An Economic Analysis of Private Market Wetland Values in Southwestern Coastal Louisiana

• Main Author: Xu, Baifu
• Other Authors: Walter R. Keithly
• Format: Others
• Language: en
• Published: LSU 2004
• Subjects: Environmental Studies
• Online Access: http://etd.lsu.edu/docs/available/etd-11122004-112840/

Coastal Louisiana wetlands contain more than 30% of the U.S. coastal wetlands, but its wetland loss accounts for about 90% of the continental states. Although the effects of coastal wetlands preservation and restoration never stop since the enactment of CWPPRA in 1990, these regulation projects benefit only a small fraction of the degraded Louisiana coastal wetlands because of the limited budget. The general objective of this study is to provide an understanding of the economic factors which establish property values in coastal wetlands private market in order to devise and implement cost efficient economic incentive mechanisms for private landowners and then address the wetlands loss of coastal southwestern Louisiana. The research collects 59 useful private property samples from Southwest Louisiana and covered the 1990-2002 period. Four wetland types (fresh marsh, intermediate marsh, brackish and saline marsh), open water, property size, a discrete variable indicating whether a property is separated into two or more parcels, and distance variables (i.e., distance from the nearest coast and road) were the factors affecting property values. With the help of GIS data and tools, hedonic functions are established. Results indicate that open water percentage and percentages of all wetland types have negative effects on property prices. Furthermore, wetland types have different marginal implicit prices. Intermediate marsh has the largest effect on property values, followed by the brackish and saline marsh, and open water in descending order. All three types of wetlands are statistically significant at the level of above 99%; however, fresh marsh percentage is statistically insignificant even at the level of 85%, and has little coefficient effect on property price when considered in relation to the base (i.e., other category).