WWRC 89-36
Valuing Groundwater Protection Benefits
Introduction
Groundwater is a valuable, renewable natural resource that, if contaminated
by economic activities, may be rendered a nonrenewable, unusable, and
mobile public hazard. There are reasons to believe, given certain physical and
technical aspects of groundwater contamination, that the straightforward
piecemeal application of conventional Cost-Benefit analysis will lead to a
cumulative loss of groundwater resources.
This report develops and extends features of economic theory appropriate
to groundwater contamination issues, provides some empirical applications and
reports empirical results, and suggests an easy-to-use technique that will
usually allow policymakers to obtain a reasonably accurate and precise
prediction of the economic benefits of groundwater protection.
This chapter surveys and synthesizes the analytical literature that deals
with the economic value of preventing or remedying groundwater contamination.
We identify and resolve several literature omissions and discuss the value
implications of alternative analytical frameworks.
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