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Estimating the economic benefits of maintaining residential lake levels at an irrigation reservoir: A contingent valuation study
Author(s) -
Loomis John,
Smith Adam,
Huszar Paul
Publication year - 2005
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/2004wr003812
Subject(s) - contingent valuation , willingness to pay , irrigation , lease , environmental science , geography , agricultural economics , economics , ecology , finance , biology , microeconomics
The contingent valuation method (CVM) was used to estimate homeowners' willingness to pay for water leasing to maintain stable lake levels at an irrigation reservoir in a residential neighborhood. A binary logit model was used to analyze households' voter referendum responses for maintaining the lake level. The median willingness to pay (WTP) was found to be $368 per year for lakefront residents and $59 per year for off‐lake residents. The median WTP for lakefront residents was significantly different from off‐lake residents at the 90% confidence level. Using the median WTP for lakefront and nonlakefront residents, we found that the increase in homeowner association fees would generate approximately $43,000, enough money to lease sufficient water to reach the target higher lake level in a normal water year.