Recreation benefits of instream flow: Application to Montana's Big Hole and Bitterroot Rivers

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Abstract
Allocation of water between instream uses such as recreation and consumptive uses such as irrigation is an important public policy issue in the western United States. One basis for identifying appropriate levels of instream flows is maximization of net economic benefits. A general framework for estimating the recreational value of instream flows was developed and applied to Montana's Big Hole and Bitterroot rivers. The paper also provides a synthesis of methods for interpreting covariate effects in dichotomous choice contingent valuation models. Precision of the estimates is examined through a simulation approach. The marginal recreational value of instream flow in these rivers is in the range of $50 per acre foot (1 acre foot equals 1233.5 m3) for recreation at low‐flow levels plus $25 per acre foot for downstream hydroelectric generation. These values indicate that at some flow levels, gains may be achieved on the study rivers by reallocating water from consumptive to instream uses.