Kevin J. Egan

Valuing Water Quality as a Function of Water Quality Measures

Employing a unique and rich data set of water quality attributes in conjunction with detailed household characteristics and trip information, we develop a mixed logit model of recreational lake usage and undertake thorough model specification and fitting procedures to identify the best set of explanatory variables, and their functional form for the estimated model. Our empirical analysis shows that individuals are responsive to the full set of water quality measures used by biologists to identify the impaired status of lakes. Thus, changes in these quality measures are not simply a scientific exercise, but they also translate into changes in the recreational usage patterns and well-being of individual households. Willingness-to-pay (WTP) estimates are reported based on improvements in these physical measures.

Increasing Beach Recreation Benefits by Using Wetlands to Reduce Contamination

Abstract The public swimming beach at Maumee Bay State Park (MBSP) on Lake Erie is often posted for occurrences of unsafe levels of bacteria. The main source of bacteria derives from a drainage ditch that discharges near the beach. We have conducted a comprehensive study to determine the feasibility of using a constructed wetland to filter the ditch water, prior to its entry into Maumee Bay. As part of this study, we administered an on-site non-market valuation survey of beach visitors, in which observed and contingent trips to the beach were used to estimate the potential welfare benefits of the restored wetlands. The data were analyzed using three versions of the multivariate Poisson-lognormal (MPLN) model, a random effects count data model. We conclude version one, with flexible covariance structure and vehicle costs of

Aesthetic Values of Lakes and Rivers

0.25 per mile, is the preferred version and use it to estimate an average annual willingness to pay (WTP) of

Multivariate count data regression models with individual panel data from an on-site sample

166 to construct wetlands and improve water quality. The aggregate annual benefit to an estimated 37,300 annual beach visitors is estimated as

Three reasons to use annual payments in contingent valuation surveys: Convergent validity, discount rates, and mental accounting☆

6.19 million. The robustness of this estimate to a variety of alternative assumptions is examined. JEL Classification Code: Q51

Recreation Demand Using Physical Measures Of Water Quality

The aesthetic quality of water resources is often assumed to be valuable to society, yet few robust estimates of this value have been reported in the limnological literature. Because entire lakes and rivers are not bought and sold regularly, their aesthetic value cannot be determined by differences in market prices. Therefore, economically valid estimates must be determined by methods that estimate willingness to pay (WTP) for aesthetic value. Methods for and example results of an environmental valuation study to estimate local residents’ and visitors’ WTP for improved aesthetic quality in Clear Lake (Iowa, USA), a eutrophic, natural lake are presented. Both revealed preference and stated preference techniques for estimating value are considered. In the revealed preference application, WTP is inferred by comparing the number of times survey respondents planned to visit the lake given its current conditions with the number of times they would plan to visit if the lake’s water quality were improved. In the stated preference application, WTP is inferred by presenting survey respondents with a hypothetical ballot initiative offering improved water quality and resulting higher taxes associated, then estimating the highest tax bill at which the ballot initiative would have passed.