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J. For. 113(❚):000–000 REVIEW ARTICLE http://dx.doi.org/10.5849/jof.14-136

A Synthesis of the Economic Values of Wilderness

Thomas P. Holmes, J.M. Bowker, Jeffrey Englin, Evan Hjerpe, John B. Loomis, Spencer Phillips, and Robert Richardson

Early applications of wilderness economic research demonstrated that the values of natural amenities and reveal broad underlying trends in the evolv- commodities produced from natural areas could be measured in commensurate terms. To the surprise of many, ing role of wilderness in American . In the economic values of wilderness protection often exceeded the potential commercial values that might result particular, we are interested in describing from extraction. Here, the concepts and tools used in the economic analysis of wilderness are described, how economic analysis can be used to ad- and the wilderness economic literature is reviewed with a focus on understanding trends in use, value, and dress three fundamental questions: economic impacts. Although our review suggests that each of these factors is trending upward, variations in • Has the public’s willingness to pay for research methods plus large gaps in the literature limit understanding of long-run trends. However, as new data wilderness (both individually and in aggre- on wilderness use, visitor origins, and spatially referenced features of are becoming increasingly gate) changed during the past five decades? available, more robust economic analysis of both onsite and offsite wilderness economic values and impacts is • Have the characteristics of wilderness now becoming possible. users shifted over ? • Has the role that wilderness areas play Keywords: use value, passive use value, services, economic impacts in community development evolved? During the 1960s, scholarly and prag- matic interest in wilderness preservation he (Public Law 88- ignated as such by Congress. Other catego- grew rapidly. In his classic treatise, Wilder- 577), creating the National Wilder- ries of use, such as roadless areas or ness and the American Mind, Roderick Nash ness Preservation System (NWPS), other open , are not included in our T (1967) traced the evolution of American was signed into law 50 years ago (1964). Sec- use of the term wilderness throughout this sentiment toward wilderness from a land- tion 2(c) of the Act provides the following article. scape-demanding transformation to a van- definition: A review of the economic values of wil- ishing remnant of the pioneer environment derness was recently published and provided A wilderness, in contrast with those areas that needed protection. Concepts of the where man and his own works dominate useful background for this article (Bowker et value of wilderness protection were neatly the , is hereby recognized as an al. 2014). Our synthesis differs from that area where the and its community of summarized by the Re- life are untrammeled by man, where man review in that we examine the suite of his- sources Review Commission (1962, p. 7) in himself is a visitor who does not remain. An torical wilderness economic studies for evi- three categories: recreational values, which area of wilderness is further defined to mean dence of long-run societal trends in the use, in this Act an area of undeveloped Federal arise from “deep personal revelations and ex- land retaining its primeval character and in- valuation, and economic impacts of wilder- perience of natural beauty,” social values, in- fluence… ness areas. In doing so, we emphasize that cluding scientific study; and knowledge that Wilderness, as used in this synthesis, economic models can be used to assess a wilderness exists. Subsequently, these value specifically refers to federal land that is des- complementary set of hypotheses that may categories were formalized into economic

Received November 7, 2014; accepted May 11, 2015; published online June 18, 2015. Affiliations: Thomas P. Holmes ([email protected]), USDA Service, Southern Research Station, Research Triangle Park, NC. J.M. Bowker ([email protected]), USDA Forest Service. Jeffrey Englin ([email protected]), Arizona State University. Evan Hjerpe ([email protected]), Conservation Economics Institute. John B. Loomis ([email protected]), State University. Spencer Phillips ([email protected]), Key Log Economics. Robert Richardson ([email protected]), Michigan State University. Acknowledgments: We gratefully acknowledge Susan Fox, Wilderness Research Institute, without whose encouragement and support this synthesis would not have been possible.

