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