Protect Lakes from Eurasian Watermilfoil Invasion

1. Protect Lakes from Eurasian Watermilfoil Invasion Congwen Zhang Kevin Boyle 06/24/2010

2. Research Objectives Applying the hedonic price method to investigate: • If Eurasian watermilfoil invasion affects lakefront property values. • If total aquatic macrophyte growth (both milfoil and native plant) affects lakefront property values.

3. Our Contribution • First hedonic study to investigate marginal values for an aquatic invasive species. • Marginal losses for milfoil infestation range from $355 (0.33%) to $17,764 (16.35%).

4. Data • 4 lakes and a pond in Rutland County, Vermont. • 65 property sales from 1990 to 1995 (Single family residential or vacation homes/unimproved lands). • Independent variables include: 9 property attributes, lake fixed effects, milfoil/total coverage. • Aquatic macrophyte coverage ratings: 1-6 1(<1%), 2 (1-20%),…, 6 (81-100%)

5. Macrophyte Coverage

6. Macrophyte Coverage

7. Estimation Results

8. Robustness Check (for TOTAL) PCA: Principle Component Analysis APR: All-Possible-Regressions Procedure

9. Robustness Check (for TOTAL) PCA: Principle Component Analysis APR: All-Possible-Regressions Procedure

10. Conclusions and Policy Implications • Eurasian watermilfoil, as the primary component of total aquatic macrophyte growth in a lake, significantly and substantially affects lakefront property values. • Marginal losses for infestation range from $355 (0.33%) to $17,764 (16.35%). • Preventing infestations has significant economic benefits to lakefront property owners and local communities.

11. Thank You !