Estimating Willingness to Pay for a Cleaner
Lake Menomin: A Contingent Valuation Study
Matthew Flyr, St. Mary’s College of Maryland; Dr. Chris Ferguson, UW-Stout
Results
Background
According to a 2012 WDNR report to the EPA, Lake Menomin is
home to “nuisance algal blooms” and poor water quality, which
has led to biodiversity damage and reduced recreational use.
Many citizens in and around Menomonie have expressed
concern over the cleanliness of the Lake, evidenced by the
various policy solutions that have been debated by local
policymakers. However, no study has been done to determine
exactly how much citizens value a cleaner lake and how much
they’d be willing to pay for different policy solutions.
89%
43%
would vote YES for a
0.1% additional
sales tax that
Research Questions
How much are downstream citizens willing to pay for various
policies that clean Lakes Menomin, including an additional sales
tax, a water bill add-on, and a property tax add-on?
How do different factors influence willingness to pay for these
various policies?
Sample Demographic Comparison
Sample
Menomonie
would vote
YES for a $10
improves the lake for
the entire summer
(drops to 67% if it
improves for 1 month)
monthly
water bill
add-on
52%
would vote YES
for a $120
annual
property tax
add-on
The mean respondent would pay an additional…
146%
295%
more likely to vote YES
for an additional 0.1%
sales tax if the
respondent believes
agricultural runoff
is a major source of
the lake pollution
more likely to vote YES
for an additional 0.1%
sales tax if the tax
keeps the lake
clean all summer
rather than one extra
month
$381,822
in annual revenue generated
by implementing an additional
Dunn
sales tax of 0.1% in Dunn
County
$565.13
$653.19
(Sales)
(Water)
$511.97
(Property)
Methods
Survey Design
• Questions: pollution knowledge/awareness; political values;
use and anticipated future use of Lake Menomin under
improved quality; use and cost of substitute lakes; willingness
to pay (WTP) for sales tax, property tax, and water bill tax addons; demographics
Data Collection
• Emailed survey to Stout faculty/staff (n=212, response
rate=35%) and students (n=222, response rate=8%)
• Tables at local events and canvassed door-to-door (n=73)
Sales tax maximum calculated using a random effect probit model.
Property tax and water bill maximums calculated using a random effect
tobit regression
An additional
sales tax of
0.1% that
would keep
the lake clean
for the entire
summer would
pass with
89% of the
popular
vote
Even an
additional
sales tax of
3.009%
*Significant at 0.05%
**Significant at 0.01%
Conclusion
would pass
with 50% of
Implementing efforts to inform citizens about agricultural runoff’s
contribution to lake pollution could significantly increase the
community’s support for cleanup policies such as an additional
sales tax
according to
our results
If the local government wants to pass a successful policy to raise
funds to clean the surrounding lakes, it should choose an
additional sales tax rather than a water bill or property tax add-on
the popular
vote