Americans are demanding cleaner lakes, beaches, and rivers. In survey after survey, people rank water quality as the environmental issue that worries them the most. Polluted waterways are of greater concern to Americans than climate change and species extinction. They matter more to people than air pollution and the loss of tropical rainforests.

Unfortunately, America’s waterways are in poor shape. Around 1.75 million miles of the country’s rivers and streams are too polluted for swimming, fishing, or drinking — half the total distance. And that’s not counting the lakes.

It’s clear the public wants action. What’s murkier is just how much people are willing to pay to clean up their local waterways. “We know water quality matters to people,” says Daniel Phaneuf, the Henry C. Taylor Professor of Agricultural and Applied Economics at CALS. “But what we don’t know is exactly how much it matters.”

What are Americans willing to sacrifice to have cleaner lakes and rivers? And what does “cleaner” mean? Do people want smaller-scale improvements to lakes and rivers or more expensive, sweeping changes to restore waterways to natural conditions?

For environmental economists like Phaneuf, developing novel methods for measuring how much people value bodies of water is crucial. That’s because cleaning up lakes and rivers doesn’t come cheap.

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In 1972, a bipartisan majority in Congress passed the Clean Water Act, which forced cities and companies to stop releasing sewage and toxic waste into America’s waterways. The law, which led to sweeping improvements, came at an enormous cost.

Since then, the federal government has spent almost $1 trillion on clean-water grants under the act. That’s more than $100 per U.S. citizen each year. Turning a single mile of dirty river into a fishing-fit waterway costs $1.5 million annually.

The expense is obvious. But how do we know if the investment is worth it? To answer that question, we first need to understand the value of a clean lake or river. But researchers have long been challenged by the question of how to put price tags on things that cannot be bought or sold. Economists are used to thinking about the value of a product based on what people are willing to give up for it, Phaneuf says. “If I go to a café and buy a $4 cup of coffee, then I’ve told the world that I am willing to pay at least that much. But we don’t go to the store to buy water quality.”

A more creative approach is needed to value nature. Environmental economists such as Phaneuf must think like detectives, piecing together many different clues — from real-estate prices to how far people are willing to drive — to infer a dollar value.

Critics are skeptical of attempts to put price tags on the environment. Some things, they protest, are simply too precious to be expressed in dollars. But, according to Phaneuf and his longtime collaborator Catherine Kling, an economist at Cornell University, quantifying the value of lakes and rivers helps us protect them.

“Don’t we just want to say these things are priceless, and that’s all there is to it?” Kling says. “Well, in a world where we can have everything we want, that would be exactly right.”

But, like it or not, Kling continues, we live in a world of scarcity and trade-offs. When we harm the natural environment to produce something to sell in a market, such as oil, that product has a clear price. It is far less obvious how to value the damage to nature.

This means that the environment is often undervalued by policymakers, Phaneuf says, because it is hard to measure how much nature matters to people. Without an accurate measure of its worth, environmental advocates have greater difficulty arguing for the money to protect and restore ecosystems.

“If the costs are measured in dollars,” Phaneuf says, “we’d like to be able to measure the benefits in dollars too.”

Traditionally, environmental economics has focused on people who use the outdoors for activities such as boating or hunting. “That’s super important, but it’s not the whole picture,” Kling says. It excludes people who may “just enjoy watching wild birds hang out on the water.”

That’s why, over the last several years, Phaneuf and Kling, working with researchers from several other institutions and a team of CALS graduate students, have been designing new and innovative tools for quantifying our love of the outdoors. The goal: to ensure government agencies make decisions informed by precisely how much Americans value the country’s lakes, rivers, and streams.

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Phaneuf has always loved the outdoors. When he was deciding which graduate school to attend, he eventually settled on Iowa State University. The reason? He had a friend who lived near campus and owned a hunting dog; he pictured himself spending weekends tracking down pheasants in Iowa’s rolling hills.

While pursuing his Ph.D. in economics, Phaneuf realized he could combine his interests. “It was always intuitive to me that the environment mattered,” he says. “But as somebody who thinks analytically, it was natural for me to wonder, well, how much?”

Environmental economists try to understand the values that people place on nature in two main ways. One, they can look for clues in people’s behavior, something called revealed preference. Or, two, they can ask people directly, which is referred to as stated preference.

Traditionally, researchers use surveys to gather information on people’s revealed preferences. For example, an economist trying to understand how much value people place on clean bodies of water would have to repeatedly ask individuals how many times they have visited lakes and rivers over the last year, and how far they drove. Then, they would compare those data with the water quality of those lakes and rivers to come up with a dollar value.

It’s an approach that works well for a relatively small area. But zoom out to regional or national scales, and the information needs become unwieldy. It’s “very difficult to survey thousands and thousands of people at a large spatial scale,” Phaneuf says. “And it’s hard to do so multiple times, year after year.”

So, Phaneuf went looking for a larger dataset. And he found one in cell phone location data.

Enormous, anonymized collections of cell phone data are, it turns out, a powerful tool for understanding how much people value clean water. When we allow an app to access our location data, sometimes the company behind the app sells the location data to third-party companies. Much of this $12 billion industry is devoted to making it easier to target people with location-specific ads. But Phaneuf, who accesses cell phone data through one of these third-party companies, harnesses the resource to help him place a value on natural resources.

