FAQ

Total Economic Value Study of the National Park Service

Q: What are the numbers?

A: The total economic value of the National Park Service is $92 billion, a conservative estimate study authors say. It represents the amount the U.S. public says it would pay so as not to lose national parks and programs. The study found significant value in national parks but also in the programs of the National Park Service – programs to protect historic buildings and sites through their designation on the National Register of Historic Places, transfer of lands to local communities for recreation, protection of local natural landmarks and educational programs within and outside national parks.

• $62 billion value of parks in the national park system which breaks down to a
• • $33.5 billion value because parks are protected for current and future generations, regardless if the respondent visits and a
  • $28.5 billion recreation value of the parks within the national park system
• $30 billion value of NPS programs including
• • $14 billion value of education
  • $7.4 billion value of protecting natural landmarks
  • $6.6 billion value of historic preservation and
  • $2 billion value of recreational lands transferred to communities

Q: What does this number compare to?

A: According to Forbes, the $92 billion valuation of the national parks system is larger than many of the top 500 corporations in the world, including Daimler, Volkswagen, Met Life, Siemens, Goldman Sachs and Boeing. It’s more money than the federal government spends each year on transportation, Social Security, unemployment and labor, and science combined.

• Total Congressional appropriations to the National Park Service were $2.85 billion in FY2016
• Previous academic study of the value to visitors was $28 billion (Neher et al., 2013)
• The NPS's Visitor Spending Model in 2015 estimated a value of $32 billion in economic output from $16.9 billion in visitor spending (https://www.nps.gov/subjects/socialscience/vse.htm). These benefits accrue to local communities in the form of sustainable economic activity and jobs. The benefits described by the CSU/Harvard study ($92 billion) accrue directly to individual members of the public, whether they visit national parks or not.

Q: Study authors say the U.S. public would pay higher taxes to not lose national parks and programs. How much would they pay?

A: Respondents to the survey were willing to pay on average $4,400 per year for 10 years –to retain all national parks and NPS programs. This figure is based on the monetary trade off households would make in higher income taxes to avoid reductions in acreage of National Parks and cuts to NPS Programs. Study authors assumed that households that did not respond to the survey would pay zero dollars - even though there are many reasons why people don't fill in surveys - they did this in order to be excessively conservative. Realistically many of those households would pay some amount greater than zero to not be deprived of the NPS parks and programs, so the actual number of $92 billion would be higher.

Note: The study authors utilized income taxes as a way households would envision paying to prevent a reduction in the number of National Park lands/waters and historic sites when responding to the survey. This was done not because the authors propose households to pay higher taxes but because taxes are a recommended, realistic and conservative survey research method to elicit what a household would pay for a public good.

Q: What is net economic value and how does it differ from economic impacts?

A: Each year, an economic analysis is used to determine how visitation to our national parks benefits local communities, in terms of jobs and business sales. These are called economic impacts or economic contributions, and are estimated annually for the NPS using the Visitor Spending Effects model. In 2015, it was estimated that NPS visitors spent $16.9 billion in parks and surrounding gateway communities, which contributed 295 thousand jobs and $32 billion in economic output to the national economy (https://www.nps.gov/subjects/socialscience/vse.htm).

A different aspect of the benefits provided by NPS parks and programs are those enjoyed by individual people, including both visitors and non-visitors. This is reflected in net economic value. This value is reflected in the tradeoffs people make every day based on the personal benefits they expect to receive from a purchase and their income. For example, when someone decides to visit a national park instead of staying home or going elsewhere, they are making that choice based on the personal satisfaction they expect to get from that decision, as bounded by their income. Net economic value provides a way to quantify such personal benefits. However, people may also derive a benefit from simply knowing that the national parks are there. This may be because they enjoy knowing that special scenery, historical and cultural places are protected for the future, or knowing that school children are being taught about US history in the historical sites. All of these are examples of net economic value.

Economic impacts (benefits to communities) and net economic values (benefits to individuals) are two completely different measures that should not be simply added together. However, these measures do complement one another, and together, help to provide a more complete picture of the economic outcomes supported by the National Park Service.

Q: What is Total Economic Value (TEV)?

A: It is the sum of all the different types of net economic values that different people derive from the lands, waters, historic sites, and programs administered by the National Park Service. When visitors come to NPS lands to enjoy a scenic view or a day of hiking, they are benefiting from that experience of directly using park resources. This type of net economic value is called direct use value. Other people benefit from simply knowing that parks and the resources they protect are preserved for the current and future generations, regardless of their own current or future use. This type of net economic value is called passive use value. The combination of direct use value and passive use value makes up total economic value (TEV). Measures of TEV can be used to better understand the different motivations or reasons that the public has for valuing NPS parks and programs.

Q: Are there ways other than economics to describe the benefits provided by NPS’ parks and programs?

A: Economics provides just one of many ways to define and measure the benefits provided by the lands, waters, historic sites, and programs administered by the National Park Service. Net economic value in particular is based on an individual’s willingness and ability to pay for a good or service. This allows benefits to be expressed in a common metric (dollars) that can be compared to other cost or benefit measures. Describing values in economic terms is generally useful when tradeoffs are being evaluated. However, it is important to note that there are non-economic approaches that can be used to determine other types of value that the public may hold for various aspects of the National Park System.

