8 STAR

REPORT

Vol. 3 Issue 2 August 1999 A product of the National Center for Environmental Research and Quality Assurance

ENVIRONMENTAL DECISION MAKING AND ECONOMICS

U.S. EPA Office of Research

and Development’s Science

To Achieve Results (STAR)

Research in Progress

What methods are most accurate for determining the costs of environmental regulations?

How can we best describe or measure the benefits of protecting environmental resources?

How should we compare the value of preserving

an environmental resource with that of developing it? These are the types of questions that are

at the heart of EPA’s environmental economics

research.

Environmental policies and programs are intended to

protect the health and well being of humans and ecosystems. Policies that protect the environment also provide

economic value and other benefits to society. Federal

environmental laws typically require some economic

analyses to be conducted by implementing agencies.

The Clean Water Act requires economic impacts to be

considered in developing point source discharge

elimination requirements and in protecting wetlands to

preserve ecological benefits. The 1990 Clean Air Act

Amendments required EPA to assess the benefits of

improved air quality. And the federal law regulating

pesticide use mandates case-by-case risk-benefit analyses

to balance farmers’ and consumers’ benefits from

protecting crops against the potential for ecological

harm. In recent years, policymakers at all levels of

government have been increasingly asking for economic

information to help them understand and evaluate the

consequences of regulatory decisions. However, it is
widely felt by policymakers, economists and environmental scientists alike that available methods for evaluating the

benefits and the costs of environmental protection do not provide all the information decision makers and the public

want in judging the merits of proposed solutions to environmental problems. This report describes economic and

ecological research supported by EPA’s STAR program to meet the needs for cost, benefit and valuation information to

support environmental decision making.

Methods commonly used by economists to measure public values include revealed or stated preference methods

and contingent valuation. Representatives of the public are surveyed, or choices made by individuals or supported by the

public in local government forums are determined, to learn how various types of environmental protection have been

valued. Measures used by ecologists to describe the functions and services of healthy ecosystems are also central to

valuing the benefits of environmental protection. Each of these types of approach are furthered by research supported by

the STAR program. This report describes grants awarded from 1995 to 1998. The National Science Foundation (NSF) has

joined with EPA to identify a related set of projects to be supported within NSF’s Social, Behavioral and Economic Research

program. Those NSF projects are also briefly noted at the end of this report, with more details available from the NSF

Website at www.nsf.gov/sbe/.

Air Quality Benefits

In the eastern U.S., a multistate Ozone Transport Assessment

Group (OTAG) conducts modeling and assessments to support

regulatory decisions for the states’ air pollution control programs. The Georgia Institute of Technology and a nonprofit

Washinton, D.C.-based research organization called Resources

for the Future have a joint STAR grant to develop a model that

will be used to search for efficient pollutant control programs,

such as emissions or ambient trading, that could extend

the OTAG modeling work by adding an environmental benefit component. The new work also treats

economic cost and benefit factors, and the variables

relevant to ozone formation processes, by incorporating uncertainty factors to simulate the unpredictable aspects of these variables (such uncertainty

models are called “stochastic” rather than “deterministic”). Results are intended to help OTAG and others in

eastern states better consider economic factors in analyzing

alternate ozone reduction strategies. It is hoped that the

data sensitivity analyses and uncertainty analysis will

contribute to more precise model outcomes for regional

ozone assessment.

Duke University has received a STAR grant to

refine procedures for estimating the benefits of reducing air pollution in California taking into account

geographic distributions of wealth, housing values and

other community characteristics. Results

are expected to help in evaluating the

importance of localized conditions in

ENVIRONMENTAL DECISION MAKING AND ECONOMIC

RESEARCH IN EPA’S “STAR” PROGRAM
improving air quality benefit estimates

by critically examining the relative

importance of data aggregation,

tradeoffs, and variations in space and

time using an exceptionally large timeseries data set. Data used are from the

entire South Coast Air Basin, comprising Los Angeles, Orange, Riverside and

San Bernadino Counties, and containing over one hundred cities, for the

period 1980-1996. Willingness to pay

estimates will be developed and a new

procedure will be tested for estimating

the effect of air quality on housing

prices. It is expected that case studies

developed here should be of use in

benefits estimation for other locations.

