Valuing Preservation and Improvements of Water
Quality in Clear Lake
Christopher Azevedo, Joseph Herriges, and Catherine
Kling
A. Abstract
This report presents summary statistics and other results of a survey of Clear Lake visitors and residents. The purpose of the survey was to collect information concerning use and value of water quality improvements at Clear Lake. Support for the survey was provided by the Iowa Department of Natural Resources.
B. Introduction
This report describes the results of a study on Clear Lake as a recreational resource. It is intended to provide information on recreational usage of the lake, attitudes of recreators and local residents toward possible watershed management changes, as well as estimates of visitor’s and resident’s willingness to pay for water quality improvements at the lake.
C. Survey
Design and Implementation
In this section of the report, we provide an overview of the procedures used in selecting the samples and designing the Clear Lake Survey, the implementation procedures used to administer the survey, and the final survey response rates.
1. Sample Selection. Two groups of respondents were targeted to receive the survey: recreational users (visitors) of the lake and local residents. Although other population segments may value water quality improvements at Clear Lake, for example to protect the wildlife habitat the lake provides to migratory birds, we believed that the largest values would be associated with those who actually visit the lake or live in its vicinity. However, it is important to note that all of the information provided in this report relates only to those two population segments: those who have visited the lake at least once, and those who have residences in the cities of Clear Lake or Ventura, Iowa.
To obtain addresses of visitors to the lake, potential respondents were intercepted while engaging in recreational activities at the lake. This occurred during the months of May, June, July, August, and September of 2000. A total of 1,024 recreators agreed to participate in a mail survey that was scheduled for October of that year. They were informed that everyone who returned a completed survey would receive five dollars. The sample of local residents was provided by Survey Sampling, Inc., a sampling firm located in Connecticut. The sample of 900 names was randomly drawn from the white page listings for the cities of Clear Lake and Ventura, Iowa.
It is important to note that the sampling of visitors on site, as was done here, will produce a sample that does not accurately represent the true population of visitors. This is because individuals who take more than the average number of trips have a higher chance of being intercepted and interviewed than their true representation in the population. Likewise, individuals who take fewer than the mean number of trips will be under-represented in the sample. It is thus necessary to adjust the data by re-weighting the observations so that they appropriately represent the actual population. All summary statistics reported here have already been appropriately adjusted.
2. Structure of the Survey. The surveys mailed to the two groups (visitors and residents) were very similar. The survey was designed to focus on how the respondent values different levels of water quality at Clear Lake. In order to provide a baseline level of quality for the respondent, current conditions at Clear Lake were described. This description was developed in consultation with limnologists John Downing and Jeff Kopaska of the Department of Animal Ecology at Iowa State University, both of whom have studied the water quality conditions at Clear Lake. Both versions of the survey contained the following description of the current conditions at the lake.
Respondents were then presented with various plans, each describing a different overall condition of the lake (as defined by the above attributes), and were asked about their willingness to pay for the plan. Plan A described a decrease in water quality, and Plan B described an increase in water quality. Data pertaining to both of these plans will be summarized below.
In addition to the valuation questions, both versions of the survey also contained questions pertaining to the respondents’ support for various projects for improving water quality, their opinion concerning various land use changes, and the water quality attributes most important to them. Finally, socioeconomic information was gathered from all respondents.
The visitor’s and resident’s versions of the survey differed in that the visitor’s version collected information on the number of recreation trips the respondent took to the lake in the past year, as well as information on the number of trips the respondent planned to make in the coming year under various scenarios. The visitor’s and resident’s versions of the survey are contained in Appendices 2 and 3.
3. Response Rates. The visitor’s version of the survey was mailed in mid October while the resident’s version was mailed in early December. For both versions, respondents who did not return the survey were sent a reminder postcard approximately two weeks after the initial survey was mailed. After approximately two more weeks, survey recipients who still had not returned the survey were sent a second copy of the survey. Of the 1,024 surveys mailed to the group of visitors, 26 were returned by the post office as undeliverable. Of the deliverable surveys, 662 were returned, resulting in a 66 percent response rate. Of the 900 surveys mailed to the group of local residents, 132 were returned as undeliverable. Of the deliverable surveys, 443 were returned, resulting in a 58 percent response rate.
D. Survey Results
In this section of the report we provide summary statistics from the Clear Lake survey, focusing on (1) reported visitation, (2) spending patterns, (3) attitudes toward various watershed and land use changes and (4) implied valuations.
1. Visitation. On average, visitors reported a high usage of Clear Lake between
November 1999
and October 2000. The average total
number of trips taken was 6.6. Of those
trips, an average of 2.67 were multiple day visits (i.e. the respondents spent
at least one night in or around Clear Lake).
Respondents indicated that they expected to make an average of 6.63
trips to Clear Lake over the next year.
Respondents reported having visited Clear Lake an average of 3.63 times
over the past five years. Table 1 shows
the average number of trips (both multi-day and single-day) reported by time
period, while Figure 1 shows the average
percentage of time devoted to various activities reported by respondents. As expected, a majority of trips were taken
during the summer months. The most
popular recreation activity engaged in by visitors was recreational boating.
