoid potential degradation sample drawn from phone directories of four major cities adjacent to rural areas in MT mail ( 61%) OE m= 3 $ 91.53 N= 171 $ 35.78 $ 907 river & lake single water body 15 Walsh et al.

( 1978) postpone mining to avoid degradation in water quality throughout the South Platte River Basin, CO, to avoid permanent preclusion of riparian recreation ( to a level absent of heavy metals random sample of households in Denver and Fort Collins, CO personal interview ( na) IB m= 4 $ 132.63 N= 174 205n $ 250.66 $ 211.42 $ 941 river basin local/ regional 8 30, 62, 45, 44,674 44,674 44, 44,

39,

43, March 12, 2003 Table A  Non Use Analysis Studies and Characteristicsa Author &

Year Amenity Valued Sampled Population Admin Method &

Response Rate Elicitation Method, b Non Use Method; Mean Annual Non

Use WTP/ hh ( 2002$);

Sample Sizec Mean Annual Use WTP/ hh ( 2002$) d Mean Annual User Non

Use WTP/ hh ( 2002$) Mean Annual Household Income ( 2002$) e Water Body Type Geographic Scale of Improvement Year Indexf A 4 / contamination)

Welle ( 1986) avoid degradation in MN water quality from " unpolluted" to " severely polluted" due to reduction in acid deposition representative sample of MN adults drawn from list of driver's license holders mail ( 76%) OE m= 2 $ 113.69 N= 415o $ 20.06 $ 198.96 $ 470 all freshwater statewide 16 Whitehead &

Groothuis ( 1992) water quality improvement in the Tar Pamlico River due to program to reduce non point source pollution, resulting in double catch rate for anglers &

general improvements in fishing,

swimming, boating, and drinking Eastern NC households the Tar

Pamlico River basin phone ( 71%) OE m= 1 $ 27.74 N= 91 $ 18.49 $ 164 river single water body 22 Whitehead et al. ( 1995) avoid degradation in water quality and fish and wildlife habitat in the Albemarle Pamlico estuary system, NC 100 counties in NC,

16 counties in VA mail ( 61%) IB m= 1 $ 68.08 N= 1033p $ 29.83 $ 49,541 estuary single water body 25 a. All values are adjusted to 2002 dollars using the Consumer Price Index ( U. S. Bureau of Labor Statistics 2002).

b. Abbreviations refer to elicitation methods as follows: CC = contingent choice; DC = dichotomous choice; IB = iterative bidding; OE = open ended; PC =

payment card.

c. m= method of isolating non use value and takes on a value of 1, 2, 3, 4, or 5 ( see section 2.3 for a discussion of methods of isolating non use value);

N= sample size used in regression analysis if available from the original study, unless otherwise noted. ple size used for regression analysis of the entire usable sample was not reported, or if regression analysis was not conducted, EPA selected the sample size from each study ost closely reflects the sample of responses used to calculate mean WTP values, and/ or the total   usable  survey responses. ple sizes reported in studies vary in terms of relevance to WTP estimates and other analyses ( i. e. regression analyses), and some studies report several sample sizes that correspond to variouslydefined sub samples ( e. g. user versus non user groups, or non protest responses). some cases, sample sizes reflect the sample of responses used to calculate non parametric WTP.

d. Use value adjusted based on assumption that users  non use value is equal to non users  WTP.

e. Mean or median annual income estimates were not available for the survey/ regression samples in seven studies ( 14 observations), and were therefore estimated using Census income data. me in place of sample estimates for Lant and Roberts ( 1990), Olsen et al. ( 1991), and Sanders et al. ( 1990) ( U. S. Census 2002); county level income data for Croke et al. ( 1986), Roberts and Leitch ( 1997), and Sutherland et al. ( 1985) ( U. S. Census 43,

46,

If the sam that m The sam In EPA used state level inco March 12, 2003 2003a); and Metropolitan Statistical Area median income for Cronin ( 1982) ( U. S. Census 2003b). See Appendix B for details on the estimation of median income for each study.

f. Year in which the study was conducted, converted to an index by subtracting 1970.

