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

100'

A. J. DOUGLAS AND R L. JOHNSON

flow related amenity values can be remarkably disparate. The disparity in the
benefits estimates produced in two recent studies is worth noting. Olsen et al.38 esti-
mate benefits of $171 million per annum for 3.4 million Pacific Northwest
(Washington, Oregon, Idaho, and western Montana) households of doubling the size
of the Columbia River basin anadromous fish runs. The runs currently average about
two million returning adults.39 Under pristine conditions, there were roughly 10-16
million spawning adult fish per annum. Loomis et al.7 estimate annual benefits of
over $2 billion dollars for a partial restoration of the fish runs of the San Joaquin
River in central California; their population base estimate of aggregate willingness-
to-pay is 12.5 million California, Nevada, Washington, and Oregon households.
There are some differences in the studies; the aggregate household benefits esti-
mates in Olsen et al.38 contain a user component. Loomis et al.7 estimate an average
household willingness-to-pay for restoring the San Joaquin River run by non-
California households of $103 per annum. Nevada households are only 20% of the
total non-California household population in Loomis et al. 7 Olsen et al. 38 estimate an
average willingness-to-pay for Pacific Northwest households of $50.34 per annum
for doubling the Columbia River basin fish runs. Over 80% of the population in their
study consists of Washington and Oregon households. Thus. there is a sharp differ-
ence in the results for the household subset common to both studies. Olsen et al.38
should have included California households in their benefits study. California is the
only state outside the Pacific Northwest region that imports a significant amount of
Columbia River basin hydropower generated electricity.40
An estimate of the social benefits provided to California and Nevada households
should take into account the fact that California and Nevada residents will pay less
for resource protection for the Columbia River basin runs than Pacific Northwest
residents. The estimated ratio of willingness-to-pay for California versus non-
California households in Loomis et aU can be used as a rough adjustment factor.
Applying this adjustment factor to the aggregate annual benefits estimate in Olsen
et al. 38 to estimate the California-Nevada aggregate willingness-to-pay results in a
total aggregate benefits estimate of $324-$461 million per annum for Pacific
Northwest. California. and Nevada households. The range brackets extreme
assumptions about the rate at which California and Nevada households fish in
Columbia River basin waters.
A wholesale extrapolation of the benefits estimates in Loomis et aI.7 to the
Columbia River run involves using a $103 per year average household benefits value
for Pacific Northwest households and $57.97 as the mean per year benefits value for
California and Nevada households for doubling the size of the fish runs. One ration-
ale for making the upward adjustment is that some of the Columbia River runs are
badly depleted. The National Marine Fisheries Service proposed listing these runs as
threatened and endangered species after the Olsen et aI.38 survey instrument had
been administered (see Miller41). A survey instrument that distinguishes between
restoring badly depleted runs to a viable condition and doubling the overall size of
the aggregate spawning run for viable runs might generate larger benefits estimates.
The extrapolation of Loomis et al.'s benefits estimates to the Columbia River basin
run generates an aggregate willingness-to-pay of $945 million per annum. The three
sets of benefits estimates listed in this section for doubling the Columbia River
anadromous fish runs are hereafter labeled the Olsen et al. 38 estimate ($171 million
per annum), the modified-Olsen estimate ($324-$461 million per annum), and the
extrapolated Loomis estimate ($945 million per annum) (Table I).
Consider the Federal Energy Regulatory Commission (FERC) relicensing pro-
cess in the light of the benefits estimates of Loomis et al.7 and Olsen et ai.3M Many