09 September 1998
Governor John A. KitzhaberState Capitol Building
Salem, Oregon 97310

Governor Tony Knowles
Office of the Governor
P.O. Box 110001
Juneau, Alaska 99811

Governor Gary Locke
Office of the Governor
P.O. Box 40002
Olympia, Washington 98504-0002

Governor Pete Wilson
State Capitol Building
Sacramento, California 95814

Premier Glen Clark
Office of the Premier
Room 156, West Annex
Parliament Buildings
Victoria, BC V8V 1X4 Canada
Dear Governors Kitzhaber, Knowles, Locke, and Wilson, and Premier Clark:
Decisions regarding the management of Pacific salmon, many of which are experiencing
deep declines in numbers, can affect a vast landscape along the western edge of North
America and markedly influence the region's future economy. With this letter, we hope tohelp lay the foundation for the public debate over the economic aspects of these decisions.
Most of the discourse on the economic issues of salmon recovery has focused too narrowly,
concentrating almost exclusively on the costs of recovery. Costs are indeed important, butthey tell only part of the economic story. We encourage you and the members of yourAdministrations to adopt a broader perspective and consider the full range of economic
consequences of salmon-management decisions. Toward this end, we recommend that you
examine and weigh all these factors:* Costs, Benefits, and Net Benefits.
Salmon recovery will generate economic benefits as well as costs. To understand the netbenefit (a net cost if negative) to the economy as a whole, one must consider the effects on
the production of all goods and services. The effects on goods and services that are traded inmarkets, such as commercial salmon, timber production, and agricultural production,
should receive the same consideration as those, such as recreational fishing, clean streams,and biodiversity, that are not. A full accounting must be provided of the true value of eachaffected good or service, taking into account the market price, where appropriate, as well as
all factors, such as subsidies, taxes, and environmental externalities, that distort the levelof supply or demand. Some of the benefits and costs will manifest themselves in theConcerned Economists to Kitzhaber/Knowles/Locke/Wilson/Clark

9 September 98

page 2immediate vicinity of the resources affected by salmon recovery, while others will manifest
themselves at greater distances.
* Jobs, Incomes, and Transitions.
Salmon recovery will have diverse impacts on labor markets, increasing some demands forlabor and decreasing others. It also may affect the spatial distribution of the supply of laborby influencing the location decisions of some households. To understand the resulting
impacts on jobs and incomes, one must consider the salmon-related changes in demand andsupply against the backdrop of the markets' ability to adjust. One should examine both theoverall change in jobs and incomes as well as the transitions for affected workers, theirfamilies, and their communities.
* Distribution of Economic Consequences.
The positive and negative effects of salmon recovery will not be distributed equally.
Identifying the winners and losers can create opportunities to explore options for breaking
political gridlock–by clarifying mechanisms, for example, for the winners to provide somecompensation to the losers.
* Rights and Responsibilities.
Owners of natural resources affected by salmon-recovery measures have both rights
regarding their use of these resources and responsibilities not to exercise these rights inways that unreasonably restrict the rights of others. This is true of both private- andpublic-property owners. To understand the costs and benefits associated with salmon
recovery, one first must have a clear understanding of the relevant rights andresponsibilities, because society might assign very different values to two recovery actions
that are otherwise identical but one restricts a property owner's rights and the other forces
it to comply with its responsibilities.
* Uncertainty and Sustainability.
Nobody can eliminate the uncertainty regarding how salmon-recovery decisions will affectsalmon populations and the economy, and it is inevitable that some decisions will not yield
the desired outcomes. Reversing undesired outcomes is always costly, however, someoutcomes are less costly to reverse than others. Some, of course, are irreversible. To
understand the full economic consequences of salmon-recovery decisions, one should
consider the potential reversal costs if the decision should yield undesired outcomes.
* Looking Beyond Salmon.
To understand the full consequences of salmon recovery, one must look beyond those tied tothe salmon, themselves, and examine those linked to the productivity and use of thesurrounding ecosystem. Changes in ecosystem productivity may occur through therestoration of the ecological functions of salmon-bearing streams and the surrounding
watersheds that will accompany salmon recovery. Changes in the use of the resources of thelarger ecosystem may have both positive and negative effects on the economy.