Table 2 shows the average number of trips taken
from November 1999 through October 2000 to other lakes and reservoirs. Minnesota lakes, Saylorville Lake, the
Mississippi River, and other unlisted lakes appear to be the main alternatives
to Clear Lake.
Table 1. Average number of trips by time period
Time Period |
Number of Visits
|
November 1999 through February 2000 |
0.62 |
March 2000 through May 2000 |
1.13 |
June 2000 through August 2000 |
3.70 |
September 2000 through October 2000 |
1.13 |
Figure 1. Clear Lake activities
Table 2. Average number of trips taken to other lakes and reservoirs
Lake or Reservoir |
Number of Visits |
|
Lake orReservoir |
Number of Visits |
Lake Okoboji-East and West |
0.98 |
|
Lake Odessa |
0.05 |
Lost Island Lake |
0.03 |
|
Rathbun Reservoir |
0.97 |
Rice Lake |
0.36 |
|
Mississippi River |
0.77 |
Spirit Lake |
0.23 |
|
Minnesota Lakes |
1.76 |
Storm Lake |
0.10 |
|
Wisconsin Lakes |
0.19 |
Tuttle Lake |
0.04 |
|
Lake Red Rock |
0.40 |
Saylorville Lake |
1.96 |
|
Other |
2.78 |
Coralville Reservoir |
0.12 |
|
|
|
2. Spending.
Respondents
reported spending an average of $51 in or near the town of Clear Lake on a
typical visit. Respondents from Iowa
reported spending an average of $48 per trip, while out-of-state respondents
reported spending an average of $93 per trip.
Spending can also be categorized by the type of trip
taken. Respondents who took only
single-day visits reported spending an average of $26 per trip, while
respondents who took only multi-day visits reported spending an average of $98
per trip.
3. Opinions.
Respondents were asked to allocate 100
importance points to the lake characteristics listed in Figure 2. The average point allocation is shown for
both visitors and residents. Safety from
bacterial contamination is the most important characteristic for both visitors
and local residents. As expected, those
characteristics associated with water recreation are slightly more important to
visitors, while water clarity and lack of water odor are slightly more
important to local residents.
Figure 2. Importance points
Figures 3, 4, 5, and 6 show respondent’s opinions toward various water quality projects and land use changes. In general, both visitors and local residents appear to either support, or are indifferent to, most projects and land use changes. Very few respondents in either group oppose repair of storm drains or restoration to Ventura Marsh. Restrictions on residential development are supported by roughly 75 percent of local residents surveyed, with fewer than 10 percent opposing restrictions.
The issue that generated the most opposition among respondents was the institution of non-motor boat days. Roughly 40 percent of visitors oppose non-motor boat days, with about 34 percent supporting them. In the case of local residents, roughly 30 percent oppose non-motor boat days, while about 45 percent support them. Increased no-wake zones are supported by about 60 percent of local residents and about 43 percent of visitors. Roughly 70 percent of local residents and only about 37 percent of visitors support limiting motor horsepower. There appears to be wide support for restoration of woodlands, prairies, and wetlands in both groups.
Figure 3. Projects: visitors
Figure 4. Projects: local residents
Figure 5. Land use changes: visitors
Figure 6. Land use changes: local residents
4. Valuation.
One important goal of the survey was to
estimate the value that both visitors and local residents place on the
preservation and/or restoration of Clear Lake.
Conservation budgets are tight and there are more projects than there is
money to fund them. Thus, society must
decide where to focus the available resources, both private and public
sources. To help with these decisions,
economists have devised methods to measure the value people place on
environmental goods as measured by their willingness to pay for the goods. Two of these techniques are employed in this
study. The first method is based on
observing the public use of a natural resource (visits to the lake) and
inferring visitors’ willingness to pay for the resource from their
behavior. The second method is based on
directly asking whether people are willing to pay various sums of money to
support a particular project.
The first value estimated in this study is the willingness to pay for the existing level of Clear Lake visits. This can be thought of as providing a baseline of the value visitors place on preserving the existing level of the resource in terms of how much enjoyment they get from Clear Lake at its current level of water quality. Based only on the reported single-day trips data, the average recreational value per season of Clear Lake is $28 per visitor. Analysis of multiple-day trips has not been completed to date and is not represented in this value. Since 25 percent of the reported trips to the lake were multiple-day trips, they represent a potentially significant source of value.
