Measuring the value of remediation in muskegon lake
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Measuring The Value of Remediation in Muskegon Lake. Dr. Paul Isely Seidman College of Business Grand Valley State University & Carrie Hause Elaine Isely. Funding. National Oceanic and Atmospheric Administration Great Lakes Commission

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Measuring the value of remediation in muskegon lake

Measuring The Value of Remediation in Muskegon Lake

Dr. Paul Isely

Seidman College of Business

Grand Valley State University

&

Carrie Hause

Elaine Isely


Funding

Funding

  • National Oceanic and Atmospheric Administration

    • Great Lakes Commission

    • West Michigan Shoreline Regional Development Commission

  • Area of Concern in Muskegon Lake

  • $10 million ARRA funding

  • Socioeconomic monitoring


Purpose

Purpose

  • Hedonic Analysis of Housing Values

  • Travel Cost Study of Recreation Values

  • Contingent Valuation study of Use and Non-Use Values


Hedonics

HEDONICS


Measuring the value of remediation in muskegon lake

Data

  • County assessor database

    • House characteristics

    • Sales information

  • AWRI shoreline inventory


Measuring the value of remediation in muskegon lake

Houses > 800m from Lake not Used

Houses affected by Lake Michigan not Used

Houses <100m from Lake not Used


Model

Model

LnPrice as a function or:

Floor area.000359***

Basement area.000118***

age-.00563***

age2.000018**

Bear Lake.497***

Garage space.0562***

Industrial-.068

Stone.0529*

Bathrooms.0606***

Yearsold 2 - 20SUPPRESSED

District2-.24***

District3-.26***

Occupancy2-.18***

Occupancy3-.0712

NEIGHBORHOODSSUPPRESSED

Distance Lake-.000151***

Lnnatratio.0297***

Lnhardratio-.0532***

_cons10.7***

N934

legend:* p<.1;** p<.05;*** p<.01


What does the model mean

WHAT DOES THE MODEL MEAN?


Contingent valuation

Contingent Valuation


Value of lake recreation

Value of Lake Recreation

  • Mailed survey as part of a CV study

  • A little more than 15% response rate


The question

The QUestion

To restore just 1 acre of wetland habitat in Muskegon Lake, 1 in every 300 households in Michigan would need to contribute $A to this fund. If more households contribute, more habitat can be restored.

Given your household income and expenses, would you be willing to make a one time, tax-deductible donation of $A? _____YES_____NO


The results

The Results

  • Model 1 - $2.5 Million

  • Model 2 - $9 Million

  • Average $5.7 Million

  • Re survey occurring this year to improve sample


Travel cost

TRAVEL COST


Travel cost1

Travel Cost

  • Stated costs plus time cost

  • Calculated costs using mileage and normal expenses plus time cost

  • These were averaged together for the model estimations


Consumer surplus

Consumer Surplus

Value in $

Travel Cost

Trips

Quantity


Value of a trip 2009

Value of a Trip 2009

  • Coefficient on TRAVEL COST is -0.036

  • Value of a single trip is 1/(-βTRAVEL COST)

  • Value of a single trip to Muskegon Lake is $27.77


Value of a trip 2010 and 2011

Value of a trip 2010 and 2011

?


Questions

[email protected]

QUESTIONS


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