Journal of Forestry • MONTH 2015 1 arguments for wilderness preservation by a Economic Concepts of Value several variants of the travel cost method in team of economists at for the Fu- Wilderness areas are public goods, and the following decades and allowed econo- ture, led by John Krutilla (Krutilla and the amenity values provided by the preserva- mists to measure the economic “use” value Fisher 1975). tion of wilderness cannot be purchased in of wilderness and other natural areas. As the In developing an economic approach to established markets. Consequently, the name implies, use value refers to the onsite wilderness preservation, Krutilla thought value of wilderness protection must be mea- value obtained from direct contact with wil- that it was necessary to quantify both the sured using nonmarket valuation methods. derness (Figure 1). Studies of willingness to benefits of wilderness preservation and the The conceptual basis for measuring eco- pay for wilderness use are often holistic and costs in terms of foregone (or postponed) nomic values for public goods is found in the simply focus on the overall onsite value of a development of natural areas. In doing so, theory of welfare economics, and several the- recreational trip. However, as we discuss be- Krutilla (1967) recognized how the passage oretical measures that describe the economic low, economists are also interested in under- of time can influence the computation of the value, benefits, or willingness to pay for en- standing how specific wilderness character- benefits and costs inherent in decisions of vironmental amenities have been developed istics contribute to overall willingness to whether or not to preserve natural areas of (Flores 2003). It has been demonstrated that pay, and modern economic methods are well national significance. In particular, he ar- differences between these theoretical mea- suited to estimating the values of ecosystem gued that (1) wilderness areas represent sures, when applied to empirical estimates of characteristics. unique conditions that, once developed for environmental value, are small and are gener- The second main category of economic productive purposes, are largely irreproduc- ally less than the errors incurred by estimation value as applied to natural areas, first articu- ible, (2) the supply of natural environments (Willig 1976). Consequently, we use the terms lated by Krutilla (1967), is known as “pas- cannot be enlarged but can only diminish, economic value, economic benefits, and willing- sive use value.” This offsite value category (3) individual and aggregate willingness to ness to pay synonymously in this article. was originally depicted as being comprised pay for direct association with undisturbed An essential concept used to describe of three related concepts (Figure 1). Exis- natural environments will increase over the economic value of onsite wilderness ac- tence value is the value derived from know- time due to increasing levels of income, tivities is known as “consumer surplus” and ing that natural areas exist, even if one never education, and population and (4) over refers to the difference between the maxi- plans to visit those areas. Option value is the time, technological advancements will de- mum amount a consumer is willing to pay value of maintaining the option to visit a crease the reliance of society on natural re- for a consumer good and the amount actu- natural area sometime in the future. Finally, sources that may be extracted from pristine ally expended (e.g., for a historical review of bequest value is the value of passing on nat- natural areas. The interaction of these sup- this concept, see Currie et al. 1971). Con- ural areas to future generations. The sum of ply and demand factors led him to predict sumer surplus traditionally refers to how much use value and passive-use value is known as that the value of wilderness protection, rela- better off an individual is by consuming the total economic value (TEV). Use values, tive to the value of resources that might be chosen good rather than allocating the actual passive use values, and TEVs have been esti- mated for US wilderness areas (and are dis- extracted from such natural environments, expenditure to some other consumer good. cussed below). would increase over time. Although this During the second half of the 20th cen- tury, welfare economic concepts were re- We include a fourth offsite wilderness conceptual framework for wilderness preser- fined to include the valuation of natural en- value in our TEV typology that was not em- vation was then considered novel (Porter vironments. Based on a suggestion made by phasized either by the Outdoor Recreation 1982) and was subsequently applied to the Harold Hotelling to the Director of the Na- Review Commission (1962) or by Krutilla empirical analysis of a range of policy issues tional Park Service, Marion Clawson and (1967). This is the amenity value of wilder- (Krutilla and Fisher 1975), the fundamental Jack Knetsch (Clawson and Knetsch 1966) ness areas that is capitalized into nearby res- hypothesis that the value of wilderness pro- developed a method for measuring con- idential property values. The conceptual tection will increase over time has not been sumer surplus based on what is known as the framework used to derive these values is con- rigorously evaluated. travel cost method. This conceptual step for- sistent with welfare economic theory (Tay- In the next two sections, we describe ward set the stage for the development of lor 2003) and reflects home buyers willing- what is meant by economic value and eco- nomic impact and explain why these two economic measures cannot be added to- gether. Then we review the studies that have Management and Policy Implications estimated wilderness economic values, in- cluding a relatively new approach that esti- Economic analysis informs policy decisions within a benefit-cost framework. Although wilderness economics mates the value of wilderness that is capital- research has generally shown that the economic benefits derived from wilderness activities have increased ized into nearby residential property values. substantially since the passage of the Wilderness Act 50 years ago, much less is known about the costs This is followed by a summary of what is of wilderness preservation in terms of foregone jobs and other economic opportunities in wilderness known about the impact of wilderness areas gateway communities. Federal agency planning for existing and potential wilderness areas would benefit on jobs and income in gateway communities from better information on the long-term and recent trends in wilderness use and value. Agency planning and regional economies. In the final section of for potential wilderness areas would also benefit from a better understanding of the opportunity costs of the article, we present our conclusions and wilderness preservation. Better information on wilderness value spillovers to nearby gateway communities provide our thoughts on some key unanswered could also help local planners address emerging trends in rural and exurban economic development. questions in wilderness economics.

