The Benefits of Protecting Rural Water Quality : An Empirical Analysis

Concerns about the impact of farm production on the quality of the Nation's
drinking and recreational water resources have risen over the past 10 years.
Because point sources of pollution were controlled first, agricultural nonpoint
sources have become the Nation's largest remaining single water-quality problem.
Both public and private costs of policies that address the conflict between
agricultural production and water quality are relevant, but measuring the off-farm
benefits and costs of changing water quality is difficult. Many of the values
placed on these resources are not measured in traditional ways through market
prices. This report explores the use of nonmarket valuation methods to estimate
the benefits of protecting or improving rural water quality from agricultural
sources of pollution. Two case studies show how these valuation methods can
be used to include water-quality benefits estimates in economic analyses of
specific policies to prevent or reduce water pollution.