The Value of Wetlands Versus Open Water in Louisiana

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The Value of Wetlands VersusOpen Water in
Louisiana

• Walter R. Keithly, Jr.
• Baifu Xu
• John Barras
• Richard F. Kazmierczak, Jr.

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Land Loss of Coastal Louisiana

• Americas Wetlands, about 30 of the Lower 48
  states coastal wetland
• 20 of wetlands lost in the past 100 years
• Catastrophic loss rate 25-35 square miles a
  year
• 90 of the continental US coastal marsh loss
• Hurricane Katrina caused southeastern Louisiana
  over 90 billion in physical losses and Hurricane
  Rita caused the southwest coastal area of
  Louisiana over 5 billion, and unexpected wetland
  loss.

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Wetlands Restoration Measures

• 129 federal and state restoration projects
• Less than 10 of the minimum funding needed for
  restoration
• 80 percent of all coastal Louisiana wetlands are
  privately owned.

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Objectives

• To identify the factors influencing the value of
  coastal wetland properties in southwestern
  Louisiana
• To examine the influence of open water and
  wetland types on private market property values
• To estimate implicit prices associated with
  underlying wetland characteristics.

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Steps for Hedonic Model

• Gather property transfers and price
• Collect explanatory variables
• Property characteristics (e.g., wetland type)
• Structural characteristics (e.g., acreage,
  distance from coast)
• Establish the relationship between price and
  explanatory variables.

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Study Area
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How Did We Digitalize a Privately Owned Property?

• Bill of Sales (Transfers)
• Township Map locate township, range, and
  section
• Scanned Topographic Maps
• Draw property polygons using ArcGIS.

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Example of One Individual Property
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Property Polygons - Digitalizing
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Symbols and Descriptive Statistics
Symbol Mean Minimum Maximum Std. Dev
PRICE2K 284004 12858 3369130 524137
P2KPACRE 570.89 51.05 2938.65 495.13
ACRES 933.93 36.21 11395.48 1765.14
OPEN WATER 20.24 0 87.41 21.30
FRESH 10.81 0 99.89 25.39
INTER 26.49 0 98.97 34.94
BS 15.88 0 98.00 30.99
OTHER 25.97 0 99.89 36.84
INTEREST 0.957 0.03 1 0.176
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General Hedonic Model





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Specific Model

• Ln(Price/acre)

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Hedonic Price FunctionR2 0.7110, Adjusted R2
0.6763
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Discussion/Key Findings

• An increase of fresh marshes relative to open
  water enhances the price per acre, ceteris
  paribus
• An increase in intermediate marsh and/or brackish
  saline marsh relative to open water decreases
  the price per acre, ceteris paribus
• Other significant positive influences include
  interest in property and year
• Other significant negative influences include
  total acres and higher expected erosion rate

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Thanks!