Studia i Prace WNEiZ US

Water is the basic ingredient of living organisms on Earth. It constitutes the basis of their feeding, an important habitat and the resource used in the production processes. At the same time, water, changing states and circulating in nature, can become a dangerous element that threatens the lives and health of people, destroys their property and deteriorates the state of ecosystems. The dynamics of the variation in the amount of water and the amount of water resources in a given area are threats to the functioning of ecosystems and the economy. This threat manifests itself through floods, droughts, or water shortages. The paper deals with the issue of defining and estimating the economic value of water as a resource, from the point of view of the hypothesis of expected utility. Literature has been reviewed with regard to the economic value of water. The basic assumptions of the hypothesis of expected utility and its implications for determining the economic value of water are presented. To this aim, types of water users are identified and for them the utility functions have been defined according to the assumptions of expected utility hypothesis. A discussion of the possibilities of using these utility functions in decision-making processes related to water resources is discussed.