Prepared for:

National Parks Conservation

Association

Prepared by:

Jared Hardner

Bruce McKenney

Date:

May 30, 2006

The U.S. National Park System

An Economic Asset at Risk

1THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

The authors extend their gratitude to the many experts in academia, nongovernmental organizations, private consulting firms, and the National Park

Service that provided guidance in the development of this report. Their

names, too numerous to list here, can be found in the appendix to this report.

A special thanks for reviewing the draft report go to Dr. Bruce Peacock of the

National Park Service, Dr. Daniel Stynes of Michigan State University, and

Dr. John Loomis of Colorado State University. 

Acknowledgements
2THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

About Hardner & Gullison 

Associates, LLC

Hardner & Gullison Associates, LLC is a private consulting firm that provides

technical assistance in the field of conservation to foundations, conservation

groups, governments, and corporations. Its work includes economic analysis,

conservation finance, program evaluation, project design and implementation, and corporate environmental management. Members of the firm

include among their past and present clients the World Bank, Inter-American

Development Bank, Asian Development Bank, U.S. Agency for International

Development, The Nature Conservancy, World Wildlife Fund, Conservation

International, National Parks Conservation Association, Environmental

Defense, National Fish and Wildlife Foundation, U.S. Fish and Wildlife

Service, U.S. Environmental Protection Agency, BP, Shell Oil Company,

Compañía Minera Antamina, among others. For more information, please

visit www.hg-llc.com.
3THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Executive Summary 5

Chapter 1: Introduction 7

Chapter 2: Cost-Benefit Analysis of National Parks 9

Economic Benefits of National Parks 9

Costs of National Park Service 12

Cost-Benefit Comparison 12

Cost-Benefit Analysis of the NPS Budget Shortfall 13

Conclusion 15

Chapter 3: Economic Impacts of National Parks 17

Economic Impact Estimates: System-Wide and Case Studies 17

Opportunities for Refining and Extending Impact Estimates 18

Conclusion 19

Chapter 4: Economic Growth and National Parks 21

Measuring Economic Growth 21

Amenity-Driven Economic Growth 21

Economic Growth and National Parks 22

Smart Growth 23

Conclusion 24

Chapter 5: Case Studies 25

Acadia National Park 27

Apostle Islands National Seashore 28

Biscayne National Park 29

Denali National Park and Preserve 30

Fort Sumter National Monument 31

Gettysburg National Military Park 32

Joshua Tree National Park 33

Point Reyes National Seashore 34

Rocky Mountain National Park 35

Sequoia and Kings Canyon National Parks 36

Shenandoah National Park 37

Zion National Park 38

Chapter 6: Next Steps 39

References 41

Appendix: Key Project Steps and Sources 43

Contents
4THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK
5THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

The U.S. National Park System is

an economic asset at risk. The park

system generates at least four dollars

in value to the public for every tax

dollar invested in its annual budget.

Yet, every year the parks suffer an

operating shortfall of $800 million, in

addition to a massive multi-billion

dollar maintenance backlog. As a

result, the fiscal crisis confronting the

national parks continues to deepen

and important park functions go

without, park infrastructure decays,

natural ecosystems are overrun with

exotic species, historical treasures are

inadequately preserved, and public

safety is jeopardized.

The U.S. Congress established

and maintains the National Park

System to conserve our nation’s

most significant lands and landmarks. Yet, the U.S. Congress is

jeopardizing this valuable asset by

not adequately funding the National

Park Service. Although the full

value of the park system evades

quantification, this report presents

hard economic evidence that

national parks generate tremendous

value to the public. 

• National parks generate more than

four dollars in value to the public

for every tax dollar invested. 

• National parks support $13.3 billion of local private-sector economic activity and 267,000 private-sector jobs. 

• National parks attract businesses

and individuals to the local area,

resulting in economic growth in

areas near parks that is an average

of 1 percent per year greater than

statewide rates over the past three

decades. 

• The benefits of national parks are

many and extend well beyond

economic values. 

Executive Summary

In developing the study we conducted

an extensive literature review and

interviewed 30 experts from academia, the National Park Service and

other governmental agencies, nongovernmental organizations, and the

private sector to gain their perspective

on the economic role of the National

Park System. We determined that

capturing the economic importance

of national parks requires using three

different approaches, each of which

illuminates a different perspective.

The results are not additive, but rather

provide a view on the significance of

parks to national, regional, and local

stakeholders. 