There have been reports of cases

in which taxes designed to further

environmental protection have

unintentional negative consequences

because of taxed entities’ responses to

new taxes combined with pre-exisiting

economic factors. Such factors can

include other taxes that affect capital

or labor costs. Stanford University is

working with Resources For The

Future to assess the effects of such

“distorting taxes”, and to recommend

policy approaches that would complement, rather than work

against, economic forces in accomplishing pollution reduction. As an

example, they will examine regulations affecting electric utilities. Results

may help in the design of regulatory

instruments that accomplish environmental protection goals while minimizing unintended costs of compliance. In another study relevant to

electricity use, the University of

Maine is reviewing survey data

collected by the Department of Energy

on the effects of “environmental

labeling” of products on consumers’

purchasing behavior. Factors analyzed

will include the different label types,

for example “environmental certification” or “disclosure”. Researchers will

assess the degree to which consumers

find labels relevant, credible and easy

to understand. Results will be differentiated according to respondents’

socioeconomic characteristics;

providing information regarding the

impact of environmental labeling

programs in different groups of

people.

Reduced visibility in scenic areas

is an impact of particular concern in

air quality regulation. The University

assessing overall pollution control

benefits, and to provide new estimates

of incremental benefits for reducing air

pollution in Southern California that

can serve as plausibility checks for

EPA's effects-specific measures.

Currently used benefits estimates

monetize risk reduction with each

specific effect treated independently,

even though the sum may be more

than an individual would be willing to

pay for all the risk changes as a group.

The new procedure is intended to

avoid this problem by assessing

peoples’ willingness to pay for

pollution reduction in the aggregate.

The method will also allow comparisons of wealth and ethnicity profiles

for schools and neighborhoods to

those areas with greatest air quality

impacts,

factors that

are relevant

to environmental

justice

considerations. In a

second Southern California

study, San Diego

State University

and the University

of Texas at Dallas

are working on
of New Hampshire and the University of Massachusetts are joining with

the Appalachian Mountain Club in

research to determine how reduced

visibility may affect the regional

economy in New Hampshire's White

Mountains. It has been speculated

that deregulation of the electric

industry could lead to degradation in

air quality and visibility. This study will

use two commonly applied valuation

methods, contingent valuation and

conjoint analysis (see final section of

this report) to assess the likely impacts

of visibility changes in the White

Mountains on perceptions and

economically-related activities of

visitors to the region. This is described

by economists as estimating the

impact on the “consumer surplus” of

recreational visitors. Results will be

relevant to examining the cost

implications of deregulation in this

and other areas.

Wetland Protection

The University of Rhode Island

is modeling public preferences

regarding forested wetlands, comparing potential economic returns from

developing

wetlands to

amounts

people have

paid to

preserve

similar

wetlands.

In addition

to

providing

data

specific

to

Rhode Island’s wetlands decisions,

these data will be compared to

answers respondents have given to

hypothetical questions concerning

their “willingness to pay” to preserve

wetlands in various places. This crosschecking of real expenditures with

theoretical willingness-to-pay data will

help researchers calibrate the realism

of such theoretical data, which are

widely used in estimating values the

public holds for environmental

resources.

In another wetland valuation

study, Iowa State University is

assessing values of restoring wetlands

that are important for sustaining

waterfowl, flood management and

other ecological functions, as well as

the non-monetary “existence value” of

natural ecosystems to people with

expressed interests in environmental

conservation. This will provide a

framework for combining the widely

varying types of information available

on such values: monetizable data such

as expenditures on hunting and other

human uses, information on people’s

wetland uses and travel to wetland

sites, and theoretical willingness to pay

surveys.

A third wetlands study by Johns

Hopkins University focuses on

optimizing the benefits of protecting

specific wetlands because they

contribute to migratory flyways for

waterfowl. Available state and

federal Geographic Information

System wetlands databases will be

used to identify wetland candidates for

inclusion in a protected flyway system.