g. Clonts and Malone ( 1990) conducted a random telephone survey of 733 households. The number of responses used in calculating WTP is unknown;

regression results ( if applicable) are not reported in the publication.

h. Represents sample size used to calculate non parametric WTP for the specific quality improvement; sample sizes are different for the WTP estimates Croke et al. ( 1986) estimated for the three water quality levels.

i. Desvousges et al. ( 1983) estimated components of total value separately, and using slightly different samples. Therefore, the following sample sizes are associated with each value type: existence value: 205; option value: 211; recreational use value: 280.

j. EPA interpreted this samples size, reported in the Olsen et al. ( 1991), to represent those usable responses used in the non parametric calculation of mean WTP estimates.

k. A total of 968 questionnaires were completed.

l. Represents usable surveys, not the responses used to calculate WTP.

m. This represents total surveys with usable data. There were 439 responses to the WTP question, and 356 were used in calculating WTP.

n. Walsh et al. ( 1978) estimated components of total value using slightly different samples, and apparently, non parametric methods. Therefore, the following sample sizes are associated with each value type: existence value: 203; bequest value: 205; option value: 177; recreational use value: 174.

o. Sample used in non parametric estimation of mean WTP.

p. Represents the total of off site users, on site users, and non users, used in three separate regression models.

A 5 March 12, 2003 Appendix B  Summary Descriptions of Valuation Studies This appendix provides a short description of each of the 18 studies used in the non use benefits meta analysis.

Clonts & Malone ( 1990) Clonts & Malone used a stated preference study ( SP) to estimate the values associated with preserving 15 Alabama rivers in a free flowing state. The survey instrument used in this study describes free flowing rivers as those that have not been significantly altered by dams, waterways, diversions, or other measures, including water impoundment or extraction. Some of the objectives of this research were to   determine the recreational use of selected free flowing Alabama rivers;  and to   estimate preservation values Alabamians place on selected free flowing rivers in the State,  which include recreational use, option, existence, and bequest value.

The authors conducted a telephone survey of 733 Alabama households in 1986 87 to meet these objectives and to obtain attitudinal information. The article does not provide a detailed description of the survey instrument or the specific definition of the amenity being valued; however, respondents cited the top two reasons for preserving rivers as   protecting fish and wildlife habitat  and   protection of water scenery and air quality.  For this reason, and for the purposes of this analysis, EPA assumed that the WTP estimates largely reflect the value of aquatic habitats and recreational uses in general.

In this study, households were considered user households if at least one member had visited a free flowing river for the purpose of outdoor recreation in the past three years. The survey asked both user and non user households the same set of valuation questions to elicit WTP for the value categories listed above ( method 2 of isolating non use value). Both users and non users placed the highest value on the existence of free flowing rivers, followed by bequest, and option values. The authors reported recreational value for both groups and valued the least of all categories, but the context and interpretation of non users  WTP for recreational use is unclear. Respondents might have misinterpreted the question, or might have included stewardship value in their responses, therefore, due to these uncertainties, EPA s analysis does not consider non users  recreational WTP.

This study did not report mean sample income. EPA used the average of income ranges for river users and river non users presented in the study to approximate mean sample income to the regression based meta analysis.

Croke et al. ( 1986 87) Croke et al. used a stated preference study designed to estimate the value of cleaner rivers in the Chicago urban river system. This study is the only one among 18 studies selected for the meta analysis that deals exclusively with urban water resources. The purpose of the study was to evaluate the benefits of an urban storm water wastewater sewer system project that would reduce effluent discharge to rivers and waterways.

The authors conducted a phone survey of 350 households from a sample that included the entire city of Chicago and the surrounding suburban communities. Respondents defined baseline water quality. The authors obtained values for three incremental levels of water quality, defined by the suitability of each level for outings, boating, and fishing. In order to distinguish between users and non users, the survey asked respondents to determine the frequency with which they used Chicago s urban rivers for B 1 March 12, 2003 recreational purposes. 9 The survey elicited total WTP for each respondent for each quality change, with a separate estimate intended to represent the sum of use, option, and existence value. The EPA analysis used WTP estimates for each of these three quality changes. This study found that non use values dominate the values of the water quality improvements. The study also suggests that users and non users constitute distinct populations and that the Mitchell and Carson approach to estimating non use values by separating the sample into users   who have both use and non use values, and non users   who have only non use values may introduce errors in estimates of non use value for users.

