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1-1

1-2
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1-3
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1-4

1-5
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1-6
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1-7

1-8
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1-9
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1-10
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1-11

1-12
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1-13
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1-14
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RESPONSES TO COMMENT SET 1: Utility Water Act Group

1-1 Thank you for the detailed comments. 

1-2 EPA extended the comment period by 30 days in order to accommodate review of 

supporting materials. 

1-3 See Section 2a of Part A this ICR for a discussion of the purpose of the study. 

1-4 Again, see Section 2a of Part A of this ICR for a detailed discussion of the purpose of the 

study. 

1-5 EPA recognizes that hypothetical bias is a potential concern in stated preference (SP) 

surveys and takes this concern seriously. In general, SP methods have “been tested and 

validated through years of research and are widely accepted by federal, state, and local 

government agencies and the U.S. courts as reliable techniques for estimating nonmarket 

values” (Bergstrom and Ready 2009, p. 26). A recent meta-analyses of the stated 

preference literature also concludes that hypothetical bias may not always be a 

significant concern (Murphy, et al. 2005). 

To reduce the potential for hypothetical bias in this survey EPA has consulted with 

experts and drawn from peer reviewed literature to address it in the survey design. For 

example, the survey explicitly incorporates elements that allow mitigation of hypothetical 

bias, such as the use of reminders about budget constraints (akin to the cheap talk 

language in Cummings and Taylor 1999; List 2001). These features of survey design are 

shown to minimize hypothetical bias in experimental settings. The text used in this 

survey has undergone thorough testing with participants in focus group and one-on-one 

interviews. EPA believes that the steps taken during survey development and testing 

have largely mitigated the potential for hypothetical bias. See Section 2d of Part B of this 

ICR for more information on how we address hypothetical bias. 

Similarly, EPA recognizes the potential for households to exhibit yea-saying and to 

overstate or understate their true WTP in order to influence decisions informed by survey 

data. Survey and study design choices can mitigate yea-saying. The use of mail survey 

rather than face-to-face interview has been shown to decrease the social pressure that 

may influence a respondent to provide a response deemed desirable (Dillman 2000). This 

survey also employs a conjoint choice framework, where respondents must consider the 

trade-offs between a status quo and two policy options. Respondents are asked to make a 

discrete choice among three unranked options rather than a simple yes or no. These 

options vary in terms of the levels of five environmental attributes (plus cost). In this 

choice experiment framework it is has been shown that the likelihood for yea-saying and

strategic responses is less prominent (Blamey and Bennett 2001, Collins and Vossler 

2009). 
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EPA also recognizes the potential for non-response bias and the impacts it could have on 

the data analysis. First, EPA is taking steps to obtain the highest possible response rate, 

thereby mitigating non-response bias. Specifically, EPA is using focus group-tested 

design choices to encourage participation. EPA is also following the Dillman tailored 

design method (Dillman 2008) for mail surveys which includes an introduction letter 

preceding the survey, a reminder post card, and second mailing of the survey, and a 

reminder letter following the second survey. 

EPA will also administer a non-response follow-up survey (Attachment 11) in both the 

pre-test and full survey in order to examine whether or not respondents are systematically 

different from non-respondents (see OMB 2006). In the non-response follow-up survey, 

households that do not return the survey will be randomly sampled to receive a short 

questionnaire by priority mail. The questionnaire will elicit basic demographic 

information as well as a few short questions regarding awareness and the reasons they did 

not complete the survey. Responses to these questions will be used to examine whether 

respondents are systematically different from non-respondents. See Section 2c of Part B 

of this Information Collection Request for a description of the non-response follow-up 

survey. 

In addition, in order to identify such respondents EPA includes debriefing questions at 

the end of the survey to identify respondents who might believe that protecting the 

environment is important no matter the cost. Sensitivity analysis will be used to examine 

if and how responses to these debriefing questions influence responses. Again, Section 

5b of Part B of this ICR provides a detailed response. 

1-6 It is impossible to know the magnitude of nonuse values prior to conducting this study. 

While information is available in Bockstael, McConnell and Strand (1989) on the 

potential value of water quality improvements in the Watershed, the study is based on a 

small sample of Bay-area residents, and provides limited information on a broader set of 

benefits attributable to water quality improvements. 