First we use cost-benefit analysis

to examine the national economic

benefits of the park system relative

to its cost to taxpayers. Second, we

analyze the economic impact of

national parks to the communities

that surround them. And finally, we

measure economic growth in the

regions around parks. All analyses

point to the same conclusion, the

U.S. National Park System is an asset

of tremendous economic value at

the national, regional, and local

level. Failure to properly manage

our parks puts this public asset in

jeopardy.

Cost-Benefit Analysis

The National Park System generates at least four dollars in value

to the public for every tax dollar

appropriated for its budget. This

report uses cost-benefit analysis to

measure the economic value generated by national parks, and to compare that value with the cost of running the National Park Service.

Cost-benefit analysis is a standard

approach used by the Federal

Government, institutionalized by an

executive order under President

Ronald Reagan in 1981, to assess

whether a government regulation or

expenditure generates value for U.S.

citizens. According to public

finance theory, government should

raise the funds necessary to invest in

projects that generate value in

excess of their cost.

For this analysis we draw upon a

database of approximately one thousand estimates of the economic

value derived from visitation to

national parks and wilderness areas

in the United States (Kaval and

Loomis 2003). The analysis shows

that the National Park System generates approximately four times the

value ($10.1 billion) of its cost to taxpayers ($2.6 billion). We also perform a series of 12 case studies of

individual parks within the system

and find that sites such as Acadia

National Park and Point Reyes

National Seashore generate over 14

times the economic value to the

public compared to their annual

budgets. In none of our case studies

do annual budgetary expenditures

exceed the economic benefits generated for the public. 

And these value estimates are

conservative – because of limitations

in valuation methods and data, we

only consider the benefits derived

from direct recreational use by park

visitors. Parks generate a wide range

of other values not quantified in this

report. They include use values such

as: ecosystem services like provision

of clean air and water; biodiversity

conservation; scientific research;

education; and cultural and spiritual

values. They also include passive-use

values such as the comfort of knowledge that our nation’s natural and

historical treasures are conserved for

public enjoyment today and for
6THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

future generations. Considering the

entire suite of economic benefits

generated by our national parks,

the National Park System generates

value likely many times greater

than this estimate.

Economic Impact Analysis

The park system is responsible for

$13.3 billion of local private-sector

economic activity, supporting

267,000 private-sector jobs. This

reflects the local economic impacts

of park-related tourism.

Economic impact analysis provides an estimate of the level of economic activity in terms of sales, jobs,

wages and profits attributable to a

public investment. In the case of

national parks, visitors spend money

on travel, lodging, food, and other

goods and services, all of which can

be quantified in an impact analysis.

In fact, not only are these direct

transactions quantifiable, so are the

indirect impacts as tourist expenditures ripple through the economy.

In other words, income earned in

the tourism sector is spent locally on

other goods and services, generating

more sales, jobs, income and profits.

This report summarizes analyses

performed by researchers at Michigan

State University for the National Park

Service using the Money Generation

Model 2 (MGM2). According to this

work, national park visitors spend

$11.3 billion in areas local to national

parks, resulting in $13.3 billion in economic activity, 267,000 jobs, and $7.5

billion in wages and profits.

The economic impacts estimated

by MGM2 are conservative. They

exclude expenditures made outside

of a 50-100 mile radius of national

parks, including among other things

airfare and other modes of travel

from afar as well as equipment and

other goods purchased for visits to

parks. Considering all spending

for visits to national parks could

increase impact estimates by two

to four times those provided by

MGM2.

Economic Growth Analysis

National parks play a major role

in attracting businesses and individuals to the local area resulting

in economic growth that outpaces

areas without parks. This report

compares various indices of economic growth in areas near parks to

all other areas.

Economic growth shows the

cumulative impact of economic

activity, and can be measured in a

variety of ways, including changes in

population, number of jobs, per

capita income, and earnings per job.

Comparing these indices for areas

near parks and areas far from parks

allows us to draw conclusions about

the role of parks as engines of economic growth.

Case analyses of park areas conducted for this report indicate population, employment, and per capita

income have exceeded statewide

rates by an average of 1 percent per

year over the past three decades.

What’s even more compelling is that

this growth can only partly be

explained by tourism–the majority is

driven by individuals and companies

unrelated to the tourism sector that

are likely drawn to the area because

of its natural amenities.

