The Value of Wetlands Versus Open Water in Louisiana Walter R. Keithly, Jr. Baifu Xu John Barras Richard F. Kazmierczak, Jr.

Land Loss of Coastal Louisiana “America’s 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.

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.

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.

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.

Study Area

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.

Example of One Individual Property

Property Polygons - Digitalizing

Symbols and Descriptive Statistics 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 87.41 21.30 FRESH % 10.81 99.89 25.39 INTER % 26.49 98.97 34.94 BS % 15.88 98.00 30.99 OTHER % 25.97 36.84 INTEREST 0.957 0.03 1 0.176

General Hedonic Model

Specific Model Ln(Price/acre)=

Hedonic Price Function R2: 0.7110, Adjusted R2: 0.6763

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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