2 Journal of Forestry • MONTH 2015 Station of the USDA Forest Service and John Loomis (then at US Fish and Service) conducted a review of the literature on economic valuation of all recreation ac- tivities, including wilderness. At that time, it did not take long to summarize the eco- nomic value of wilderness recreation as there were only five studies (Sorg and Loomis 1984). However, estimating the economic value of wilderness recreation was an active area of research subsequently, and by 1988 when the USDA Forest Service asked Rich- ard Walsh (Walsh et al. 1992) to update the 1985 RPA values of Sorg and Loomis, his team found 12 separate studies on the eco- nomic value of wilderness recreation with an average value of $21.47 per recreation day in 1987 dollars ($45 in 2014). In 1998, Rosen- berger and Loomis (2001) were asked to make a further update for the 2000 RPA/Strategic Plan. They located 29 sepa- Figure 1. Wilderness economic values and impacts. rate estimates of wilderness recreation values averaging $39 a day in 1996 dollars ($59 in 2014). The most recent summary of eco- ness to pay for wilderness-based landscape Wilderness Recreation Values nomic values of wilderness recreation was by amenities near their home (Phillips 2000, and Use Bowker et al., published in 2005. Their 2004, Izo´n et al. 2010). The fact that wilder- analysis documented 31 estimates of the ness-based enhancement of nearby private Recreation Value per Trip economic value of wilderness recreation, property values has not been studied until Wilderness recreation was the first eco- with an average value of $61.47 in 2002 dol- recently may reflect the changing character nomic benefit of wilderness to be monetized lars ($81 in $2014). of rural community development in some by economists. Primitive and unconfined Given the trend in these summary value regions of the country and the increasing recreation is specifically mentioned in the estimates (Table 1), it might be concluded availability of information on residential Wilderness Act. It is also one of the purposes that the value of wilderness trips is increas- property transactions and spatially refer- of all Federal agencies in- ing over time—just as Krutilla (1967) pre- enced data on land cover and land uses. cluding the , US Fish dicted. However, caution is warranted be- fore any firm conclusions are drawn. First, and Wildlife Service and the two multiple Economic Impacts we note that the value of a wilderness recre- use agencies, the US Department of Agricul- Although economic measures are based ation trip is likely to be sensitive to the geol- ture (USDA) Forest Service and US Bureau on the worth of objects used in exchange ogy, , and ecosystem characteristics of Land Management (BLM). Techniques (such as dollars), units of worth cannot be found at the study sites (Figure 1). Failure to for estimating the economic value of recre- summed together if the conceptual founda- address site heterogeneity across study sites is ation to visitors were also well developed and tion for the economic measures differs. This like mixing apples and oranges. Second, the distinction applies to the economic contri- recommended for federal agency use by the comparability of economic value estimates butions wilderness areas make to local com- US Resources Council in the early depends on the research methods used and munities. Above, we discussed the total eco- 1980s (US Council 1983). the underlying assumptions that are made to nomic value of wilderness areas in terms of Of course, in the early 1980s there was a conduct a study. For example, some studies society’s willingness to pay for wilderness common skepticism among federal agency use surveys asking respondents how much preservation. This concept differs from the staff (noneconomists and some agency econ- they are willing to pay for preserving new economic impacts wilderness areas have on omists) about whether the economic valua- wilderness areas. These studies assume that local and regional economic activity. Eco- tion of wilderness recreation could be accu- descriptions of new wilderness areas pro- nomic impact analysis focuses attention on rately estimated, and if it could be, whether vided in the survey are adequate for respon- the expenditures made by visitors to wilder- it should be done. Nonetheless, the USDA dents to provide a reliable willingness to pay ness areas and the degree to which those ex- Forest Service included wilderness recre- amount. Other studies use observations of penditures are translated into jobs. Conse- ation as one of its multiple use “outputs” to the number of actual wilderness trips taken quently, economic impacts are connected to be valued in preparing economic values of to estimate values from travel cost models. the TEV framework using a dashed line multiple use resources for the 1985 Re- These studies often assume that a compo- (Figure 1). Estimates of the economic im- sources Planning Act (RPA) program. nent of travel cost is the opportunity cost of pacts of wilderness areas are discussed fur- In the of 1982, Cindy (Sorg) time, which is computed as some proportion ther below. Swanson at the Rocky Research of the recreationist’s hourly wage rate.

Journal of Forestry • MONTH 2015 3 Table 1. Summary of onsite recreational use values for wilderness.

Year published Number of Consumer surplus Study (data year) studies Area ($2014)

Summaries of previous studies Walsh et al. 1992 (varied) 12 Varied $45 Rosenberger and Loomis 2001 (varied) 29 Varied $59 Bowker et al. 2005 (varied) 32 Varied $81 Individual studies (all but Englin et al. 2008 included in Bowker et al. 2005) Smith and Kopp 1980 (1972) 1 Santa Lucia , California $30 Hellerstein 1991 (1980) 1 Boundary , Minnesota $182 Englin and Shonkwiler 1995 (1982) 1 Cascade Mountains, $54 Englin et al. 2008 (1990–2002) 1 Sierra Nevada Mountains, California $217

The top half of the table shows average values from previous data summaries that included a heterogeneous set of documented studies. The bottom half of the table shows wilderness values for a more homogeneous set of individual studies that used the travel cost method.