In order to conduct this analysis,

we rely on a database developed by

the Sonoran Institute for the US

Bureau of Land Management. The

database, called the Economic Profile

System (EPS), provides county-level

economic and demographic data

from multiple public sources spanning the last thirty years.

The data clearly show that growth

rates in counties around parks outpace statewide averages. This is further proof that national parks are of

economic significance, if not

engines of economic growth. Yet,

failure to properly manage parks

could result in the deterioration of

the very amenities that drive this

growth. Parks must be fully funded

to conserve the natural attributes the

National Park Service is mandated

to protect. 

Conclusions

The estimated required budget of

the National Park System is $3.4 billion per year, plus the investment

required to eliminate the maintenance backlog estimated at between

$4.5 and $9.7 billion. Annual appropriations of $2.6 billion for national

parks fall short by $800 million,

before considering the maintenance

backlog. Budget shortfalls are

undermining the park system, a valuable economic asset and national

treasure. Given the economic analysis, cutting park budgets cannot be

described as prudent fiscal belttightening. Instead, it is undermining a public economic asset that

will result in negative economic

repercussions for U.S. citizens.

This report provides a clear

exposition on the economic value,

impact, and growth effects of the

National Park System. The estimates

in this report are intentionally conservative to ensure that advocates

and critics alike are presented with

reliable and concrete data for

informed public policy debate.

Lastly, it is important to emphasize that this report provides an economic perspective only. The merits

of the National Park System and the

reasons to properly fund it are myriad and transcend a strictly numerical analysis. This report provides

just one approach to examining its

importance.
7THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

The U.S National Park System protects our country’s natural and historic treasures, conserving and managing key sites of our nation’s heritage such as Yellowstone National

Park and Gettysburg National

Military Park. It is managed by the

National Park Service (NPS), which

was created by an act of congress in

1916 “to conserve the scenery and

the natural and historic objects and

the wildlife therein and to provide

for the enjoyment of the same in

such manner and by such means as

will leave them unimpaired for the

enjoyment of future generations.”

Today’s park system includes 390

units covering more than 83 million

acres. 

This report examines the economic significance of the park system, including the economic benefits

generated by the parks, the economic

impacts of park visitation, and the

economic growth patterns associated

with parks. Many researchers and

government analysts have studied

various aspects of the system’s role

in the economy, but here we attempt

to synthesize those approaches into

a unified portrait. Different analytic

approaches allow us to examine the

economic significance of the national park system from perspectives relevant to a range of stakeholders

(Table 1).

• Economic Benefit is a national

concern – it measures the total

value that people derive from the

national park system through

direct and passive use. 

• Economic Impact is a local concern – it measures park visitors’

spending and the effects it has on

a town or county’s output,

employment, and income.

Chapter 1: Introduction

• Economic Growth is a local and

regional concern – it highlights

trends occurring as a result of

economic activity associated with

proximity to parks. Such economic activity extends beyond

tourism to include all economic

activity attracted to an area by the

natural amenities provided by the

park.

The three measures of economic significance are not directly comparable, nor can one sum them to generate a single number that represents

the economic importance of the

park system. Instead, we need to

evaluate each independently, as we

do in the following chapters of this

report.

Our analysis demonstrates that

each measure of economic significance reflects quite positively on the

national park system. Adjusting all

figures to the year 2004:

• The economic benefits of the

park system are at least $10.1 billion per year, and likely much

greater;

• The total economic impact of

visitor spending in areas surrounding parks was $13.3 billion

in sales, creating 267,000 jobs and

$7.5 billion in value added (wages,

rents, and business profits); and,

• Economic growth in counties

around national parks is generally

faster than other counties in the

same states.

We also show that federal spending

on national parks generates a fourfold increase in value for the nation,

and that proposed budget increases

for the system clearly satisfy economic scrutiny. In fact, current

threats to national parks resulting

from budgetary shortfalls may likely

cause significant losses in economic

benefits to the nation. 

In order to illustrate these points

more fully, we present 12 site-level

case studies, representing a diversity

of geographic locations, types of

sites, levels of visitation, proximity to

population centers, and levels of

funding. The cases are: 

• Acadia National Park

• Apostle Islands National

Lakeshore

• Biscayne National Park

• Denali National Park and

Preserve

• Fort Sumter National Monument

• Gettysburg National Military

Park

• Joshua Tree National Park

• Point Reyes National Seashore

• Rocky Mountain National Park

• Sequoia and Kings Canyon

National Parks
8THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

• Shenandoah National Park

• Zion National Park

For each of the twelve cases, we analyze economic benefits, impacts, and

growth patterns. Results of the case

studies appear throughout the

report, and are summarized on a

site-by-site basis in Chapter 5.

