U.S. EPA Office of Research
H'll
and Development's Science
To Achieve Results (STAR)
Research in Progress
Vol.3 Issue 2 August 1999 A product of the National Center for Environmental Research and Quality Assurance
ENVIRONMENTAL DECISION MAKING AND ECONOMICS
What methods are most accurate for deter-
mining the costs of environmental regulations?
How can we best describe or measure the ben-
efits of protecting environmental resources?
How should we compare the value of preserving
an environmental resource with that of develop-
ing it? These are the types of questions that are
at the heart of EPA's environmental economics
research.
Environmental policies and programs are intended to
protect the health and well being of humans and ecosys-
tems. Policies that protect the environment also provide
*ern
economic value and other benefits to society. Federal
environmental laws typically require some economic
analyses to be conducted by implementing agencies.
The Clean Water Act requires economic impacts to be
considered in developing point source discharge
elimination requirements and in protecting wetlands to
preserve ecological benefits. The 1990 Clean Air Act
Amendments required EPA to assess the benefits of
improved air quality. And the federal law regulating
pesticide use mandates case-by-case risk-benefit analyses
to balance farmers' and consumers' benefits from
protecting crops against the potential for ecological
harm. In recent years, policymakers at all levels of
government have been increasingly asking for economic
information to help them understand and evaluate the
consequences of regulatory decisions. However, it is
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widely felt by policymakers, economists and environmental scientists alike that available methods for evaluating the
benefits and the costs of environmental protection do not provide all the information decision makers and the public
want in judging the merits of proposed solutions to environmental problems. This report describes economic and
ecological research supported by EPA's STAR program to meet the needs for cost, benefit and valuation information to
support environmental decision making.
Methods commonly used by economists to measure public values include revealed or stated preference methods
and contingent valuation. Representatives of the public are surveyed, or choices made by individuals or supported by the
public in local government forums are determined, to learn how various types of environmental protection have been
valued. Measures used by ecologists to describe the functions and services of healthy ecosystems are also central to
valuing the benefits of environmental protection. Each of these types of approach are furthered by research supported by
the STAR program. This report describes grants awarded from 1995 to 1998. The National Science Foundation (NSF) has
joined with EPA to identify a related set of projects to be supported within NSF's Social, Behavioral and Economic Research
program. Those NSF projects are also briefly noted at the end of this report, with more details available from the NSF
Website at www.nsf.gov/sbe/.
ENVIRONMENTAL DECISION AAAKING AND ECONOMIC
RESEARCH IN EPA'S "STAR" PROGRAM
Air Quality Benefits
In the eastern U.S., a multistate Ozone Transport Assessment
Group (OTAG) conducts modeling and assessments to support
regulatory decisions for the states' air pollution control pro-
grams. The Georgia Institute of Technology and a nonprofit
Washinton, D.C.-based research organization called Resources
for the Future have a joint STAR grant to develop a model that
will be used to search for efficient pollutant control programs,
such as emissions or ambient trading, that could extend
the OTAG modeling work by adding an environmen-
tal benefit component. The new work also treats
economic cost and benefit factors, and the variables
relevant to ozone formation processes, by incorpo-
rating uncertainty factors to simulate the unpredict-
able aspects of these variables (such uncertainty
models are called "stochastic" rather than "determin-
istic"). Results are intended to help OTAG and others in
eastern states better consider economic factors in analyzing
alternate ozone reduction strategies. It is hoped that the
data sensitivity analyses and uncertainty analysis will
contribute to more precise model outcomes for regional t
ozone assessment.
Duke University has received a STAR grant to
refine procedures for estimating the benefits of reduc-
ing air pollution in California taking into account
geographic distributions of wealth, housing values and
other community characteristics. Results
are expected to help in evaluating the
importance of localized conditions in
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assessing overall pollution control
benefits, and to provide new estimates
of incremental benefits for reducing air
pollution in Southern California that
can serve as plausibility checks for
EPA's effects-specific measures.
Currently used benefits estimates
monetize risk reduction with each
specific effect treated independently,
even though the sum may be more
than an individual would be willing to
pay for all the risk changes as a group.
The new procedure is intended to
avoid this problem by assessing
peoples' willingness to pay for
pollution reduction in the aggregate.
