Economic Valuation of River Systems

Economic Valuation of River Systems

New Horizons in Environmental Economics series

Edited by Fred J. Hitzhusen

The book applies benefit–cost analysis and a wide array of non-market and distribution economic valuation methods in ecologic context to determine the pay-off and distribution impacts of various infrastructure and water quality improvements to eight river systems in the Great Lakes region of the US. The generally positive results have important implications for public policy and future research.

Chapter 6: Economic Analysis of Infrastructure and Water Quality Improvements in the Muskingum River Corridor

Fred J. Hitzhusen, Radha Ayalasomayajula and Sarah Lowder

Subjects: economics and finance, environmental economics, valuation, environment, environmental economics, valuation, water


Fred J. Hitzhusen, Radha Ayalasomayajula, and Sarah Lowder INTRODUCTION The Muskingum River, which flows 75 miles through four counties in an economically depressed region of southeastern Ohio in The Great Lakes region of the US provides an example of the roles a river can play in regional development. Although the Muskingum tributary is small relative to the Mississippi Basin of which it is a part, it illustrates many important issues of public policy. Throughout the length of the river are 10 sets of locks and dams that were constructed between 1837 and 1841 to facilitate transport of products by barge (see Figure 6.1). The original features of the locks have been maintained throughout the century, making them an interesting attraction for boaters and anglers as well as for tourists, even though little cargo moves through them now. The Muskingum River has the designation of an American Heritage River which implies keen interest in improvements in the river to develop the potential of the river as an economic resource. In the first stage, this study developed methodologies to estimate the current or without improvements annual recreation and tourism expenditures related to the river, and to estimate the impact of property, community and environmental attributes on values of residential properties along the river. In the second stage, the study determined the costs and benefits of residential property value impacts in addition to proposed river corridor improvements including: (a) improving water quality in the river, (b) developing a bike trail/greenway along the...

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