PHOTOGRAMMETRIC ENGINEERING & REMOTE SENSING
August 2015
647
Valuing Geospatial Information: Using the
Contingent Valuation Method to Estimate the
Economic Benefits of Landsat Satellite Imagery
John Loomis, Steve Koontz, Holly Miller, and Leslie Richardson
Abstract
While the U.S. government does not charge for download-
ing Landsat images, the images have value to users. This
paper demonstrates a method that can value Landsat and
other imagery to users. A survey of downloaders of Landsat
images found: (a) established US users have a mean value
of $912
USD
per scene; (b) new US users and users returning
when imagery became free have a mean value of $367
USD
per scene. Total US user benefits for the 2.38 million scenes
downloaded is $1.8 billion
USD
. While these benefits indicate
a high willingness-to-pay among many Landsat downloaders,
it would be economically inefficient for the US government
to charge for Landsat imagery. Charging a price of $100
USD
a scene would result in an efficiency loss of $37.5 million a
year. This economic information should be useful to policy-
makers who must decide about the future of this and similar
remote sensing programs.
Introduction
Geospatial information is ubiquitous in everyday life through
online mapping, social media, and other applications, many
of which are available for free. These applications frequently
incorporate free geospatial data, often collected and distrib-
uted by government entities. Additionally, geospatial data is
used extensively in research and development, in both the
private and public sectors. The widespread use of geospatial
information suggests the data are very valuable, but without
a market price, it can be difficult to estimate that value. It be-
comes even more challenging to estimate value once the orig-
inal data has been incorporated into value-added products.
Landsat satellite imagery is one such source of geospatial data
that is currently provided at no cost by the United States (US)
Federal government to all users.
We present a method of eliciting the economic value of a
public good in an application to Landsat satellite imagery. We
use well-established procedures for valuing goods not sold
in competitive markets, and are able to elicit values across
different types of users. Combined with information on rep-
resentative users, we are then able to construct a conservative
aggregate benefit to society for the Federal government having
provided this service in 2011. We answer the question: what is
Landsat imagery worth to the community of direct imagery us-
ers? We believe this information, and the processes used, will
be useful to the community of satellite imagery users, as well
as decision and policymakers who may find the results helpful
in deliberations about the future of this and similar programs.
Landsat satellites have been operating since 1972, provid-
ing a continuous global record of the Earth’s land surface. The
more than 40-year record of imagery is unique among satellite
imagery today, and this archive of data is among the most
important attributes of Landsat to users (Miller
et al
., 2013).
Apart from a failed attempt at privatization in the 1980s, the
Federal government has built, launched, and operated the
satellites, and archived and distributed the images provided
by those satellites. For most of the duration of the program,
Landsat scenes were available for a fee, ranging from $200
USD
to over $4,000
USD
per scene. Beginning in 2008, the
imagery became available at no cost through the US Geolog-
ical Survey (
USGS
). This free and open data policy resulted
in a huge increase in the number of scenes downloaded from
USGS
, from a few thousand scenes per year to millions of
scenes per year. The current user community includes users
in every sector (e.g., private, academic, and government)
employing the imagery in more than 40 diverse applications,
from forestry and water resources to humanitarian aid and
urban planning (Miller
et al
., 2013). The vast number of
scenes downloaded and breadth of users and applications
infers a substantial societal benefit is being generated, but
little generalizable research has been conducted to determine
the economic value of the imagery. Since 1999, there have
been two Landsat satellites operating concurrently, provid-
ing imagery every eight days. One of the current satellites,
Landsat-7, is nearing the end of its lifespan, and to maintain
the frequency of return that users have become reliant upon, a
new satellite will be needed soon. Given the cost of building
and launching a typical Landsat satellite (almost a billion US
dollars), estimating the benefits of the imagery is critical to
ensuring the continuity of data for users.
The societal benefits derived from the use of Landsat im-
agery have been well-documented qualitatively (e.g., NASA,
2012; Serbina and Miller, 2014), but few studies have been
conducted on the quantitative value of the imagery. The ma-
jority of these studies have focused on the cost savings associ-
ated with using Landsat (e.g., Morse
et al
., 2008; Serbina and
Miller, 2014) or cost-benefit analyses which incorporate cost
savings (e.g., Booz Allen Hamilton, 2012). For example, the
Landsat Advisory Group (2012) estimated a savings of $178 to
235 million
USD
over 10 Federal and state government appli-
cations of Landsat, ranging from consumptive water use and
forestry, to agriculture and flood mitigation. The gain or loss
of revenue has also been used to assess value. Bernknopf
et al
.
(2012) projected a potential increased profit of more than
John Loomis and Steve Koontz are with Colorado State Uni-
versity, Department of Agricultural and Resource Eco-nomics,
Fort Collins, CO 80523 (
.
Holly Miller and Leslie Richardson are with the US Geologi-
cal Survey, Fort Collins Science Center, 2150 Centre Avenue,
Bldg. C, Fort Collins, CO 80526.
Photogrammetric Engineering & Remote Sensing
Vol. 81, No. 8, August 2015, pp. 647–656.
0099-1112/15/647–656
© 2015 American Society for Photogrammetry
and Remote Sensing
doi: 10.14358/PERS.81.8.647