The method will also allow compari-
sons of wealth and ethnicity profiles
for schools and neighborhoods to
those areas with greatest air quality
^^^^^^~ impacts,
^ factors that
are relevant
to environ-
mental
justice
consider-
ations. In a
second South-
ern California
study, San Diego
State University
and the University
of Texas at Dallas
are working on
improving air quality benefit estimates
by critically examining the relative
importance of data aggregation,
tradeoffs, and variations in space and
time using an exceptionally large time-
series data set. Data used are from the
entire South Coast Air Basin, compris-
ing Los Angeles, Orange, Riverside and
San Bernadino Counties, and contain-
ing over one hundred cities, for the
period 1980-1996. Willingness to pay
estimates will be developed and a new
procedure will be tested for estimating
the effect of air quality on housing
prices. It is expected that case studies
developed here should be of use in
benefits estimation for other locations.
There have been reports of cases
in which taxes designed to further
environmental protection have
unintentional negative consequences
because of taxed entities' responses to
new taxes combined with pre-exisiting
economic factors. Such factors can
include other taxes that affect capital
or labor costs. Stanford University is
working with Resources For The
Future to assess the effects of such
"distorting taxes", and to recommend
policy approaches that would comple-
ment, rather than work
against, economic forces in accom-
plishing pollution reduction. As an
example, they will examine regula-
tions affecting electric utilities. Results
may help in the design of regulatory
instruments that accomplish environ-
mental protection goals while mini-
mizing unintended costs of compli-
ance. In another study relevant to
electricity use, the University of
Maine is reviewing survey data
collected by the Department of Energy
on the effects of "environmental
labeling" of products on consumers'
purchasing behavior. Factors analyzed
will include the different label types,
for example "environmental certifica-
tion" or "disclosure". Researchers will
assess the degree to which consumers
find labels relevant, credible and easy
to understand. Results will be differen-
tiated according to respondents'
socioeconomic characteristics;
providing information regarding the
impact of environmental labeling
programs in different groups of
people.
Reduced visibility in scenic areas
is an impact of particular concern in
air quality regulation. The University
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of New Hampshire and the Univer-
sity of Massachusetts are joining with
the Appalachian Mountain Club in
research to determine how reduced
visibility may affect the regional
economy in New Hampshire's White
Mountains. It has been speculated
that deregulation of the electric
industry could lead to degradation in
air quality and visibility. This study will
use two commonly applied valuation
methods, contingent valuation and
conjoint analysis (see final section of
this report) to assess the likely impacts
of visibility changes in the White
Mountains on perceptions and
economically-related activities of
visitors to the region. This is described
by economists as estimating the
impact on the "consumer surplus" of
recreational visitors. Results will be
relevant to examining the cost
implications of deregulation in this
and other areas.
Wetland Protection
The University of Rhode Island
is modeling public preferences
regarding forested wetlands, compar-
ing potential economic returns from
developing
wetlands to
amounts
people have
Rhode Island's wetlands decisions,
these data will be compared to
answers respondents have given to
hypothetical questions concerning
their "willingness to pay" to preserve
wetlands in various places. This cross-
checking of real expenditures with
theoretical willingness-to-pay data will
help researchers calibrate the realism
of such theoretical data, which are
widely used in estimating values the
public holds for environmental
resources.
In another wetland valuation
study, Iowa State University is
assessing values of restoring wetlands
that are important for sustaining
waterfowl, flood management and
other ecological functions, as well as
the non-monetary "existence value" of
natural ecosystems to people with
expressed interests in environmental
conservation. This will provide a
framework for combining the widely
varying types of information available
on such values: monetizable data such
as expenditures on hunting and other
human uses, information on people's
wetland uses and travel to wetland
sites, and theoretical willingness to pay
surveys.
A third wetlands study by Johns
Hopkins University focuses on
optimizing the benefits of protecting
specific wetlands because they
contribute to migratory flyways for
waterfowl. Available state and
federal Geographic Information
System wetlands databases will be
used to identify wetland candidates for
inclusion in a protected flyway system.
