7793

• UCREFRP Catalog Number: 7793
• Author: Douglas, A. J. and R. L. Johnson
• Title: Instream Flow Assessment and Economic Valuation
• USFW Year: 1993
• USFW - Doc Type: A Survey of Nonmarket Benefits Research
• Copyright Material: YES

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III"mJ Ellvirollm~III.1 Studits, 1993. Vol. 43, pp. 89-104

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IN STREAM FLOW ASSESSMENT AND ECONOMIC
VALUATION: A SURVEY OF NONMARKET
BENEFITS RESEARCH

AARON 1. DOUGLAS and RICHARD L. JOHNSON

National Ecology Research Center, US Fish and Wildlife Service,
4512 McMurry Avenue, Fort Collins, Colorado 80525-3400 (USA)

(Received September 8, 1992)

Instream flow benefits for United States streams and rivers have recently been investigated by a number
of resource economists. These valuation efforts differ in scope, method. and quantitative results. An
assessment and review of these valuation efforts is presented. The various sources of differences in non-
market values produced by these studies are explored in some detail. The considerable difficulty of pro-
ducing estimales of instream flow benefits values that consider all of the pertinent policy and technical
issues is delineated in various policy contexts. Evidence is presented that indicates that the considerable
policy impact of recent research on this topic is justified despite considerable variation in the magnitude
of the estimates.

KEY WORDS: Off-site benefits, instream flow, non market.

INTRODucnON

Within the last decade, nonmarket evaluation techniques have been applied to the
water resources of the United States,1 More particularly, they have been used to esti-
mate nonmarket benefits provided by rivers and streams. The considerable size of
the dollar values of instream flow benefits have played a key role in important
policy arenas.1.2 Yet many resource managers look to other types of analyses and
policy aids [see, for example, the paper by Cavendish and Duncan3] as tools for the
protection of instream flows. The current paper attempts to examine some of the
uses, limitations, and strengths of the recent economic literature on nonmarket
benefits of instream flows in the United States. This is a body of literature with a
deep, but until recently, somewhat narrow policy focus. The literature might have
had a still greater policy impact had it addressed a broader set of water allocation
issues.
The primary goal of this paper-to introduce the non-economist to the basic ter-
minology and research techniques of water based nonmarket valuation research-is
rather bland. However, the discussion does assess some of the policy implications of
the recent research. Nonmarket in stream flow valuation research is applied research
that attempts to influence decision makers. The discussion of water allocation issues,
therefore, deals with controversial issues.
Three aspects of the application of nonmarket valuation techniques to the valua-
tion of instream flows are considered here: the valuation method; the range of
dollar values for estimates of nonmarket social benefits provided by instream flows;
and the policy implications of the value estimates. The current review does not cite
the depth and breadth of the recent literature. To do so would be redundant in view

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