1-7 Standard survey development protocols have been used to develop the survey. See 

Section 3c of Part A for a discussion of background information. 

1-8 In response to peer review comments from academic experts in stated preference 

methods, EPA is now only modeling willingness to pay for improvements in bay water 

clarity, striped bass, blue crab, oyster populations, and the quality of lakes in the 

watershed. This was previously referred to as the “endpoint” version of the survey. 

These attributes were chosen based on extensive focus groups and interviews as the 

environmental features that are most salient to the general public. Furthermore, EPA and 

NOAA models predict that these features will be impacted by the TMDL. The stated 

preference survey outlined in the ICR does not estimate the benefits of the TMDL 

directly; rather this survey is designed to value generic status quo and policy options that 

result in changes in the environmental attributes. As part of the experimental design, 

respondents are presented with hypothetical changes in these attributes and cost. In other 

words, the hypothetical levels associated with each of the attributes and costs in the 

survey vary across respondents (see Section 2d of Part B). This allows us to identify the 
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parameters and estimate a range of values associated with different scenarios. The 

variation in costs across programs is not intended to reflect the costs of the TMDL, but 

rather the likely range of values respondents hold for the options, as found in extensive 

focus groups and interviews. The parameters estimated from respondents’ choices to 

these hypothetical scenarios will then be used to estimate the benefits of the TMDL 

incremental to the baseline. 

1-9 The survey does remind respondents to consider other things they may spend their money 

on, like food, clothing, etc., so that they fully consider their budget constraint before 

making choices. However, respondents are also reminded several times that all other 

factors (including employment) are held constant across options. In other words, the 

survey only assesses the value people hold for the attributes specified in the choice 

experiments. EPA believes that focusing on this subset of factors will lead to a 

conservative but more reliable estimate of total benefits. EPA proposes to administer 

three versions of the survey - an increasing baseline, decreasing baseline and constant 

baseline - in order to estimate benefits of environmental improvements relative to a range 

of baseline scenarios. 

1-10 EPA conducted 10 focus groups and 72 cognitive interviews with individuals within and 

outside the Watershed in order to test their level of understanding of the materials 

included in the survey (OMB Control Number 2090-0028). We used this standard survey 

design protocol to identify the most salient environmental endpoints that will be affected 

by the TMDL. 

1-11 See Sections 2b and 5b of Part B of the ICR for the survey implementation and 

econometric analysis approach to be used in the survey project. 

1-12 Again, the EPA disputes the idea that the stated preference method does not have the 

ability to collect information with, “quality, objectivity, utility, integrity” on the 

foundation that these methods are largely accepted as a valuable tool among those 

seeking to understand the benefits of changes to nonmarket goods. The use and nonuse 

willingness-to-pay estimates generated from this research will provide a more wellrounded evaluation of future pollution reduction programs in the Chesapeake Bay, 

contributing to the quality, objectivity, and integrity of information the EPA will 

disseminate. 

1-13 We appreciate the attention to these details addressed by UWAG and can assure them 

that any errors within the experimental design have been rectified. 

1-14 EPA believes this study will allow public values and opinions to be included in the 

decision-making process for the Chesapeake Bay. Using current econometric methods, 

this study will provide unique, policy relevant information about what, if any, further 

actions are called for in the Chesapeake Bay. 
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2-1

2-2

2-3
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2-4

2-5

2-6
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2-7

2-8

2-9

2-10
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2-11
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2-12

2-13

2-14

2-15
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2-16

2-17

2-18

2-19

2-20

2-21
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RESPONSES TO COMMENT SET 2: Coalition of 18 Interest Groups (C18)

2-1 A complementary study of the costs of the TMDL is being conducted by EPA’s 

Chesapeake Bay Program Office and will be issued by EPA after a peer-review is 

complete. 

2-2 No response required.

2-3 No response required.

2-4 EPA recognizes that hypothetical bias is a potential concern in stated preference (SP) 

surveys and takes this concern seriously. In general, SP methods have “been tested and 

validated through years of research and are widely accepted by federal, state, and local 

government agencies and the U.S. courts as reliable techniques for estimating nonmarket 

values” (Bergstrom and Ready 2009, p. 26). A recent meta-analyses of the stated 

preference literature also concludes that hypothetical bias may not always be a 

significant concern (Murphy, et al. 2005). 