Cost data, including approximate land
values and wetland restoration costs,
will be gathered and models will be
formulated to evaluate alternate
corridor's configurations. Objectives
[hat might be specified include
minimizing corridor cost, maximizing
the amount of habitat in the corridor,
and ensuring a suitable geographic
distribution of habitat. Tradeoffs
between cost and habitat protec-
tion will be examined. Results will be
relevant to the needs of the U.S. Army
Corps of Engineers, U.S. Fish and
Wildlife Service and other agencies
that implement the North American
Waterfowl Management Plan.
Benefits of Protecting
Surface Waters
In 1996, flooding occured in the
Pacific Northwest at levels unseen for
three decades. In Salem, Oregon,
high sediment loads due to the winter
flood overwhelmed the municipal
water supply's filtration capacity,
halting water delivery. The city and
major water customers incurred
extraordinary costs to alter operations
or obtain backup supplies. The
watershed is heavily forested, and
there is now debate over the extent to
which logging and related activities
led to the extraordinary sediment
loads. Despite extensive assessments
of activities affecting forest ecosystems
in the region, there exists no full
analysis of the downstream economic
consequences of increased sedimenta-
tion. The University of Oregon is
conducting such an analysis, attempt-
ing to establish correlations between
upland forest management practices
and the economic consequences of
stream sedimentation for water
supplies. They will estimate down-
stream costs due to sedimentation,
and assess the contributions of land
and reservoir management activities to
sediment loads, providing their results
for use by the state and municipal
management authorities and public
stakeholder groups that are actively
addressing these issues in the region.
Values associated with improv-
ing the condition of southwestern
streams, streambanks and rangelands
are being studied by the University of
New Mexico. Investigators will
incoporate data on real payments
made to protect some resources with
information from focus groups and
STAR: Bui/ding a scientific foundation for sound environmental at
eciswns
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There is disagreement about now best to estimate improvements in property value expected to result from the cleanup of hazardous waste sites.
other ways of asking about people's
preferences. This study will include
method assessment relevant to
environmental valuation studies as a
whole.
Iowa State University is
examining approaches to modeling
recreation demand in two case
studies, one for the Wisconsin Great
Lakes Region, and one for Iowa
wetlands. Recreation demand models
are used to value existing recreation
facilities and in decisions affecting the
numbers and types of recreation sites
in an area. Two models will be tested
with data sets from these two areas in
an attempt to overcome problems that
have been encountered in the past
when such theoretical models have
been tested in actual valuation
settings. If the models prove work-
able, the advantage offered is a better
ability to link together various factors
relating to site selection, participation
decisions and other aspects of
recreational users' behavior, providing
a behavior modeling framework that
unifies factors previously modeled
through cumbersome separate
analyses.
Contaminated Sites
The choice of a remedial
strategy for a site with contaminated
groundwater involves tradeoffs
between the large expenses of action
and the large and uncertain conse-
quences of inaction - consequences
for health, for ecological quality, and
for the availability of drinking water.
The Massachusetts Institue of
Technology is developing a decision
analysis framework for groundwater
remediation to help site managers deal
with such tradeoffs. The choice of a
strategy involves attitudes toward risk,
the discounting of outcomes in the
distant future, concerns for equity
among outcomes at different times,
and concerns for equity among the
outcomes for different groups of
people. The research brings together
recently emerging ideas from the
natural and social sciences. Ground-
water hydrologists are recognizing
that slow mass-transfer processes
between mobile and immobile
material phases constrain rates of
human aquifer remediation, but that
slow natural degradation processes
will tend to reduce organic contami-
nant levels over the long-term.
Decision analysts are recognizing the
importance of modeling social values
to include significance to future
generations and concerns for equity in
the present day. This research will
provide a framework for evaluating
alternatives for cleanup and contain-
ment, based first on information
pertaining to a case study location,
and then generalized into a model
intended to be of use for national site
remediation policy analysis.
Michigan Technological
University and Northern Michigan
University are also developing and
testing new algorithms that would
allow optimizing for multiple objec-
tives in analyzing groundwater
remediation problems. Objectives to
be addressed include minimizing cost,
risk and time, in the context of
complex contaminated subsurface
environments. The project will
produce a software tool based on a
version of a mathematical model
called a Niched Pareto genetic
algorithm, which allows multi-
objective optimization. It is hoped
that resulting remediation designs will
be significantly less expensive than
those provided by traditional ap-
proaches.
There is disagreement about
how best to estimate improvements in
property value expected to result from
the cleanup of hazardous waste sites.
