Animal Waste, Water Quality and Human Health

430Animal Waste, Water Quality and Human Healthin an economic evaluation include the identification, measurement, valuation andcomparison of the costs and consequences of the alternatives being considered.In the context of recreational water, as an example of the more general case to bemade for water quality, this chapter looks at the economic evaluation ofinterventions addressing water contamination by livestock waste. It provides asummary of the concepts underpinning economic evaluation, includingeconomic value, cost-benefit analysis, cost-effectiveness analysis, as well as themethods employed to value costs and benefits. The chapter also includes a briefreview of some empirical studies that have sought to estimate the economicvalue of interventions to improve contaminated recreational bathing waters.This is then followed by a more detailed case study outlining the economiccost-benefit approach, as applied to the bacteriological contamination ofrecreational bathing waters in the Netherlands.12.2 ECONOMICS, ECONOMIC VALUES ANDECONOMIC EVALUATION OF INTERVENTIONSEconomics is defined as “the science which studies human behaviour as arelationship between ends and scarce means which have alternative uses”(Robbins 1935). The objective of economics is to maximise human welfare orutility. Thus, it is important that the allocation of resources in society is done asefficiently as possible. In economic terms, an efficient allocation of resources isdefined as one that takes advantage of every opportunity to ensure that someindividuals will be better off while not making anyone else worse off. Anyintervention that sets out to reduce the adverse impacts on water quality andpublic health of microbial contamination of recreational and other waters bylivestock waste will necessitate a reallocation of society’s resources. Economistsargue that in looking at whether an intervention represents an efficient use ofresources, rational management decisions should be based on an informedassessment of the costs of reducing the adverse impacts on water quality andpublic health, as well as the benefits of reducing them. This requires that weplace “economic” values on these elements.The economic definition of value is a rigorously defined theoretical concept, butone which is also grounded in empirically observed phenomena. Nevertheless,despite its familiarity and role in people’s everyday lives, much confusioncontinues to surround the concept and much abuse is heaped upon it. Economicvalue is used in welfare economics to assess the efficiency of a proposed changefrom the point of view of society’s welfare. Because human welfare is anintangible concept that cannot be directly measured, economists use atransformation of welfare into a more general single-scale composite indicator,