Management decisions for publicly accessed resources: An application to recreational lakes

Date of Completion

January 2000


Economics, Agricultural|Political Science, Public Administration|Environmental Sciences|Recreation




Environmental amenities are often restricted to those who own property in an area. Government intervention can provide public access to such resources. In doing so, government must decide how best to preserve the resource through spending on maintenance and improvement programs. ^ This research provides a framework in which government decisions regarding development and maintenance incorporate all stakeholder interests. A model of social welfare is developed for carrying out cost-benefit and policy analysis in the context of recreational lakes. The model can also be used to evaluate public access and protection policies for other resources such as highways, airports and parkland. ^ By comparing societal benefits of recreational use with project costs, the model is used to address two types of lake management decisions. First, what types of public access restrictions are socially desirable? Second, how much public funding should be spent to maintain or improve water quality on a publicly-accessed lake? ^ Impacts on private-sector stakeholders are quantified as follows. A contingent price survey of waterfront property owners is used to estimate changes in property values due to changes in water quality. A contingent valuation survey of public site users is used to estimate changes in non-resident recreational benefits from changes in water quality. A hedonic property value method is used to estimate changes in lake area property values from changes in public access. ^ Results indicate that average property values drop 35% when swimmability is lost, 20% when fish edibility is lost, and 42% when swimmability and fish edibility are lost. Public site users have higher average losses, 70%, 47% and 100% respectively. In most cases the value of lost societal benefits should exceed societal costs of preventing water quality deterioration. ^ When new public access is opened property values are found to increase or decrease by 5–10% depending on externalities caused by permitted uses and cost subsidies provided to existing property owners. The impact on property values from expansion of existing public access is found to be nominal and depends on cost subsidies and lake boating capacity. In all cases, changes in property values drive the direction of change in social welfare. ^