Previous studies typically have not
assessed property values after cleanup
has been completed, and may not
take into account the effect of post
cleanup stigma, in which an area may
be clean and safe, but prospective
buyer willingness to pay is still
negatively affected. The University of
California at Berkeley is assessing this
effect in a study of housing values
post-cleanup. They will develop an
economic model of "hysteresis" (the
tendency of values to return to
previous levels) based on their findings
of post-cleanup prices paid for
residential real estate at varying
distances from the cleanup location.
National Accounts
The U.S., and all developed
nations, regularly report data on
national economic conditions,
including such familiar "national
accounts" as the gross national
product (or gross domestic product),
employment data, costs for goods and
services, productivity and other
statistics. However, neither the U.S.
nor other nations report similar
comprehensive statistics on the values
to society of natural resources, or the
loss of value when such resources are
damaged by pollution, land develop-
ment and other human impacts. Such
national accounts of natural resource
values are not yet widely reported in
part because of a lack of agreed upon
methodologies for defining them.
Two STAR program grants have been
&EPA
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Ecosystem health ana environmental quality depend in large part on the pattern of land use.
awarded to economists developing ways to perform such valuations relevant to
U.S. national accounts. The University of Colorado at Boulder is assessing
which proposed national account revisions would be most useful for evaluating
overall impacts on social welfare of natural resource degradation. Factors to be
considered include not only ways to evaluate the current stock of environmental
goods, but also ways to predict future effects based on current man-made
capital stock and potential technology advances, shifts in human preferences
that may occur over time, and the fact that some potential environmental
impacts would be irreversible. The Colorado School of Mines is specifically
developing ways to estimate values of energy and mineral resources, so that
additions to and depletions of these resources could be incorporated more
accurately in national accounts.
Industrial and Household Pollution Prevention
The economic benefits of pollution prevention and other innovative
industrial approaches are assessed by several STAR grants. The University of
Rhode Island and Woods Hole Oceanographic Institute have a joint project to
estimate potential cost savings of technological innovation in offshore oil drilling
operations. An historical analysis of offshore oil practices will provide the
baseline for developing scenarios of potential future productivity changes and
impacts of innovation. The model will be linked to various types of environmen-
tal regulation, including market-based approaches, to explore their implications
for encouraging innovation, pollution prevention and improvements in produc-
tivity. A notable feature of this model lies in identifying the significance of
technological advances as well as more subtle process changes, which can have
major effects on process efficiency, waste production and management needs,
and overall economic productivity of an operation.
The University of Utah is taking advantage of construction of a new Salt
Lake City/County Household Hazardous Waste Facility to study attitudes and
behavior change of household members concerning not only proper disposal,
but also proper use of hazardous materials, including reduced use and proper
storage for extended shelf life. The project will test a combination of individual
persuasion and small group involvement techniques, including pamphlets,
meetings and discussion groups. The importance of understanding and
influencing a community's shared values is a major focus. If successful, tech-
niques developed can serve as a model for other communities interested in
reaching large numbers of citizens to optimize the environmental and economic
efficiency of their household hazardous waste management programs.
Biotechnology
The University of California at Berkeley is assessing potential benefits
associated with developing new or cheaper products using biotechnology. This
will be integrated with existing efforts to estimate economic benefits of preserv-
ing biodiversity, which protects the exisiting stock of genetic resources. It is
hoped this may provide a more comprehensive economic approach for valuing
biodiversity as well as the potential benefits of goods (medicines, crops, etc.)
incorporating or derived from newly engineered genetic materials.
Farmland Preservation
Programs
Ecosystem health and environ-
mental quality depend in large part on
the pattern of land use. Farmland
preservation is one policy instrument
that seeks directly to control that
pattern. The University of Maryland is
studying landowners' farmland
preservation behavior. A profusion of
farmland preservation programs in
that state set the stage for an experi-
ment that allows us to test how
different features of such programs
affect different landowners' decisions
to sell development rights. They will
assess the factors influencing whether
landowners will participate in various
preservation programs. A second
objective will be to predict the
ecological consequences of the farm
preservation programs, using generally
agreed upon indicators that reflect
environmental quality as influenced by
land use patterns.