Q: Why do these values matter?

A: Monetary measures of net economic value are used by NPS for required economic analyses associated with regulatory rulemaking, damage assessments (such as the Deepwater Horizon oil spill in the Gulf of Mexico), and environmental compliance. For example, a study on net economic use values was instrumental in completing the winter use planning effort for Yellowstone National Park. Measures of net economic value are regularly used within NPS to better understand effects on human well-being.

The amount of TEV may also be compared to the amount that the US budget allocates in taxpayer dollars to the NPS. In this case, the amount of TEV is $92 billion which is almost 30x the annual appropriation to the NPS.

Q: Are measures of net economic value for nonmarket goods and services, and the methods used to estimate them, widely accepted?

A: Yes. Net economic value is the recommended measure of the total benefit to society from a government program or project (OMB, 1992). The use of these values in assessing natural resource damages has been upheld by the U.S. District Court of Appeals (State of Ohio vs. Department of the Interior, 1989), and recent federal guidance has encouraged agencies to include such values in planning and management decisions (Executive Memorandum M-16-01, 2015; PCAST, 2011).

The methods used to estimate net economic values for publically provided, nonmarket goods and services are based on economic theory and rigorous science, as reflected in an extensive peer reviewed academic literature published in scientific journals. The methods have been used to quantify net economic values held for a broad range of public goods and services, including improved weather forecasts (Lazo and Chestnut, 2002), Landsat satellite imagery (Miller et al., 2013), the preservation of threatened and endangered species (see Richardson and Loomis, 2009 for a summary of studies), recreation opportunities on public lands (see Loomis, 2005 for a summary of studies), and many more.

Q: How is this study useful to NPS?

A: This study demonstrates that NPS parks and programs create significant value for a broad cross section of the American Public, whether they visit or not. Since significant values for both passive use and direct use were estimated, the study shows that NPS parks and programs benefit both preservation and visitor use, avoiding the “economy vs. the environment” argument. The net economic values estimated in this study demonstrate that benefits of NPS parks and programs extend beyond just visitor expenditures. This study also demonstrates that the value to conserve unimpaired for future generations is on a par with the value of visitor use. Finally, this study communicates economic arguments for policy and budget analysts on the economic merits of policies and programs.

Q: Who was surveyed?

A: A random sample of U.S. household using an address based sample were contacted via the mail and given the opportunity to answer the survey on-line and in a 12 page survey booklet. Repeated contacts were made with non-respondents.

Q: Who responded to the survey?

A: As is typical with mail/internet surveys, the raw respondents had slightly higher incomes, higher education, and were older than the typical U.S. household, according to U.S. Census data. A higher proportion of the raw survey respondents visited a national park in the last two years compared to an independent survey of American households. Standard statistical procedures were used to reweight the sample observations to reflect proportions in the U.S. population. There was no statistically significant difference in responses among different demographic groups.

Q: Why is this study believed to be a conservative valuation of NPS parks and programs?

The estimate was conservative in six ways:

• 1. The study authors used the technique of "willingness-to-pay" (WTP) to keep National park lands/waters/historic sites instead of the more appropriate "willingness-to-accept" (WTA) to give up these places that people already own. WTA is usually much larger than WTP for public goods.
• 2. The study authors attributed a zero value to the non-respondents to the survey. They conducted a follow-up sample which confirmed that most non-respondents failed to respond because they don't generally answer long questionnaires -- even though the sample was overwhelmingly favorable to national parks.
• 3. The survey included “protest responses”—people who indicate they would not pay even though they value National Parks but can’t afford to pay or for other reasons (such as rejecting any tax increases). This lowered the overall valuation.
• 4. The study authors only asked the value of losing 20% to 40% in National Park lands/waters and historic sites, but assumed that same value per acre or per site applied all the way to a loss of 100% of all National Park lands/waters and historic sites. Economists have frequently demonstrated that the loss of a whole resource or program has a higher per-unit value than the loss of only a part.
• 5. The study authors selected the economic valuation weighting model that gives the lowest estimate of what households would pay.
• 6. The study authors did not ask questions on the value of some additional NPS activities, such as scientific research, ecosystem management, or archaeology.

Q: How are these monetary values to be believed?

A: The monetary values follow economic principles: as dollar amounts households were asked to pay increased, the proportion of survey respondents indicating that they would pay declined. This tells the authors that the respondents were paying close attention to the dollar amount in increased federal income taxes they would have to pay, rather than just indicating support regardless of dollar cost to their household.

Q: How does this value relate to the economic value of visitor spending in communities near national parks?

A: TEV or Total Economic Value, is based on a survey used to estimate economic value of a broad cross section of the U.S. public, whether they visit or not. The NPS’ annual Visitor Spending Effects report estimates the number of jobs supported and the effects that direct visitor spending in communities within 60 miles of a park in the National Park System has on local, regional and the U.S. economy. The two different types of studies use different economic methods to quantify different types of economic effects that the NPS provides to the Nation.

Q: How did study authors come up with this survey?

A: The survey design began by choosing an economic method and associated survey design that have been recommended by other economists and used by other economists to value individual National Parks and preservation of natural environments. The survey drafts were tested in nine focus groups throughout the country and peer reviewed by economists who specialize in valuing National Parks and National Forests.