ABSTRACT
To lay the basis for the subsequent analyses, this chapter summarizes the broad conceptual framework for economic valuation of nonmarket goods and services as applied to water resources. I begin by reviewing some of the basic concepts and definitions used in measuring economic value or benefits of public water projects or policies. The main focus is on valuing changes in water supply for reallocation and investment choices, but changes in water quality and reliability are also addressed. Next comes a discussion of some issues in valuation unique to the water resource. The chapter concludes with a classification system of types of benefits, broad types of measurement techniques, and methods by which water is valued in applied contexts.