Public Values Concerning
Health Risks
Duke University and the
Research Triangle Institute have
received a STAR grant to study public
values concerning human fertility risks
that might be posed by some environ-
mental contaminants. Typical
valuation methods assess values of
individuals. However, that may not be
a complete way of assessing public
concern about this issue, since it
intrinsically involves values people
hold as couples. This study will
emphasize ways, using focus groups
and other methods, of helping
respondents describe their values
concerning fertility risks so that
feelings as individuals and as couples
are incorporated in survey results.
Results will be used to develop a
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model of "household" decision
making and values that would be
relevant to environmental decision
making concerning reducing possible
fertility risks.
An interdisciplinary team from
Resources for the Future, the
University of Maryland, the Univer-
sity of Colorado and the University
They will estimate willingness to pay
for risk reduction over an entire
lifetime, with a particular emphasis on
valuation of benefits that occur later in
life. Results are intended to provide
quantitative estimates to be for
benefits assessments for a range of
policy applications. Two thousand
people are included in the study.
this approach promises to improve
ecosystem management by creating a
secondary information market for
ecosystem services valuations.
Another ecosystem valuation
grant, focusing on site selection
procedures for biological reserves, has
been awarded to a team from Oregon
State University, the University of
For environmental protection ana sustained economic growth to occcur together requires ... common sense approaches that favor the most cost-
effective ways to achieve our goals. EPA is committed to seeking the most cost-effective approaches by incorporating estimates of costs ana
benefits in strategic planning, where valid estimates of costs ana benefits of economically significant regulations exist [EPA Strategic Plan]
of Michigan will combine economic
and psychological methods to better
understand how people evaluate the
importance of the relatively tiny
estimated mortality risks associated
with environmental pollution. Results
will be used to develop survey
"instruments" (e.g., questionnaires)
that help respondents more effectively
provide, and policymakers more
readily interpret, information on values
relevant to very small risks of serious or
lethal health impacts. In a related
study, Harvard University and the
University of California at Berkeley
are working to improve procedures for
assessing public values placed on
avoiding health risks of varying
severity. A common problem with
valuation methods is that, when faced
with standard contingent valuation
questions concerning willingness to
pay, people may say that they value
avoiding even quite minor risks equally
to preventing major risks. Researchers
will test survey designs to improve
ways of communicating about the
magnitude of health risks, so that
respondents better understand the
risks when asked to evaluate reason-
able costs to avoid them.
A team of researchers from
Resources for the Future, the
University of Maryland, the Univer-
sity of Colorado and the University
of Michigan is testing two new survey
instruments for estimating people's
valuation of mortality risk reductions.
Ecosystem Valuation
Despite tremendous progress in
environmental protection over the last
few decades, ecosystems remain under
threat from the cumulative effects of
remaining pollution sources and land
development, and we lack agreed
upon tools to assess the "ecosystem
services" that are being lost as a result.
A team of leading economists,
ecologists and legal scholars from
American University, Stanford Univer-
sity, the University of Maryland,
Southern Illinois University and Indiana
University has received a STAR grant to
conduct case studies intended to bring
together, test and widely disseminate
the best current ideas on how to value
ecosystem services in addressing some
of the more widespread environmental
management problems. Problems to
be considered include contaminated
site management, natural resource
damages, which include wildlife
declines, and efforts to mitigate
destruction or degradation of wet-
lands. Products will include a practical
users' guide for managers working in
the field. This will provide instruction
on using non-monetary valuation
methods - i.e. indicators - focused on
performance measures of local
ecosystem services. The project will
also provide an analysis of existing
legal authorities that may allow a shift
in focus of decision making processes
towards the maintenance of ecosys-
tem services. The research team feels
Cincinnati, the University of Maine
and the University of Idaho. They
will evaluate various technical factors
for defining areas of greatest impor-
tance for conserving biological
diversity. Factors assessed will include
the probabilities of individual species'
occurence at sites, combined species
coverages, and the validity of using
such simple measures as proxies for
more sophisticated diversity indices.
A large, multidisciplinary study
to predict the linked ecological and
economic effects of environmental
protection in Maryland's Patuxent
watershed is being funded by EPA and
other federal programs, and con-
ducted by a team from several
universities and state and federal
agencies. One component of this
"Ecological Economics Patuxent
Watershed Model", conducted by
Clark University and the University
of Maryland, is supported by EPA's
STAR environmental economics
program. They are developing
ecosystem health indices relevant to
the Patuxent area, and linking the
ecosystem models to a pricing model
that contributes to overall project
predictions of economic implications
of environmental protection options.