Mean sample income was not available in this study. EPA used 1989 Cook County, IL median household income from the decennial Census ( U. S. Census Bureau 2003a) to assign a value to the income variable in meta data.

Cronin ( 1982) Cronin conducted a stated preference study in the Washington, D. C. area to estimate WTP for water quality improvements in the Potomac River. The study obtained data from 1,579 respondents in the Washington, D. C. area through personal interviews. The survey instrument defined water quality based on five physical and bio chemical characteristics and six types of outputs ( e. g., swimming, boating, type and extent of fish species, odor, river appearance, and ecological and miscellaneous outputs). Cronin used method 1 of isolating non use value. This method assumes that user and non user populations have identical non use values. The author applied a narrow definition of non use by considering a respondent to be a user if at least one member of a household uses   the river in question, the seashore, or any other river, lake, or local pool, for swimming, boating, fishing, hiking, camping, or picnicking.

The study elicited option price for both respondent groups   users and non users   for preventing the deterioration of water quality from usable for boating to unusable for recreation. For non users who do not plan to use the water body in the future it can be interpreted as non use value for non users The authors also valued three other quality changes, which roughly map to the water quality ladder as follows: improvement from ( 1) usable for boating to suitable for rough fishing, ( 2) rough fishing to game fishing, and ( 3) game fishing to suitable for swimming. The EPA analysis used mean WTP for prevention of the loss of the Potomac River for recreation for users and non users, which represents mean total value for each group. 10 Mean sample income was not reported in this study. For the regression analysis, EPA used median household income for the Washington D. C. Metropolitan Statistical Area from the 1970 decennial Census to approximate the year ( 1973) and geographic area ( Washington D. C.) of the original survey ( U. S. Census Bureau 2003b).

Desvousges et al. ( 1983) Desvousges et al. report the results of a U. S. EPA study that compared alternative approaches for estimating water quality benefits, using the Pennsylvania portion of the Monongahela River basin as a case study. The study used a stated preference method to estimate WTP for water quality improvements.

9The user population is less than 10 percent of the entire sample, which is likely due to the very poor quality of Chicago s urban rivers at the time of the study.

10Fisher and Raucher ( 1984) calculated WTP values from Table 6.1 of Cronin 1982, which are presented in Tables 3 and 5 of their review. EPA used the values from Table 5 in this analysis.

B 2 March 12, 2003 The authors conducted personal interviews of 301 households in 1981 based on a stratified sample covering five Pennsylvania counties. Four groups of respondents received slightly different versions of the stated preference survey, all of which valued the same changes in water quality. Only one version of the survey, which used the direct question payment card elicitation format, measured respondents  non use value. The survey asked these respondents to assume zero use of the river and to state their WTP to avoid a decrease in water quality from boatable to not suitable for recreation. Option and use values were obtained through the same elicitation format ( i. e., separate questions). This study used method 4 of measuring non use value, with separate non use value estimates for user and non user groups.

The authors found some respondents reported the same figure for the existence value question as they did for option price. This indicates that some respondents may confuse existence ( i. e., non use) with option values. EPA found, however, that the ratio of non user to user value from this study closely approximates the median of the ratios used in this analysis, representing a conservative estimate of non use benefits relative to the sample. Moreover, Mitchell and Carson ( 1981) argue that option value is small for non unique resources.

Huang et al. ( 1997) Huang et al. analyzed revealed and stated preference data from a telephone survey of 1077 eastern North Carolina households conducted in 1995. The survey consisted of both revealed and stated preference questions. Respondents stated their WTP for a program that would restore the quality of the Pamlico and Albemarle Sounds to 1981 levels, which would result in a 60 percent increase in fish catches and a 25 percent increase in the quantity of open shellfish beds. The survey informed respondents of the causes of the degradation and asked for their WTP to restore the water quality of the sounds through more stringent laws.

