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Measuring The Value of Remediation in Muskegon Lake

Measuring The Value of Remediation in Muskegon Lake. Dr. Paul Isely Seidman College of Business Grand Valley State University & Carrie Hause Elaine Isely. Funding. National Oceanic and Atmospheric Administration Great Lakes Commission

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Measuring The Value of Remediation in Muskegon Lake

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  1. Measuring The Value of Remediation in Muskegon Lake Dr. Paul Isely Seidman College of Business Grand Valley State University & Carrie Hause Elaine Isely

  2. Funding • National Oceanic and Atmospheric Administration • Great Lakes Commission • West Michigan Shoreline Regional Development Commission • Area of Concern in Muskegon Lake • $10 million ARRA funding • Socioeconomic monitoring

  3. Purpose • Hedonic Analysis of Housing Values • Travel Cost Study of Recreation Values • Contingent Valuation study of Use and Non-Use Values

  4. HEDONICS

  5. Data • County assessor database • House characteristics • Sales information • AWRI shoreline inventory

  6. Houses > 800m from Lake not Used Houses affected by Lake Michigan not Used Houses <100m from Lake not Used

  7. Model LnPrice as a function or: Floor area .000359*** Basement area .000118*** age -.00563*** age2 .000018** Bear Lake .497*** Garage space .0562*** Industrial -.068 Stone .0529* Bathrooms .0606*** Yearsold 2 - 20 SUPPRESSED District2 -.24*** District3 -.26*** Occupancy2 -.18*** Occupancy3 -.0712 NEIGHBORHOODS SUPPRESSED Distance Lake -.000151*** Lnnatratio .0297*** Lnhardratio -.0532*** _cons 10.7*** N 934 legend: * p<.1; ** p<.05; *** p<.01

  8. WHAT DOES THE MODEL MEAN?

  9. Contingent Valuation

  10. Value of Lake Recreation • Mailed survey as part of a CV study • A little more than 15% response rate

  11. The QUestion To restore just 1 acre of wetland habitat in Muskegon Lake, 1 in every 300 households in Michigan would need to contribute $A to this fund. If more households contribute, more habitat can be restored. Given your household income and expenses, would you be willing to make a one time, tax-deductible donation of $A? _____YES _____NO

  12. The Results • Model 1 - $2.5 Million • Model 2 - $9 Million • Average $5.7 Million • Re survey occurring this year to improve sample

  13. TRAVEL COST

  14. Travel Cost • Stated costs plus time cost • Calculated costs using mileage and normal expenses plus time cost • These were averaged together for the model estimations

  15. Consumer Surplus Value in $ Travel Cost Trips Quantity

  16. Value of a Trip 2009 • Coefficient on TRAVEL COST is -0.036 • Value of a single trip is 1/(-βTRAVEL COST) • Value of a single trip to Muskegon Lake is $27.77

  17. Value of a trip 2010 and 2011 ?

  18. iselyp@gvsu.edu QUESTIONS

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