The Economic Value of Water and Ecosystem Preservation

gallons, which results in a value of $565 per 1,000 gallons. This is very high rate
relative to water rates of alternative uses with market prices.
4.5. Conclusion
This chapter has examined the calculation of the value of freshwater inflows
in support of the ecotourism sector. This type of analysis is important for
answering two questions. First, what is the value of inflows for the current
economic state of ecotourism? Second, what is the economic impact if these
flows are altered? The analysis relies heavily on the knowledge of the interaction
between inflows and the ‘production’ of ecosystem services. The analysis should
be interpreted an initial, although significant, step in the development of this
methodology.
The economic analysis has shown that eco-tourism has significant economic
value in the San Antonio Bay. The Travel Cost Method analysis showed that the
average visitor (who resided in Texas) experienced a consumer surplus of $273
dollars per visit. The average reported expenditure per Texas resident was $231.
The consumer value is the economic benefit received in excess of actual travel
expenditures indicating a high value of freshwater inflows. Further analysis could
be undertaken to calculate an aggregate value for the region, but was unable to
be conducted here.
A production function type approach was used to examine the contribution of
freshwater inflows to the production of eco-tourism. This approach has been
used in agricultural economics to estimate the value of water as an input in crop
production. There were many conceptual difficulties in applying such an
approach and the analysis presented here should be considered as a first step in
this direction rather than a final conclusion. The primary complication was in
modeling the relationship between water inflows and the ‘production’ of ecotourism.’
There appeared to be a coincidental correlation between high flows and
higher visitor numbers at the Aransas Wildlife Refuge.
An attempt was made to control for correlated factors so that an indicative
calculation could be made. A tourism-water production function was estimated.
Freshwater inflows were show to have a positive relationship with visitor numbers
up to a flow rate of 2,400 cfs. The average flow rate from the data was calculated
as 1,995 cfs. This should be interpreted as an early indicator that freshwater
inflows have a positive impact on the ecosystem services that tourists use.
However, more work needs to be done to address the timing and magnitude of
flow variations and their respective impacts on freshwater inflows. This type of
approach will be highly useful in analyzing tradeoffs from allocating water
between competing uses.
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