The authors estimated travel cost and contingent behavior models to estimate respondents  respective recreational and total values for restoring water quality in the sounds. The study measured consumer surplus using both ex ante and ex post recreation trips taken at the current quality level, yielding separate estimates of recreational value. The authors compared these values with total WTP based on stated preference data to calculate two estimates of the non use value of the quality change. This study represents one of two instances in this meta analysis where revealed and stated preference data were combined to estimate the non use value of an environmental quality change ( method 5).

Kaoru ( 1993) This study estimated the benefits of water quality improvements in three coastal ponds on the island of Martha s Vineyard, Massachusetts. The current level of water quality in these coastal ponds corresponds to intermittent closures of the ponds for shell fishing. Kaoru surveyed 559 local property owners in 1989 and asked their WTP for water quality improvements in the three ponds from the current level to a level that would allow them to be open for shell fishing year round. Kaoru employed method 3 of isolating non use value by asking respondents for their total WTP and then asking them to allocate this amount into use, option, and existence values. The mean value respondents placed on existence value accounts for over half of their total mean WTP.

Lant and Roberts ( 1990) Lant and Roberts used the contingent valuation method to estimate recreational and intrinsic benefits of river water quality in the corn belt, in the context of agricultural non point source pollution. The authors conducted 200 personal interviews with residents in 14 selected towns in Iowa and Illinois in 1987,

B 3 March 12, 2003 concerning selected river basins in the two states. Questions to the entire sample of respondents elicited both recreational and intrinsic values for the following three water quality improvements: poor to fair, fair to good, and good to excellent. The authors used photographs and further defined improvements as incrementally allowing boating, rough fishing, game fishing, and swimming, respectively. The water quality levels considered in this study maps onto the Resources For the Future ( RFF) water quality ladder as follows:

Water Quality Level Supported Uses poor 6 boating fair 6 boating, rough fishing good 6 boating, rough fishing, game fishing excellent 6 boating, rough fishing, game fishing, swimming Therefore, water quality changes from   poor  to   fair  and from   fair  to   good  are expected to affect the quality and quantity of recreational fishery resources. Water quality changes from   good  to excellent may further improve recreational game fishing.

This study did not report mean sample income. EPA used the average of Illinois and Iowa median income provided by the Census in the annual Historical Income Tables ( U. S. Census Bureau 2002) to assign a value to the income variable used in the regression analysis.

Magat et al. ( 2000) Magat et al. conducted a unique iterative choice method survey for valuing freshwater quality. The authors used personal, centralized, and intercept interview methods to survey 410 respondents in North Carolina and Colorado. Respondents addressed several iterations of hypothetical scenarios, in which they were asked to consider moving to a new region where 15 percent more of the freshwater could be characterized as   good,  compared with the region in which they currently lived.

The authors defined " good" water quality as safe for swimming and supportive of a variety of plants and aquatic life, including a variety of fish safe for consumption. The authors defined water quality that was   not good  as unsafe for swimming, supportive of only a small number of plants and aquatic life, and not supportive of edible fish. The study obtained WTP values via increased costs of living associated with respondents  decisions of whether or not to move to a region with a greater percentage   good  water quality.

The authors obtained non use values in a separate section of the survey, through a similar iterative choice approach where the respondents assumed that they would have a zero, one third, or one tenth probability of visiting lakes and rivers in the region. This approach can be classified as method 4 of isolating non use value. EPA s meta analysis uses the mean value of instances where respondents would have no chance of visiting lakes and streams in the new region, which most closely approximates pure non use value.

Mitchell and Carson ( 1981) In this seminal study, Mitchell and Carson estimated values for national freshwater quality improvements using CVM. The authors conducted personal interviews of 1,576 households in 1980. Based on the RFF water quality ladder, respondents stated their perceptions regarding the current quality of the nation s B 4 March 12, 2003 lakes, rivers, and streams, and subsequently reported their WTP to improve the water quality to three improved levels: a level safe for boating, a level safe for fishing, and a level safe for swimming. 11 Mitchell and Carson used method 1 for isolating non use value, thereby obtaining total WTP values for respondents in both the user and non user groups. Respondents were classified as non users if   they had not boated, fished, or swum in freshwater in the past two years.  The authors estimated non use WTP only for improving the nationwide water quality to a fishable level. In addition, Mitchell and Carson estimated non use value for users by assuming that users and non users hold the same intrinsic values for water quality.

