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Measuring The Value of Remediation in Muskegon Lake

This study assesses the impact of remediation efforts in Muskegon Lake through hedonic analysis and travel cost studies. Using data from housing values and recreation, the research aims to determine the economic value of restoration. The contingent valuation method was employed to gauge public willingness to contribute to the restoration fund, with results indicating significant potential funding. Ongoing surveys seek to enhance data accuracy and refine estimations. For further inquiries, contact iselyp@gvsu.edu.

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Measuring The Value of Remediation in Muskegon Lake

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  1. Measuring The Value of Remediation in Muskegon Lake Dr. Paul Isely Seidman College of Business Grand Valley State University & Carrie Hause Elaine Isely

  2. 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

  3. Purpose • Hedonic Analysis of Housing Values • Travel Cost Study of Recreation Values • Contingent Valuation study of Use and Non-Use Values

  4. HEDONICS

  5. Data • County assessor database • House characteristics • Sales information • AWRI shoreline inventory

  6. Houses > 800m from Lake not Used Houses affected by Lake Michigan not Used Houses <100m from Lake not Used

  7. 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 - 20 SUPPRESSED District2 -.24*** District3 -.26*** Occupancy2 -.18*** Occupancy3 -.0712 NEIGHBORHOODS SUPPRESSED Distance Lake -.000151*** Lnnatratio .0297*** Lnhardratio -.0532*** _cons 10.7*** N 934 legend: * p<.1; ** p<.05; *** p<.01

  8. WHAT DOES THE MODEL MEAN?

  9. Contingent Valuation

  10. Value of Lake Recreation • Mailed survey as part of a CV study • A little more than 15% response rate

  11. 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

  12. The Results • Model 1 - $2.5 Million • Model 2 - $9 Million • Average $5.7 Million • Re survey occurring this year to improve sample

  13. TRAVEL COST

  14. 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

  15. Consumer Surplus Value in $ Travel Cost Trips Quantity

  16. 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

  17. Value of a trip 2010 and 2011 ?

  18. iselyp@gvsu.edu QUESTIONS

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