An Analysis of the Impact of Local Drought Conditions on Gross Sales in the Lake Hartwell Regions

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Dickes, Lori A.
Carey, Robert T.
Saltzman, Ellen W.
Allen, Jeffery S.
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Lake Keowee is a reservoir created by the Keowee Dam and the Little River Dam and is located in Oconee County, South Carolina. Figure 1 illustrates the location of the lake in the state. The Lake was constructed by Duke Energy for use as cooling water by the Oconee Nuclear Generating Station’s three reactors. While the primary function of the lake has been as an input into the power generation process, the past thirty years have seen a dramatic expansion in the lake’s economic role in the region. As the economic activity directly and indirectly related to Lake Keowee has evolved, so too have the number of stakeholders associated with the lake. The economic concerns of regional stakeholders peaked over the period 2007-2009 as record drought plagued the region and brought to light questions regarding the economic impact that falling lake levels have on surrounding communities. Figure 2 illustrates Lake Keowee’s water level changes from 1998-2010. This paper will begin to evaluate the importance of lake level as a lakefront amenity. This research begins with a review of hedonic literature studying lake and lake related features. This is followed by a discussion of the hedonic models used for the counties bordering Lake Keowee over the twelve year period from 1998-2009. This period includes two major droughts, which should provide sufficient data to clarify the capitalized value of lake level on lakefront property. This analysis is a portion of a larger study funded by Duke Energy to understand the economic impact of Lake Keowee and declining lake levels on the regional economy.
Sponsored by: Georgia Environmental Protection Division U.S. Geological Survey, Georgia Water Science Center U.S. Department of Agriculture, Natural Resources Conservation Service Georgia Institute of Technology, Georgia Water Resources Institute The University of Georgia, Water Resources Faculty
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