Date of Award
Doctor of Philosophy in Environmental and Natural Resources Economics
Environmental & Natural Resource Economics
The objective of this study is to estimate values associated with recreation in three Rhode Island salt ponds: Ninigret, Quanochontaug and Point Judith pond. The study estimates values per recreation day, as well as changes in values associated with changes in water quality and congestion.
First the study applies the Travel Cost Method to estimate the user-day value for recreation in Rhode Island salt ponds, based on an on-site survey. The study then applies the Conjoint stated preference approach to estimate changes in recreational values associated with changes in water quality and congestion at the recreation sites. Next the study provides a more robust estimation of the opportunity cost of time spent to traveling to visit the salt ponds by calibrating the opportunity cost of time used in Travel Cost Method using stated preference regarding travel distance obtained from responses to the Conjoint Analysis.
The data were collected by administering a survey of visitors at coastal salt ponds, in Rhode Island during July and August of 2015. The survey included questions about the travel related information, followed by a series of choice questions that asked the respondents to select the most preferred site from 3 hypothetical sites described in terms of different levels of water quality, congestion, parking lot size, travel distance and entrance fee. A total of 309 visitors responded to the survey, of which 287 completed the entire survey.
The study estimates the value per recreational user day to be approximately $17. It also estimates a total of approximately 161,576 visits at the three salt ponds during July and August. Applying these results, the annual recreational value of the three salt ponds is estimated to be approximately $2.8 million for the month of July and August.
Water quality is currently rated as fair in the three Salt Ponds. Conjoint Analysis Stated Preference Method estimates a Willingness To Pay (WTP) of $17 to avoid poor water quality, WTP of $29 to improve water quality to good from fair, and an additional WTP of $12 from good to excellent. Stated Preference Conjoint results estimate that recreational users are willing to pay $23 per user-day to avoid sites becoming over-congested. The incremental willingness to pay to reduce congestion below the status quo level is not statistically significant.
The opportunity cost of time is generally specified to be a fraction of the wage rate. However, there is no consensus in the literature on the proper fraction to use, with studies generally using between 25% to 100% of the wage. We follow this literature in the travel cost model of chapter 3 by using an opportunity cost of time one third of the wage rate. We use the Conjoint Analysis results to calibrate the proper opportunity cost of time, and find it is approximately 15% of the hourly wage, which is closer to the lower bound of existing guiding lines. Using an opportunity cost of time that ranges from 15% to 33% of the hourly wage results in a user-day value that ranges from $13.77 to $17.42, and a total annual recreational use value that ranges from $2.2 million to $2.8 million for the three salt ponds during July and August.
The study uses the results discussed above to provide a perspective on the recreational benefits of water quality improvements, relative to the costs of upgrading septic systems to include nitrate reduction, which is a key action to improve water quality in the salt ponds. The study uses a range of estimate of $2,000 to $15,000 for the incremental cost of adding nitrogen removal at the time new septic system is installed.
We estimate a total of approximately 5,700 visits per day for peak months of July and August to the three Rhode Island salt ponds and a total of 161,576 visits for the two months.
We assume that the total visitors of the rest ten months are equal to the visitor number of the two peak months. Applying the value per user-day to avoid to poor quality implies a total recreational value of approximately $5.4 million to avoid deterioration of water quality from fair to poor, and $9.4 million for improving water quality from fair to good. Thus, recreational benefits of water quality improvements are substantial relative to costs of actions to improve water quality.
It is important to note that this is not intended to be a full cost benefit analysis for several reasons. First, we include only estimated benefits to recreational users, and not other benefits, such as ecological effects or aesthetic benefits to nearby residents. Second, we do not provide an estimate of the actual water quality improvement that would result from requiring upgrades in septic systems. Doing so requires an analysis of how reduced nitrogen loads from residential septic in the area would impact water quality in the salt ponds.
In summary, this study finds that recreational activities in Rhode Island salt ponds are highly valued, and that recreational values are quite sensitive to levels of water quality and congestion. These results suggest that efforts to protect and manage the Rhode Island salt ponds can provide significant benefits to the public. We find that recreational values alone might provide a strong rationale for actions to protect and improve quality of Rhode Island salt ponds. This rationale is reinforced by other values that are outside the scope of this study, such as ecological and aesthetic values for water quality improvement.
Hwang, Eunsun, "Estimating Recreational User Day Value and Impacts of Congestion and Water Quality: Application to Salt Ponds, Rhode Island" (2018). Open Access Dissertations. Paper 746.