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