APPLIED ECONOMICS AND POLICY


Measuring the social benefits of water quality improvements to support regulatory objectives: Progress and future directions


CATHERINE LOUISE KLING TISCH UNIVERSITY PROFESSOR Charles H. Dyson School


Of Applied Economics and Management Cornell SC Johnson College of Business Cornell University


Proceedings of the National Academy of Sciences (PNAS), 120, 18, April 2023 LINK TO PAPER LINK TO VIDEO


Co-authors • Catherine Louise Kling


Tisch University Professor, Charles H. Dyson School


of Applied Economics and Management, Cornell SC Johnson College of Business, Cornell University


• Chris C. Moore, U.S. Environmental Protection Agency • Joel Corona, U.S. Environmental Protection Agency • Charles Griffiths, U.S. Environmental Protection Agency • William Wheeler, U.S. Environmental Protection Agency


Summary


President Reagan’s 1981 Executive Order 12291 and subsequent Executive Orders require the US Environmental Protection Agency (EPA) to undertake dozens of regulatory impact and benefit-cost studies related to the objectives of the Clean Water Act (CWA), with the objective of maximizing net benefits and avoiding regulations where the costs to society do not justify the benefits. Benefits tied to the direct use of water bodies, such as fishing in a river or living near a lake, can be inferred from the expenditures people make to use the resource. But benefits unrelated to use can accrue as well; people may value water quality because it is beneficial to other species, preserves the resource for future generations, or sustains the environment.


As these nonuse values cannot be inferred from observed behavior in markets or related settings, economists have devised survey methods capturing both use and nonuse values to measure the public’s willingness to pay (WTP) for improved environmental quality. Tis paper discusses the methodologies and challenges in quantifying the social benefits of improved water quality, which is essential for supporting regulatory objectives aimed at enhancing water quality standards. Te authors emphasize the importance of understanding the broad societal gains that can result from such improvements, including direct health benefits, increased property values, recreational opportunities, and ecosystem health.


TO IMPACT CONTENTS


RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2023 EDITION 24


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