{ THE VALUE OF OUTDOOR RECREATION A CASE STUDY by Philip A. Eby A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN THE SCHOOL OF COMMUNITY AND REGIONAL PLANNING We accept this thesis 3g co^ormiDSj 4o the required standard THE UNIVERSITY OF BRITISH COLUMBIA APRIL, 1975 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. ! l <; / Department of C^^^U^H^!^ cCZ<Yid? $ €^r^r>itt^,^3^( ^^-^? The University of British Columbia 2075 Wesbrook Place Vancouver, Canada V6T 1W5 Date ClAruZ a?. THE VALUE OF OUTDOOR RECREATION - A CASE STUDY (ABSTRACT) Resource planners are often charged with the responsibility of allocating resources between competing beneficial uses. Where one of the uses is outdoor recreation, a major problem arises in attempting to compare the benefits of outdoor recreation with the benefits of an alternative com• mercial use which generates readily measurable dollar benefits. On a more general level, regional planners are often faced with a similar task, for example, in setting land use policy and zoning. It is the basic premise of this thesis that recreational values can be measured, at least in part, in monetary terms, and that such measures provide extremely useful analytical tools to the planner and decision maker in evaluating resource use conflicts. The purpose of the thesis is to re• view and critically evaluate the various methods which have been developed for measuring outdoor recreational value, and to illustrate the application of the technique thought to be most appropriate in a case study of the recrea• tional values generated by a portion of Wells Gray Park in British Columbia. It is concluded that the concept of consumer surplus is the most valid measure of non-priced recreation, and that where an existing recrea• tional use is being threatened with destruction, the appropriate measure of consumer surplus for residents of the referent area is the welfare loss they would suffer through loss of the area, and that the only way to determine such values is by the use of the direct or interview approach. Further, option and preservation values can only be measured in this way. For non residents, the appropriate measure of use value is the amount users would be willing to pay for access. The area chosen for analysis is the portion of Wells Gray Park which lies within the drainage area of the Clearwater River. Wells Gray Park is a long established Class B provincial park whose main attractions are its wilderness atmosphere, spectacular waterfalls, scenic lakes and free-flowing rivers which provide high quality fishing and boating opportuni• ties. The Clearwater River has been studied and proposed for flood control and hydroelectric power development as part of a series of similar purpose dams on the Upper Fraser, McGregor, Clearwater and Cariboo Rivers. In order to assess the recreational values which would be lost through power development, an extensive interview and mail questionnaire survey was conducted among Park users. A measure of price equivalent con• sumer surplus was derived from B.C. residents, while non-residents were asked to estimate their price compensating consumer surplus. Average day values for various user groups and projections of future use were used to generate an estimate of the present value of Park use under both "preserva• tion" and "development" conditions. Aside from the discovery of large economic benefits, this research has found a significant difference in two types of commonly used shadow prices, price equivalent and price compensating consumer surplus. These findings are thought to have significant implications for regional, and particularly, outdoor recreational planning. First, it has been shown the price equivalent measures of value are much higher than price compensating measures. Second, it has been found that personal interviews ellicit far different value estimates than mail questionnaires. Third, the large absolute value of the Wells Gray Park area, even at present use levels and using a conservative method of estimating values, should encourage re• creational planners and governments to give serious consideration to the pro• vision of adequate recreational areas and facilities, even where the land required for outdoor recreation has other, competing uses and values. - iii - Table of Contents Page Abstract i Table of Contents iii List of Tables v List of Figures vii Acknowledgements viii CHAPTER I INTRODUCTION 1 Hypothesis and Structure of Study 6 CHAPTER II Techniques for Evaluating Non Priced Recreation 8 Kinds of Recreational Values 8 Methods of Measuring Recreational Values 13 The Cost Approach 13 Market Value of Fish and Game Method 14 Expenditures Approach 16 Land Enhancement Measure 20 The Concept of Consumer Surplus as a Measure of Benefits 21 The Travel Cost Approach 25 The Direct or Interview Approach 32 The Measurement of Option, Preservation and Other Social Values 36 Conclusions 41 CHAPTER III THE CASE STUDY 44 Background 45 Study Purpose 52 Study Methodology 52 Present Recreational Use 55 Park User Activity Patterns and Preferences 57 Potential Recreational Use of Wells Gray Park .... 