These concerns can be mitigated to use was a “visitor-day,” defined as one per- in wilderness use throughout the entire some degree by examining only those studies son present onsite for 12 hours. This mea- NWPS are provided by Cole (1996) for the that were published either in refereed jour- sure is useful because it accounts for the first three decades after passage of the Act. nals or book chapters (therefore, readily length of stay, and historical records indicate These data also show that although total vis- available for review by the interested reader) that visitor-days in USDA Forest Service itor-days increased, the rate of increase and used similar research methods. In the wilderness areas increased from roughly 4.5 slowed during this period. Nevertheless, bottom half of Table 1, we list willingness to million in 1965 to about 11.2 million in because the average annual change in vis- pay estimates of the value of wilderness rec- 1986 (Lucas and Stankey 1989) or about itor-days consistently exceeded the rate of reation (per trip) from a subset of published 4.4% per year. The current system for esti- growth of the US population, we can con- studies that used travel cost models to esti- mating wilderness use is the number of “vis- clude that the aggregate rate of growth of mate onsite recreational use. Although the its” which, while being a useful indicator of wilderness value derived from visits number of studies available for comparison use frequency (English et al. 2002), it is less throughout the entire NWPS also ex- is reduced from 31 to 4, these studies are useful for understanding use intensity and, ceeded the rate of growth of the popula- quite similar in terms of data sources and unfortunately, visits cannot be directly com- tion. research methods. For the three wilderness pared with visitor-days. The most recent and To make forecasts of wilderness use and areas located in Pacific states (California and reliable estimates suggest that Forest Service value, it is important to understand how Washington), we see an upward trend in rec- wilderness visitation increased from about American society is changing. It has been reational use values. However, the study 6.5 to 8.1 million visits per year between argued, at , that wilderness preserva- from the Area, 2005 and 2012 (Bowker et al. 2014) or tion primarily benefits the wealthier mem- which has unique site characteristics and rec- roughly 3.2% per year. During the same pe- bers of society. For example, the well-known reation uses, illustrates the effect of site het- riod, the overall US population increased by environmental historian William Cronon erogeneity on value estimates (the value is about 0.8% per year suggesting that the per has argued that quite a bit larger than the values for the other capita rate of Forest Service wilderness use studies from that time period). The unique- Ever since the nineteenth century, celebrat- increased during that period. ing wilderness has been an activity mainly ness of this area suggests that any evidence of Although the rate of growth of recre- for well-to-do folks…. (E)lite urban a trend in economic value would require an tourists and wealthy sportsmen projected ational use of wilderness appears to be less analysis of historical data collected solely their leisure-time frontier fantasies onto the rapid during this later period relative to that American landscape and so created wilder- from that wilderness. More generally, histori- for the first two decades after the Wilderness ness in their own image. (Cronon 1996, p. cal records (where they could be retrieved) for 15) Act was passed, the evidence suggests that individual wilderness areas, analyzed with a the aggregate rate of growth of wilderness consistent research approach, would provide a Although this statement may be apt for stronger basis for drawing conclusions about value (number of trips multiplied by the av- historical wilderness advocates such as trends in wilderness value. erage value per trip) on Forest Service land is (Brinkley 2009), eco- exceeding the rate of growth of the popula- nomic analysis can be used to investigate this Wilderness Use and Aggregate tion. Bowker et al. (2014) estimated that vis- claim using more recent literature on the de- Recreation Value itation to the entire NWPS was roughly mand for wilderness recreation. In particu- Given our tentative conclusion that 10.1 million annual visits in 2012. Based on lar, by examining factors influencing the de- willingness to pay for a wilderness recreation the most recent estimates of average wilder- mand for wilderness recreation, it is possible trip has increased over time, the aggregate ness recreation value ($84 per trip) and wil- to determine how rapidly the numbers of value of wilderness recreation will also logi- derness use, then, simple multiplication sug- wilderness trips change as demographic cally increase if the total number of wilder- gests that the annual use value of the NWPS characteristics in the population change. ness trips increase. Up until the mid-1980s, is on the order of $850 million annually With use of evidence on the relation- the standard unit for estimating wilderness (Bowker et al. 2014). Estimates of the trend ship between income and wilderness visits

4 Journal of Forestry • MONTH 2015 Table 2. Passive use values, per household and per 1,000 acres, for wilderness preservation ($2014 dollars).

Year published Annual household Study (data year) (s) Value type WTP WTP per 1,000 ac

Walsh et al. 1984 (1980) 10 million ac (CO) Option; existence; bequest (sum) $27; $32; $33; ($92) ($0.01) Barrick and Beazley 1990 (1983) Washakie (WY) Option $110 onsite; $22 offsite $0.11 $0.02 Pope and Jones 1990 (1986) 1.9 million ac (UT) Option; existence; bequest (sum) ($114) ($0.06) Gilbert et al. 1992 (1990) Lye Brook (VT) Option; existence; bequest (sum) $2; $3; $6 ($11) ($0.61) Diamond et al. 1993 (1991) Selway Bitteroot (ID);Washakie Option; existence; bequest (sum) ($87; $52; $64) ($0.06; $0.05; $0.06) (WY); Bob Marshall (MT) McFadden 1994 (1990) Selway Bitteroot (ID) Option; existence; bequest (sum) ($78) ($0.06)

All values are based on responses to open-ended willingness to pay (WTP) questions. WTP values in parentheses ($) are total preservation values. (Updated and modified from Bowker et al. 2005.)

