MEASURING THE SITE‐SPECIFIC RECREATION BENEFITS RESULTING FROM IMPROVED WATER QUALITY: AN UPPER BOUND APPROACH1

Abstract

SummaryThe estimation of the value of recreation benefits resulting from improved water quality is required for many purposes. In particular, the Water Pollution Control Act of 1980 requires the consideration of the reasonableness of costs of reducing water pollution in relation to benefits to be derived from establishing effluent standards (Clean Water Act of 1977). Recreation is often the most important benefit resulting from water quality improvement. Current methods used to calculate recreation benefits are either not site‐specific or are expensive and controversial. This paper presents a relatively simple, inexpensive, and less controversial method of calculating site‐specific recreation benefits resulting from improved water quality. It does this by producing an upper bound estimate which often is adequate for the relevant decision. The upper bound estimates is based on two assumptions: 1) there are alternative equivalent substitute sites for the newly augmented water quality site, and 2) the new augmented recreation opportunities at the site will be used to their maximum supply capacity. Clearly, if an upper bound benefit estimate in a cost‐benefit ratio does not produce a favorable ratio, no other benefit estimate will. In cases where this estimate produces an ambiguous result resort must be had to other more precise methods of estimation.