7812

• UCREFRP Catalog Number: 7812
• Author: Many
• Title: Rivers, Studies in the Science, Environmental Policy, and Law of Instream Flow
• USFW Year: 1990
• USFW - Doc Type: Rivers
• Copyright Material: YES

valuation method (CVM); (2) travel cost
method (TCM); and (3) hedonic property
value approach (McConnell 1985). The
CVM and TCM are commonly used in in-
stream flow studies. The first study to
quantify the economic value of alternative
levels of instream flow was performed by
Daubert and Young (1981) using the CVM.
Since then, the majority of instream flow
studies have largely relied on the CVM or
contingent behavior data (Loomis 1987).
The CVM is a market simulation approach
that asks people their net willingness to
pay for alternative river flows. The method
can be used to value visitors' as well as the
general public's willingness to pay for riv-
er protection.
The TCM is a demand estimating tech-
nique that quantifies visitors net willing-
ness to pay for recreation. Unlike the con-
tingent valuation method, TCM relies on
visitors' actual behavior to infer net will-
ingness to pay. To perform a benefit cost
analysis (BCA) of changes in recreation
benefits with different instream flows, it is
necessary to know how the TCM demand
function shifts with changes in instream
flow. However, it is often difficult to collect
the needed data indicating how visitation
rates actually change with flow levels. Past
applications of TCM to valuing instream
flow shifted the demand curves by the
change in visitation rates recreationists
stated they would make in response to al-
ternative river levels (Narayanan et al. 1983;
Ward 1987). While combining actual be-
havior to estimate the underlying demand
curve with intended behavior to estimate
the shift in the demand curve is clever, it
would be desirable to rely entirely on ac-
tual behavior in estimating both the un-
derlying demand curve as well as the shift
in the demand curve.
The contribution of this paper is in pro-
viding an approach for using actual data
to estimate both the underlying demand
equation as well as estimating how the de-
mand equation is indirectly shifted with
changes in flow. This is done by noting
that instream flow is often an input to pro-
ducing fishing quality; that is, river flow
influences both the amount (e.g., wetted
perimeter, depth of pools) and quality of
habitat (e.g., water temperature). Thus, an
angler might partially judge the adequacy
of river flows in terms of fishing quality.
Of course, the river flow itself may be of
additional value to the anglers in terms of
the aesthetics of the river and vigor of ri-
parian vegetation.
Nonetheless, fishing quality is certainly
one instream flow related variable of in-
terest to the angler. While the relationship
between instream flow and angler benefits
has been measured using the CVM for
steelhead trout (Johnson and Adams 1988),
it has not been measured relying only on
actual behavior within the TCM frame-
work.
Incorporating fishing quality into a TCM
to be built using secondary data is difficult.
If fishing quality is measured as the total
fish catch over some period of time it may
be a function of both streamflow and the
number of fishing trips taken to a site. Be-
cause of this simultaneity between fish
catch and trips, proper econometric pro-
cedure requires that a two equation system
be estimated. One equation is the demand
for trips and the other is a quasi-supply or
production equation for fish catch. In the
presence of simultaneity a single demand
equation that includes total fish catch may
result in biased and inefficient coefficient
estimates. Even if the relationship between
trips and catch is minimal, the estimation
of these two equations simultaneously al-
low the level of river flow in cubic feet per
second (cfs) to be explicitly incorporated
as the river quality control variable. Hence,
the effect of a change in river flow on rec-
reationists' benefits can be directly mea-
sured. No TCM studies allowing this direct
interaction between observed visitation
data and instream flow have ever been per-
formed (Douglas 1987).
THE MODEL
The economic benefit of maintaining in-
stream flow is measured as the visitor's
consumer surplus or net willingness to pay.
Consumer surplus, or maximum net will-
ingness to pay, is the maximum increase
in dollars above current costs a person
would be willing to pay for the purchase
of a good or service. Examples of a "good"
are a fishing trip or the viewing of a wild
bird. Total or gross willingness to pay is
1N- 24 Rivers • Volume 1, Number 1 January 1990