The report attempts to pull

together a broad body of economic

research and analysis that has been

conducted over the years. Many of

the researchers behind that work

have provided input to shape this

report. Building on this expansive

base of expertise, our synthesis of

the economic importance of the

national park system demonstrates

quite clearly that the parks,

seashores, historic and other sites in

the system are national assets of

tremendous value, and merit the

budgetary consideration necessary

to protect and maintain them.
9THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Chapter 2: Cost-Benefit Analysis of

National Parks

“Although cost-benefit analysis is surely an imperfect tool, it is the only analytic

framework available for making consistent decisions. Forbidding cost-benefit

analysis amounts to outlawing sensible decision making.”

Harvey Rosen, Ph.D. in Public Finance (1988)

Professor of Economics and Business Policy, Princeton University

Member & Chairman, President's Council of Economic Advisers (2003-2005)

Social cost-benefit analysis is an analytic approach used by governments

to determine whether the net economic benefits to society of a public-sector program are greater than

the costs. Cost-benefit analysis

became a standard tool for decision

making in the U.S. Government during the Johnson administration,

entitled the Planning Programming

Budget System. It was further institutionalized in 1981 when President

Reagan issued an executive order

that all new federal regulations

needed to pass a cost-benefit test.

As a result cost-benefit analysis has

become a standard analysis in the

U.S. Government, with regular guidance provided by the White House

Office of Management and Budget

(see Box A).

In the case of the national parks,

cost-benefit analysis can show

whether the cost of maintaining the

system is merited by the value it generates for the U.S. public.

Fundamentally, most U.S. citizens

view the management of sites like the

Statue of Liberty and Yellowstone as

an unquestionable responsibility of

the federal government. Discussion

of cost-benefit analysis is typically

stopped short by the assertion that

such national treasures are “priceless” and analysis of their economic

value is misguided.

Nevertheless, NPS finds itself

short of funding to perform the

management functions necessary to

maintain its sites, suggesting the federal government has underestimated

their public value. Of course, the

political challenge to acquiring

funding needed by NPS is complex,

so in an effort to place these budget

needs into a clear analytic framework for public decision makers we

provide a cost-benefit analysis that

quantifies the economic implications of budgetary spending on the

national park system. Such an

approach puts budget allocation

decisions to the same test as many

other federal projects, programs,

and regulations ensuring fair consideration of NPS needs in budgetary

debates. 

Economic Benefits of National

Parks

The types of economic benefits

associated with national parks have

been studied extensively.

Economists have categorized the

benefits flowing from parks into

two broad categories: use and passive-use (Table 2). Use benefits

include the value visitors place on

recreation, scientific and educational uses, ecological services such as

the provision of clean water to communities and habitat for a number

of species that may have economic

effects (e.g. reproduction of species

hunted offsite, insects necessary for

pollination, etc.), conservation of

biodiversity for its genetic and

intrinsic value, as well as the cultural and spiritual values of many sites.

Passive-use benefits include the

value individuals place on the

option to use a site in the future, or

the mere knowledge that a site is

protected (existence value) and will

be so for generations to come

(bequest value).

Consumer surplus is the technical

term used for the difference between

the value an individual places on an

economic benefit and the cost they

incur to enjoy it. In other words, a

visitor may pay $70 to travel to

Acadia National Park, but enjoys

$100 in perceived value (also known

as willingness-to-pay) from the experience of birdwatching while in the

park. The consumer surplus for that

visit is $30. It is possible to add up

the consumer surplus of all visitors

to a park to determine the total consumer surplus derived from public

visitation. This is also known as

social economic benefit.
10THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Box A: Guidance for Cost-Benefit Analysis from

White House Office of Management and Budget (OMB)

The White House Office of Management and Budget (OMB) provides updated guidance on the use of costbenefit analysis in OMB Circular A-4, September 17, 2003. Following is an excerpt from the circular.

The Need for Analysis of Proposed Regulatory Actions

A good regulatory analysis is designed to inform the public and other parts of the Government (as well as the

agency conducting the analysis) of the effects of alternative actions. Regulatory analysis sometimes will show

that a proposed action is misguided, but it can also demonstrate that well-conceived actions are reasonable

and justified.