70 The Value of Recreation Under Preservation 72 - iv - Page Interview Results 72 Questionnaire Results 74 The Value of Future Recreational Use 80 The Development Alternative 88 CHAPTER IV CONCLUSIONS AND OBSERVATIONS 95 Literature Cited 101 Appendix A: Questionnaire and Interview Forms Used in Wells Gray Park A-1 - v - List of Tables Table Page 1. Estimated 1971 Recreation Activity in the Wells Gray Park-Clearwater River Area, by Month and Visitor Origin .... 56 2. Estimated Number of Resident Hunters and Estimated Number of Days of Hunting in Wells Gray Park (M.A. 12), 1970-71 ... 58 3. Activity Patterns in Wells Gray Park 60 4. Ranking of Activities by 1971 Summer Visitors to the Wells Gray Park-Clearwater River Area, by Area of Origin 61 5. Questionnaire Respondents, Ranking of the Wells Gray Park- Clearwater River Area, by Area of Origin 63 6. Interviewee Ranking of the Wells Gray Park-Clearwater River Area 64 7. Incidence of Wildlife Sightings in the Study Area by Area of Origin 65 8. Importance of Wildlife Sightings to Study Area Visitors, by Area of Origin 66 9. Study Area Visitors' Intentions to Return, by Area of Origin 67 10. General Comments made by 1971 Summer Visitors to the Wells Gray Park-Clearwater River Area, by Area of Origin 69 11. Projected Maximum Future Recreational Use of the Wells Gray Park-Clearwater River Area, by Area of Origin, 1990 71 12. Average Recreation Values Per Day Based on Interview Responses 73 - vi Table Page 13. Average Recreation Values Per Day Based on Questionnaire Responses 75 14. Expenditures of Visitors to the Wells Gray Park-Clearwater River Area, 1971, by Area of Origin 79 15. 1972 Present Value Estimates, Recreational Benefits from Use of the "River Area"; Wells Gray Park-Clearwater River Area 84 16. 1972 Present Value Estimates, Recreational Benefits from Use of the "Lake Area"; Wells Gray Park-Clearwater River Area 85 17. 1972 Present Value Estimate, Recreational Benefits from Resident. Hunting, Wells Gray Park-Clearwater River , 86 18. Present Value of Primary Recreation Use, Wells Gray Park- Clearwater River Area, 1972-2031 87 19. Summary of Economic Values Under Preservation in the Wells Gray Park-Clearwater River Area 89 20. Future Recreational Capacity of the Wells Gray Park- Clearwater River Area After System E Development 91 21. Summary of Residual Present Values Under System E Develop• ment in Wells Gray Park-Clearwater River Area 93 22. Comparison of Net Economic Values, Wells Gray Park- Clearwater River Area, Under Preservation and Development .. 94 - vii - List of Figures Figure Page 1. Effect of Excluding Time Costs in the Travel Cost Approach .. 30 2. Proposed Location of System E Dams 48 3. The Wells Gray Park Study Area and Potential Campsite Areas . 51 - viii - Acknowledgements The author would like to express his sincere gratitude to the many people who have helped in the carrying out of this research. Parti• cular thanks must go to Dr. C. Davis and Dr. W. Rees, without whose encour• agement, understanding and patience this study could not have been completed. Thanks are also due to Gary Bowden and Dr. H. Lewis, who offered both encouragement and helpful criticism during the preparation of this paper. Rose Cella, who typed this paper, and who was equal to the task during the hectic final rush, deserves a special vote of thanks. Finally, I would like to express my appreciation for the encour• agement and constant support of my wife Mary, who endured the seemingly endless process of research and drafting without complaint. CHAPTER I INTRODUCTION The purpose of a competitive market economy is to allocate scarce resources among competing, alternate uses in such a way as to maximize, or optimize, the welfare of both individuals and society in general. The price system is the vehicle through which this objective is reached. It is perhaps valid, though trite, to state that in a perfectly functioning competitive market economy, there would be little or no need for "extra market" forces such as urban and regional.planning to ensure that an effi• cient and optimal allocation of resources took place. The market would automatically, through the price system, bring about optimal resource allocation, and all land, labor and capital resources would be used in their most productive and beneficial ways.