The 57-page analysis, conducted by the South Carolina Water Resources Center at Clemson University’s Strom Thurmond Institute, examined retail activity, property values of lakefront real estate and real estate sales from 1998 to 2009 – a period that included multiple drought cycles.
“These models confirm statistically significant relationships between Thurmond Lake levels and economic activity,” the study found, and “counties with the most population and diverse economic activity experienced more substantial losses/gains from declining/increasing lake levels.”
Though the 72,000-acre reservoir is bordered by six counties in two states, Columbia County accounts for 71.6 percent of the jobs and personal income in the study area and bears the bulk of low-water impacts, the study found.
The other counties – Elbert, Lincoln, McDuffie, and Wilkes in Georgia and McCormick in South Carolina – have smaller populations that might rely more heavily on the economic activity generated by the lake.
Though property sales plummet when the lake is dry, those losses can be offset when the lake recovers.
“In general, falling lake levels correlate with fewer real estate sales, while rising lake levels with more sales,” the study found. “However, even when lake elevation is well below full pool, an upward fluctuation in level is predicted to generate an offsetting impact on those transactions.”
Researchers also found that perceptions – and irrational expectations among property buyers – can affect economic activity as much as droughts.
“Water level changes are almost always temporal events,” the study said. “Even in record drought years, it is generally assumed that at some point the drought will be over. If consumers understand and internalize this knowledge, water level would not be significantly correlated with sales price.”
Low-water impacts are only a small portion of the region’s economy, the study said, but “this does not diminish the impacts to local businesses and/or homes that are most directly impacted by declining lake levels.”
Extended low-water periods also reduce revenues to local governments, which increase as the lake refills.
“The estimated impact on local net revenue in Columbia County is $438,000 per month per foot increase in lake elevation,” the study said. “Local governments in Lincoln County see a predicted increase of $150,000 in net revenue, and governments in McDuffie County increase net revenue by approximately $144,000.”
The study should be treated with caution, researchers wrote, because it provides only a snapshot of economic effects that can be influenced by outside factors, such as the national economy.
Droughts, especially severe ones that leave much of the lake high and dry, have become more common in recent years.
The lake’s full pool is 330 feet above sea level. Recent drought-induced low points include 313.22 in 1988, 312.79 in 1989 and 313.68 in 2008.
The lowest level this year was 313.43, recorded Dec. 10. The lake had risen only slightly this week, to 314.58.