Valuing Water Quality Valuing Water Quality Through Recreational Uses in Through Recreational Uses in
IowaIowa
Joseph Herriges and Catherine KlingJoseph Herriges and Catherine KlingDepartment of EconomicsDepartment of Economics
Center for Agricultural and Rural DevelopmentCenter for Agricultural and Rural Development
John DowningJohn Downing Department of Ecology, Evolution and Organisimal BiologyDepartment of Ecology, Evolution and Organisimal Biology
Iowa State UniversityIowa State University
Funding from EPA Star grant, Iowa DNR, and CARD appreciatedFunding from EPA Star grant, Iowa DNR, and CARD appreciated
Project OverviewProject Overview A four-year panel data set of survey responses will be A four-year panel data set of survey responses will be
collected involvingcollected involving Actual trip behavior and future expected trips, years 2001-Actual trip behavior and future expected trips, years 2001-
20062006 Water quality scenarios at several target lakesWater quality scenarios at several target lakes Knowledge and perceptions regarding lake qualityKnowledge and perceptions regarding lake quality
Data linked to limnological measurements (Downing) Data linked to limnological measurements (Downing) at 132 primary lakes in Iowaat 132 primary lakes in Iowa
Estimate demand for and value of improved water Estimate demand for and value of improved water quality in Iowa’s lakesquality in Iowa’s lakes
Measuring Benefits of Iowa LakesMeasuring Benefits of Iowa Lakes Economic value = how much are people willing to give up to get more water Economic value = how much are people willing to give up to get more water
quality quality Want to measure tradeoffs people would be willing to make if they had toWant to measure tradeoffs people would be willing to make if they had to Represents the value of others goods willing to give up to get improved water Represents the value of others goods willing to give up to get improved water
qualityquality Also called “maximum willingness to pay” or just willingness to payAlso called “maximum willingness to pay” or just willingness to pay Same concept as used for any good (shoes, cars, yo-yo’s, etc.)Same concept as used for any good (shoes, cars, yo-yo’s, etc.)
Do people WANT to pay this? No, but they would rather pay it than be forced to Do people WANT to pay this? No, but they would rather pay it than be forced to live with lower water quality live with lower water quality
Use observed patterns in lake usage to infer WTP for water qualityUse observed patterns in lake usage to infer WTP for water quality
Local economic impact = how many dollars exchange hands near the lakeLocal economic impact = how many dollars exchange hands near the lake Useful and relevant for some questions, but not cost-benefit assessmentsUseful and relevant for some questions, but not cost-benefit assessments Represents benefits of economic activity to a region, but some of that activity Represents benefits of economic activity to a region, but some of that activity
comes at expense of activity elsewherecomes at expense of activity elsewhere And, it misses lots of sources of value: if I visit a lake and don’t buy anything And, it misses lots of sources of value: if I visit a lake and don’t buy anything
near the lake that day, is my value zero? near the lake that day, is my value zero?
Baseline SurveyBaseline Survey
First of four mail surveys First of four mail surveys 8000 Iowa residents 8000 Iowa residents
selected at randomselected at random Survey collected Survey collected
trip data for 132 lakestrip data for 132 lakes attitudes regarding lake attitudes regarding lake
qualityquality Socio-demographic dataSocio-demographic data
62.1% response rate62.1% response rate
Lakes included in StudyLakes included in Study
Top 10 Lakes by UsageTop 10 Lakes by UsageLake Name
Single Day 2002 Total 2002
Saylorville Dam 599,719 651,860
West Okoboji Lake 365,232 629,828
Coralville Lake 457,466 510,096
Clear Lake 354,825 454,321
East Okoboji Lake 291,594 398,888
Red Rock Lake 284,176 372,350
Big Creek Lake 351,392 363,566
Lake McBride 291,558 312,766
Rathbun Lake 248,263 302,237
Storm Lake 231,749 267,162
Table 1. Physical Water Quality Summary Statistics
Variable Mean Std. Dev. Minimum Maximum
Secchi Depth (m) 1.17 0.92 0.09 5.67
Chlorophyll (ug/l) 40.93 38.02 2.45 182.92
NH3+NH4 (ug/l) 292.15 158.57 72 955.34
NO3+NO2 (mg/l) 1.20 2.54 0.07 14.13
Total Nitrogen (mg/l) 2.20 2.52 0.55 13.37
Total Phosphorus (ug/l) 105.65 80.61 17.10 452.55
Silicon (mg/l) 4.56 3.24 0.95 16.31
pH 8.50 0.33 7.76 10.03
Alkalinity (mg/l) 141.80 40.98 73.83 286.17
Inorganic SS (mg/l) 9.43 17.87 0.57 177.60
Volatile SS (mg/l) 9.35 7.93 1.64 49.87
Variation in Lake ConditionsVariation in Lake Conditions
0
10
20
30
40
50
60
70
Perc
enta
ge o
f Hou
seho
lds
2001 2002 2003
Iowa Lakes Mississippi/Missouri River Lakes outside of Iowa
Figure 1: Percentage of respondents who took at least one tripFigure 1: Percentage of respondents who took at least one trip
0
1
2
3
4
5
6
7
8
9
Ave
rage
Num
ber
of T
rips
2001 2002 2003
Iowa Lakes Mississippi/Missouri River Lakes outside of Iowa
Figure 2: Average number of day tripsFigure 2: Average number of day trips
33%
32%
27%
8%
Never
Rarely
Sometimes
Frequently
How frequently do you or your family How frequently do you or your family swim in Iowa Lakes?swim in Iowa Lakes?