Benefit-cost analysis is a primary tool used for regulatory analysis. Where all benefits and costs can be quantified and expressed in monetary units, benefit-cost analysis provides decision makers with a clear indication of

the most efficient alternative, that is, the alternative that generates the largest net benefits to society (ignoring

distributional effects). This is useful information for decision makers and the public to receive, even when

economic efficiency is not the only or the overriding public policy objective.

It will not always be possible to express in monetary units all of the important benefits and costs. When it is

not, the most efficient alternative will not necessarily be the one with the largest quantified and monetized

net-benefit estimate. In such cases, you should exercise professional judgment in determining how important

the non-quantified benefits or costs may be in the context of the overall analysis. If the non-quantified benefits or costs are likely to be important, you should carry out a “threshold” analysis to evaluate their significance. Threshold or “break-even” analysis answers the question, “How small could the value of the nonquantified benefits be (or how large would the value of the non-quantified costs need to be) before the rule

would yield zero net benefits?” In addition to threshold analysis you should indicate, where possible, which

non-quantified effects are most important and why.

Key Elements of a Regulatory Analysis

A good regulatory analysis should include the following three basic elements: (1) a statement of the need for the

proposed action, (2) an examination of alternative approaches, and (3) an evaluation of the benefits and costs –

quantitative and qualitative – of the proposed action and the main alternatives identified by the analysis.

To evaluate properly the benefits and costs of regulations and their alternatives, you will need to do the following:

• Explain how the actions required by the rule are linked to the expected benefits. For example, indicate

how additional safety equipment will reduce safety risks. A similar analysis should be done for each of the

alternatives.

• Identify a baseline. Benefits and costs are defined in comparison with a clearly stated alternative. This normally will be a “no action” baseline: what the world will be like if the proposed rule is not adopted.

Comparisons to a “next best” alternative are also especially useful.

• Identify the expected undesirable side-effects and ancillary benefits of the proposed regulatory action and

the alternatives. These should be added to the direct benefits and costs as appropriate.

With this information, you should be able to assess quantitatively the benefits and costs of the proposed rule

and its alternatives. A complete regulatory analysis includes a discussion of non-quantified as well as quantified benefits and costs.
In theory, consumer surplus could

be calculated by summing all of the

use and passive-use benefits enumerated in Table 3 however in practice it

is very difficult to quantify many of

them. In some cases the methods

exist, only resources are scarce to

implement them. For example, we

know that protected natural habitat,

especially forest, provides important

watershed functions. USDA Forest

Service made an attempt to quantify

the value of this watershed function

in terms of clean water provided to

downstream users by the 186 million

acres of forest service lands (Sedell

et al 2000). Their method generated

a value estimate of $4.06 billion per

year. Applying this same method to

the 83.6 million acres in the park system could generate a significant,

albeit smaller,1 estimate. In the case

of passive use values, estimates for

NPS sites range from billions of dollars to “priceless,” but more precise

figures are not yet available. The

only conclusive statement that can be

made on the topic at this point in

time is that it is an error not to

acknowledge a positive value for passive-use.2

Fortunately, a great deal of

research has been conducted on the

estimation of consumer surplus from

recreation. The methods to determine consumer surplus from recreation include specialized surveys of

visitors and using travel costs to trace

out a demand curve for recreation at

11THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

specific sites. A variety of U.S.

Government departments and agencies use these methods such as the

Department of Justice in assessing

natural resource damage from oil

spills, and the Environmental

Protection Agency in estimating the

benefits of regulations that protect

natural ecosystems. A drawback of

the methods for estimating consumer surplus from recreation is that

they are data intensive and costly to

implement. As a result, the U.S.

Government allows estimates to be

made based on extrapolations from

existing studies (OMB Circular A-4). 

NPS recently commissioned an

updated summary of consumer surplus estimates relevant to national

parks (Kaval and Loomis 2003) that

included 1,239 estimates from 593

independent studies conducted at

NPS sites and other wilderness areas

in the U.S. The database includes

estimates for a wide range of activities including hiking, backpacking,

camping, bird watching and wildlife

viewing, bicycling, fishing, and a

host of others. The average consumer surplus from a single recre1 It is important to note NPS lands are not only smaller in extension than USDA Forest

Service, they also include vast areas of non-forested lands, as well as extensive areas in

Alaska where there are few or no (human) downstream water users. Given that, the

value estimate would likely not exceed $1 billion.

