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Improving Accuracy and Reducing the Costs of Environmental Benefits Assessments, Volumes I-VII (1986-1987, 1993)

Paper Number: EE-0285A-G

Document Date: 05/01/1986 - 12/01/1987, and 9/01/1993

Author(s):  University of Colorado, University of Wyoming, University of New Mexico

Subject Area(s): Economic Analysis,  Benefits Analysis, Survey Methods, Risk Communication, Stated Preference Methods, Revealed Preference Methods

Keywords: Economic Analysis,  Benefits Analysis, Survey Methods, Risk Communication, Stated Preference Methods, Revealed Preference Methods


Series of EPA-funded research reports on improving estimation of economic benefits, using variety of methods tested on different environmental policy issues.

Volume I.  Risk Communication for Superfund Sites: An Analysis of Problems and Objectives.  The primary purpose of the research is to attempt to determine what goes wrong with risk communication at low probabilities. The research initially attempts to answer two related questions. First, does something go wrong in the way people think about low probability hazards? Second, can it be conclusively shown that the individual and community response to low probabilities is inappropriate? In the authors' view, the answers to these two questions, in turn, raise some very serious policy issues for EPA with respect to risk communication at Superfund sites. Since they believe that people fail to behave rationally in the face of low probability risks no matter how well they understand the risk, the authors analyze how factors that affect risk judgments could be employed as part of risk communication strategy to help people better  judge the risk from Superfund sites.  (Authors: McClelland, Gary H.; Schulze, William D.; Coursey, Don L.; Hurd, Brian; Irwin, Julie R.; Boyce, Rebecca R.)

Volume II. Value of Symptoms of Ozone Exposure: An Application of the Averting Behavior Method. This 1986 report by the University of Wyoming presents estimates of the dollar benefits of reducing symptoms of exposure to ozone. The survey instruments, a background and a follow-up survey, were designed to collect the data necessary to implement the cost of illness, contingent valuation, and averting behavior methods. This study focuses primarily on the averting behavior method to estimate daily willingness to pay to avoid ozone related symptoms. (Authors:  Gerking, Shelby D.; Dickie, Mark; Schulze, William D.; Coulson, Anne; Tashkin, Donald).

Volume III. Estimating Benefits of Reducing Community Low-Level Ozone Exposure. This volume is a progress report on continuing research into the dollar value of health benefits of reducing ozone levels. The willingness to pay to avoid the symptoms of ozone exposure will be estimated using two approaches: 1) the averting behavior method (ABM), based on excess medical expenses and changes in activities induced by ozone exposure, and 2) the contingent valuation method (CVM). Consideration of the case of ozone, therefore, will serve the following three purposes: 1) advancing the state of the art in applying two benefit estimation techniques, 2) developing cross comparisons of the cost effectiveness, and 3) obtaining policy relevant ozone benefit estimates. This volume should be viewed as an interim report on the progress to date in achieving these three goals. (Authors:  Schulze, William D.; Gerking, Shelby D.; Coulson, Anne; Tashkin, Donald; Dickie, Mark).

Volume IV.  A Case Study of a Hazardous Waste Site: Perspectives from Economics and Psychology.  This 1986 study by the University of Colorado uses concepts and methods of analysis drawn from both economics and cognitive psychology to understand the sources of a large drop in property values that occurred near the Operating Industries Incorporated (OII) Landfill in Monterey Park, California. The study reports on the substantial impact of the Landfill on property values and on the results of a survey of subjective risks. Two main conclusions emerge from the study results: (1) Subjective health risks are likely to be overestimates of the objective risks, and (2) the overestimated subjective health risks are associated with significant property value losses.  (Authors:  Schulze, William D.; McClelland, Gary H.; Hurd, Brian; Smith, Joy).

Volume V.  Valuation of Visual Forest Damages from Ozone.  This document reports on a study of the value of visual aesthetic damages to forests from ozone air pollution in Los Angeles, Orange, and San Bernardino Counties of California. Respondents to a contingent valuation study were asked their willingness-to-pay to protect forest quality locally, state-wide, and nationally. They were also asked to partition their bids into use, bequest, and existence values.  (Authors: Peterson, Donald C.; Rowe, Robert D.; Schulze, William D.; Russell, Glenn W.; Boyce, Rebecca R.; Elliott, Steven R.; Hurd, Brian)

Volume VI.  Field and Laboratory Experiments on the Reliability of the Contingent Valuation Method.  This 1993 study by the University of Colorado tests proposed procedures for dealing with hypothetical bias in a field application using air quality in the Denver metropolitan area. It was undertaken for two purposes: (1) To provide a current assessment of the reliability of the contingent valuation method (CVM) for public policy analysis, and (2) to begin to develop a reliable CVM methodology for valuing visibility in an urban setting. The report includes reviews of recent laboratory and filed experiments conducted for evaluating CVM, the design of a field experiment on the Denver "Brown Cloud" air pollution problem, and descriptive statistics and data analysis of the experiment. (Authors: Schulze, William D.; McClelland, Gary H.; Schenk, David; Elliott, Steven R.; Boyce, Rebecca R.; Irwin, Julie R.; Stewart, Thomas; Slovic, Paul; Deck, Leland; Thayer, Mark A.)

Volume VII. Reconciling Averting Behavior and Contingent Valuation Benefit Estimates of Reducing Symptoms of Ozone Exposure.  This report uses a data set to reconcile differences between the contingent valuation method and the averting behavior method estimates of reduced ozone-related health symptoms. The reconciliation approach, which focuses on the contingent valuation method, involved three steps. First. each respondent was directly asked for his willingness-to-pay to avoid one day of recently experienced ozone-related symptoms such as headache, cough, and chest tightness. Second, each bid was multiplied by the number of times per month that a symptom occurs and monthly bids are totaled across symptoms. Third, respondents were advised of these totals and given an opportunity to revise their bids. Results obtained from data collected in 1986 from residents of Glendora and Burbank California, revealed that averages of revised bids were dramatically lower than averages of original bids.  (Authors: Dickie, Mark; Gerking, Shelby D.; Brookshire, David S.; Coursey, Don L.; Schulze, William D.; Coulson, Anne; Tashkin, Donald).

This paper is part of the  Environmental Economics Research Inventory.

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