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A loon on every lake: A hedonic analysis of lake water quality in the Adirondacks

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  • Tuttle, Carrie M.
  • Heintzelman, Martin D.

Abstract

The Adirondack Park contains over 6 million acres and over 3000 lakes. Approximately 43% of the Park is publically owned and protected to remain “forever wild”. Despite regulatory measures aimed at protecting the natural resources of the Adirondacks, surface water quality is threatened by acid and mercury deposition. This paper uses data on 12,001 property transactions over 9 years in the 12 counties that comprise the Adirondack Park to explore how property owners value lake water quality using fixed effects hedonic analysis. We find that multiple measures of water quality have significant effects on property values including lake acidity, the presence of water milfoil, an invasive species, and the presence of loons, an indicator species. This research provides valuable insight into how water quality and associated ecosystem health are capitalized into property values. Moreover, this research helps partially quantify air pollution impacts on Adirondack property values and could be used to justify additional regulations to further restrict sulfur and mercury emissions which are negatively impacting the Park.

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  • Tuttle, Carrie M. & Heintzelman, Martin D., 2015. "A loon on every lake: A hedonic analysis of lake water quality in the Adirondacks," Resource and Energy Economics, Elsevier, vol. 39(C), pages 1-15.
    • Handle: RePEc:eee:resene:v:39:y:2015:i:c:p:1-15
    DOI: 10.1016/j.reseneeco.2014.11.001
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    References listed on IDEAS

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    1. Tuttle, Carrie M. & Heintzelman, Martin D., 2013. "The Value of Forever Wild: An Economic Analysis of Land Use in the Adirondacks," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(1), pages 1-20, April.
    2. Dennis Guignet & Matthew T. Heberling & Michael Papenfus & Olivia Griot, 2022. "Property Values, Water Quality, and Benefit Transfer: A Nationwide Meta-analysis," Land Economics, University of Wisconsin Press, vol. 98(2), pages 191-218.
    3. Melstrom, Richard T., 2022. "Residential demand for sediment remediation to restore water quality: Evidence from Milwaukee," Journal of Environmental Economics and Management, Elsevier, vol. 116(C).
    4. Liu, Fangge & Zhang, Wendong, 2018. "The Value of Lake Restoration to Homeowners: Evidence from Iowa using a Difference-in-Difference Approach," 2018 Annual Meeting, August 5-7, Washington, D.C. 274032, Agricultural and Applied Economics Association.
    5. Felix Haifeng Liao & Frank M. Wilhelm & Mark Solomon, 2016. "The Effects of Ambient Water Quality and Eurasian Watermilfoil on Lakefront Property Values in the Coeur d’Alene Area of Northern Idaho, USA," Sustainability, MDPI, vol. 8(1), pages 1-12, January.
    6. Sarah Nicholls & John Crompton, 2018. "A Comprehensive Review of the Evidence of the Impact of Surface Water Quality on Property Values," Sustainability, MDPI, vol. 10(2), pages 1-30, February.
    7. Wolf, David M. & Georgic, Will C. & Klaiber, Allen, 2017. "Reeling in the Damages: Harmful Algal Blooms' Impact on Lake Erie's Recreational Fishing Industry," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258096, Agricultural and Applied Economics Association.
    8. Andrew Bechard, 2021. "Gone with the Wind: Declines in Property Values as Harmful Algal Blooms Are Blown Towards the Shore," The Journal of Real Estate Finance and Economics, Springer, vol. 62(2), pages 242-257, February.
    9. Wolf, David & Klaiber, H. Allen & Gopalakrishnan, Sathya, 2022. "Beyond marginal: Estimating the demand for water quality," Resource and Energy Economics, Elsevier, vol. 68(C).
    10. Moore, Michael R. & Doubek, Jonathan P. & Xu, Hui & Cardinale, Bradley J., 2020. "Hedonic Price Estimates of Lake Water Quality: Valued Attribute, Instrumental Variables, and Ecological-Economic Benefits," Ecological Economics, Elsevier, vol. 176(C).
    11. Andres Jauregui & Qin Fan & Jacquelin Curry, 2023. "House Price Capitalization of Stormwater Retention Basins: Evidence from Fresno-Clovis Metropolitan Area in California," The Journal of Real Estate Finance and Economics, Springer, vol. 67(4), pages 606-626, November.
    12. Wolf, David & Klaiber, H. Allen, 2017. "Bloom and bust: Toxic algae's impact on nearby property values," Ecological Economics, Elsevier, vol. 135(C), pages 209-221.
    13. Tang, Chuan & Heintzelman, Martin D. & Holsen, Thomas M., 2018. "Mercury pollution, information, and property values," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 418-432.
    14. Zhang, Jiarui & Phaneuf, Daniel J. & Schaeffer, Blake A., 2022. "Property values and cyanobacterial algal blooms: Evidence from satellite monitoring of Inland Lakes," Ecological Economics, Elsevier, vol. 199(C).

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