Olsen et al. 1991 Olsen et al. conducted a CVM study to estimate non market benefits associated with a major fishery management program in the Pacific Northwest, which was designed to double the size of salmon and steelhead fish runs in the Columbia River Basin by the year 2000. In an effort to estimate both existence and sport values of the resource, the authors conducted a telephone survey of households in Idaho, Montana, Oregon, and Washington in 1989, resulting in 1,395 usable responses.

The survey used method 4 of isolating non use value, and was designed to distinguish between three respondent types: non users with no probability of future use, non users with some probability of future use, and users. Non users with no probability of future use had not participated in the commercial or sport fishery and did not plan to do so; those with some probability of future use had not participated in the previous five years but were uncertain about fishing during the next five years; and resource users reported having participated in the salmon or steelhead commercial or sport fisheries within the previous two years. The authors estimated total WTP for each individual, capturing existence value, option value, and expected consumer surplus ( use value). For the purposes of this analysis, EPA considered only the users and the non users with no probability of future use.

This study did not report mean sample income. Therefore, EPA used the average of 1989 state median income for Idaho, Montana, Oregon, and Washington, available from Census  annual Historical Income Tables, to estimate sample income for the regression analysis ( U. S. Census Bureau 2002).

Roberts and Leitch ( 1997) Roberts and Leitch conducted an economic evaluation of wetland outputs of Mud Lake, MN SD, including a CVM study designed to estimate recreational and aesthetic values. The authors conducted a mail survey of 1,034 randomly selected households within a 30 mile radius of Mud Lake in 1996.

The survey asked separate questions of each respondent to determine annual per acre WTP for use, option, and existence value. Discussion of method 2 of isolating non use value ( see Section 2.3 of this memorandum) presents the text of the survey questions that elicited use and existence values. The authors asked a third question to estimate option value:   What is the maximum amount you would be willing to pay through an annual voluntary donation to ensure that recreational activities and fish/ wildlife habitat at Mud Lake are available in the future to you or your descendants?  This question seems to elicit both option and bequest values. For this meta analysis, EPA included the values obtained from this question in the estimate of use value due to the inability to discern between option and bequest values.

11 See description of Lant and Roberts ( 1990) above for a description of the RFF water quality ladder.

B 5 March 12, 2003 This study did not report mean sample income. Therefore, EPA used the average of Census estimates of 1989 median household income for counties located within a 30 mile radius of Mud Lake in order to estimate sample income for the regression analysis ( U. S. Census Bureau 2003a).

Rowe et al. ( 1985) In 1985, Rowe et al. conducted an economic assessment of natural resource damages associated with the Eagle Mine facility near Gilman, CO. 12 Mine tailings from the Eagle Mine had polluted the Eagle river, reducing the trout stock and adversely affecting the aesthetic quality of the area. The authors conducted two contingent valuation surveys to estimate damages to both Eagle County residents and the statewide population, as well as to gather recreational participation information.

In the first survey, Eagle County residents received a questionnaire by mail that elicited WTP for various potential actions to ameliorate degraded water quality and other aesthetic damages in the area. For this analysis EPA was interested in the mean WTP of respondents to   clean up and protect  the area. Under this option water quality would be raised from a level   okay for watering your lawn and some industrial uses  to a level acceptable for activities such as swimming and rafting. This value, representing the total of use, option, and bequest values, can be compared with the adjusted unit day value estimate of wildlife and fish recreation from the recreational demand analysis used in the study, to estimate non use value. This approach uses both revealed and stated preference data to estimate non use value ( method 5). Although the study did not compare unit estimates, the report presented the results from these separate analyses to compare aggregate values. 13 The authors sent the second survey to 2,800 Colorado households with the primary objective of estimating use, bequest, and existence values for cleaning up problems at Colorado hazardous waste sites. The Eagle Mine facility was one of seven primary sites of interest for which values were obtained. The quality improvement was similar to that described in the County survey, but respondents were to state their total WTP and then allocate that figure among hazardous waste sites and value categories. Thus, this survey employed method 3 of isolating non use value.