(specifically, income elasticity) provided in approach is to use choice experiments (Hol- of alternative quantities of BLM land as wil- Smith and Kopp (1980, p. 70) and in Englin mes and Adamowicz 2003) to value wilder- derness varying from 1.9 million acres (the et al. (2008, p. 203–204), it is reasonable to ness characteristics (Lawson and Manning BLM preferred alternative) to 16 million conclude that the demand for wilderness 2003). Although wilderness are acres (the Earth First alternative). These au- recreation has increased more rapidly for not generally subject to management inter- thors surveyed both onsite users of the wil- lower income classes than for higher income ventions, a greater understanding of the derness as well as sampling the general pop- classes during the three decades spanned by value of specific recreational services could ulation. The only study of total economic these two studies. However, a more nuanced help wilderness managers make decisions re- value of eastern US wilderness was con- story emerges when wilderness use data re- garding issues such as where to conduct fire ducted by Gilbert et al. (1992), who esti- ported in the National Survey on Recreation suppression or risk reduction activities (Bae- mated the value of preserving Lye Brook wil- and the Environment are evaluated for the renklau et al. 2009), where to locate derness (about 18,000 acres) in Vermont. influence of demographic characteristics and campsites, and how to manage access to The studies of Diamond et al. (1993) and (Bowker et al. 2006). That analysis suggests ecologically sensitive areas. McFadden (1994) were quite similar in that that race (black), ethnicity (Hispanic), im- they estimated passive use values for western Wilderness Passive Use Values migrant status, age, and urban dwelling are wilderness areas that they proposed would Federal agencies were much slower to negatively correlated with wilderness use, be subject to future logging if adequate adopt offsite passive use values such as op- whereas education, income, and gender funds were not obtained to preserve them as tion, existence, and bequest values of wilder- (male) are positively correlated. Using cen- wilderness. These wilderness areas ranged ness into their economic analyses. In part sus data to forecast these population charac- in size from about 700,000 acres (the this was because passive use values are more teristics into the future, the authors con- Washakie Wilderness, ) to more cluded that although total wilderness use controversial since they are not observed in actual behavior and must be measured using than 1 million acres (the Selway Bitteroot will continue to increase, per capita wilder- Wilderness, Idaho, and the Bob Marshall ness use will decline over time. stated preference methods such as the con- tingent valuation method or choice experi- Wilderness, ). Wilderness Attribute Values ments. Despite the critical views of some Table 2 summarizes the passive use In addition to the wilderness economic economists (Diamond et al. 1993), this was value studies of wilderness to date. As can be studies described above that focus attention an active area of research during the 1980s and seen, some studies provided individual esti- on the overall (or holistic) estimates of rec- 1990s and used to estimate the damages from mates of option, existence, and bequest val- reational use value (Table 1), we note that high profile events such as the Exxon Valdez ues, whereas other studies simply reported other methods have been used to estimate oil spill in (Carson et al. 2003). preservation values, which are the sum of the willingness to pay for specific wilderness at- The study of Walsh et al. (1984) in Col- three sources of passive use value. In most of tributes. We can think of wilderness ecosys- orado represents the first attempt to apply the Western states, passive use values are tems as settings for ecological processes (or the contingent valuation method to measure generally similar, and there does not appear production functions) that produce inter- option, existence, and bequest values of ex- to be any trend, either increasing or decreas- mediate (e.g., webs) and final (e.g., isting and potential wilderness areas. That ing, in passive use value over the time span viewing wildlife) ecosystem services (Figure study varied the amount of wilderness pro- during which these studies were conducted 1). Economic values are generally ascribed to tection from 1.2 million acres (existing at (1980–1991). However, the data broadly final ecosystem services (or, equivalently, the time of the study) to 10 million acres. suggest that passive use values increase at a ecosystem attributes) that people care about Soon thereafter, Barrick and Beazley (1990) decreasing rate as wilderness size increases (Johnston and Russell 2011). An early ex- focused attention on a single component of (known to economists as “external scope”). ample of this approach to wilderness valua- passive use value, option value, for an exist- For example, the passive use value for the tion used the hedonic travel cost modeling ing wilderness in Wyoming that was threat- Lye Brook wilderness (18,122 acres) is about Ϫ Ϫ approach to estimate the value of wilderness ened with proposed oil and gas drilling. $0.61 household 1 1,000 acres 1.Incon- attributes such as rock and , tree , Pope and Jones (1990), in the only study of trast, the passive use value for wilderness ar- and tree size (Englin and Mendelsohn 1991, potential BLM wilderness, estimated eas roughly 1–2 million acres in size range Ϫ Pendleton et al. 1998). An alternative residents’ willingness to pay for designation from $0.02 to $0.06 household 1 1,000