22
3211
18
9
5 3
Proximity
Water Quality
Location of Friends/Relatives
Park Facilities
Activities at the Lake
Activities in the Town
Other
Figure 3: Average allocation of importance points to factors Figure 3: Average allocation of importance points to factors important in choosing a lake for recreationimportant in choosing a lake for recreation
Figure 4: Average allocation of importance points to lake Figure 4: Average allocation of importance points to lake characteristicscharacteristics
19%
12%
14%
8%9%
1%
10%
27%
Water clarity
Hard, clean, sandy bottom in swimming area
Lack of water odor
Diversity of wildlife
Diversity of fish species /habitat
Quantity of fish caught
Safety from Bacteria contamination/healthadvisoriesOther
How important is the presence of the lake nearest your How important is the presence of the lake nearest your permanent residence to making your community an permanent residence to making your community an
interesting and vibrant place?interesting and vibrant place?
20
27
34 33
4038
26
2018
97
6
11
65
0
5
10
15
20
25
30
35
40
VeryImportant
SomewhatImportant
Neutral SomewhatUnimportant
VeryUnimportant
Overall 10-mile radius 5-mile radius
How important is the presence of the lake nearest your How important is the presence of the lake nearest your permanent residence to retaining the interest of young permanent residence to retaining the interest of young
people to remain in your community or in attracting people to remain in your community or in attracting prospective residents to your area?prospective residents to your area?
17
21
24
3033 32
27 2625
12 11
9
13
9 9
0
5
10
15
20
25
30
35
VeryImportant
SomewhatImportant
Neutral SomewhatUnimportant
VeryUnimportant
Overall 10-mile radius 5-mile radius
Survey Results (Cont’d)Survey Results (Cont’d)
MeanMean Std. Dev.Std. Dev. Min.Min. Max.Max.
Mean WQ PerceptionMean WQ Perception 5.755.75 0.510.51 4.114.11 6.816.81
Standard deviation of WQ Standard deviation of WQ PerceptionPerception 1.661.66 0.280.28 1.061.06 2.422.42
Water Quality AssessmentsWater Quality Assessments
Water Quality PerceptionsWater Quality PerceptionsCorrelations with Observed Physical MeasuresCorrelations with Observed Physical Measures
Full SampleFull Sample Water ContactWater ContactNon-Water Non-Water
ContactContact
Day Trip Per CapitaDay Trip Per Capita 0.250.25 0.260.26 -0.10-0.10
Secchi DepthSecchi Depth 0.420.42 0.430.43 0.130.13
ChlorophyllChlorophyll -0.30-0.30 -0.29-0.29 -0.16-0.16
NH3+NH4NH3+NH4 -0.24-0.24 -0.23-0.23 -0.11-0.11
NO3NO2NO3NO2 -0.04-0.04 -0.03-0.03 -0.15-0.15
Total NitrogenTotal Nitrogen -0.19-0.19 -0.18-0.18 -0.20-0.20
Total PhosphorusTotal Phosphorus -0.33-0.33 -0.32-0.32 -0.25-0.25
SiliconSilicon -0.40-0.40 -0.39-0.39 -0.27-0.27
pHpH -0.09-0.09 -0.10-0.10 0.030.03
AlkalinityAlkalinity -0.20-0.20 -0.21-0.21 -0.13-0.13
ISSISS -0.33-0.33 -0.34-0.34 -0.10-0.10
VSSVSS -0.38-0.38 -0.38-0.38 -0.15-0.15
Relationship between Recreation Trips and Relationship between Recreation Trips and Physical Water Quality Measures: 2002 DataPhysical Water Quality Measures: 2002 Data
Zone 3Zone 3LakesLakes
AverageAverageTrips withinTrips within
Zone 3Zone 3
SecchiSecchiDepth Depth
(m)(m)
Chlorophyll Chlorophyll (ug/l)(ug/l)
TotalTotalPhosphorous Phosphorous
(ug/l)(ug/l)
TotalTotalSuspendedSuspended
Solids Solids (mg/l)(mg/l)
George George WythWythLakeLake
1.281.28 1.11.1 1717 5050 7.27.2
Silver LakeSilver Lake 0.020.02 0.20.2 177177 246246 27.927.9
Silver LakeSilver Lake
Using Travel Patterns to Reveal ValuationUsing Travel Patterns to Reveal Valuation
Valuing Lake Restoration/PreservationValuing Lake Restoration/Preservation
Lake restoration efforts can be costly, involvingLake restoration efforts can be costly, involving dredgingdredging watershed managementwatershed management
However, the benefits to Iowans can also be substantialHowever, the benefits to Iowans can also be substantial recreational benefitsrecreational benefits benefits to local residentsbenefits to local residents non-use valuesnon-use values
The benefits to any restoration “program” depends upon the The benefits to any restoration “program” depends upon the mix of lakes being restored mix of lakes being restored notnot just on the sum of benefits from just on the sum of benefits from each lake each lake
A Lake Prioritization AnalysisA Lake Prioritization AnalysisThe Cost SideThe Cost Side
IDNR provided a list of 35 priority Lakes for possible IDNR provided a list of 35 priority Lakes for possible restorationrestoration
Preliminary lake restoration costs were estimated for each lake Preliminary lake restoration costs were estimated for each lake by IDNR and John Downing, incorporatingby IDNR and John Downing, incorporating
In-lake restoration costs including dredging to an average depth of 10 In-lake restoration costs including dredging to an average depth of 10 ft.ft.