Next, the value of various water quality changes was estimated. Both the visitor’s and resident’s version of the survey contained a scenario entitled Plan A. The description of the plan stated that if nothing is done to improve the water quality of the lake, it is likely to deteriorate over the next decade. Specifically, respondents were told to suppose that the conditions at Clear Lake were as follows:
They were then asked the following question, “Would you vote yes on a referendum to maintain the current water quality of Clear Lake and avoid the deteriorated water quality as described under Plan A? The proposed project would cost you $B (payable in five [$B/5] installments over a five-year period). In this question, the value of “B” was varied so that different respondents were faced with different project costs.1 Figure 7 plots the relationship between the percentage of visitors indicating they would be willing to pay the stated amount along the horizontal axis. Roughly 85 percent would be willing to pay $30 toward this plan ($6 annually for five years), but only about 20 percent would be willing to pay $150. Based on these data, the average willingness to pay is approximately $104 per visitor in support of Plan A.2
Figure 7. Willingness
to pay for Plan A: visitors
Figure 8 plots the relationship between the percentage of local residents indicating they would be willing to pay the stated amount along the horizontal axis. Though the trend is somewhat less pronounced for the local residents, statistical analysis clearly indicates that fewer people are willing to contribute at the higher bid levels. On average, local residents would be willing to pay approximately $568 in support of Plan A. This significantly higher value for residents is not surprising given their continuous exposure to the lake and its attributes.
While Plan A focused on the respondent’s willingness to pay to avoid a deterioration in water quality, Plan B focused on willingness to pay for improvements in water quality. Two versions of Plan B were created: the first described a program that would result in a moderate improvement in water quality over the next five to ten years, while the second described a program that would result in a substantial improvement in water quality over the next ten to twenty years. Both versions are shown below.
Figure 8. Willingness
to pay for Plan A: Local residents
Figure 9 shows the data from the visitor’s survey for the low quality improvement. As before, the relationship between the percentage of respondents indicating they would be willing to pay the stated amount of the horizontal axis is plotted. Based on these data, visitors would, on average, be willing to pay approximately $85 in support of the low quality improvement described in Plan B.
This value is actually less than the $104 visitors were willing to pay for Plan A, which simply maintained the current lake conditions. However, the two results are not statistically different, suggesting that visitors are willing to pay roughly $100 to maintain the lake, but little, if any, for modest improvements.
Figure 10 shows the data from the local resident’s survey for the low quality improvement. Based on these data, local residents would, on average, be willing to pay approximately $550 in support of the low quality improvement described in Plan B. Again, this value is slightly lower than the $568 local residents were willing to pay for Plan A, though the two are not statistically different. This indicates that local residents are willing to pay roughly $550 to maintain the lake, but little, in any, for modest improvements.
Figure 9.
Willingness to pay for Plan B, low improvement: visitors
Figure 10.
Willingness to pay for Plan B, low improvement: local residents
Figure 11 shows the data from the visitor’s survey for the high quality improvement. Based on these data, visitors would, on average, be willing to pay approximately $425 in support of the high quality improvement described in Plan B.
In addition to the values described above, visitors indicated that the quality changes described in the survey would affect the number of trips they would expect to take. As described above, visitors indicated that they took an average of 6.60 trips between November 1999 and October 2000. They also reported that over the course of the next year they expected to make 6.63 trips to Clear Lake. After each quality change plan was described, the respondent was asked to consider all the recreation trips they made to Clear Lake in the past year, and report the number of trips they would have made if conditions were as described in the plan. This information is summarized in Figure 12.
The response to the decreased water quality described in Plan A is dramatic. With the decrease in water quality, visitors would take an average of about two trips. Visitors also responded to the higher water quality scenarios by indicating that they would increase the number of trips they would take. With the low quality improvement, respondents would take an average of 7.03 trips, while with the high quality improvement, respondents would take an average of 10.32 trips.
The average income level reported for the visitor’s survey was $45,000. Average household size was about 3 people, and about 61 percent of the respondents were male.
Figure 11.
Willingness to pay for Plan B, high improvement: visitors
Figure 12. Number of trips taken at varying quality levels
The average income level reported for the local resident’s survey was $40,000. Average household size was about 2.5 people, and about 67 percent of the respondents were male.
E. Conclusions
Clear Lake is very important as a recreational resource, with visitors reporting high, persistent usage of the lake. Both visitors and residents indicated a high willingness to pay to avoid further deterioration of the lake. When asked about their willingness to pay for improvement, respondents indicated that they are willing to pay only moderate amounts for a low quality improvement to the lake, but they are willing to pay substantially more for a significant quality improvement to the conditions at the lake.
This strong preference for the high quality improvement over the low quality improvement is also borne out by the number of trips visitors expect to take under each scenario. With the current conditions, visitors reported that they expect to take 6.63 trips next year. The expected number of trips falls to about 2 trips under Plan A (deteriorated quality). With the low quality improvement, the expected number of trips is 7.03, not much different than the expected number of trips under current conditions, which is consistent with the relatively low values reported for Plan A. However, with the high quality improvement, the expected number of trips jumps significantly to about 10. Thus, respondents appear to value highly avoiding further deterioration to the lake, and if quality is to be improved at the lake, they indicate a strong preference for a high quality improvement.
Finally, it is
important to remember that the value estimates presented in this paper are
point estimates. That is, though they
are not reported in this paper, there is a sampling error associated with each
estimate. For example, the point
estimate for the local resident’s willingness to pay for Plan B is $550 with a
margin of error of $226.3
Endnotes
1.
The value of “B” varied
between $15 and $150 for visitors and between $45 and $450 for local residents.
2.
The value of $104 was
generated via a formal statistical model.
3.
This margin of error
represents a 90 percent confidence interval.