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© 1990 by S.E.L & Associates Economic Benefits of Instream Flow to Fisheries: A Case Study of California's Feather River John Loomis Division of Environmental Studies University of California-Davis Davis, California 95616 Joseph Cooper Department of Agricultural Economics University of California-Davis Davis, California 95616 ABSTRACT. Performing a benefit cost analysis of changes in instream flow requires knowledge of how the demand function shifts with changes in flow or flow related variables, such as fish catch. This paper presents a simultaneous system of demand and production equations that explicitly incorporates an instream flow variable. With this simultaneous system, the effect on recreationists' benefits of a change in instream flow can be directly measured. The Travel Cost Model demand equation includes the level of fish catch as the quality variable, that is, in turn, a function of river flow. The case study modeled this relationship between river flow and fishing trips to the North Fork of California's Feather River. KEY WORDS. Recreation, demand curves, travel cost method, consumer surplus, regression, fishing quality. INTRO Ensuring adequate river flows for rec- reational fisheries on Northern Cali- fornia's Feather River is a major challenge for state and federal water managers. The challenge lies in providing equal consid- eration for fisheries and developmental uses of water. For example, federal water resource agencies governed by the U.S. Water Resources Council Principles and Guidelines (WRC 1983) and the Federal Energy Regulatory Commission under the Electric Consumers Protection Act of 1986 (16 U.S.C. 79la-825r as amended), require a comparison of benefits and costs for pro- posed water projects. One way to provide equal consideration to fisheries resources is to answer the question: How much is water worth to society when left in a par- ticular stretch of the river? DUCTION To answer this question, one first has to define the affected members of society, and, second, measure the impact. Past studies have shown that visitors to rivers such as anglers, boaters and swimmers are affected by changes in instream flow (Walsh et al. 1980; Daubert and Young 1981; Ward 1987). If flow levels are substantially reduced, shoreline users, such as picnickers, can also be affected. When the decision is made to dam a river, even the nonvisiting general public is affected (Walsh et al. 1985). Knowing that a broad segment of the public suffers when streamflows are re- duced begs the question of how this impact can be measured. In general, there are three theoretically correct and widely recom- mended techniques for measuring the val- ue of environmental goods: (1) contingent Rivers Volume 1, Number 1 Pages 23-30 23 '?