Benefits from a flood control project that accrue to a landowner are defined as the amount the landowner is willing to pay for the reduction in flood risk. The primary method utilized by the U.S. Army Corps of Engineers to estimate a residential landowner's benefits is the property damages avoided method. Only under a set of restrictive assumptions will this method accurately estimate landowner willingness to pay. Therefore, several alternative techniques, such as the hedonic price method, are approved for use by the Corps but it is not known how they compare.

The purpose of this study is to examine the benefit measures from the property damages avoided and hedonic price methods and two new measures, restricted willingness to pay (RWTP) and restricted willingness to accept (RWTA). The measures RWTP and RWTA are biased estimates of willingness to pay (WTP) and willingness to accept (WTA) where the direction of the bias is known. In addition, the methods that calculate these measures, the RWTP and RWTA methods, do not require data on income or an aggregator for the prices of all goods not in the analysis. Benefit estimates from the hedonic price and RWTP methods provide upper and lower bounds on WTP for non-marginal reductions in flood risk and converge for marginal reductions.