Cost data, including approximate land

values and wetland restoration costs,

will be gathered and models will be

formulated to evaluate alternate

corridor’s configurations. Objectives

that might be specified include

minimizing corridor cost, maximizing

the amount of habitat in the corridor,

and ensuring a suitable geographic

distribution of habitat. Tradeoffs

between cost and habitat protection will be examined. Results will be

relevant to the needs of the U.S. Army

Corps of Engineers, U.S. Fish and

Wildlife Service and other agencies

that implement the North American

Waterfowl Management Plan.

Benefits of Protecting

Surface Waters

In 1996, flooding occured in the

Pacific Northwest at levels unseen for

three decades. In Salem, Oregon,

high sediment loads due to the winter

flood overwhelmed the municipal

water supply’s filtration capacity,

halting water delivery. The city and

major water customers incurred

extraordinary costs to alter operations

or obtain backup supplies. The

watershed is heavily forested, and

there is now debate over the extent to

which logging and related activities

led to the extraordinary sediment

loads. Despite extensive assessments

of activities affecting forest ecosystems

in the region, there exists no full

analysis of the downstream economic

consequences of increased sedimentation. The University of Oregon is

conducting such an analysis, attempting to establish correlations between

upland forest management practices

and the economic consequences of

stream sedimentation for water

supplies. They will estimate downstream costs due to sedimentation,

and assess the contributions of land

and reservoir management activities to

sediment loads, providing their results

for use by the state and municipal

management authorities and public

stakeholder groups that are actively

addressing these issues in the region.

Values associated with improving the condition of southwestern

streams, streambanks and rangelands

are being studied by the University of

New Mexico. Investigators will

incoporate data on real payments

made to protect some resources with

information from focus groups and

STAR: Building a scientific foundation for sound environmental decisions
other ways of asking about people’s

preferences. This study will include

method assessment relevant to

environmental valuation studies as a

whole.

Iowa State University is

examining approaches to modeling

recreation demand in two case

studies, one for the Wisconsin Great

Lakes Region, and one for Iowa

wetlands. Recreation demand models

are used to value existing recreation

facilities and in decisions affecting the

numbers and types of recreation sites

in an area. Two models will be tested

with data sets from these two areas in

an attempt to overcome problems that

have been encountered in the past

when such theoretical models have

been tested in actual valuation

settings. If the models prove workable, the advantage offered is a better

ability to link together various factors

relating to site selection, participation

decisions and other aspects of

recreational users’ behavior, providing

a behavior modeling framework that

unifies factors previously modeled

through cumbersome separate

analyses.

Contaminated Sites

The choice of a remedial

strategy for a site with contaminated

groundwater involves tradeoffs

between the large expenses of action

and the large and uncertain consequences of inaction -- consequences

for health, for ecological quality, and

for the availability of drinking water.

The Massachusetts Institue of

Technology is developing a decision

analysis framework for groundwater

remediation to help site managers deal

with such tradeoffs. The choice of a

strategy involves attitudes toward risk,

the discounting of outcomes in the

distant future, concerns for equity

among outcomes at different times,

and concerns for equity among the

outcomes for different groups of

people. The research brings together

recently emerging ideas from the

natural and social sciences. Groundwater hydrologists are recognizing

that slow mass-transfer processes

between mobile and immobile

material phases constrain rates of

human aquifer remediation, but that

slow natural degradation processes

will tend to reduce organic contaminant levels over the long-term.

Decision analysts are recognizing the

importance of modeling social values

to include significance to future

generations and concerns for equity in

the present day. This research will

provide a framework for evaluating

alternatives for cleanup and containment, based first on information

pertaining to a case study location,

and then generalized into a model

intended to be of use for national site

remediation policy analysis.

Michigan Technological

University and Northern Michigan

University are also developing and

testing new algorithms that would

allow optimizing for multiple objectives in analyzing groundwater

remediation problems. Objectives to

be addressed include minimizing cost,

risk and time, in the context of

complex contaminated subsurface

environments. The project will

produce a software tool based on a

version of a mathematical model

called a Niched Pareto genetic

algorithm, which allows multiobjective optimization. It is hoped

that resulting remediation designs will

be significantly less expensive than

those provided by traditional approaches.

There is disagreement about

how best to estimate improvements in

property value expected to result from

the cleanup of hazardous waste sites.

