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2.3.4.3.2. Hedonic: Water Quality

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Environmental Economics Research at EPA


Taking the Lake Okoboji area of Iowa as a setting, the study Water Quality Benefits: An Experimental Analysis of the Lakes at Okoboji, Iowa (EE-0051) by d’Arge and Shogren examines five measures value that could be used to estimate the impacts of water quality on economic benefits: real estate agent best estimates of value, a pooled regression estimate based on assessed values, comparison of imputed lake frontage prices, marginal willingness to pay, and willingness to be compensated. With the exception of the compensation measure, the values derived from the different approaches were similar. From 13 to 23 percent of per square foot residence value is accounted for by water quality increasing from boating/fishing to swimming/drinking.


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