Journal of Forestry • MONTH 2015 5 Ϫ acres 1. Furthermore, the passive use value able. In apparently the first study of its kind, for the presence of wilderness areas so that for protecting 10 million acres in Colorado using the well-known hedonic property the two types of would not be con- Ϫ Ϫ is about $0.01 household 1 1,000 acres 1. value method, Phillips (2000, 2004) con- flated in their analysis. The authors found We also note that both studies that esti- cluded that residential property values are that for each percent increase in wilderness mated passive use values for varying higher in towns with and/or closer to desig- land per Census tract, housing prices in- amounts of potential wilderness (known as nated wilderness (Big Branch, Breadloaf, creased by 0.64–1.19% (depending on the “internal scope”) also found that values in- Bristol Cliffs, George D. Aiken, Lye Brook, model that was estimated). creased at a decreasing rate as the area of and Peru Peak) in the Green Mountain Na- Although the empirical results provided wilderness preserved was increased (Walsh tional Forest (Vermont). Furthermore, he by these two studies are suggestive, it would et al. 1984, Barrick and Beazley 1990). forecasted that, if passed into law, proposed be informative to repeat this type of eco- Empirical research focused on estimat- additions to the Green Mountain National nomic analysis in other diverse landscapes to ing passive use values of wilderness has Forest wilderness acreage (some 78,870 gain a deeper understanding of the factors dropped off in recent years, in part perhaps acres) would add between $1 million and $2 that influence, positively or negatively, the due to fewer politically charged debates re- million per year to the value of properties value of residential properties that are lo- garding high-profile wilderness areas. As can that would be located closer to wilderness. cated near wilderness areas. On the one be seen from Tables 1 and 2, the use values It is important to note that value en- hand, it is possible (even likely) that proxim- (per trip) and nonuse values (per household) hancement from nonwilderness (but still ity to wilderness, in some situations, does associated with wilderness areas are fairly publicly owned and managed) acreage in the not contribute to private property values. similar, at least to an order of magnitude. same study region was not found. Specifi- This might be the case where open is However, one aspect of great importance cally, and as indicated from parallel versions abundant and population is minimal. On when considering passive use value is that of Phillips’ model, neither the presence of, the other hand, situations such as that re- consumers do not compete for them. Every- amount of, nor distance to undifferentiated ported in the Vermont study suggest that one can have a passive use value, and those national forest acreage was significant in ex- wilderness may contribute substantially to values are additive. If the average household plaining variations in residential land prices. property values where wilderness is relatively in the was willing to pay $1.00 The study does not reveal why wilderness has scarce and population is relatively dense and per year to preserve the Boundary Waters the discernible positive effect (the perma- affluent. Canoe Area Wilderness, for example, then nence and degree of protection or the fact that would amount to roughly $115 million that wilderness tends to be designated Economic Impacts and per year in passive use value for a single wil- around charismatic landscape features (e.g., Contributions of Wilderness derness area. As such, even the smallest pas- Bristol Cliffs) or popular recreational ame- sive use values per household shown in Ta- nities (Lye Brook Falls), but it does show Areas ble 2, when multiplied by the more than 100 that designated wilderness influences land Wilderness areas in the United States million households in the United States, re- prices in a way that simple public ownership have a cascading economic impact on sur- sult in estimates of passive use values that are does not. rounding regional economies as wilderness several billion dollars in magnitude. Given The passage of the New England Wil- recreation users purchase local goods and the potential contribution that passive use derness Act of 2006, which added 34,875 services. Wilderness also attracts entrepre- value makes to the TEV of wilderness and acres of wilderness (including the Glasten- neurs, retirees, and businesses looking to im- that the most recent estimates of passive use bury and Joseph Battell wilderness areas) prove their quality of life by being closer to value were made more than 20 years ago, we provided a “natural experiment” for testing the scenic and recreational opportunities suggest that is time to update estimates of the hypotheses that, given the initial extent provided by wilderness. This type of ame- these values. of protected wilderness within a rural land- nity migration may, in fact, may be a rela- scape, additional wilderness will further en- tively recent social dynamic that enhances Wilderness Value Spillovers to hance nearby property values. The results of residential property values (as discussed Nearby Residential Property subsequent empirical analysis were highly above). Economic impacts from wilderness Owners consistent with the previous findings of recreation are usually described in terms of Drawing on a brief passage in Krutilla Phillips’ (2000, 2004). Specifically, the pres- jobs and income in local communities. and Fisher (1975, p. 25), it is clear that these ence of wilderness in a town increased the Wilderness Visitor Expenditures authors understood that living close to a wil- value of residential property by roughly 19% Wilderness visitors come to enjoy hik- derness area may confer positive benefits or (an increase in implicit price per of ing, fishing, and many other recreation ac- externalities: $20,190 in 2010 dollars). And for every 0.62 mile closer to a wilderness boundary, the mar- tivities in wilderness areas. Some visitors are The scenery within a tract of wildlands, for ket value of residential properties increased by local, whereas others travel from far dis- example, may represent…a source of pri- 0.48% ($525 per acre on average). tances. Some visitors just go in for a day trip, vate ownership externality as seen from a point outside the boundary of the tract…. A second economic study of the bene- whereas others spend multiple days in a wil- fits of living close to a wilderness area was derness. Wilderness visitors spend money in Despite the intuitive of this con- conducted in (Izo´n et al. the gateway regions on food, fuel, lodging, cept, the data and economic tools required 2010). Although that study focused on the and gear. Thus, an understanding of wilder- to estimate the value of these external bene- economic value of protecting inventoried ness visitor expenditures is needed to know fits have only recently become readily avail- roadless areas, the authors needed to control how much money is spent on these activities