Previous studies typically have not

assessed property values after cleanup

has been completed, and may not

take into account the effect of post

cleanup stigma, in which an area may

be clean and safe, but prospective

buyer willingness to pay is still

negatively affected. The University of

California at Berkeley is assessing this

effect in a study of housing values

post-cleanup. They will develop an

economic model of “hysteresis” (the

tendency of values to return to

previous levels) based on their findings

of post-cleanup prices paid for

residential real estate at varying

distances from the cleanup location.

National Accounts

The U.S., and all developed

nations, regularly report data on

national economic conditions,

including such familiar “national

accounts” as the gross national

product (or gross domestic product),

employment data, costs for goods and

services, productivity and other

statistics. However, neither the U.S.

nor other nations report similar

comprehensive statistics on the values

to society of natural resources, or the

loss of value when such resources are

damaged by pollution, land development and other human impacts. Such

national accounts of natural resource

values are not yet widely reported in

part because of a lack of agreed upon

methodologies for defining them.

Two STAR program grants have been

There is disagreement about how best to estimate improvements in property value expected to result from the cleanup of hazardous waste sites.
awarded to economists developing ways to perform such valuations relevant to

U.S. national accounts. The University of Colorado at Boulder is assessing

which proposed national account revisions would be most useful for evaluating

overall impacts on social welfare of natural resource degradation. Factors to be

considered include not only ways to evaluate the current stock of environmental

goods, but also ways to predict future effects based on current man-made

capital stock and potential technology advances, shifts in human preferences

that may occur over time, and the fact that some potential environmental

impacts would be irreversible. The Colorado School of Mines is specifically

developing ways to estimate values of energy and mineral resources, so that

additions to and depletions of these resources could be incorporated more

accurately in national accounts.

Industrial and Household Pollution Prevention

The economic benefits of pollution prevention and other innovative

industrial approaches are assessed by several STAR grants. The University of

Rhode Island and Woods Hole Oceanographic Institute have a joint project to

estimate potential cost savings of technological innovation in offshore oil drilling

operations. An historical analysis of offshore oil practices will provide the

baseline for developing scenarios of potential future productivity changes and

impacts of innovation. The model will be linked to various types of environmental regulation, including market-based approaches, to explore their implications

for encouraging innovation, pollution prevention and improvements in productivity. A notable feature of this model lies in identifying the significance of

technological advances as well as more subtle process changes, which can have

major effects on process efficiency, waste production and management needs,

and overall economic productivity of an operation.

The University of Utah is taking advantage of construction of a new Salt

Lake City/County Household Hazardous Waste Facility to study attitudes and

behavior change of household members concerning not only proper disposal,

but also proper use of hazardous materials, including reduced use and proper

storage for extended shelf life. The project will test a combination of individual

persuasion and small group involvement techniques, including pamphlets,

meetings and discussion groups. The importance of understanding and

influencing a community’s shared values is a major focus. If successful, techniques developed can serve as a model for other communities interested in

reaching large numbers of citizens to optimize the environmental and economic

efficiency of their household hazardous waste management programs.

Biotechnology

The University of California at Berkeley is assessing potential benefits

associated with developing new or cheaper products using biotechnology. This

will be integrated with existing efforts to estimate economic benefits of preserving biodiversity, which protects the exisiting stock of genetic resources. It is

hoped this may provide a more comprehensive economic approach for valuing

biodiversity as well as the potential benefits of goods (medicines, crops, etc.)

incorporating or derived from newly engineered genetic materials.

Farmland Preservation

Programs

Ecosystem health and environmental quality depend in large part on

the pattern of land use. Farmland

preservation is one policy instrument

that seeks directly to control that

pattern. The University of Maryland is

studying landowners' farmland

preservation behavior. A profusion of

farmland preservation programs in

that state set the stage for an experiment that allows us to test how

different features of such programs

affect different landowners' decisions

to sell development rights. They will

assess the factors influencing whether

landowners will participate in various

preservation programs. A second

objective will be to predict the

ecological consequences of the farm

preservation programs, using generally

agreed upon indicators that reflect

environmental quality as influenced by

land use patterns.

