The Economic Value of Water and Ecosystem Preservation

egion for ecotourism purposes does not exist hampering the estimate of their
economic impact. Regardless of these difficulties in measuring ecotourism
production and impact, existing evidence indicates that ecotourism is playing an
important role in the local economy.
However, despite the growth of the ecotourism industry, the Bay’s fragile
estuarine ecosystem is facing pressure from other economic activities. The
increased pressure on both surface water and groundwater resources upstream
by agricultural production, industry, and a rapidly growing urban population in
San Antonio has altered the timing and volume of river inflow to the Guadalupe
estuary. This delicate estuarine system is deteriorating because upstream water
users rarely consider the water needs of an ecosystem.
Need for Economic Analysis
An important obstacle to more widespread recognition of the ecosystem’s
water needs is that the economic value of using water to sustain the regional
ecosystem has never been quantified. Without ‘economic representation’ of this
value, it is difficult for water managers, planners, and users to consider the
ecosystem, along with agriculture, industry, and municipalities, when making
water use decisions. A fundamental element of the economic analysis is the
ecology of the bay and estuary, which is a complex system made up of
interdependent elements (e.g. water, flora, land, etc.). However, the complexity
of the science underlying the understanding of freshwater inflows on marine and
river ecosystems has led to infighting resulting in little progress on the issue
(Korosec, 2007).
Ultimately, if the unique ecosystems of the San Antonio Bay are to survive,
they must be recognized as a valuable natural asset as well as an economically
important water user (Mathis, 2004a). This study attempts to more fully develop
the economics behind freshwater inflows in order to better inform the ongoing
debate on environmental flows.
Travel Cost Method
The Travel Cost Method was used to estimate the value of freshwater inflows
on the eco-tourism sector operating in the San Antonio Bay area. The Travel
Cost Method uses actual expenditure data to estimate a ‘value’ for the natural
resource services which support the ecotourism service that is consumed.
The Travel Cost Method analysis showed that the average visitor (who
resided in Texas) experienced a consumer surplus of $273 dollars per visit, while
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.
Production Function Approach
An ecotourism production function was estimated as a function of inflows and
other key variables. This function was then used to calculate a marginal value for
freshwater inflows. For this study, the freshwater inflows are the only input to
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