Lost Use-Value from Environmental Injury when Visitation Drops at Undamaged Sites

05 February 2018
By Dr. Garrett Glasgow and Dr. Kenneth Train

In an article published in the February 2018 issue of Land Economics, NERA Senior Consultant Dr. Garrett Glasgow and Associate Director Dr. Kenneth Train describe welfare calculations when an environmental injury reduces recreational trips to both damaged and undamaged sites. They show that in these cases, welfare losses are underestimated when standard welfare formulas are applied to only undamaged sites, but overestimated when these formulas are applied to all sites with lost trips. They provide a formula to appropriately estimate welfare losses in these cases, and provide an example of a welfare loss calculation based on the Deepwater Horizon oil spill.