This joint modeling effort will help
economists and managers more fully
consider the positive results of
protecting watersheds through
streamside buffer zones and other
reductions in nonpoint source pollu-
STAR: Building a scientific foundation for sound environmental a<
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tion, by providing better agreed upon
ways of quantifying resulting improve-
ments in ecosystem conditions.
Forest management is often
considered as an option for reducing
net human carbon emissions to reduce
global warming. The Ohio State
University is assessing the societal
costs that might be entailed in storing
carbon in forests through large-scale,
global carbon sequestration programs.
Previous studies have not considered
the system-wide, dynamic effects that
would result from global-scale
managed forestry programs. Specific
objectives are to model the marginal
cost of carbon sequestration, develop
a global forest carbon storage data-
base, develop alternative strategies for
forest carbon sequestration, and
estimate costs. On a smaller scale,
Oregon State University is combining
biological and economic models for a
Cascade Mountains forest to analyze
land use problems to support forest
management. Wildlife dynamics will
be modeled with the widely used
PATCH population simulation model,
while a computerized search method,
most likely also a genetic algorithm,
will be used to describe optimal
timber stand growth for given timber
harvest objectives. The analysis will
generate estimates of tradeoffs
between timber production and
species survival and between survival
likelihoods for species within the set.
And it will incorporate financial
evaluation of timber harvest in a
unified managment framework. An
advantage over previous approaches is
that the conservation and economic
tradeoffs will be identified over the full
range of land management regimes,
rather than for a limited set of
alternatives
Refining Contingent Valuation, Conjoint Analysis,
Willingness To Pay Methods
A group of awards supports general methodology improvements,
focusing on the meaning and reliability of commonly used ways of assessing
public values for environmental protection. The University of California at San
Diego will compare results of a number of such methods, including "willingness
to pay" approaches among others. They will consider psychological factors
such as risk preferences and responses to uncertainty about costs and benefits,
and will assess how question and response formats affect survey outcomes. And
they will consider how to address the concern that answers can be greatly
affected by people's beliefs concerning how their answers will be used.
Georgia State University is testing contingent valuation survey designs,
including eliciting answers to theoretical questions about values that more
accurately mimic situations in which people actually pay for goods or services.
Carnegie Mellon University is also evaluating alternative valuation techniques.
Researchers there emphasize the need to help respondents answer questions
about issues that may seem ambiguous and difficult to understand, or about
impacts of uncertain scope or magnitude.
One method for assessing people's values for environmental protection
without relying solely on monetary measures is called "conjoint analysis". The
University of Rhode Island is using this type of analysis, developing and testing
environmental valuation surveys using such innovative techniques as interactive
multimedia computer presentations. They will try to modify standard economic
assumptions to include psychological factors such as people being ambivalent,
or having "fuzzy preferences", when confronted with decisions about environ-
mental values.
An important concern in developing environmental regulations is how to
measure the value of environmental resources to people who do not actively use
them for readily measured benefits. "Active uses" such as fishing, boating and
camping are often valued by determining the amounts people pay to enjoy
them through daily use fees, and in paying for gear, traveling, lodging and
similar costs. However, many feel that the value of protecting environmental
resources goes well beyond such active uses, including significant "passive use"
benefits to members of the public who want the resources to remain intact
whether or not they actively use them. A team from Cornell University,
Princeton University, the University of California at Los Angeles, the
University of Washington and the University of Colorado is studying ways to
obtain better agreed upon estimates of "passive use" values. Approaches
include assessing public preferences as revealed in an on-going "green pricing
program" in which customers of a New York power utility are asked to approve
expenditures through public good auctions such as purchasing a landfill gas
recovery project or planting a large number of trees. Another component of the
study will be to analyze a psychological phenomenon in which survey respon-
dents may have in mind environmental resource issues that are not the intended
focus of a survey, so that their answers describe values they hold for resources
other than those the survey addresses. This team includes researchers with
differing predictions on how the public will respond to various types of ques-
tion. It is hoped that this joint study will help provide statistically valid and
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relevant data to help resolve some central methodological differences among researchers
who work on passive use valuation.
