TABLE 4.5 A General Matrix of Ground Water Functions/Services and Applicable Valuation Methods

Water Function/Service Flow

Applicable Valuation Method

A. Extractive values

Cost of illness

1. Municipal use (drinking water)

 

a) Human health - morbidity

Averting behavior; Contingent valuation; Contingent ranking/behavior

b) Human health - mortality

Averting behavior; Contingent valuation; Contingent ranking/behavior

2. Agricultural water use

Derived demand/production cost

3. Industrial water use

Derived demand/production cost

B. In situ values

 

1. Ecological values

Production cost techniques; Contingent valuation; Contingent ranking/behavior

2. Buffer value

Dynamic optimization; Contingent valuation; Contingent ranking/behavior

3. Subsidence avoidance

Production cost; Hedonic pricing model; Contingent valuation; Contingent ranking/behavior

4. Recreation

Travel cost method; Contingent valuation; Contingent ranking/behavior

5. Existence value

Contingent valuation; Contingent ranking/behavior

6. Bequest value

Contingent valuation; Contingent ranking/behavior

 

SOURCE: Adapted from Freeman, 1993. (Reprinted with permission from Resources for the Future, 1993. Copyright by Resources for the Future.)

information on nonuse values of ground water. For example, only one study (McClelland et al., 1992) has attempted to address existence value of ground water, and the approaches used in the study have been criticized. The estimates for existence and bequest values found in this study were smaller than use values found from other studies using indirect or direct methods. Additional research is needed to further document the existence and size of nonuse values for ground water resources. Table 4.5 illustrates the applicable valuation methods for address-



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