To reduce the potential for hypothetical bias in this survey EPA has consulted with 

experts and drawn from peer reviewed literature to address it in the survey design. For 

example, the survey explicitly incorporates elements that allow mitigation of hypothetical 

bias, such as the use of reminders about budget constraints (akin to the cheap talk 

language in Cummings and Taylor 1999; List 2001). These features of survey design are 

shown to minimize hypothetical bias in experimental settings. The text used in this 

survey has undergone thorough testing with participants in focus group and one-on-one 

interviews. EPA believes that the steps taken during survey development and testing 

have largely mitigated the potential for hypothetical bias. See Section 3(b) of Part A of 

this ICR for more information on how we address hypothetical bias. 

EPA recognizes the potential for non-response bias and the impacts it could have on the 

data analysis. First, EPA is taking steps to obtain the highest possible response rate, 

thereby mitigating non-response bias. Specifically, EPA is using focus group-tested 

design choices to encourage participation. EPA is also following the Dillman tailored 

design method (Dillman 2008) for mail surveys which includes an introduction letter 

preceding the survey, a reminder post card, and second mailing of the survey, and a 

reminder letter following the second survey. 

EPA will also administer a non-response follow-up survey (Attachment 11) in both the 

pre-test and full survey in order to examine whether or not respondents are systematically 

different from non-respondents (see OMB 2006). In the non-response follow-up survey, 

households that do not return the survey will be randomly sampled to receive a short 

questionnaire by priority mail. The questionnaire will elicit basic demographic 

information as well as a few short questions regarding awareness and the reasons they did 

not complete the survey. Responses to these questions will be used to examine whether 

respondents are systematically different from non-respondents. See Section 2c of Part B 

of this Information Collection Request for a description of the non-response follow-up 

survey. 
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Responses to Comments

EPA agrees that it challenging to measure complex environmental commodities. 

Standard survey design protocols were followed in developing the survey. As such, EPA 

conducted 10 focus groups and 72 cognitive interviews with individuals within and 

outside the Chesapeake Bay Watershed in order to test their level of understanding of the 

materials included in the survey (OMB Control Number 2090-0028). We used this 

standard protocol to identify the most salient environmental commodities that will be 

affected by the TMDL. Limiting the survey to those policy outcomes (i.e., water clarity, 

striped bass, oysters, blue crabs, and lake water quality) is conservative but we can be 

confident in the benefits we do capture from the survey. 

2-5 EPA believes the survey has practical utility, as required by the Paperwork Reduction 

Act. The results of the study will be made available to state and local governments which 

they may use to better understand the preferences of households in their jurisdictions and 

the benefits they can expect as a result of meeting the TMDL. Finally, stakeholders and 

the general public will be able to use this information to understand the social benefits of 

improving water quality in the Chesapeake Bay Watershed to accompany the cost 

information also being developed by EPA. EPA also believes that the survey meets 

OMB’s information quality guidelines. We agree that a number based on a poor quality 

survey is inferior to no number at all. Therefore, EPA is using standard survey design 

protocols in the design and implementation of the survey, including extensive focus 

group and interview testing, a pre-test, and a non-response follow-up analysis. 

2-6 The attributes on the survey (i.e., water clarity, striped bass, oysters, blue crabs, and 

watershed lake conditions) were chosen because water quality and ecological modeling 

show that they will be affected by the nutrient and sediment reduction targets in the 

TMDL. EPA’s National Center for Environmental Economics has been working closely 

with water quality modelers in the EPA Chesapeake Bay Program Office and the Office 

of Research and Development to quantify the impact of the TMDL on the chosen 

attributes. 

EPA has also been working closely with ecosystem modelers in NOAA’s Chesapeake 

Bay Office and National Marine Fisheries Service’s Office of Habitat Conservation. 

