Abstract

Water resources, especially high-quality water resources, provide and support a wide range of ecosystem services. Yet the value of water quality is not considered in environmental policies, largely due to an absence of water quality valuation. Water quality valuation studies that are conducted at a local scale are not generalizable to other geographic locations. Using national level datasets, we evaluate the benefits of water quality capitalized in housing markets throughout the United States and provide compelling evidence that homeowners place a premium on improved lake water quality. The value of water quality decays with distance from the waterbody. The willingness-to-pay estimate to restore the water quality to pristine level for the contiguous United States is $18 billion. This study helps policymakers to incorporate water quality valuation in environmental decision making.

Coauthors: Adriana Castillo, Kristen Swedberg, Jiarui Zhang, Tahitina Andarge, Kevin Boyle, Diego Cardoso, Dave Keiser, Catherine L. Kling, Christoph Nolte, Michael Papenfus, Daniel Phaneuf, Stephen Polasky