Public Values Concerning

Health Risks

Duke University and the

Research Triangle Institute have

received a STAR grant to study public

values concerning human fertility risks

that might be posed by some environmental contaminants. Typical

valuation methods assess values of

individuals. However, that may not be

a complete way of assessing public

concern about this issue, since it

intrinsically involves values people

hold as couples. This study will

emphasize ways, using focus groups

and other methods, of helping

respondents describe their values

concerning fertility risks so that

feelings as individuals and as couples

are incorporated in survey results.

Results will be used to develop a

Ecosystem health and environmental quality depend in large part on the pattern of land use.
model of “household” decision

making and values that would be

relevant to environmental decision

making concerning reducing possible

fertility risks.

An interdisciplinary team from

Resources for the Future, the

University of Maryland, the University of Colorado and the University

of Michigan will combine economic

and psychological methods to better

understand how people evaluate the

importance of the relatively tiny

estimated mortality risks associated

with environmental pollution. Results

will be used to develop survey

“instruments” (e.g., questionnaires)

that help respondents more effectively

provide, and policymakers more

readily interpret, information on values

relevant to very small risks of serious or

lethal health impacts. In a related

study, Harvard University and the

University of California at Berkeley

are working to improve procedures for

assessing public values placed on

avoiding health risks of varying

severity. A common problem with

valuation methods is that, when faced

with standard contingent valuation

questions concerning willingness to

pay, people may say that they value

avoiding even quite minor risks equally

to preventing major risks. Researchers

will test survey designs to improve

ways of communicating about the

magnitude of health risks, so that

respondents better understand the

risks when asked to evaluate reasonable costs to avoid them.

A team of researchers from

Resources for the Future, the

University of Maryland, the University of Colorado and the University

of Michigan is testing two new survey

instruments for estimating people’s

valuation of mortality risk reductions.

They will estimate willingness to pay

for risk reduction over an entire

lifetime, with a particular emphasis on

valuation of benefits that occur later in

life. Results are intended to provide

quantitative estimates to be for

benefits assessments for a range of

policy applications. Two thousand

people are included in the study.

Ecosystem Valuation

Despite tremendous progress in

environmental protection over the last

few decades, ecosystems remain under

threat from the cumulative effects of

remaining pollution sources and land

development, and we lack agreed

upon tools to assess the “ecosystem

services” that are being lost as a result.

A team of leading economists,

ecologists and legal scholars from

American University, Stanford University, the University of Maryland,

Southern Illinois University and Indiana

University has received a STAR grant to

conduct case studies intended to bring

together, test and widely disseminate

the best current ideas on how to value

ecosystem services in addressing some

of the more widespread environmental

management problems. Problems to

be considered include contaminated

site management, natural resource

damages, which include wildlife

declines, and efforts to mitigate

destruction or degradation of wetlands. Products will include a practical

users’ guide for managers working in

the field. This will provide instruction

on using non-monetary valuation

methods -- i.e. indicators -- focused on

performance measures of local

ecosystem services. The project will

also provide an analysis of existing

legal authorities that may allow a shift

in focus of decision making processes

towards the maintenance of ecosystem services. The research team feels

this approach promises to improve

ecosystem management by creating a

secondary information market for

ecosystem services valuations.

Another ecosystem valuation

grant, focusing on site selection

procedures for biological reserves, has

been awarded to a team from Oregon

State University, the University of

Cincinnati, the University of Maine

and the University of Idaho. They

will evaluate various technical factors

for defining areas of greatest importance for conserving biological

diversity. Factors assessed will include

the probabilities of individual species’

occurence at sites, combined species

coverages, and the validity of using

such simple measures as proxies for

more sophisticated diversity indices.

A large, multidisciplinary study

to predict the linked ecological and

economic effects of environmental

protection in Maryland’s Patuxent

watershed is being funded by EPA and

other federal programs, and conducted by a team from several

universities and state and federal

agencies. One component of this

“Ecological Economics Patuxent

Watershed Model”, conducted by

Clark University and the University

of Maryland, is supported by EPA’s

STAR environmental economics

program. They are developing

ecosystem health indices relevant to

the Patuxent area, and linking the

ecosystem models to a pricing model

that contributes to overall project

predictions of economic implications

of environmental protection options.

