Economic decision-making and lake management policy: two empirical analyses

     This research explores economic decision-making at several scales of lake and watershed management. We analyze two nationally-relevant water quality topics that involve significant economic-environmental connections. The papers share a common goal of advancing the use of economic tools to obtain information about people, the environment, and the economy in pursuit of policies which meet environmental goals at least cost to society.

     The first paper models the spread of an invasive aquatic plant, watermilfoil, in Maine lakes. This research statistically evaluates the risk of new invasions facing a representative sample of Maine lakes by using information on lakes’ distance and connection to nearby invasions, their environmental characteristics, and their degree of use by recreational boats. Results of our regression analysis suggest factors related to natural- and human-related exposure are the most reliable predictors of the current distribution of invasions, confirming the findings of researchers from several other lake-rich regions of the United States. Variables related to plant growth do impact establishment but appear to be less reliable predictors of invasions in this region.  Our results support current policy choices in Maine, such as directing management resources towards monitoring lakes with heavy boat traffic.

     The second paper examines the role of economics and social norms in households’ decisions about helping to maintain lake water quality. We specifically focus on decisions about conservation practices designed to reduce and mitigate storm water pollution, which is water pollution derived from everyday household activities. We surveyed lakefront households around 14 Maine lakes, asking about property maintenance behavior, economic trade-offs, and social norms. Social norms are the perceived social pressures to behave in certain ways. In a hybrid (multi-disciplinary) model, we found that both economic trade-offs and social norm-related rewards are connected to patterns of conservation practice use. The relative importance of economic and psychological concerns varies across different types of practices. Implications are discussed for lake water quality protection programs employing social rewards to motivate lake stewardship.