Abstract
This national-scale, watershed-level analysis provides an empirical assessment of land use impacts on water quality and aquatic ecosystems in the United States. Results suggest that the level of conventional water pollution in a watershed is significantly affected by the amount of land allocated to intensive agriculture and urban development, while the level of toxic water pollution is significantly affected by the amount of land allocated to transportation and mining. We examine the relationship between land use, water quality, and aquatic species extinction and discuss the implications of the results for the design and implementation of the water quality trading policy. (JEL Q24, Q53, Q57)
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