This joint modeling effort will help

economists and managers more fully

consider the positive results of

protecting watersheds through

streamside buffer zones and other

reductions in nonpoint source polluFor environmental protection and sustained economic growth to occcur together requires ... common sense approaches that favor the most costeffective ways to achieve our goals. EPA is committed to seeking the most cost-effective approaches by incorporating estimates of costs and

benefits in strategic planning, where valid estimates of costs and benefits of economically significant regulations exist.........[EPA Strategic Plan]

STAR: Building a scientific foundation for sound environmental decisions
tion, by providing better agreed upon

ways of quantifying resulting improvements in ecosystem conditions.

Forest management is often

considered as an option for reducing

net human carbon emissions to reduce

global warming. The Ohio State

University is assessing the societal

costs that might be entailed in storing

carbon in forests through large-scale,

global carbon sequestration programs.

Previous studies have not considered

the system-wide, dynamic effects that

would result from global-scale

managed forestry programs. Specific

objectives are to model the marginal

cost of carbon sequestration, develop

a global forest carbon storage database, develop alternative strategies for

forest carbon sequestration, and

estimate costs. On a smaller scale,

Oregon State University is combining

biological and economic models for a

Cascade Mountains forest to analyze

land use problems to support forest

management. Wildlife dynamics will

be modeled with the widely used

PATCH population simulation model,

while a computerized search method,

most likely also a genetic algorithm,

will be used to describe optimal

timber stand growth for given timber

harvest objectives. The analysis will

generate estimates of tradeoffs

between timber production and

species survival and between survival

likelihoods for species within the set.

And it will incorporate financial

evaluation of timber harvest in a

unified managment framework. An

advantage over previous approaches is

that the conservation and economic

tradeoffs will be identified over the full

range of land management regimes,

rather than for a limited set of

alternatives

Refining Contingent Valuation, Conjoint Analysis,

Willingness To Pay Methods

A group of awards supports general methodology improvements,

focusing on the meaning and reliability of commonly used ways of assessing

public values for environmental protection. The University of California at San

Diego will compare results of a number of such methods, including “willingness

to pay” approaches among others. They will consider psychological factors

such as risk preferences and responses to uncertainty about costs and benefits,

and will assess how question and response formats affect survey outcomes. And

they will consider how to address the concern that answers can be greatly

affected by people’s beliefs concerning how their answers will be used.

Georgia State University is testing contingent valuation survey designs,

including eliciting answers to theoretical questions about values that more

accurately mimic situations in which people actually pay for goods or services.

Carnegie Mellon University is also evaluating alternative valuation techniques.

Researchers there emphasize the need to help respondents answer questions

about issues that may seem ambiguous and difficult to understand, or about

impacts of uncertain scope or magnitude.

One method for assessing people’s values for environmental protection

without relying solely on monetary measures is called “conjoint analysis”. The

University of Rhode Island is using this type of analysis, developing and testing

environmental valuation surveys using such innovative techniques as interactive

multimedia computer presentations. They will try to modify standard economic

assumptions to include psychological factors such as people being ambivalent,

or having “fuzzy preferences”, when confronted with decisions about environmental values.

An important concern in developing environmental regulations is how to

measure the value of environmental resources to people who do not actively use

them for readily measured benefits. “Active uses” such as fishing, boating and

camping are often valued by determining the amounts people pay to enjoy

them through daily use fees, and in paying for gear, traveling, lodging and

similar costs. However, many feel that the value of protecting environmental

resources goes well beyond such active uses, including significant “passive use”

benefits to members of the public who want the resources to remain intact

whether or not they actively use them. A team from Cornell University,

Princeton University, the University of California at Los Angeles, the

University of Washington and the University of Colorado is studying ways to

obtain better agreed upon estimates of “passive use” values. Approaches

include assessing public preferences as revealed in an on-going “green pricing

program” in which customers of a New York power utility are asked to approve

expenditures through public good auctions such as purchasing a landfill gas

recovery project or planting a large number of trees. Another component of the

study will be to analyze a psychological phenomenon in which survey respondents may have in mind environmental resource issues that are not the intended

focus of a survey, so that their answers describe values they hold for resources

other than those the survey addresses. This team includes researchers with

differing predictions on how the public will respond to various types of question. It is hoped that this joint study will help provide statistically valid and
relevant data to help resolve some central methodological differences among researchers

who work on passive use valuation.