Accessing the anonymized data on a secure server, Phaneuf can see how far millions of people are willing to travel from their homes to less polluted boating, fishing, or swimming areas. These data have enhanced his ability to illuminate people’s revealed preferences.

“Using these data at a level of aggregation that preserves privacy, we can count up how many people from a particular neighborhood have made trips to a particular lake and use that to determine their recreation behavior— and the travel versus water-quality trade-offs that they are making,” Phaneuf says.

One of the focus areas for the cell phone project, which is still in progress, is Long Island Sound between Connecticut and New York, chosen because it’s a well-populated area with an array of recreation areas along the coast that have reliable water quality data. Sifting through hundreds of millions of unique trips taken by area residents between 2019 and 2021, Dimitris Friesen MS’22, a Ph.D. student working with Phaneuf, helps isolate journeys to the beach — which is challenging in such a highly populated coastal zone.

Spotting useful information in the unsorted mass of cell phone data is Where’s Waldo? come to life. “The amount of information is absolutely massive,” Friesen says. “And that is a problem. Because we have to figure out which information allows us to measure recreation. Which trips are we counting, and which are we excluding? Who do we include in the sample? Who is likely to be recreating?”

Combining all that cell phone data with detailed information about water quality, Phaneuf and Friesen then construct statistical models to assign dollar values to the condition of the water. If large numbers of people are driving to a distant recreation site where the water is unusually clean, that shows they are willing to pay extra, both in time and gas money, to go boating, fishing, or swimming there.

“I’ve learned a ton doing this work,” Friesen says. “Nobody in our group, me included, knew how to interact with cell phone data before. It’s so rich and granular.”

But, while cell phone information is plentiful, there are downsides too. “We don’t know anything about the anonymous device holders,” Phaneuf says. This makes it difficult to discern the exact demographics of the people who value water quality.

And what about people who care deeply about the health of their local water bodies but rarely visit them? By focusing only on recreation, Phaneuf says, economists can artificially depress the value of high-quality water. Most studies show that if you only focus on recreation behavior, the economic benefits from Clean Water Act programs seem smaller than the costs. “That leads the EPA (Environmental Protection Agency) to ask whether these programs are worthwhile,” Phaneuf says. “Or whether we’ve not been comprehensive enough in measuring the benefits they provide.”

Sometimes, then, there is no replacement for asking people up front what they value, and just how much they would be willing to pay for it.

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Phaneuf is also working with the EPA to develop new tools to measure the value of water quality more holistically. He and his colleagues are assembling nationwide water quality data. This means tracking down enormous amounts of biological information, from state agencies across the country, about the baseline water conditions in their areas.

“We’ve gone on a massive data hunt,” Phaneuf says. “By developing rapports with state agencies and convincing them to share their monitoring data with us, we’ve constructed a massive, integrated, and coordinated database of biological monitoring across many states in the country.”

Also, in collaboration with a multidisciplinary team of ecologists, hydrologists, and economists, Phaneuf has helped design simulated public referenda. Sending out hypothetical ballots to thousands of sampled households across the country, he asked them whether they would support various policies to improve water quality in their region.

To help respondents visualize the difference each policy would make, Phaneuf ’s team hired a graphic artist to design images of local water ecosystems, tailored to the location of the survey respondents, at six different levels of biological condition. The underwater images of a “level one” river, in its natural state, are bustling with underwater critters. The “level six” images are almost empty of life.

“Our job was to translate an ecological idea of biological conditions into something that was meaningful to laypeople,” Phaneuf says. “We’ve created graphics that show what a stream system would look like in a particular biological state, the types of species that are supported by that level of environmental integrity, and the things that people can do with that level of water quality. Can we go swimming? Can we fish? Can we boat?”

The text of each referendum explains that the results may be used to inform public policy. Then, it asks people if they would be willing to receive a higher tax bill in exchange for shifting the quality of a local waterway up a level.

The results are still flowing in, but they are surprisingly encouraging. A regional analysis focused on a section of the Upper Mississippi River basin, an 11,000 square-mile area in Wisconsin and Illinois, found that people would be happy to pay hundreds of dollars extra per year for water quality improvements.

“We found that the average household would pay $316 per year for five years to secure a one-unit increase in biological condition in their home area,” Phaneuf says. That’s three times the annual per-person cost of projects under the Clean Water Act since 1972. It’s a striking figure, reflecting just how deeply people value the quality of their waterways.

That number could be used by environmental advocates to argue for more funding to be diverted to cleanup projects, says Kling.

“It doesn’t mean that people are going to start writing $316 checks,” she says. “But advocacy groups can band together and use these numbers. They can go to state legislatures or the federal government and say, ‘Look, people are willing to give up other goods and services to improve our bodies of water, and here’s an exact number.’”

Now, Phaneuf is working on scaling up these simulated referenda to the whole nation. The results will provide the most comprehensive attempt yet to help policymakers place a value on the benefits of water cleanup programs.

“It’s perfectly legitimate to care about a lake because you want to preserve it for future generations or because it just matters to you for a reason that’s hard to put into words,” Phaneuf says.

With these advances, Phaneuf and his colleagues are helping turn people’s emotional connections with bodies of water into figures that can then be used to improve lakes and rivers. “I’m hoping to show the contribution that the environment makes to people’s well-being,” he says. “Hopefully, understanding that analytical logic will help us make rational decisions, as individuals and as societies, about how to protect our ecosystems.”