ABSTRACT
The use of house prices to estimate the benefits of environmental improvements has a long history in economics. Environmental quality may well be a normal good, and the willingness to pay for environmental improvements may require a minimum level of income. This chapter analyzes the economic benefits of the dredging plan. The estimate of the economic benefits of the Grand Calumet River Dredging Plan may well be conservative. Bordering the downtown commercial district and an established neighborhood of generally well-built and maintained homes, the Grand Calumet River could potentially be a tremendous resource for the residents of Gary, Indiana. The hedonic water pollution studies focus on relatively expensive houses, many of which are used as vacation homes. The Calumet Township Assessor's Office provided assessment data for 2002 on every home in the area most likely to be adversely affected by the Grand Calumet River.