2 While we are not able to include a precise passive use estimate, the Federal

Government does support its consideration in administrative and judicial decision

making (see Arrow, K., R. Solow, P.Portney, E. Leamer, R. Radner and H. Schuman.

1993. Report of the NOAA Panel on Contingent Valuation. Federal Register

58(10):4602-4614)

3 Kaval and Loomis provide an average recreational surplus estimate of $52.08 from

studies conducted solely at NPS sites. We chose to include a larger sample of studies

(n=947 vs. n=49 for just NPS sites) that includes comparable wilderness areas and

activities that occur at NPS sites, which provides an average value of $50.94. While a

more conservative estimate, it is more robust given the larger sample size. 

4 All dollar figures adjusted for inflation through 2004 per CPI, Economic Report to

the President.

ational visit to an NPS site was

$50.94,3 adjusted for inflation.4 That

is, an average park visitor enjoys

approximately $51 of value beyond

all the costs he or she incurs to visit

a park.

The NPS study does not include

estimates of consumer surplus from

visits to historic sites, and indeed

very little research has been conducted in this area. Only one peerreviewed academic paper (Leggett et

al 2003) examines a historic site in

NPS, and provides an average consumer surplus value of $9.06, adjusted for inflation. Some reasons why

this value is so low compared to natural resource-based parks is its location in an urban area where there

are many substitute recreational

activities, and the limited time spent

by visitors at the site. Since there is

only one study, we use this value

only to illustrate our point – further

study is required to develop and

refine consumer surplus estimates

for historic sites.

Given individual surplus values,

we can compute the social economic

benefit from recreation at NPS sites

– that is, the total of all visitors’ surplus values – by simply multiplying

by the number of visitors. In 2004,

the national park system received

276,908,337 visitors, and of them 35

percent visited historic sites. The

economic benefit of recreational

park visitation in 2004 was therefore

$10.1 billion (see Table 3).

It is important to note that these

estimates are subject to error generated by extrapolating from existing

studies. Using an average value for

park visits masks a great deal of the

variation in the quality of experience

across parks with very different

attributes. In addition, the number

of studies examining each activity

conducted in parks varies and the
12THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

recreational value of $10.1 billion.

Passive use value for example of the

Statue of Liberty, Mount Rushmore,

Old Faithful, the Grand Canyon,

Yosemite Valley, and many other

sites in the system are likely to be

priceless. Add to this ecosystem

services and the intrinsic values of

biodiversity protected at NPS sites

and $10.1 billion may begin to seem a

quite modest number. 

Costs of National Park Service

The cost of NPS is simply the

money spent in a given year to manage the system.5 According to US

Department of the Interior’s Budget

Justification for NPS, also known as

the “Greenbook,” federal appropriations in 2004, 2005, and 2006 were

$2.3 billion, and were complemented

by $0.3 billion in revenues, for a total

budget of $2.6 billion (Figure 1). 

In 1998, NPS with the assistance

of National Parks Conservation

Association, and more recently the

Student Conservation Association,

began a series of rigorous financial

analyses of its sites called the Business

Plan Initiative (BPI). These business

plans provide an understanding of the

current use of funding as well as the

required budget to achieve a minimum standard of management.

statistical variation in their results

can be large. Also, the average value

is based on a composition of studies

on specific activities that may not

represent the array of activities available at all parks. Lastly, for historic

recreation, far more primary field

research must be conducted at additional sites, many of which are materially different from Fort Sumter

from which we derive the value in

Table 3. We are able to resolve several of these issues in our treatment

of case studies later in this chapter.

It is important to re-iterate that

this estimate of $10.1 billion is conservative. One consideration is the

rate at which consumer surplus for

recreational visits to parks may

increase over time. Since NPS sites

are limited in area and access to

wilderness areas continues to diminish, but population continues to

increase, the value of a visit to an

NPS site is likely to increase reflecting diminishing supply relative to

demand. We must also restate that

the benefits of the national park system extend well beyond that of

recreation. If all use and passive-use

values presented in Table 2 were

quantified, the total social economic

benefits of the national park system

would likely be multiples of the

5

OMB recommends consideration of opportunity cost, which in this case is the commercial value of exploiting natural resources at NPS sites. Because this analysis does

not consider changing the protected status of NPS sites, but only improved management, we do not estimate that opportunity cost here.

