Benefits to beach users from water quality improvements
This report documents an empirical study of the value of water quality improvements at beaches in Ontario. A user survey was undertaken to develop basic descriptive information on beach use behaviour and water quality perceptions in Ontario. Beach users are shown to develop accurate perceptions of water quality conditions. The posting of beaches is a key determinant of this perception and is also a significant factor affecting decisions to use beaches. The estimated annual benefit associated with improved water quality at beaches ranges from $60 to $70 per household. The estimated annual loss caused by a deterioration of water quality ranges from $10 to $50 per household. A new approach to the valuation of environmental amenities based on "contingent use" data is successfully applied and compared to standard approaches. The research also explores key methodological issues. For instance, the treatment of extreme values held by some survey respondents is identified as a potentially significant source of bias in the analysis. An aversion to paying more taxes is estimated to depress the stated willingness to pay for improvements by $30.The opportunity cost of travel time for recreation was estimated to be 12% of the wage rate rather than 25% to 50% as is usually assumed in this type of research. Opportunities for additional analysis based on the survey data are described and a hypothetical case is used to demonstrate how the results of the analysis in this report can be applied in the evaluation of investments to improve water quality at beaches.
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