Specifically, NOAA’s modelers have provided assistance with the eco-system based 

fishery models "Ecopath with Ecosim" and "Atlantis." These consultations have been 

instrumental in examining the ecological impacts of reducing nutrient and sediment loads 

to the Bay of the ecosystem-based fishery models and will allow EPA to more accurately 

translate the values people place on the various attributes of the Chesapeake Bay 

highlighted in the survey to benefits estimates associated with the TMDLs.

2-7 The survey is indeed framed in a way to elicit “willingness to pay for generic 

improvements in water quality.” This allows EPA to estimate the parameters for a range 

of policy outcomes, which will then be used to estimate a “benefits curve.” To allow for a 

range in outcomes, EPA describes conditions in 2025 with the current programs in place 

and have developed three survey versions with different hypothetical future baseline 

conditions (i.e., with no additional programs), where environmental quality is increasing, 

decreasing, or constant, as described in Section 5b of Part B of this ICR. The benefits 
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curve will be used to estimate the incremental benefits of the TMDL relative to the most 

accurate baseline as predicted by the water quality and ecological models developed by 

EPA and NOAA. Sensitivity analyses will be conducted on the results of the survey to 

examine the effect of uncertainty in future levels of the environmental conditions, under 

both the baseline (i.e., without the TMDL) and TMDL scenarios.

Flexibility in the baseline and policy outcomes are important in this case because the 

Chesapekae Bay TMDL allows for adaptive management and additional offsets if the 

required nutrient reductions are not being met. So as population in the watershed grows 

over the future and landuse patterns change, these survey data will still be useful in 

estimating the benefits of nutrient and sediment reductions in the Chesapeake Bay. 

2-8 The EPA recognizes that there are other programs and activities that will affect water 

quality in the Watershed. For this reason we have included an increasing baseline 

version of the survey to reflect the fact that absent new programs it is plausible that 

conditions will improve in the Watershed under these existing programs. 

2-9 Again, the improving baseline version of the survey captures this scenario. 

2-10 See 2-9.

2-11 EPA agrees that improvements to lakes that are not in the Watershed should not be 

included in the survey. We have made several modifications to the survey instrument to 

make it clear that only lakes in the Watershed should be considered. First, we have 

enhanced the map at the beginning of the survey to identify major cities within and 

outside the Watershed and added the Finger Lakes to the map (which are clearly marked 

as being outside the watershed). This helps orient respondents who are considering 

whether or not they “use” (i.e., engage in recreation activities) the Watershed. Second, 

we clearly describe the Watershed as including lakes and state that water bodies outside 

of the Watershed will not be affected by the programs. Finally, we include a follow-up 

question designed to test their level of understanding that conditions in lakes outside the 

watershed will not be affected by the programs described by the survey.

2-12 In addition to providing an enhanced map of the Watershed we identify which sampled 

households are in the Watershed and which are not. Respondents will be told in the 

cover letter of the survey if their home address is inside or outside the watershed. See 

Attachments 5 and 6 for examples of the cover letters. 

2-13 The survey scenarios were designed based on the goal of illustrating hypothetical but 

realistic policy scenarios that “span the range over which we expect respondents to have 

preferences, and/or are practically achievable” (Bateman et al. 2002, p. 259). In the 

survey these scenarios are framed as generic policies in order to estimate the range of 

benefits for water quality improvements. These benefit estimates will then be used to 

estimate the incremental benefits of the TMDL relative to the baseline (see response 2-7).

The survey provides examples of sources of nutrients, including fertilizers, livestock 

manure, and household wastewater. The list is not intended to be comprehensive. As 
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stated above, different versions of the survey have different baseline assumptions, which 

will be used in the statistical analysis to reflect the fact that future conditions in the Bay, 

absent new programs, are uncertain. EPA agrees that this baseline uncertainty stems, at 

least partially, from the fact that the TMDL does not impact other sources of nutrients 

and sediments, including air disposition from outside the watershed, sediments, and 

hurricanes and ocean currents.

2-14 While the sequence of implementation is unknown the experimental design allows EPA 

to estimate benefits for a range of outcomes. 

2-15 We added information to the survey to inform respondents that programs will be 

implemented over time, with full implementation occurring in 2025. 

2-16 A separate analysis of the costs of implementing the TMDLs is being developed by 

EPA’s Chesapeake Bay Program Office and will be available upon the completion of 

peer review. 

