A Loon on Every Lake: A Hedonic Analysis of Lake Quality in the Adirondacks

34 Pages Posted: 19 Jul 2014

See all articles by Carrie Tuttle

Carrie Tuttle

Clarkson University

Martin D. Heintzelman

Clarkson University School of Business

Date Written: May 19, 2014

Abstract

The Adirondack Park contains over 6 million acres and over 3,000 lakes. Approximately 43% of the Park is publicly 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.

Keywords: Hedonic Analysis, Ecosystem Services, Water Quality

JEL Classification: Q5

Suggested Citation

Tuttle, Carrie and Heintzelman, Martin D., A Loon on Every Lake: A Hedonic Analysis of Lake Quality in the Adirondacks (May 19, 2014). Available at SSRN: https://ssrn.com/abstract=2467745 or http://dx.doi.org/10.2139/ssrn.2467745

Carrie Tuttle

Clarkson University ( email )

United States

Martin D. Heintzelman (Contact Author)

Clarkson University School of Business ( email )

Potsdam, NY 13699-5780
United States

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