Recreation Demand Using Recreation Demand Using Physical Measures of Water Physical Measures of Water
QualityQuality
Kevin Egan, Joseph Herriges, and Catherine KlingKevin Egan, Joseph 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
R830818
Linking Recreational Values to Linking Recreational Values to Physical Water QualityPhysical Water Quality
Regulatory considerations, such as TMDL standards, Regulatory considerations, such as TMDL standards, require developing physical water quality standards.require developing physical water quality standards.
Yet the linkage between the physical measures of water Yet the linkage between the physical measures of water quality and the values associated with water resources is quality and the values associated with water resources is poorly understood.poorly understood.
Recreation demand models have found water quality Recreation demand models have found water quality matters, but have typically had to rely on limited matters, but have typically had to rely on limited measures, such asmeasures, such as
Catch rates (e.g., Chen, Lupi, and Hoehn, 1999),Catch rates (e.g., Chen, Lupi, and Hoehn, 1999), Toxin levels (Phaneuf, Kling and Herriges, 2000), orToxin levels (Phaneuf, Kling and Herriges, 2000), or Water quality indicators (Parsons, Helm, and Bondelid, 2003)Water quality indicators (Parsons, Helm, and Bondelid, 2003)
Understanding the linkage between physical attributes Understanding the linkage between physical attributes and water quality values is important toand water quality values is important to
setting water quality standardssetting water quality standards prioritizing restoration effortsprioritizing restoration efforts
Iowa Lakes Valuation ProjectIowa Lakes Valuation Project Collaborative project involving economists and Collaborative project involving economists and
ecologists studying Iowa lakesecologists studying Iowa lakes Builds off of existing 5 year study of the ecological Builds off of existing 5 year study of the ecological
conditions of 132 lakes in Iowa (2000-2004)conditions of 132 lakes in Iowa (2000-2004)
EPA Star grant augments work begun with Iowa DNR EPA Star grant augments work begun with Iowa DNR funding and CARD support – 4 year projectfunding and CARD support – 4 year project
A four-year panel data set of survey responses will be A four-year panel data set of survey responses will be collected involving collected involving
Actual trip behavior and future expected trips, years 2001-2006Actual trip behavior and future expected trips, years 2001-2006 22ndnd through 4 through 4thth year survey will contain water quality scenarios year survey will contain water quality scenarios
measuring WTP for quality improvementsmeasuring WTP for quality improvements Knowledge and perceptions regarding lake qualityKnowledge and perceptions regarding lake quality
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• 2001 and 2002 actual trips2001 and 2002 actual trips
• 2003 anticipated trips2003 anticipated trips attitudes regarding lake attitudes regarding lake
qualityquality Socio-demographic dataSocio-demographic data
62.1% response rate62.1% response rate
0
1
2
3
4
5
6
7
8
9A
vera
ge N
umbe
r of
Tri
ps
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
62.8% of Iowa households took at least one trip
Summary StatisticsSummary StatisticsTable 2. Lake Characteristics Summary StatisticsTable 2. Lake Characteristics Summary Statistics
VariableVariable MeanMean Std. Dev.Std. Dev. MinimumMinimum MaximumMaximum
Day Trips Day Trips per per
IndividualIndividual6.686.68 10.4610.46 00 5252
PricePrice 135.79135.79 29.4729.47 94.1294.12 239.30239.30
AcresAcres 672.20672.20 2,120.302,120.30 1010 19,00019,000
Log(Acres)Log(Acres) 4.814.81 1.691.69 2.302.30 9.859.85
RampRamp 0.860.86 0.350.35 00 11
WakeWake 0.660.66 0.470.47 00 11
Handicap Handicap FacilitiesFacilities 0.390.39 0.490.49 00 11
State ParkState Park 0.390.39 0.490.49 00 11
Summary StatisticsSummary Statistics
Table 3. Physical Water Quality Summary StatisticsTable 3. Physical Water Quality Summary Statistics
