Economic Value of Soil Moisture Information
Soil moisture information can support decision-making for a variety of applications, including reservoir management, flood control, wildfire management, irrigation, crop yield forecasting, and index-based insurance. However, decision-makers often use soil moisture data in conjunction with other variables. For example, predictions of natural hazards, such as wildfire spread, are influenced by soil moisture as well as precipitation, air temperature, wind speed, available fuels, and other conditions. Because of this, and because soil moisture data are generally a public good without a direct market price, the economic value of soil moisture information is difficult to quantify.
Funded by NOAA’s National Integrated Drought Information System (NIDIS), economists from Oklahoma State University leveraged previous economic and scientific studies to generate conservative, mid-range, and high-end estimates of the existing and potential economic benefits of soil moisture information. They estimated that the current benefits of soil moisture information in the U.S. range from a conservative estimate of $101 million annually to a high-end estimate of $5.28 billion, with a mid-range estimate of $1.86 billion. Additional benefits are possible with increased adoption of soil moisture information in decision-making.
For this study, soil moisture information included data from in situ stations, as well as modeled and remotely sensed soil moisture products. The researchers defined economic value based on the dollar savings or gains associated with soil moisture-related decisions or economic activities, such as managing reservoir operations or making planting and irrigation plans. The term “value” encompasses both avoided losses related to the outcome of a decision (e.g., increased economic value of a crop) and avoided damages (e.g., damages prevented due to informed decision-making around flood risk).
The researchers tailored the methodology to estimate economic value for each economic impact category, within a similar overarching approach. To estimate economic value, they paired literature reviews with public data to estimate the value of a given decision (like flood warnings or crop insurance) and then paired this with information from studies about how different sectors actually use soil moisture information. To scale these case-specific values to a national level, the team estimated three different scenarios based on the use of soil moisture information and its impact on decision-making: conservative, mid-range, and optimistic.
For more information, please contact Elise Osenga (elise.osenga@noaa.gov).
Research Snapshot
Wade Brorsen, Oklahoma State University
Riza Radmehr, Tyson Ochsner, and Erik Kreuger, Oklahoma State University
Results of This Research
The project found that across sectors, current benefits of soil moisture information in the U.S. range from a conservative estimate of $101 million to a high-end estimate of $5.28 billion annually, with a mid-range estimate of $1.86 billion. With increased adoption of soil moisture information for decision-making across sectors, the potential value of soil moisture information could be much higher than current numbers. Enhancements to and increased investments in data quality, in situ data collection, and information accessibility and communication (to increase adoption of soil moisture information) could all contribute to future economic benefits ranging from a conservative estimate of $780 million to a high-end estimate of $17.82 billion annually for the United States. According to this study, the greatest potential increases in economic benefits are in the flood warning, irrigation, and wildfire sectors.
This wide range reflects the limited data sources that isolate the economic impact of soil moisture data from other factors that influence decision-making. This broad range is also due to uncertainties in how widely soil moisture information is used in decision-making. Due to a lack of available data, this study did not consider all potential applications of soil moisture information; for example, the study did not consider impacts to construction, transportation, human health, carbon sequestration, landslides, and drought impacts outside of agriculture.
This study found that investments in soil moisture information, particularly ground-based networks and land surface models, could be a cost-effective strategy to support national agricultural productivity, reduce disaster risk, and inform water resource management. However, the magnitude of these economic returns will depend on whether soil moisture information is used by decision-makers—from individual farmers and ranchers to reservoir operators and city managers.
Publications
Radmehr, R., B. W. Brorsen, E. S. Krueger, and T. E. Ochsner. (2026). Understanding the potential uses of soil moisture information in the United States,Vadose Zone Journal 25(2), e70087.
Another publication is coming soon, which includes total cross-sector estimates of current and future economic benefits of soil moisture information.