Management functions include maintaining infrastructure, accommodating visitation, conservation for future

generations, as well as research and

study of the sites to improve management over time. According to recent

calculations based on NPS business

plans, the park system requires additional funding of $0.8 billion per year

to achieve a basic level of management (this calculation focuses on the

additional funds required for park

operations and makes no allowance

for additional investment in operating

funds for regional or national NPS

offices). That is, in order to continue

providing the economic benefits of

the parks in terms of current visitor

satisfaction today and prevention of

deterioration of the parks over the

long term, the NPS budget must

increase to about $3.4 billion per year.

Cost-Benefit Comparison

According to public finance theory,

when the social economic benefits

generated by a government project

or program exceed the costs to

implement it, there is a clear justification for government spending

(Rosen 1988). The relationship

between benefits and costs is often

expressed as a ratio: such as, “the

benefit-cost ratio of the project is

1.5,” meaning the benefits to society

are one and a half times the cost of

the project – a favorable result.

Some economists prefer to merely

subtract costs from benefits to

determine if the net social benefit is

positive, again a signal for government to invest. 

In the case of the national park

system, we estimate the benefit-cost

ratio by dividing annual social economic benefits, estimated to be

greater than $10.1 billion by the

annual NPS budget of $2.6 billion.

The benefit-cost ratio is therefore

greater than 3.9, and the net social

benefit is greater than $7.5 billion –

an admirable result for any public

sector investment (Table 4).

Considering only the estimable benefits presented here, NPS is generating economic benefits well in excess

of the cost of maintaining the system. In fact, the public enjoys at least
four times the value of each dollar

spent by the federal government.

We perform the same analysis for

each of our twelve NPS case study

sites (Table 5). The sites with the

highest benefit to cost ratio are

Acadia, Point Reyes, and Zion. The

sites with the lowest ratios are

Denali, Gettysburg, Sequoia &

Kings Canyon, and Apostle Islands.

Low ratios are the result of the

remoteness and low visitation of

Denali and Apostle Islands, and the

potentially conservative surplus estimate for historic sites applied to

Gettysburg. Nonetheless, all the

case study sites show a benefit to

cost ratio in excess of 1.

Cost-Benefit Analysis of the NPS

Budget Shortfall

What about the budgetary shortfall

for NPS – how do we determine if

13THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

additional funding should be allocated to the system? According to

OMB, this assessment should

include three elements: 1) a statement of the need for the proposed

action; (2) an examination of alternative approaches; and, 3) an evaluation of the benefits and costs –

quantitative and qualitative – of the

proposed action and the main alternatives identified by the analysis.

Statement of Need for the Proposed

Action

The National Park System Organic

Act mandates that the National Park

Service conserve, in an unimpaired

state, the natural and historic amenities of the park system for present

and future generations. But according to NPS business plans, the current NPS budget falls short of allowing the system to fully achieve this

purpose. A recent study by the U.S.

Government Accountability Office

(2006) draws similar conclusions,

noting that funding for daily operations has declined in inflationadjusted terms from 2001-2005. As a

result, parks are cutting services:

“All park units we visited received

project-related allocations but most

park units experienced declines in

inflation-adjusted terms in their

allocations for daily operations.

Each of the 12 park units reported

their daily operations allocations

were not sufficient to address

increases in operating costs, such

as salaries and new Park Service

requirements. In response, officials

reported that they either eliminated

or reduced services, or relied on

other authorized sources to pay

operating expenses that have historically been paid with allocations for

daily operations” (US GAO 2006).

Evidence of a decline in management is documented in a series of

reports by National Parks

Conservation Association (NPCA),

entitled State of the Parks and Faded

Glory: Top Ten Reasons to Reinvest in

America’s National Park Heritage

(www.npca.org). According to

NPCA, some of the main issues

threatening NPS’ ability to fulfill its

purpose include:

• Law enforcement – NPS suffers

from inadequate resources for

law enforcement. In one park

alone, Sequoia and Kings

Canyon, park officials seized $176

million worth of marijuana plants

in 2004. In 2002, NPS recorded

11,000 violations of the

Archaeological Resources

Protection Act of 1979. In its fiscal 2005 budget, NPS identified

illegal removal of wildlife as a factor in the decline of at least 29

species of wildlife, and could

cause extirpation of 19 species

from parks. Illegal fishing and

coral poaching are causing degradation of Virgin Islands National

Park and Biscayne National Park.