VariableVariable MeanMean Std. Dev.Std. Dev. MinimumMinimum MaximumMaximum
Secchi Depth (m)Secchi Depth (m) 1.171.17 0.920.92 0.090.09 5.675.67
Chlorophyll (ug/l)Chlorophyll (ug/l) 40.9340.93 38.0238.02 2.452.45 182.92182.92
NHNH33+NH+NH4 4 (ug/l)(ug/l) 292.15292.15 158.57158.57 7272 955.34955.34
NONO33+NO+NO2 2 (mg/l)(mg/l) 1.201.20 2.542.54 0.070.07 14.1314.13
Total Nitrogen (mg/l)Total Nitrogen (mg/l) 2.202.20 2.522.52 0.550.55 13.3713.37
Total Phosphorus (ug/l)Total Phosphorus (ug/l) 105.65105.65 80.6180.61 17.1017.10 452.55452.55
Silicon (mg/l)Silicon (mg/l) 4.564.56 3.243.24 0.950.95 16.3116.31
pH pH 8.508.50 0.330.33 7.767.76 10.0310.03
Alkalinity (mg/l)Alkalinity (mg/l) 141.80141.80 40.9840.98 73.8373.83 286.17286.17
Inorganic SS (mg/l)Inorganic SS (mg/l) 9.439.43 17.8717.87 0.570.57 177.60177.60
Volatile SS (mg/l)Volatile SS (mg/l) 9.359.35 7.937.93 1.641.64 49.8749.87
Modeling IssuesModeling Issues
Randomly divided sample into three segments:Randomly divided sample into three segments: SpecificationSpecification EstimationEstimation PredictionPrediction
Modeling approach: repeated mixed logitModeling approach: repeated mixed logit Specification considerationsSpecification considerations
Inclusion/exclusion of specific water quality measuresInclusion/exclusion of specific water quality measures functional form (e.g., linear, quadratic or logarithmic)functional form (e.g., linear, quadratic or logarithmic) random versus fixed parametersrandom versus fixed parameters
Repeated Mixed LogitRepeated Mixed Logit
,( ; )ij iijt ijtU V X 1,...,1286; 0,...,129; 1,...,52.i j t
Conditional on the parameter vector, i , the probability of observing that
Individual i chooses alternative j on choice occasion t follows the standard logit form:
The corresponding unconditional probability, , is obtained by integrating over an assumed probability density function for the assuming i.i.d. so that
0
ijt iijt i J
iiktk
xp VL
xp V
ijtP ' ,i s
|ijt ijtP L f d
SpecificationSpecificationz'
0
' ' , 1,..., i i t
ijt p q aij j i j i ijt
zU
P Q A j J
1
3
where
is the vector of socio-demographic data,
represents the computed travel cost or "price" of the recreation trip
calculated as: =.25*distance+ travel time * wage ,
represents the p
i
ij
ij
j
z
P
P
Q hysical water quality measures for each lake,
represents the attributes for ea ch lake
.
jA
Coefficient ResultsCoefficient Results
VariableVariable Using 6 PhysicalUsing 6 PhysicalWQ measuresWQ measures
Secchi DepthSecchi Depth 0.870.87
ChlorophyllChlorophyll 0.610.61
Total NitrogenTotal Nitrogen -0.15-0.15
Total PhosphorusTotal Phosphorus -2.51-2.51
Inorganic SSInorganic SS -0.73-0.73
Volatile SSVolatile SS -0.20-0.20
VariableVariable
Using 6 physicalUsing 6 physicalWQ measuresWQ measures
MeanMean DispersionDispersion
IncomeIncome -0.06-0.06
MaleMale -5.79-5.79
AgeAge -0.35-0.35
AgeAge22 -0.0004-0.0004
SchoolSchool -2.61-2.61
HouseholdHousehold -2.50-2.50
PricePrice -0.48-0.48
Log(Acres)Log(Acres) 4.384.38 3.753.75
RampRamp 11.1411.14 18.8618.86
State ParkState Park 3.833.83 14.8614.86
FacilitiesFacilities 0.800.80 14.4014.40
WakeWake 2.432.43 10.4810.48
-12.24-12.24 2.442.44
Comparing Water Quality across LakesComparing Water Quality across Lakes
West West Okoboji Okoboji
LakeLake
Averages of Averages of the nine focus the nine focus lakeslakes
Secchi Secchi Depth (m)Depth (m) 5.675.67 1.231.23
ChlorophyllChlorophyll 2.632.63 40.1340.13
Total Total NitrogenNitrogen 0.860.86 3.643.64
Total Total PhosphorusPhosphorus 21.2821.28 91.1191.11
Inorganic Inorganic Suspended Suspended
SolidsSolids1.001.00 9.529.52
Volatile Volatile Suspended Suspended
SolidsSolids1.791.79 8.428.42
Medians of the Medians of the non-impaired non-impaired
lakeslakes
Averages of the Averages of the 65 impaired lakes65 impaired lakes
0.900.90 0.700.70
6.556.55 56.7656.76
1.101.10 2.772.77
43.8743.87 153.70153.70
5.425.42 20.4220.42
3.623.62 15.4915.49
Silver LakeSilver Lake
West Okoboji LakeWest Okoboji Lake
Willingness to Pay EstimatesWillingness to Pay Estimates