6 Journal of Forestry • MONTH 2015 and which industries are most affected by also typically lower than visitation to other dustries, with corresponding dramatic this spending. In economic impact/contri- public . However, as total visits to wil- increases in services and manufacturing bution analyses, visitor spending for goods derness have been increasing (as described (Power 1996a). These structural changes and services in particular sectors (restau- above), it is reasonable to conclude that ag- have had implications in terms of more peo- rants, fuel, and other expenditures) ripples gregate visitor expenditures have been in- ple seeking environmental amenities in gen- through local economies to produce eco- creasing as well. eral (Rasker 1993) and specifically for envi- nomic activity in other economic sectors. ronmental amenities provided by wilderness These expenditures represent final demand Wilderness and Regional Economic (Power 1996b). for economic goods known as indirect and Development induced effects. Wilderness can have a number of com- Conclusions and Future To understand wilderness economic munity economic impacts beyond just those Research Needs associated with local visitor expenditures. contributions, an example of a guiding out- During the first few decades after the Power (1992) emphasizes how wilderness fit can be helpful. The direct effect is repre- passage of the Wilderness Act, a number of can be important to proximate residents and sented by the wilderness visitor’s expendi- contentious environmental issues came to communities and how wilderness can be im- ture to purchase a guided trip. Indirect the attention of the American public, such as portant in attracting both businesses and effects represent purchases made by suppli- the proposed development of hydroelectric population to a particular area (often re- ers of direct services to wilderness visitors (in dams in Hells Canyon along the lower Snake ferred to as amenity migration). Still other this case the outfitters and guides) such as River. These threats to pristine natural envi- economic impacts occur as property values food, equipment, and administrative over- ronments motivated a cadre of economists are enhanced and county and local tax bases head, necessary to provide the overall final to develop a new set of concepts and tools service. Induced effects include the recircu- increase, given the desirability to live near that could be used to quantify the economic lation of guides’ incomes, as they spend wilderness (Phillips 2000, 2004, Izo´n et al. benefits derived from preserving amenity re- money locally on dining, entertainment, 2010). Therefore, Power (1992) urges econ- sources. Applications of these new economic and other expenditures. The calculation of omists to include these “other” community methods were persuasive and, for example, additional indirect and induced effects of economic impacts of wilderness when effects contributed to arguments that ultimately led economic contributions is known as a mul- are calculated. to the defeat of the High Mountain Sheep tiplier effect. There have been general (Rosenberger dam proposal in Hell’s Canyon. In subse- There has been little empirical investi- and English 2005) and empirical examina- quent decades, these economic tools have gation of the market contributions of wil- tions of the regional economic effects of wil- been refined and applied to a variety of wil- derness as a whole (nationwide) or to proxi- derness in terms of determining the net ef- derness settings. mate communities. Although there have fect on the economy (i.e., not tracking the been reports of visitor expenditures for rec- ripple effects of visitor spending but rather Congressional designation of wilder- reational activities often pursued in the seeing if the designation of wilderness had a ness causes trade-offs to be made between backcountry (e.g., White and Stynes 2008), positive or negative effect on overall regional the benefits and costs of wilderness preserva- we are aware of only a few studies investigat- economies). Duffy-Deno (1997) found no tion. Among the costs of wilderness preser- ing the economic impacts of visitor expen- statistical relationship between the amount vation are the losses of traditional activities ditures for specific wilderness areas (Moisey of wilderness and employment levels for ru- and livelihoods (Freedman 2002) as well as and Yuan 1992, Keith and Fawson 1995). ral Western counties. Holmes and Hecox the foreclosure of potential future employ- These studies found modest contributions (2004), on the other hand, found a positive ment opportunities that could result from by wilderness visitors to regional economies, correlation between the presence of wilder- resource extraction (Foley 1998). The bal- ranging from $50–$65 per visitor per day in ness and employment, population, and in- ancing of costs and benefits is partly an eco- 2014 dollars (adjusted for inflation). Loomis come growth for rural Western counties nomic issue and also involves considerations and Richardson (2001) provided a brief ex- from 1970 to 2000 and attributed this of economic equity and cultural integrity as trapolation of wilderness visitor expendi- growth to increased investment income and many wilderness visitors arrive from distant tures to a national input-output model and self-employed income. locations. found that expenditures were responsible for Similar results have been found for all Our synthesis of wilderness economics approximately 27,000 jobs nationally when types of protected federal lands in the West literature has sought to discern underlying multiplier effects were included. Rudzitis (Lorah and Southwick 2003). These find- trends in wilderness use, value, and eco- and Johnson (2000) and Rosenberger and ings suggest that along with direct recreation nomic impacts with the intent of identifying English (2005) both illustrated approaches and tourist expenditures from wilderness future research needs that could better in- for estimating employment and income ef- visitors, communities near (some) wilder- form decisionmaking. An overall conclusion fects stemming from wilderness visitor ex- ness areas also experience increased eco- is that much of the wilderness economics penditures and summarized case studies. A nomic activity from amenity migrants want- literature is very dated and therefore limits common theme identified by these two ing to relocate to their region, bringing what other specific conclusions might be summary reports is that wilderness visitor investment and business income with them. made about long-term trends. Although expenditures are typically lower, on average, Likewise, general structural changes in the new data sources that can help address this than visitor expenditures for different forms US economy and particularly in the West- shortcoming, such as the USDA Forest Ser- of outdoor recreation outside of wilderness ern United States have led to dramatic re- vice Visitor Use Permit System and National areas, and total visitation to wilderness is ductions in employment in extractive in- Visitor Use Monitoring System are becom-

