Dr. Russ Kashian, Ph.D

About Us The Fiscal and Economic Research Center (FERC)

at the University of Wisconsin – Whitewater analyzed the economic impact of lakes.

Lakes Provide Many Benefits Among them:

Increase in property values

Spending

More visitors

Higher quality of life

Increase in Property Value Many studies have been conducted to determine the

effect(s) a lake has on it’s surrounding properties.

Doss & Taff (1996), Thibodeau & Ostro (1981)

A common finding in the literature is that lakes positively impact property values.

This effect has been estimated to be between 2-5%

Simply put, a property close to (or on) a lake is expected to be worth 2-5% more than a property that isn’t.

Increase in Property Value Lakefront Property Premiums: on average, what is the

added value of a property on a lakefront?

Red Cedar Lake = +$1,303

Beaver Dam Lake = +$986

Chetek Lake = +$832

Prairie Lake = +$537

Tainter Lake = +$414

Menomin Lake = +$159

Spending The FERC previously examined the daily expenditures

of residents living on several of Wisconsin’s lakes.

Results, presented in the next few slides, show the spending tendencies of lake residents, both part-time and full-time.

Spending: Part-time Residents on Tainter Lake

Spending: All Residents on Delavan Lake

Spending: Part-time Residents on Eagle Lake

Increase in Visitors Lakes have the effect of increasing visitors, especially

those that use lakes for recreation (fishermen).

The increase in visitors also has a positive impact on local businesses.

The following slides show the results from two separate surveys of fishermen.

Visitors: 2005 Study in Delavan Expenditure category Mean expenditure*

Lodging accommodation (Hotel fee for ONE NIGHT)

$2.55

Groceries and liquor $3.22 Bait and tackle $2.70 Launch fees $8.93 Dining out $8.67 Entertainment such as movies, clubs, lounges, sports activities, etc…

$0.21

Shopping—tourist $0.16 Shopping—general $2.46 Gas/oil for vehicles/boats $6.02 Licenses, registrations, permits (fishing, boat, auto)

$3.57

All other expenditures $1.91 Total daily expenditures $34.97 Statistics presented in this table are based on analysis of an interim survey dataset containing data from 186 survey respondents. * Missing were treated as zero

Visitors: 2012 Study in Madison Money Spent on Kegonsa Mendota Monona Waubesa

Lodging* $ 7.23 $ 14.51 $ - $ 0.71 Food and Beverage* $ 15.64 $ 21.95 $ 4.70 $ 11.04 Bait and Tackle* $ 3.08 $ 4.51 $ 1.49 $ 3.34 Gas or other fuels* $ 11.36 $ 10.46 $ 7.15 $ 9.73 Boat or equipment rental

$ - $ 0.05 $ - $ -

Gifts/Misc. $ 0.17 $ 0.10 $ - $ 0.17 Other $ - $ 1.58 $ - $ - Single Person Total $ 37.48 $ 53.16 $ 13.34 $ 24.99 Average Party Size 2.78 2.32 2.12 2.65

Party Total $ 104.19 $ 123.33 $ 28.28 $ 66.22 *indicates highest and lowest values removed to control for outliers

Fund for Lake Michigan The FERC recently collaborated with the Fund for Lake

Michigan in order to determine the economic impact of their projects.

Each had a specified goal such as restoring water quality, enhancing wetlands, improving storm water runoff, installing riparian buffers, etc.

Not only do these projects create jobs and stimulate the economy, but there are social gains too.

Higher quality of life

Conclusions Lakes are an important aspect of life in Wisconsin.

They provide us with many benefits:

Tangible, such as higher property values

Intangible, such as higher quality of life

References Braden, J. B., & Johnston, D. M. (2004, November). Downstream

Economic Benefits from Storm-Water Management. Journal of Water Resources Planning and Management, 130(6), 498-505

Brander, L. M., Florax, R. J. G. M., & Vermaat, J. E. (2006). The Empirics of Wetland Valuation: A Comprehensive Summary and a Meta-Analysis of the Literature. Environmental & Resource Economics, 33, 223-250.

Doss, C. R., & Taff, S. J. (1996). The Influence of Wetland Type and Wetland Proximity on Residential Property Values. Journal of Agricultural and Resource Economics, 21(1), 120-129.

References Loomis, J., Kent, P., Strange, L., Fausch, K., & Covich, A. (2000).

Measuring the total economic value of restoring ecosystem services in an impaired river basin: results from a contingent valuation survey. Ecological Economics, 33, 103-117.

Thibodeau, F. R., & Ostro, B. D. (1981). An Economic Analysis of Wetland Protection. Journal of Environmental Management, 12, 19-30.

Wise, S., Braden, J., Ghalayini, D., Grant, J., Kloss, C., MacMullan, E., Morse, S., & al. (2008). Integrating Valuation Methods to Recognize Green Infrastructure's Multiple Benefits. Chicago, IL: Center for Neighborhood Technology.