The Role of Water Quality Perceptions in Modeling Lake Recreation Demand

Recreation demand models typically incorporate measures of the physical attributes of recreational sites; e.g., Secchi depth or phosphorous levels in case of water quality. Moreover, most studies show that individuals do respond to these physical characteristics in choosing where to recreate. However, the question remains as to whether the available physical measures accurately capture individual perceptions of water quality and if there is a additional role to be played by elicited perception measures in modeling recreation demand. In this paper, we use data from the 2004 Iowa Lakes Survey to model recreation demand as a function of both the physical water quality at 131 lakes in the state and household perceptions of lake water quality. In general, water quality perceptions are correlated with the available physical measures, but not perfectly so, and both actual and perceived water quality are found to significantly impact recreational site choice.