Journal of Forestry • MONTH 2015 7 ing available, capacities for monitoring visi- increase in future wilderness use will proba- BOWKER, J.M., H.K. CORDELL, AND N.C. tor use data by other agencies with wilder- bly increase congestion. Thus, it would be POUDYAL. 2014. Valuing values: A of ness responsibilities are more limited. useful to understand the carrying ca- wilderness economics. Int. J. Wilderness 20(2): 26–33. Nevertheless, given the evidence pre- pacity of wilderness areas, how wilderness BOWKER, J.M., J. HARVARD III, J. BERGSTROM, sented in the wilderness economics litera- visitors’ willingness to pay changes as that H.K. CORDELL,D.ENGLISH, AND J. LOOMIS. ture, it is apparent that total wilderness use capacity is approached, and how limits on 2005. The net economic value of wilderness. has increased dramatically since the signing visitation might be most equitably estab- P. 161–180 in The multiple values of wilderness, of the Wilderness Act. Although the rate of lished by wilderness managers. Second, des- Cordell, H.K., J.C. Bergstrom, and J.M. growth of participation in wilderness recre- ignation of new wilderness areas might Bowker (eds.). Venture Publishing, Inc., State College, PA. ation has slowed during the past decade rel- increase visitation to those areas, so under- BRINKLEY, D. 2009. The wilderness warrior: Theo- ative to that in the first two decades after standing this dynamic could help forecast dore Roosevelt and the crusade for America. passage of the Act, the growth rate of partic- future use. Third, the demographic charac- Harper Collins, New York. 940 p. ipation during the past decade has exceeded teristics of wilderness users are changing, al- CARSON, R.T., R.C. MITCHELL,M.HANEMANN, the growth rate of the US population. Con- though very little is known about the rela- R.J. KOPP,S.PRESSER, AND P.A. RUUD. 2003. sequently, it is anticipated that wilderness Contingent valuation and lost passive use: tionship between user characteristics and Damages from the Exxon Valdez oil spill. En- participation will continue to increase into how those segments of society are changing. viron. Res. Econ. 25:257–286. the foreseeable future. Research in this area would help manage- CLAWSON, M., AND J.L. KNETSCH. 1966. Eco- More than 30 studies have estimated ment agencies better predict future levels of nomics of outdoor recreation. Johns Hopkins the benefits of wilderness preservation in the wilderness use. Fourth, although our litera- Press, Baltimore, MD. 328 p. United States, and scrutiny of these studies ture review suggested that the willingness to COLE, D.N. 1996. Wilderness recreation use demonstrated that the willingness to pay for trends, 1965 through 1994. USDA For. Serv., pay for a wilderness trip has increased over Res. Pap. INT-488, Intermountain Research a wilderness trip has not declined over time time, more rigorous tests of this hypothesis Station, Ogden, UT. 10 p. and has probably increased. Multiplying the (especially across heterogeneous landscapes) CRONON, W. 1996. The trouble with wilderness: growth in wilderness trips by a constant or would help wilderness management agen- Or, getting back to the wrong nature. Env. increasing value per trip results in an in- cies gain a better understanding of long-run Hist. 1(1):7–28. crease in the aggregate value of wilderness social trends that may affect agency planning CURRIE, J.M., J.A. MURPHY, AND A. SCHMITZ. 1971. The concept of economic surplus and recreation over the past five decades. How- and expenditures. Fifth, evidence is growing its use in economic analysis. Econ. J. ever, the demographic characteristics of wil- that wilderness areas convey offsite benefits LXXXI(324):741–800. derness users appear to be changing. Fore- to some residents of gateway communities. DIAMOND, P., J. HAUSMAN,G.LEONARD, AND M. casts of future wilderness use strongly A better understanding of where these posi- DENNING. 1993. Does contingent valuation depend on who visits wilderness areas and tive spillover effects are occurring and why measure preferences? Experimental evidence. how those segments of the population will P. 41–89 in Contingent valuation: A critical they are occurring could help planning ef- assessment, Hausman, J.A. (ed.). North Hol- change in the future. Some studies have sug- forts in gateway communities. Sixth, be- land, Amsterdam, The Netherlands. gested that wilderness visitation per capita cause ecological processes found in wilder- DUFFY-DENO, K. 1997. The effect of federal wil- will decline in the future. ness areas might be dramatically altered by a derness on county growth in the Intermoun- Our economic synthesis also suggests changing climate, it is essential to under- tain Western United States. J. Region. Sci. that wilderness areas stimulate economic stand how wilderness users respond to natu- 38(1):109–136. impacts within local and regional communi- ENGLIN, J., AND R. MENDELSOHN. 1991. A hedo- ral disturbances, which are anticipated to be- nic travel cost analysis for valuation of multiple ties. Although the contribution of wilder- come more severe in the near future. components of site quality: The recreation ness to economic growth in wilderness gate- Although the ultimate economic research value of . J. Environ. Econ. way communities is probably smaller than question concerns the overall level of wilder- Manage. 21:275–290. that for other outdoor activities (such as mo- ness protection that is socially optimal, ad- ENGLIN, J., AND J. SHONKWILER. 1995. Estimat- torized recreation), the amenity value of wil- dressing the questions posed here would take ing social welfare using count data models. derness appears to be attracting migrants to Rev. Econ. Stat. 77(1):15–112. us a long way toward finding that answer. ENGLIN, J., T.P. HOLMES, AND J. LUTZ. 2008. residential communities located near wilder- Wildfire and the economic value of recreation. ness areas. Although not much is known Literature Cited P. 191–208 in The economics of forest distur- about this phenomenon, a few studies have BAERENKLAU, K.A., A. GONZALEZ´ -CABAN´ ,C. bances, Holmes, T.P., J.P. Prestemon, and demonstrated that people are willing to pay PAEZ, AND E. CHAVEZ. 2009. Spatial allocation K.L. Abt (eds.). 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