To our knowledge, this is the first hedonic property valuation
model to estimate marginal implicit prices of ambient water
quality for an entire local watershed using both waterfront
and non-waterfront properties. It is important to note that the
localized study area/watershed is located in a county adjacent
to the Chesapeake Bay where the cultural heritage has depended on water and water quality as it relates to
commercial fish harvests as well as recreation. Public opinion
polls have shown that homeowners in sub-watersheds of the
Chesapeake Bay are both knowledgeable about water quality
issues, and willing to pay for improvements. As such, the
value of water quality changes should be incorporated into
local land use planning and policy issues. The ambient water
quality within this watershed depends largely on non-point
source pollution sources, which is turn, are dependent directly
on development or land use and associated impervious
surfaces. This study provides estimates of the marginal values
of ecosystem indicators that can be directly linked to
development activities within a small local watershed, and
thus, could potentially help regional planners who are
responsible for weighing the costs (including environmental
costs) with the benefits of additional development that will
increase impervious surfaces within a watershed thereby
impacting water quality. The significant ambient water
quality variables included within this study are total suspended
solids and dissolved inorganic nitrogen.