A somewhat controversial type of valuation study asks respondents to evaluate their

willingness to accept hypothetical monetary compensation for potential environmental

impacts in their area. A team from Duke University and the Research Triangle Institute

is assessing concerns about such studies, particularly that people react negatively to

hypothetical proposals of cash compensation for environmental risks. The researchers will

attempt to develop a value survey that would avoid such a negatively viewed alternative

in obtaining input about values concerning facility siting decisions. As an example, rather

than suggesting hypothetical financial compensation to individuals, a survey might ask

about degrees of added public services, protections and/or amenities that would be

considered to compensate for siting a new facility in a community.

Investigators from the University of California at Irvine and the firm Decision

Insights are refining approaches to assess preferences when environmental decisions will

have important long term consequences. “Discount factors” are typically applied by

economists in valuing long-range future events, but more analysis is needed of people’s

preferences in order to expand previous research on discount rates from readily monetized

consequences to many environmental non-monetized consequences.

A study by Vanderbilt University, in consultation with the Oak Ridge National

Laboratory, addresses the concern that some values studies may bias responses by directly

telling respondents that certain environmental resources are “good for” various recreational uses, rather than allowing people to judge for themselves the attributes they most

value in selecting places to go for hiking, camping, sightseeing or other reasons. This

study will use a battery of group and individual interviews to test ways of assessing values

concering forest environments. It is hoped that results will benefit estimation methods

that are more defensible, and more complete in capturing the complexity of peoples’

values regarding desirable aspects of ecosystems.

EPA Research Awards Described in This Report

1998

Resources for the Future (DC) The

Valuation of Mortality Risk Reductions:

Application of Two New Survey

Instruments

Duke University (NC) The Role of

Locational Equilibria and Collective

Behavior in Measuring the Benefits of Air

Pollution Policies

University of Rhode Island (RI)

Environmental Policy and Endogenous

Technical Change: A Theoretical &

Empirical Analysis

University of California at Irvine (CA)

Assessing Preferences for Environmental

Decisions with Long-Term Consequences

American University (DC) Market

Valuation Models and Ecosystem

Management in Making Legal and Policy

Choices

Michigan Technological University (MI)

Multi-Objective Decision-Making for

Environmental Remediation

Iowa State University (IA) An Examination

of Utility Consistent Approaches to

Modeling Corner Solutions in Recreation

Demand

Ohio State University (OH) Estimating the

Cost of Carbon Sequestration in Global

Forests

University of Maryland at College Park

(MD) The Impact of Farmland

Preservation Programs

University of Maine (ME) Environmental

Labeling of Electricity: Label Design and

Performance

Oregon State University (OR) Land and

Management with Biological and

Economic Objectives

1997

University of New Hampshire (NH) A

Comparison of Direct Methods for

Valuing Environmental Policies: A Case

Study in New Hampshire's White

Mountains

San Diego State University (CA)

Improving Air Quality Benefit Estimates

from Hedonic Models

University of Utah (UT) Promoting

Proper Use of a Household Hazardous

Waste Facility: A Systems Approach

1996

Resources for the Future (DC) Effective

Environmental Policy in the Presence of

Distorting Taxes (additional funds from

NSF)

Clark University (MA) Ecosystem

Valuation: Policy Applications for the

Patuxent Watershed Ecological-Economics

Model

Harvard University (MA) Valuation of

Risks to Human Health Insensitivity to

Magnitude?

Iowa State University (IA) Updating Prior

Methods for Non-Market Valuation A

Bayesian Approach to Combining

Disparate Sources of Environmental

Values

University of Rhode Island (RI) Stated

Preference Valuation Using Real Money

for Real Forested Wetlands

Woods Hole Oceanographic Institution

(MA) Decision-Making under Uncertainty

in the Conservation of Biological

Diversity

Research Triangle Institute (NC) Valuing

Reductions in Environmental Sources of

Infertility Risk Using the Efficient

Household Framework

1995

University of New Mexico (NM)

Preference Formation and Elicitation in

Valuing Non-Market Goods

University of California, San Diego (CA)

