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Valuing Water Resources

Water Resource Development and Management

  1. Diane Dupont,
  2. Steven J. Renzetti

Published Online: 15 APR 2005

DOI: 10.1002/047147844X.wr157

Water Encyclopedia

Water Encyclopedia

How to Cite

Dupont, D. and Renzetti, S. J. 2005. Valuing Water Resources. Water Encyclopedia. 2:653–656.

Author Information

  1. Brock University, St. Catharines, Ontario, Canada

Publication History

  1. Published Online: 15 APR 2005

Abstract

The starting point for most economic methods for measuring the value of water is an understanding of the structure of household tastes or preferences and firms' productive technologies. This understanding can then be used to develop measures of the benefits of water use and the change in household welfare or firm profits that arise from changes in the price, quantity, or quality of water. These measures, in turn, allow the analyst to determine the maximum willingness to pay (in the case of a change leading to an improvement in welfare) for water. This idea of willingness to pay forms the cornerstone of economic measures of value.1

Keywords:

  • value;
  • willingness to pay;
  • contingent valuation;
  • residual imputation;
  • water demand;
  • avoided cost;
  • travel cost method;
  • hedonic valuation;
  • option value;
  • nonuse value