A somewhat controversial type of valuation study asks respondents to evaluate their
willingness to accept hypothetical monetary compensation for potential environmental
impacts in their area. A team from Duke University and the Research Triangle Institute
is assessing concerns about such studies, particularly that people react negatively to
hypothetical proposals of cash compensation for environmental risks. The researchers will
attempt to develop a value survey that would avoid such a negatively viewed alternative
in obtaining input about values concerning facility siting decisions. As an example, rather
than suggesting hypothetical financial compensation to individuals, a survey might ask
about degrees of added public services, protections and/or amenities that would be
considered to compensate for siting a new facility in a community.
Investigators from the University of California at Irvine and the firm Decision
Insights are refining approaches to assess preferences when environmental decisions will
have important long term consequences. "Discount factors" are typically applied by
economists in valuing long-range future events, but more analysis is needed of people's
preferences in order to expand previous research on discount rates from readily monetized
consequences to many environmental non-monetized consequences.
A study by Vanderbilt University, in consultation with the Oak Ridge National
Laboratory, addresses the concern that some values studies may bias responses by directly
telling respondents that certain environmental resources are "good for" various recre-
ational uses, rather than allowing people to judge for themselves the attributes they most
value in selecting places to go for hiking, camping, sightseeing or other reasons. This
study will use a battery of group and individual interviews to test ways of assessing values
concering forest environments. It is hoped that results will benefit estimation methods
that are more defensible, and more complete in capturing the complexity of peoples'
values regarding desirable aspects of ecosystems.
EPA Research Awards Described in This Report
1998 ^^^^^^^^^^^^^^^^^^^^^^^^
Resources for the Future (DC) The
Valuation of Mortality Risk Reductions:
Application of Two New Survey
Instruments
Duke University (NC) The Role of
Locational Equilibria and Collective
Behavior in Measuring the Benefits of Air
Pollution Policies
University of Rhode Island (RI)
Environmental Policy and Endogenous
Technical Change: A Theoretical &
Empirical Analysis
University of California at Irvine (CA)
Assessing Preferences for Environmental
Decisions with Long-Term Consequences
American University (DC) Market
Valuation Models and Ecosystem
Management in Making Legal and Policy
Choices
Michigan Technological University (MI)
Multi-Objective Decision-Making for
Environmental Remediation
Iowa State University (IA) An Examination
of Utility Consistent Approaches to
Modeling Corner Solutions in Recreation
Demand
Ohio State University (OH) Estimating the
Cost of Carbon Sequestration in Global
Forests
University of Maryland at College Park
(MD) The Impact of Farmland
Preservation Programs
University of Maine (ME) Environmental
Labeling of Electricity: Label Design and
Performance
Oregon State University (OR) Land and
Management with Biological and
Economic Objectives
1997
University of New Hampshire (NH) A
Comparison of Direct Methods for
Valuing Environmental Policies: A Case
Study in New Hampshire's White
Mountains
Massachusetts Institute of Technology
(MA) A Decision Analysis Framework for
Groundwater Remediation
University of Oregon (OR) Establishing
Correlations between Upland Forest
Management Practices and the Economic
Consequences of Stream Turbidity in
Municipal Supply Watersheds
Resources for the Future (DC) Cost-
Benefit and Uncertainty Analysis for
Ambient Ozone Reduction: Development
and Demonstration of an Integrated
Model and Framework
Dept. of Agriculture & Resource
Economics University of California at
Berkeley (CA) Stigma of Environmental
Damage on Residential Property Values
Dept. of Geography and Environmental
Engineering |ohns Hopkins University
(MD) Delineating Optimal Wetland
Habitat Corridors for Inclusion in
Migratory Flyways
San Diego State University (CA)
Improving Air Quality Benefit Estimates
from Hedonic Models
University of Utah (UT) Promoting
Proper Use of a Household Hazardous
Waste Facility: A Systems Approach
1996
Resources for the Future (DC) Effective
Environmental Policy in the Presence of
Distorting Taxes (additional funds from
NSF)
Clark University (MA) Ecosystem
Valuation: Policy Applications for the
Patuxent Watershed Ecological-Economics
Model
Harvard University (MA) Valuation of
Risks to Human Health Insensitivity to
Magnitude?