Concerned Economists to Kitzhaber/Knowles/Locke/Wilson/Clark

9 September 98

page 3

We hope you will consider the factors outlined here, and use this outline to improve thepublic's understanding of the full economic consequences of salmon recovery.
Sincerely,W. Ed Whitelaw
University of Oregon/ECONorthwest

Ernest Niemi
ECONorthwest

And the following co-signing economists:
Russ Beaton, Willamette University
Peter Berck, University of California Berkeley
Bruce Blonigen, University of OregonPeter Bohmer, Evergreen CollegeRichard Brinkman, Portland State University
Gardner Brown, University of Washington
Walt Butcher, Washington State University
Kevin Calandri, California State University Sacramento
Arthur Caplan, Weber State University
Ken Casavant, Washington State University
Laura Connolly, Oregon State University
Jeffrey Connor, Oregon State University
Robert Curry, California State University Sacramento
Elizabeth E. Davis, Oregon State University
Robert Deacon, University of California Santa Barbara
David Donaldson, University of British Columbia
Bryan Ellickson, University of California Los Angeles
Mark Evans, California State University Bakersfield
Anthony Fisher, University of California Berkeley
David E. Gallo, California State University Chico
Alan Gin, University of San Diego
Eban Goodstein, Lewis & Clark CollegeLawrence Goulder, Stanford University
Theodore Groves, University of California San Diego
A.R. Gutowsky, California State University Sacramento
Steve Hackett, Humboldt State University
Brent Haddad, University of California Santa Cruz
Dan Hagen, Western Washington UniversityDarwin C. Hall, California State University Long Beach
Jane Hall, California State University Fullerton
Robert Halvorsen, University of Washington
Bill Harbaugh, University of Oregon
Martin Hart-Landsberg, Lewis & Clark CollegeStephen E. Haynes, University of Oregon
John F. Henry, California State University Sacramento
Steve Henson, Western Washington University

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9 September 98

page 4

Richard B. Howarth, DartmouthLovell S. Jarvis, University of California Davis
Desmond Jolly, University of California Davis
Mary King, Portland State University
Van Kolpin, University of Oregon
B. Y. Lee, University of Oregon
Cathleen Leue, University of OregonPeter Lund, California State University Sacramento
Bruce Mann, University of Puget Sound
Carlos Martins-Filho, Oregon State University
Ray Mikesell, University of Oregon
Andrew Narwold, University of San Diego
Noelwah Netusil, Reed College
Roger Noll, Stanford University
Dale O’Bannon, Lewis & Clark College
Arthur O’Sullivan, Oregon State University
Steve Polasky, Oregon State University
Thomas Potiowsky, Portland State UniversityTom Power, University of Montana
R. Bruce Rettig, Oregon State University
Alan Richards, University of California Santa Cruz
Robert J. Rooney, California State University Long BeachTony Rufolo, Portland State University
Linda Shaffer, California State University Fresno
Barry N. Siegel, University of Oregon
Emilson Silva, University of Oregon
Ross Singleton, University of Puget Sound
Chuck Skoro, Boise State University
David Starrett, Stanford University
Kate Stirling, University of Puget Sound
Joe Story, Pacific University
Rod Swanson, University of California Riverside
Paul Thorsnes, Grand Valley State University, Michigan
Victor Tremblay, Oregon State UniversityCharles Vars, Oregon State University
John F. Walker, Portland State University
Norm Whittlesey, Washington State University
Yung Yang, California State University
Ross Youmans, Oregon State University
Zenon X. Zygmont, Western Oregon University
Note: Affiliations are for informational purposes and do not imply consent by organizations.
cc:David Anderson, Minister, Fisheries and Oceans, CanadaWill Stelle, National Marine Fisheries Service