Federal project evaluation and intangible resources : The Tellico Dam

A model of resource evaluation incorporating reversibility of actions and substitutability for resource services is presented, along with associated decision criteria. The model extends and generalizes the Krutilla—Fisher procedure for evaluating unique resources. The more general technique is used to assess the official analysis of the Tellico Dam project in eastern Tennessee. In terms of measured values, the preservation option is shown to be superior to development only under extreme assumptions. The existence of substantial unmeasured preservation values in the Tellico case strengthens the environmentalist position, however, particularly since net benefits of development are apparently negative.