Assessing the economic impact of Cape Cod’s ponds

We know that Cape Cod’s 890 ponds and lakes add to the region’s natural beauty, but how much do they impact our region’s economy?

To answer this question, the Cape Cod Commission contracted with the Eastern Research Group (ERG) in late 2022 to conduct an economic analysis of Cape Cod’s freshwater ponds. The study seeks to understand spending associated with pond visits, the impact pond proximity and water quality have on real estate values, and an estimation of the direct and indirect economic impact that ponds bring to our region.

ERG’s analysis includes an assessment of spending by residents, non-resident owners, and tourists related to freshwater activities and their ripple effects on the economy. It also analyzes the connection between the quality of freshwater ponds and property value.

How do residents and visitors perceive our freshwater resources?

An online survey launched in February 2023 sought to identify the preferences, perceptions, and attitudes of residents, non-resident owners, and visitors related to a wide range of freshwater-related topics. The survey received 827 responses from residents, non-resident owners, and tourists living in New England, New York, and New Jersey.

The vast majority (84%) of respondents “agree” or “strongly agree” that ponds and lakes are important to the Cape Cod economy. An even greater proportion (91%) of respondents “agree” or “strongly agree” that ponds and lakes are important to the Cape Cod environment. There is a strong agreement, with 83% of respondents expressing they “agree” or “strongly agree” that addressing pond health is a Cape-wide priority.

Respondents’ top preferred pond characteristics include water that is free of bacteria and algae, the presence of a beach, an area free of litter, and the presence of public restrooms.

Further research and analysis by ERG will help us understand how far someone is willing to travel, or how much they are willing to spend to travel, to visit a particular pond based on their preference for these and other attributes.

Do visitors to ponds and lakes spend money elsewhere in the region?

From late spring through early fall 2023, ERG staff visited nearly 75 ponds and 96 unique access points in the region to conduct an intercept survey to assess spending associated with visits to Cape Cod’s ponds. The team collected 606 surveys from May to October, examining spending like lodging, food, and beach-related items by residents, non-resident owners, and tourists related to freshwater activities. Through these surveys, ERG estimated that Cape Cod’s ponds see 1.3 to 1.7 million visits annually.

Does proximity to a pond add value to a home?

Overall, Cape Cod real estate is quite valuable, but does proximity to a pond mean added value? ERG’s hedonic analysis quantifies the impact of freshwater ponds on property values and aims to better understand how particular attributes, such as freshwater quality, impact property value. An analysis of seven years of property sales (2015-2022) found that homes closer to ponds with better water quality could see close to a 9% premium on the sales price.

A full report is anticipated in early 2024.