2-17 EPA agrees and a version of the survey with an increasing baseline is now included in the 

Information Collection Request. 

2-18 EPA agrees and does not intend to add the total monetized benefit results from this study 

with results from other studies, such as those that use revealed preference methods. The 

results from this study can be used to isolate nonuse values or used alone as a measure of 

total monetized benefits. 

2-19 EPA carefully reviewed the survey instrument and has corrected typos. 

2-20 Please see Section 2b of Part B of the ICR for the sampling methodology. 

2-21 EPA is using state-of-the-science methods to assess the benefits of the TMDL for the 

Chesapeake Bay. As such EPA believes that the results will provide useful information 

to the public and decision makers on how society values improvements in environmental 

conditions in the Chesapeake Bay. 
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3-1

3-2

3-3

3-4

3-5
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3-6

3-7

3-8

3-9

3-10
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RESPONSES TO COMMENT SET 3: Food and Water Watch (FWW)

3-1 Thank you very much for the detailed comments. Stated preference surveys (or surveys 

to measure WTP) have been used by a variety of federal agencies to assess the benefits of 

regulations and federal activities (see, for example, NOAA 2002; USEPA 2008, 2009; 

U.S. Bureau of Reclamation 2012). The use of stated preferences studies (i.e., WTP 

studies) is consistent with EPA’s peer-reviewed Guidelines for Preparing Economic 

Analyses (USEPA 2010) and OMB Guidelines, Circular A-4 (OMB 2003). The use of a 

choice experiment design is consistent with standard practice in the peer-reviewed 

literature for valuing environmental resources (see Freeman 2003; Bennett and Blamey 

2001; Louviere et al. 2000). The individual choices reflected in each household survey 

response are aggregated with other household responses to estimate a total value for the 

resource. The stated preference survey is not part of a water quality trading plan, nor will 

the results of the survey be used to develop a trading plan. The survey is designed to 

estimate the welfare impacts of water quality improvements and will have no bearing on 

how those improvements are achieved.

3-2 No response required. 

3-3 We agree that the Bay is a complex resource and estimating a total value is challenging. 

EPA conducted 10 focus groups and 72 cognitive interviews with individuals within and 

outside the Watershed. These standard protocols allowed for testing of individual’s 

understanding of the materials included in the survey instrument. This approach was 

used to identify the most salient environmental resources that will be affected by the 

TMDL. Limiting the survey to those outcomes (i.e., water clarity, striped bass, oysters, 

blue crabs, and water quality of lakes in the watershed) is conservative, but means that 

we are more confident in the benefits we do capture from the survey.

3-4 The study that is referenced (i.e., a citation in Diamond and Hausman 1994 to 

Desvousges 1993) is almost 20 years old and uses methods that are no longer considered 

standard (e.g., use of convenience samples). It is standard to include debriefing questions 

to capture various biases that may appear in survey responses, such as “warm glow.” As 

such we have included questions to capture respondents who may be responding in such a 

way. 

3-5 The study that is referenced (i.e., Loomis and White 1996) is a meta-analysis based on 

older studies, many of which were unpublished or not peer-reviewed. While examples 

of implausible survey results exist, including appropriate debriefing questions, use of 

focus groups, and pre-testing reduces such occurrences. This project is based on current 

survey design methods reflecting careful design choices. In addition, the survey 

instrument will be pre-tested with a small sample to determine whether or not responses 

are plausible and consistent with economic theory. 

3-6 Stated preference surveys capture individual preferences for public goods, that is 

environmental resources that are shared by all. The choices individuals make in the 

experimental setting reflect the trade-offs, or preferences, for that individual between 

environmental improvements and costs. By examining and aggregating individual 
Attachment 13

Responses to Comments

preferences or choices using the analytical methods described in Section 5 of Part B of 

this Information Collection Request, the researcher (i.e., EPA) is able to discern a value 

from the sample of individual choices for the various environmental improvements (also 

called “attributes”) in the survey. The survey clearly states that many households are 

being asked about their preferences and choices, and therefore does not imply that any 

one person would be solely responsible for the program choices. 

