Water flowing in streams has value for various types of recreationists and is essential for fish and wildlife. Since water demdns for offstream uses in the arid west have been steadily increasing, increasing instream flows to enhance the recreational experience might be in conflict with established withdrawals for uses such as agriculture, industries, and households. Since market prices are not observable for instream flows, the estimation of economic value of instream flow would present well known difficulties. The household production function theory was used to build the theoretical model to measure economic value of instream flow. A representative sample of 500 recreationists at three river sites were interviewed during the summer of 1982, to estimate empirical demand equation for recreational activities. In order to estimate economic value of water used in the river, it was assumed taht individuals were combining goods, services, and time as input to produce recreational services. Based on this procedure, empirical estimates of multisite demands were derived. Moreover, the corresponding 'compensating variations' of consumers, from alteration of instream flow, were quantified.
Amirfathi, Parvaneh; Narayanan, Rangesan; Bishop, A. Bruce; and Larson, Dean, "A Methodology for Estimating Instream Flow Values for Recreation" (1985). Reports. Paper 648.