Commodity Information and Willingness-to-Pay for Groundwater Quality Protection

The potential sensitivity of environmental resource valuations to information concerning the resource is of interest to researchers and decision-makers involved in estimating and applying these numbers. An analysis of the impact of characteristic and service information on the economic value of groundwater quality is described. Characteristic information details the objectively measurable traits of a resource, while service information describes the consumption services provided by the resource. The analysis provides insight into the impact of information on environmental resource valuation decisions. Hypothesis tests suggest that changes in the joint levels of information may cause significant changes in groundwater quality valuation behavior. More theoretical and empirical research is required before firm conclusions can be drawn concerning the effects of information on groundwater value estimates (e.g., estimated willingness-to-pay for groundwater protection).