3-7 and 3-8

 The stated preference survey is not part of a water quality trading plan, nor will the 

results of the survey be used to develop a trading plan. The survey is designed to 

estimate the welfare impacts of water quality improvements and will have no bearing on 

how those improvements are achieved.

3-9 Stated preference surveys are routinely used in federal agencies to estimate the value of 

non-market goods (see, for example, U.S. EPA 2008, 2009; U.S. Bureau of Reclamation 

2012). It is not a method to determine a “price” for a good to be sold, but rather a method 

to reflect society’s value of the resource. There are no plans to “sell” the Chesapeake 

Bay.

3-10 Enforcement remains an important and relevant goal of the EPA. 
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REFERENCES 

Bateman, I.J., R.T. Carson, B. Day, M. Hanemann, N. Hanley, T. Hett, M. Jones-Lee, G. 

Loomes, S. Mourato, E. Ozdemiroglu, D.W. Pierce, R. Sugden, and J. Swanson. (2002). 

Economic Valuation with Stated Preference Surveys: A Manual. Northampton, MA: Edward 

Elgar.

Blamey, R., & Bennett, J. 2001. Yea-saying and validation of a choice model of green product 

choice. In J. Bennett & R. Blamey (Eds.), The Choice Modelling Approach to Economic 

Valuation. Northampton, MA: New Horizons in Environmental Economics. pp. 178-181.

Bockstael, McConnell, and Strand. Bockstael, N.E.; K.E. McConnell; and L.E. Strand. 1989. 

Measuring the Benefits of Improvements in Water Quality: The Chesapeake Bay. Marine 

Resource Economics 6: 1-18.

Cummings, R. and L. Taylor. 1999. Unbiased Value Estimates for Environmental Goods: A 

Cheap Talk Design for the Contingent Valuation Method. American Economic Review 89(3): 

649-665.

Diamond, Peter A. and Jerry A. Hausman. 1993. Contingent Valuation: Is Some Number 

Better than No Number? Journal of Economic Perspectives 8(4): 45-64. 

Desvousges, W.H., F.R. Johnson, R.W. Dunford, K.J. Boyle, S.P. Hudson, and K.N. Wilson. 

1993. “Measuring Natural Resource Damages With Contingent Valuation: Tests of Validity and 

Reliability.” In Contingent Valuation, A Critical Assessment, J.A. Hausman, ed., pp. 91–164. 

Amsterdam: Elsevier.

Freeman, A. Myrick. 2003. The Measurement of Environmental and Resource Values: Theory 

and Methods. Washington, DC: RFF Press. 

Loomis, John B. and Douglas S. White. 1996. Economic Benefits of Rare and Endangered 

Species: Summary and Meta-Analysis. Ecological Economics 18: 197-206. 

Louviere, Jordan J.; Deborah Street; Leonie Burgess; Nada Wasi; Towhidul Islam; and Anthony 

A.J. Marley. 2000. Modeling the Choices of Individual Decision-Makers by Combining 

Efficient Choice Experiment Designs With Extra Preference Information. Journal of Choice 

Modeling 1(1): 128-163. 

NOAA. 2002. Stated Preference Methods for Environmental Management: Recreational 

Summer Flounder Angling in the Northeastern United States. 

https://www.st.nmfs.noaa.gov/st5/RecEcon/Publications/NE_2000_Final_Report.pdf. (Accessed 

November 7, 2012.) 

OMB. 2003. Circular A-4, Regulatory Analysis, September 17, 2003. Available at: 

http://www.whitehouse.gov/omb/circulars_a004_a-4/. (Accessed February 22, 2011.)

U.S. Bureau of Reclamation. 2012. Klamath River Basin Restoration Nonuse Value Survey. 

Final Report. Prepared by RTI International. RTI Project Number 0212485.001.010. 
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U.S. EPA. 2008. Final Ozone NAAQS Regulatory Impact Analysis. EPA EPA-452/R-08-003. 

(Accessed November 7, 2012.) 

U.S. EPA. 2009. Environmental Impact and Benefits Assessment for the Final Effluent 

Guidelines and Standards for the Construction and Development Category. EPA-821-R-09-012. 

(Accessed November 7, 2012.) 

U.S. EPA. 2010. Guidelines for Preparing Economic Analysis. EPA 240-R-10-001.