Permanent watershed protection (per acre)Permanent watershed protection (per acre) Yearly watershed maintenance costsYearly watershed maintenance costs
Resulting lake changes were projected assuming Resulting lake changes were projected assuming a 70% reduction in total nitrogen, total phosphorous and suspended a 70% reduction in total nitrogen, total phosphorous and suspended
solidssolids a 90% reduction in cynobacteriaa 90% reduction in cynobacteria corresponding changes in Secchi depth, chlorophyll, and total corresponding changes in Secchi depth, chlorophyll, and total
phytoplanktonphytoplankton
Single Lake RankingsSingle Lake RankingsSorted by Total Net Benefits ($million)Sorted by Total Net Benefits ($million)
RankingRanking LakeLake TNBTNB TBTB TCTC
11 Big CreekBig Creek 733.74733.74 755.76755.76 22.0322.03
22 Brushy CreekBrushy Creek 490.70490.70 517.20517.20 26.5026.50
33 Hickory GroveHickory Grove 275.94275.94 277.80277.80 1.861.86
44 Lake McBrideLake McBride 218.18218.18 226.21226.21 8.038.03
55 Clear LakeClear Lake 185.32185.32 202.93202.93 17.6117.61
66 Lake GeodeLake Geode 161.34161.34 166.11166.11 4.774.77
77 Three MileThree Mile 153.36153.36 163.67163.67 10.3210.32
88 EasterEaster 102.33102.33 113.48113.48 11.1511.15
99 Lake AhquabiLake Ahquabi 86.9186.91 88.5588.55 1.641.64
1010 Little WallLittle Wall 76.7876.78 81.8581.85 5.075.07
1111 Lake AnitaLake Anita 68.8168.81 69.6769.67 0.860.86
1212 Kent ParkKent Park 61.2861.28 61.9961.99 0.710.71
1313 SpringbrookSpringbrook 60.6960.69 61.7961.79 1.101.10
1414 Red HawRed Haw 54.6554.65 55.1055.10 0.450.45
1515 Don WilliamsDon Williams 54.1254.12 66.1466.14 12.0212.02
Single Lake RankingsSingle Lake RankingsSorted by Benefit/Cost RatioSorted by Benefit/Cost Ratio
TNB Ranking Lake TNB TB TC TB/TC
3 Hickory Grove 275.94 277.80 1.86 149
14 Red Haw 54.65 55.10 0.45 122
12 Kent Park 61.28 61.99 0.71 87
11 Lake Anita 68.81 69.67 0.86 81
13 Springbrook 60.69 61.79 1.10 56
9 Lake Ahquabi 86.91 88.55 1.64 54
21 Hannen 25.45 25.95 0.49 53
18 Lake of the Hills 39.69 40.48 0.79 51
25 Central Park 22.23 22.75 0.52 44
6 Lake Geode 161.34 166.11 4.77 35
1 Big Creek 733.74 755.76 22.03 34
19 Viking 30.04 30.99 0.95 33
4 Lake McBride 218.18 226.21 8.03 28
2 Brushy Creek 490.70 517.20 26.50 20
ConclusionsConclusions
Iowans value water quality, revealing this through Iowans value water quality, revealing this through their patterns of lake usagetheir patterns of lake usage
While the costs of lake restoration are substantial, While the costs of lake restoration are substantial, they have the potential to pay back within the first they have the potential to pay back within the first year, improving the recreational opportunities within year, improving the recreational opportunities within the statethe state
West Okoboji LakeWest Okoboji Lake