Iowa State University (IA) Updating Prior
Methods for Non-Market Valuation A
Bayesian Approach to Combining
Disparate Sources of Environmental
Values
University of Rhode Island (RI) Stated
Preference Valuation Using Real Money
for Real Forested Wetlands
Woods Hole Oceanographic Institution
(MA) Decision-Making under Uncertainty
in the Conservation of Biological
Diversity
Research Triangle Institute (NC) Valuing
Reductions in Environmental Sources of
Infertility Risk Using the Efficient
Household Framework
1995
University of New Mexico (NM)
Preference Formation and Elicitation in
Valuing Non-Market Goods
University of California, San Diego (CA)
Comparative Studies of Approaches to
Eliciting Economic Values
Georgia State University (GA) Valuing
Environmental Damages with Stated
Preference Methods New Approaches that
Yield Demonstrably Valid Values for Non-
Priced Environmental Goods
Colorado School of Mines (CO) Valuing
the Stock and Flow of Mineral and
Renewable Assets in National Income
Accounting
Carnegie Mellon University (PA) Eliciting
Environmental Values A Constructivist
Approach
STAR: Building a scientific foundation for sound environmental decisions
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University of Colorado, Boulder (CO)
Environmental Values and National
Economic Accounts
Resources for the Future (DC) Mortality
Risk Valuation And Stated Preference
Methods An Exploratory Study
Duke University (NC) Improving
Willingness-to-Accept Responses Using
Alternate Forms of Compensation
University of Rhode Island (RI)
Developing Conjoint Stated Preference
Methods for Valuation of Environmental
Resources Within Their Ecological
Context
University of California at Berkeley (CA)
Deriving Biodiversity Option Value Within
a Model of Biotechnology Research and
Development
Vanderbilt University (TN) Innovation in
the Valuation of Ecosystems A Forest
Application
Cornell University (NY) Can Contingent
Valuation Measure Passive Use Values?
Related Research Supported by NSF
[Environmental Decision Making]:
1997
Georgia Institute of Technology (GA)
Multi-Criteria, Dynamic, and Place-Based
Approach to Ecosystem Valuation
Cornell University (NY) Demand
Revealing Mechanisms for Contingent
Valuation Validity Tests: An Experimental
Approach Using Appropriate Populations
Vanderbilt University (TN) Citizen's
Preference for Environmental Options:
Evidence on Existence and Triggering
Cornell University (NY) Planned
Behavior, Environmental Values and
Domestic Water Conservation. A
Longitudinal Case Study of the California-
Nevada Truckee River Watershed
1996
Decision Science Research Institute (OR)
Distinguishing Values from Valuation in a
Policy Relevant Manner
University of Maryland (MD) Aggressive
and Deliberative Contexts for Valuation:
A Philosophical Contribution to
Experimental Research in Environmental
Decision Making
University of Minneapolis (MN) Optimal
Experimental Design for Conjoint
Analysis
Resources for the Future (DC) The
Transition to Green Technology:
Implications of Irreversibility and
Noncovexity
Social Science Research Institute (MA)
Factors Influencing Participation of Local
Governmental Officals in Environmental
Policy Making
Cornell University (NY) Policy, Norms
and Values in Forest Conservation:
Protected AreaBuffer Zone Management
in Central America
General Information: The Environmental Protection Agency's STAR Research Program
Grants described in this report are part of EPA's Science to Achieve Results (STAR) program, a major research initiative designed to improve
the quality of scientific information available to support environmental decision making. The STAR program is managed by EPA's National
Center for Environmental Research and Quality Assurance in the Office of Research and Development (ORD). The program funds approxi-
mately 190 new grants every year, with the typical grant lasting three years. Funding levels vary from $50,000 to over $500,000 per year,
with FY1999 funding level at about $95 million for grants to individual principal investigators or groups of investigators. Additional STAR
funds are provided for a number of Research Centers specializing in scientific areas of particular concern to EPA, and for fellowship
programs supporting graduate students conducting environmental research.
&EBV
United States
Environmental Protection Agency
Mail Code 8701R
Washington, D.C. 20460
Offical Business
Penalty for Private Use
$300
EPA/600/F-99/012
STAR: Building a scientific foundation for sound environmental di
Decisions
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