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
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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 - PowerPoint PPT Presentation
Transcript of 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 National Oceanic and Atmospheric
AdministrationGreat Lakes CommissionWest Michigan Shoreline Regional
Development Commission
Area of Concern in Muskegon Lake
$10 million ARRA funding
Socioeconomic monitoring
PURPOSE
Hedonic Analysis of Housing Values
Travel Cost Study of Recreation Values
Contingent Valuation study of Use and Non-Use Values
HEDONICS
DATA County assessor database
House characteristics Sales information
AWRI shoreline inventory
Houses <100m from Lake not UsedHouses > 800m from Lake not UsedHouses affected by Lake Michigan not Used
MODELLnPrice 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 SUPPRESSEDDistance Lake -.000151*** Ln natratio .0297*** Ln hardratio -.0532*** _cons 10.7***
N 934 legend: * p<.1; ** p<.05; *** p<.01
WHAT DOES THE MODEL MEAN?
CONTINGENT VALUATION
VALUE OF LAKE RECREATION
Mailed survey as part of a CV study
A little more than 15% response rate
THE QUESTIONTo 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
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 Stated costs plus time cost
Calculated costs using mileage and normal expenses plus time cost
These were averaged together for the model estimations
Travel Cost
Value in $
QuantityTrips
CONSUMER SURPLUS
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
?
