One economic method of studying the value people place
on local environmental quality is through the analysis of real estate transactions via hedonic property valuation
models. For water quality valuation studies to be applicable
for policy purposes, we must assume a corresponding
relationship between residential homeowner utility functions
and ambient water quality within their local watersheds.
In certain localities where the health of the
watershed and its associated tributaries are an integral
part of the local culture and heritage such an assumption is
realistic. One such area in the United States where there is a
lengthy history of local fish harvests and water based
recreation is the Chesapeake Bay estuary and its associated
tributaries and sub-watersheds. Residents living within
jurisdictions adjacent to the Bay tend to be knowledgeable
about water quality issues and associated development
activities; often to a point where water quality deterioration
can become an important local political issue.