Estimating the economic value of protecting water quality: Scaling benefits to the national level?
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The hedonic property value method is one of the primary methods used to estimate non-market values of environmental
amenities including water quality. Property values studies combine data on behavioral outcomes or housing choices
with data on water quality to estimate benefits in a statistical model. A recent meta-analysis of hedonic studies
focused on water quality (Guignet, Heberling, Papenfus, Griot, & Holland, 2019) reveals limitations in terms of
transferring the values estimated in one context to a new region or market where a primary study has not been
conducted. One of the impediments of conducting a national level hedonic study in the past has been the lack of
consistent property sales data and water quality data. This task proposes to build on the work of (Papenfus,
2018) and use water quality impairment data and property sales data available from Zillow research to develop a
suite of consistent and uniform estimated across various regions of the country using modern econometric methods
to identify the effect of water quality improvements on housing values.
The outputs will serve to:
• Build towards national estimates of water quality that could be used in cost-benefit analysis and be integrated
into a hedonic module for evaluating water quality benefits
• Contribute to the valuation literature on the transportability of nonmarket valuation estimates.
• Provide states and local decision-makers with improved models to support watershed assessments, support the
303(d) TMDL program, and to improve our capacity to evaluate the effectiveness water quality regulations.