Sanders et al. ( 1990) Sanders et al. report the results of a stated preference survey conducted in 1983 to estimate Colorado residents  WTP to protect wild and scenic rivers in the state. A mail survey resulted in 214 responses in which respondents ranked the four most important of 11 rivers described in the survey. The survey described river protection as resulting in an array of potential benefits, which respondents were asked to 12The authors represented Energy and Resource Consultants, Inc., and prepared the report for the State of Colorado in connection with State of Colorado v. Gulf and Western Industries, Inc., et al.

13Rowe et al. used the unit day value of outdoor wildlife and fish recreation, as recommended by the U. S. Forest Service, Rocky Mountain Region, as a basis for estimating recreational value. The authors first multiplied this value by an estimate of the average annual recreation days per person obtained from the survey, the adult population in the region of interest, and the unit day price for wildlife and fish recreation. The authors then adjusted for discounting and population growth to estimate aggregate recreation value. They also made an adjustment to deflate the value to represent two of the 12 hours the unit day value from the Forest Service represents, based on the average length of Eagle County residents  recreation trips. For this meta analysis, EPA simply multiplied unit values by recreation days and adjusted for the average length of a recreation trip for comparison with mean total WTP from the CVM survey.

B 6 March 12, 2003 indicate each of a list of benefits were to them. The top two reasons for protecting rivers were to   protect the quality of water, air, and scenery,  and   protecting fish and wildlife habitat.  Respondents stated their WTP to protect their top one, two, three, and four rivers, as well as all 11 rivers, and then allocated their value among four value categories: use, option, existence, and bequest ( method 3 of isolating non use value). The study generated mean household WTP values for the top three and seven most valuable rivers, 11 study rivers, and the 11 study rivers plus the four most important additional Colorado rivers indicated by respondents. These data represent four observations in the meta analysis.

This study did not report mean sample income. For the regression analysis, EPA used the Census estimate of 1984 median annual household income for the state of Colorado ( U. S. Census Bureau 2002) to assign a value for the income variable.

Sutherland and Walsh ( 1985) Sutherland and Walsh report the results of a CVM study designed to estimate use and non use values associated with the water quality of the Flathead River and Lake system in Montana. Specifically, the study focused on testing the hypothesis that WTP for non use values of a resource declines with distance. A mail survey resulted in 171 responses from residents in four areas of the state of Montana. All respondents first stated their total WTP for protection of water quality at Flathead River and Lake to prevent potential degradation. Users of the resource then allocated this amount among recreational use, option, existence, and bequest values, while non users allocated their WTP to existence and bequest value categories only.

The following allocation questions were asked to elicit the WTP for each indicated value category:

Recreational use value:   Payment to visit Flathead Lake or River this year ( in addition to traveling or lodging expenses). _____%  Option value:   Payment for the opportunity to visit the Lake or River in the future at the same level of water quality and fishing conditions. _____%  Existence value:   Payment to preserve water quality in Flathead River and Lake. The value to you from knowing that good water quality exists here. _____%  Bequest value: " Payment to preserve water quality in Flathead River and Lake. The value to you from knowing that future generations will have good water quality. _____%

This study represents the allocation method ( method 3) of isolating non use value. Mean WTP estimates are available for the entire sample only despite the distinction between users and non users of the resource.

This study did not report mean sample income. EPA used Census estimates of 1979 annual median household income to estimate sample income for the regression analysis. The study stated that four major Montana cities were surveyed, and reported their respective distances from the study site. We inferred the four most likely cities included in the sample frame based on this information and used the average of median household income for the counties inclusive of these cities ( U. S. Census Bureau 2003a).

