A socioeconomic analysis of habitat restoration in the Muskegon Lake area of concern

As part of the 2009 American Recovery and Reinvestment Act (ARRA), a $10 million grant was awarded to restore wetlands and stabilize shoreline along the south shore of Muskegon Lake (MI), a Great Lakes Area of Concern. A socioeconomic analysis was conducted as part of this award, which included a travel cost survey for lake recreation and a hedonic housing valuation to estimate return on investment. The value of a trip to Muskegon Lake was estimated to be $39.76; when applied to the anticipated increase in post-restoration recreational trips to Muskegon Lake, and using a conservative 7% discount rate, the Net Present Value over 20 years is $38.1 million. The hedonic analysis examined values for houses between 100 and 800 m from the shoreline, using both the current shoreline distances and the new shoreline distances after restoration; this resulted in a predicted $11.9 million in additional housing value as a result of the improved shoreline features. Summing the hedonic value and travel cost estimates, along with the original $10 million spent, the result is that over 20 years, the total value generated for the local region is nearly six times the initial ARRA spending. In other words, of the $60 million of value created on the Muskegon Lake restoration, $50 million is increased environmental value over the 20 year period.