Valuation of groundwater quality using a contingent valuation-damage function approach

Using contingent valuation, this paper estimates a damage function for nitrate (NO3-N) exposures based on actual water test results of individual wells. Damages, as measured by willingness to pay for protecting individual well supplies within a 10 mg/L NO3-N health standard, are estimated to be a concave function of nitrate exposure levels, rising rapidly at low to moderate exposures and then leveling off. It is argued that future groundwater contingent valuation research should be based on objective data such as nitrate levels and census demographics in order to provide more useful information for groundwater managers and policy makers.