Walsh et al. ( 1978) Walsh et al. conducted a study for the U. S. EPA with the primary objective of estimating the option, existence, and bequest portions of benefits resulting from pollution abatement, relative to user value. The B 7 March 12, 2003 authors conducted a contingent valuation survey through personal interviews of 202 Colorado residents. The valuation questions estimated household WTP to postpone mining that would degrade water quality throughout the South Platte Basin. The survey used three photos to describe the current level of pollution in the River Basin, characterized as including both pristine waters at high elevations and water bodies severely polluted with heavy metals, algae, chemicals, and bacteria. The survey informed respondents of the potential for further degradation, which would permanently preclude riparian recreation. Their payments would be used to improve water quality to a level absent of heavy metals and contamination in order to enhance recreational enjoyment.

To isolate non use values, the survey asked respondents to assume with certainty that they would not use the River Basin for water based recreation activities ( method 4). Recreational use questions enabled the authors to distinguish users from non users, who were presented with separate questions to elicit option, bequest, and existence values. As a result, the authors estimated mean WTP for existence and bequest values for non users and estimated use and option values for users.

Welle ( 1986) Welle s dissertation concerns the potential economic impacts of acid deposition. The analysis makes use of data from a contingent valuation study conducted in 1985, in which a mail survey resulted in 669 usable responses. Welle estimated benefits for reducing acid deposition pollution and thus avoiding the degradation of water quality in the state of Minnesota. The study used an environmental quality ladder to define the amenity change being valued, which can be mapped to the water quality ladder to represent a change from   unpolluted  to   severely polluted.  Respondents valued the avoidance of such a decrease in the quality of freshwater across the state.

The study grouped respondents into the following four categories according to their likelihood of participating in water based recreation in the future: extremely unlikely ( non user), somewhat likely, likely, and extremely likely ( user). For the purposes of this meta analysis, EPA is concerned only with the extremely unlikely and extremely likely groups, which may be considered non users and users, respectively. The survey included several valuation questions and value estimates. Significantly, the study estimated demand side option price ( option, existence, and recreational value) and existence values for all respondent groups. The difference between these estimates for users is the sum of recreation and option value. As expected, the demand side option price for non users was roughly equal to their use value, indicating their certainty of not using the resource.

Whitehead and Groothuis ( 1992) Whitehead and Groothuis examined the economic benefits of improving water quality in North Carolina s Tar Pamlico River, which had experienced decreased fish catch rates, disease, and algae blooms, largely as a result of agricultural non point source pollution. The authors conducted a contingent valuation survey of Eastern North Carolina households via mail in 1991, yielding 109 responses. Respondents valued water quality improvement in the river due to the implementation of Best Management Practices by farmers to reduce non point source pollution. The result would be a doubled catch rate for anglers and general improvements in swimming, boating, and drinking.

The authors divided the sample into expected users and expected non users. Users reported that they would fish in the river after the specified quality improvement, and non users indicated that they would 8not fish in the river. This definition of users has the advantage of capturing those respondents who would become users of the resource due to the amenity change, yet lacks the comprehensiveness of other B 8 March 12, 2003 approaches by only considering the recreational use of fishing. The authors elicited total WTP for both groups. Non user WTP may be interpreted as the sum of existence and intrinsic values.

Whitehead et al. ( 1995) Whitehead et al. examined the WTP bids that various user groups reported in a contingent valuation survey. The survey, conducted by telephone in 1990, sampled 100 counties in North Carolina and 16 counties in Virginia, yielding 1,133 responses. Respondents valued water quality and fish and wildlife habitat in the Albemarle Pamlico ( A P) estuary system. The survey explained the use and non use benefits of estuaries to respondents before they stated their WTP to avoid further degradation and to ensure the current level of wildlife habitat in the A P system.

The authors divided the sample into on site users, off site users, and non users, based on their responses to questions in the survey. On site users stated that they had   engaged in fishing, swimming, boating, or some other activity during the past year....  Off site users had not been to the site, and answered   a little," " some," or " a lot," to the question, " How much have you heard or read about the resources, uses, and problems of the A P system?  Non users answered   nothing  to the question regarding off site use, and were not users of the Albemarle Pamlico system. This study used method 1 of isolating non use value by estimating total WTP values for the members of each group. To avoid confusion in interpreting non use value, EPA was concerned only with on site users and non users in this analysis. The WTP of non users, which was the lowest of the three groups, may be interpreted as the sum of existence and bequest values, plus some potential option value.

B 9