This article was originally published in the Winter 2014 issue of Twine Line, a publication of The Ohio State University's Ohio Sea Grant College Program.
Written by Christina Dierkes, Ohio Sea Grant Communications
For some things, it’s easy to define their value: a pair of jeans or a pizza is worth whatever someone has paid for them. But for others, like a pristine beach or a great fishing spot, worth is much harder to define. In one of the research projects recently funded by Ohio Sea Grant, scientists and economists from Ohio State University will develop an economic model that does just that, to help policy makers decide which conservation practices will raise the value of the Lake Erie ecosystem to its residents and visitors.
Dr. Elena Irwin and doctoral student Wendong Zhang of Ohio State University’s Department of Agricultural, Environmental & Development Economics (AEDE) are planning to develop an economic framework that will assign dollar values to ecosystem services – “the benefits that nature provides to humans,” according to Irwin – when negative events like harmful algal blooms are reduced or eliminated.
Irwin and Zhang will specifically look at three services Lake Erie provides: water clarity, safe and clean drinking water, and recreational activities like fishing and beachgoing. These services are called “non-market goods” because typically there are no set prices for these services. The value of water clarity and clean drinking water can be estimated through lakefront property values and reduction in water treatment costs due to algal toxins. Recreational activities will be valued through two surveys: a mail survey of anglers, sent to a subset of people who hold Ohio fishing licenses, and an online survey of beachgoers.
The surveys will use two forms of questions to get at the value people place on a healthy Lake Erie ecosystem. Revealed preferences are determined based on housing prices, which reflect the relative value of neighborhood features, including environmental conditions for those houses that are located close to Lake Erie. Stated preferences, on the other hand, use hypothetical scenarios to produce a dollar value that individuals would associate with a given change in environmental conditions – for example, a question may ask “how much would you be willing to pay for a 50% reduction in algal blooms at your favorite fishing spot?”
“The drinking water treatment cost will be based on an engineering cost calculation,” Irwin adds. “So if we were able to reduce the presence of algal toxins, how much does that save in terms of additional treatment cost? That’s called avoided cost, since you’re looking at the cost you avoid because you’re providing a healthy ecosystem service, in this case drinking water.”
The research enhances a multi-year National Science Foundation (NSF) project that examines how farmers’ best management practices in the watershed affect water quality in Lake Erie, and how people’s perceptions of the lake influence those practices. The NSF research team plans to develop decision-making models that take into account the relationships between farmer behavior, land management, and hydrology of the western Lake Erie watershed.
These models in turn will help policy makers and watershed managers understand how guidelines and regulations are formed, and identify practices that make sense for upstream activities and can improve the downstream ecosystem. In addition, the models could be used to help decide between a number of suggested conservation practices, because they can show which practice will provide the best cost-benefit ratio while maintaining desired ecosystem traits.
Irwin and Zhang’s project adds another dimension to the NSF project by focusing on economic implications of policy implementation. “By linking this economic model with the models produced through the NSF grant, we’ll know that if there is a nutrient management policy imposed on the farmers, this will potentially generate a reduction in phosphorus loadings,” says Zhang. “This would then translate into a lower chance of or lower intensity of harmful algal blooms, which would translate into the dollar value of increased recreational activities, increased lakefront property values, and lowered wastewater treatment cost.”
The project will also give a chance to undergraduate interns in Ohio State’s new Environment, Economy, Development & Sustainability (EEDS) major to gain real-world research experience. This past summer, undergraduate students Nate Hardin and Corey Damron and AEDE Master’s student Vincent Valentino piloted the beachgoer survey along the Lake Erie shoreline, but they ran into some troubles along the way.
“Initially they went out with official OSU polo shirts and clipboards to gather people’s emails, so they looked very official and not many people had an interest in talking with them,” Irwin explains. “So we had a strategizing session about how to get people to even interact with us, because the students were becoming very discouraged.”
The students came up with a great idea: offer the right incentive. Armed with a cooler full of popsicles, the students had much better luck, and 95% of the people that provided an email address on the beach later completed the online survey. “That cooler completely changed the whole dynamic because it made people more receptive,” says Irwin. “Kids came up and asked for popsicles, so that gave the students an entry point for a quick conversation.” The researchers will use the same protocol to collect emails during the summer of 2014 for the full survey.
“We’re pretty excited to be doing this,” Irwin says. “It’s pretty cutting edge in terms of linking all the pieces, and the important point is that you need both the social scientists and the biophysical scientists working together, and that’s what we’re doing.” Completion of the model is expected in early 2016.
In addition to Irwin and Zhang, the research team also includes Jay Martin, Professor of Ecological Engineering at Ohio State, and post-doctoral researchers Mike Fraker (Ohio State Department of Evolution, Ecology, and Organismal Biology) and Seyoum Gebremariam (Ohio State Department of Food, Agricultural and Biology Engineering).
For more information about this Ohio Sea Grant supported project, contact Dr. Irwin at irwin.78@osu.edu.
January 6, 2014