Average Annual WTPAverage Annual WTPNine focus lakes improved Nine focus lakes improved
to to
West OkbobojiWest Okboboji
Sixty-five impaired Sixty-five impaired lakes improved to the lakes improved to the
median of the non-median of the non-impaired lakesimpaired lakes
Per Iowa householdPer Iowa household
for all Iowa householdsfor all Iowa households
Predicted TripsPredicted Trips
(8.0 currently)(8.0 currently)
$11.86$11.86
$13,675,685$13,675,685
8.38.3
$10.23$10.23
$11,799,261$11,799,261
8.28.2
Lakes with the Highest Valued ImprovementsLakes with the Highest Valued Improvements
LakeLake
On EPA’s On EPA’s Impaired Impaired Waters Waters
ListList
Annual Annual WTPWTP
Secchi Secchi Depth Depth
(m)(m)
Total Total Phosphorus Phosphorus
(ug.l)(ug.l)
Total Annual Total Annual 2002 Day Trips2002 Day Trips
Average Average Travel CostTravel Cost
Coralville LakeCoralville Lake YesYes 0.8 0.8 204204 457,000457,000 $106$106
Saylorville LakeSaylorville Lake NoNo 0.70.7 101101 600,000600,000 $97$97
Red Rock LakeRed Rock Lake NoNo 1.51.5 9999 284,000284,000 $112$112
Storm LakeStorm Lake Yes Yes 0.50.5 8989 232,000232,000 $157$157
Trumbull LakeTrumbull Lake YesYes 0.10.1 453453 20,00020,000 $168$168
Lake DarlingLake Darling YesYes 0.30.3 226226 63,00063,000 $124$124
Black Hawk LakeBlack Hawk Lake YesYes 0.90.9 193193 99,00099,000 $138$138
Badger Creek LakeBadger Creek Lake YesYes 0.60.6 290290 63,00063,000 $104$104
Rathbun LakeRathbun Lake NoNo 0.90.9 4444 248,000248,000 $139$139
Hannen LakeHannen Lake NoNo 1.31.3 227227 41,00041,000 $101$101
Average across Average across
all lakesall lakes$300,000$300,000 1.21.2 106106 83,00083,000 $136$136
$10,600,000
$6,000,000
$3,700,000
$1,100,000
$900,000
$800,000
$800,000
$800,000
$600,000
$500,000
Willingness to Pay EstimatesWillingness to Pay Estimates
Figure 8: Lake zonesFigure 8: Lake zones
1
5
4
7
102
8
6
3
9
ConclusionsConclusions Recreator’s trip behavior is responsive to Recreator’s trip behavior is responsive to
physical measures of Water Qualityphysical measures of Water Quality Better water clarity increases recreational tripsBetter water clarity increases recreational trips Nutrients decrease recreational tripsNutrients decrease recreational trips
Allows consumer surplus measures to directly be Allows consumer surplus measures to directly be linked to physical water quality improvementslinked to physical water quality improvements Iowans value more highly a few lakes with superior Iowans value more highly a few lakes with superior
water quality over all recreational lakes at an adequate water quality over all recreational lakes at an adequate levellevel
Findings allow prioritization for clean-up activities Findings allow prioritization for clean-up activities to generate the greatest recreation benefits for a to generate the greatest recreation benefits for a given expendituregiven expenditure Rank which lakes and in what order and most efficient Rank which lakes and in what order and most efficient
levels of improvementlevels of improvement
Next Stages of ProjectNext Stages of Project
2003 Survey gathered2003 Survey gathered A second year of trip dataA second year of trip data Perceptions data regarding water qualityPerceptions data regarding water quality Stated preference data regarding water Stated preference data regarding water
quality improvementsquality improvements 2004 Survey is currently in development2004 Survey is currently in development
Water Quality PerceptionsWater Quality PerceptionsFull Sample Water Contact Non Water Contact
Corr. p-value Corr. p-value Corr. p-value
Day Trip Per Capita 0.25 0.00 0.26 0.00 -0.10 0.24
Secchi Depth 0.42 0.00 0.43 0.00 0.13 0.13
Chlorophyll -0.30 0.00 -0.29 0.00 -0.16 0.08
NH3+NH4 -0.24 0.01 -0.23 0.01 -0.11 0.20
NO3NO2 -0.04 0.67 -0.03 0.75 -0.15 0.09
Total Nitrogen -0.19 0.03 -0.18 0.04 -0.20 0.02
Total Phosphorus -0.33 0.00 -0.32 0.00 -0.25 0.00
Silicon -0.40 0.00 -0.39 0.00 -0.27 0.00
pH -0.09 0.29 -0.10 0.23 0.03 0.75
Alkalinity -0.20 0.02 -0.21 0.02 -0.13 0.13
ISS -0.33 0.00 -0.34 0.00 -0.10 0.26
VSS -0.38 0.00 -0.38 0.00 -0.15 0.10