Lake Drawdown Revisited: The Value Of Two Inches Of Water

Abstract

This paper uses a hedonic price model to estimate the impact of water level on the value of real estate on Lake Koshkonong in Wisconsin. Hedonic techniques are employed to show that a reduction in the lake’s water level has a significant effect on shoreline property values. The body of existing research demonstrates that changes in both the subjective and objective indicators of value are important for estimating the implicit value of water quality in hedonic analysis. This paper provides new evidence on the economic harm to lake communities created by the reduction of water levels.