Comparative Studies of Approaches to

Eliciting Economic Values

Georgia State University (GA) Valuing

Environmental Damages with Stated

Preference Methods New Approaches that

Yield Demonstrably Valid Values for NonPriced Environmental Goods

Colorado School of Mines (CO) Valuing

the Stock and Flow of Mineral and

Renewable Assets in National Income

Accounting

Carnegie Mellon University (PA) Eliciting

Environmental Values A Constructivist

Approach

Massachusetts Institute of Technology

(MA) A Decision Analysis Framework for

Groundwater Remediation

University of Oregon (OR) Establishing

Correlations between Upland Forest

Management Practices and the Economic

Consequences of Stream Turbidity in

Municipal Supply Watersheds

Resources for the Future (DC) CostBenefit and Uncertainty Analysis for

Ambient Ozone Reduction: Development

and Demonstration of an Integrated

Model and Framework

Dept. of Agriculture & Resource

Economics University of California at

Berkeley (CA) Stigma of Environmental

Damage on Residential Property Values

Dept. of Geography and Environmental

Engineering Johns Hopkins University

(MD) Delineating Optimal Wetland

Habitat Corridors for Inclusion in

Migratory Flyways

STAR: Building a scientific foundation for sound environmental decisions
General Information: The Environmental Protection Agency’s STAR Research Program

Grants described in this report are part of EPA’s Science to Achieve Results (STAR) program, a major research initiative designed to improve

the quality of scientific information available to support environmental decision making. The STAR program is managed by EPA’s National

Center for Environmental Research and Quality Assurance in the Office of Research and Development (ORD). The program funds approximately 190 new grants every year, with the typical grant lasting three years. Funding levels vary from $50,000 to over $500,000 per year,

with FY 1999 funding level at about $95 million for grants to individual principal investigators or groups of investigators. Additional STAR

funds are provided for a number of Research Centers specializing in scientific areas of particular concern to EPA, and for fellowship

programs supporting graduate students conducting environmental research.

United States

Environmental Protection Agency

Mail Code 8701R

Washington, D.C. 20460

Offical Business

Penalty for Private Use

$300

EPA/600/F-99/012

STAR: Building a scientific foundation for sound environmental decisions

University of Colorado, Boulder (CO)

Environmental Values and National

Economic Accounts

Resources for the Future (DC) Mortality

Risk Valuation And Stated Preference

Methods An Exploratory Study

Duke University (NC) Improving

Willingness-to-Accept Responses Using

Alternate Forms of Compensation

University of Rhode Island (RI)

Developing Conjoint Stated Preference

Methods for Valuation of Environmental

Resources Within Their Ecological

Context

University of California at Berkeley (CA)

Deriving Biodiversity Option Value Within

a Model of Biotechnology Research and

Development

Vanderbilt University (TN) Innovation in

the Valuation of Ecosystems A Forest

Application

Cornell University (NY) Can Contingent

Valuation Measure Passive Use Values?

Related Research Supported by NSF

[Environmental Decision Making]:

1997

Georgia Institute of Technology (GA)

Multi-Criteria, Dynamic, and Place-Based

Approach to Ecosystem Valuation

Cornell University (NY) Demand

Revealing Mechanisms for Contingent

Valuation Validity Tests: An Experimental

Approach Using Appropriate Populations

Vanderbilt University (TN) Citizen's

Preference for Environmental Options:

Evidence on Existence and Triggering

Cornell University (NY) Planned

Behavior, Environmental Values and

Domestic Water Conservation. A

Longitudinal Case Study of the CaliforniaNevada Truckee River Watershed

1996

Decision Science Research Institute (OR)

Distinguishing Values from Valuation in a

Policy Relevant Manner

University of Maryland (MD) Aggressive

and Deliberative Contexts for Valuation:

A Philosophical Contribution to

Experimental Research in Environmental

Decision Making

University of Minneapolis (MN) Optimal

Experimental Design for Conjoint

Analysis

Resources for the Future (DC) The

Transition to Green Technology:

Implications of Irreversibility and

Noncovexity

Social Science Research Institute (MA)

Factors Influencing Participation of Local

Governmental Officals in Environmental

Policy Making

Cornell University (NY) Policy, Norms

and Values in Forest Conservation:

Protected AreaBuffer Zone Management

in Central America