In addition, NPS needs resources
14THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Examination of Alternative

Approaches

Cost-benefit analysis generally tests

the difference between one or

more alternatives. Often, the test is

between the current situation

(“baseline”) and a proposed change.

In this case we evaluate two alternatives: a) leave the budget unaltered;

or b) allocate an additional $800

million to NPS in annual funding.

We must also look at the issue

from one of two perspectives. Some

contend that NPS sites are in a state

of decline and that the proposed

increase in budget is required to

maintain basic operations. Others

may contend that the national park

system is maintained in suitable condition and any increase in budget

would only be justified by marked

improvement in NPS sites. We

examine both positions.

Evaluation of Benefits and Costs

We assess the merits of the two

alternatives by comparing the costs

and benefits of the proposed change

in the NPS budget, allowing us to

determine which of the two alternatives produces the greater economic

return to society. The cost implications of the two alternatives are

clear. In the first scenario, costs

remain as currently budgeted at $2.6

billion per year. In the second scenario, costs rise by $800 million per

year, to a total annual budget for

NPS of approximately $3.4 billion.

The benefits are more difficult to

quantify. Given the available data, it

is not possible to estimate accurately

the difference in benefits between

the two scenarios. 

However, we can perform a

threshold analysis that tells us the

degree of change in the quality of

NPS sites that would justify an

increase in spending, keeping in

mind that such an increase may

either just prevent further degradato meet demands of Homeland

Security requirements.

• Invasive species – Approximately

2.6 million acres of parkland host

non-native invasive species,

changing the structure and function of the ecosystems NPS is

charged to conserve. Plants, fish,

and insects from as far away as

South America and Asia are

replacing native species in many

parks. For example, in Theodore

Roosevelt National Park in North

Dakota, more than 60 non-native

species have found their way into

the park – including leafy spurge

that invades native grasslands that

wild bison and elk depend on for

food. Joshua Tree National Park

is overrun by non-native grasses

such as cheatgrass and red brome,

which spur wildfire and compete

with native species for water.

• Historic preservation – Inadequate

resources have resulted in insufficient care and preservation of

historic artifacts, buildings, and

other structures. More than half

of the 100 million items in NPS

collections have yet to be catalogued or shared with visitors.

Two thirds of historic buildings

and structures in the national

parks are in need of repair.

• Infrastructure – Backlogged road

and bridge repair at NPS sites

exceeds $3 billion. In addition,

damages caused by natural events

such as hurricanes add a significant burden to repair budgets.

To some extent, NPS attempts to

measure its effectiveness through

periodic visitor surveys. The survey

asks visitors to rate their experience

at various NPS sites based on measures such as the quality of facilities,

educational resources and ranger

accessibility. However, solid marks

on the visitor survey do not tell the

entire story. Many of the issues

identified above are not covered in

the survey nor can many of these

issues be immediately detected during a typical recreational visit.

tion of NPS sites or might improve

them. In the simplest6 form of this

analysis we consider the NPS budget

shortfall ($800 million) as a percentage of national park system-wide

economic benefits (>$10 billion) – a

threshold figure of about eight percent. This suggests funding the NPS

budget shortfall is justified where it

would increase park benefits, or

prevent the loss of park benefits, by

eight percent. 

The next question is: how likely is

it that funding the budget shortfall

would generate an eight percent

change in economic benefits

(increase, or prevention of loss)?

One way of answering that question

is to examine recreational benefits,

where the potential change in quantity of park visitors or the quality of

the visitor experience, both of which

are factors in the total economic

value of recreation at national parks.

Because it is easiest to measure

changes in park visitation, we will

use only that variable for this example, but it is important to note that

changes in visitor experience are

equally as important in generating

economic benefits estimates (e.g. an

increase in the quality of a visitor’s

experience may increase total economic value by as much or more

than additional visitation). So,

examining only changes in visitation,

we assume a change in park quality

would affect visitation over time, and

we ask whether an eight percent

change in visitation (which translates

into an eight percent change in

recreational benefits, all other things

being equal) seems likely relative to

normal variability of park visitation.

Over the past ten years the difference

between the lowest visitation year

and highest was eight percent (U.S.

Department of Interior 2006). In

this context, our conclusion is that

indeed, an overall change in economic benefits of eight percent due

6

This analysis does not account for inter-temporal effects of budgetary changes.

Impacts such as invasive species may not be perceived immediately, but may have costly long-term impacts. A more sophisticated modeling approach is necessary to fully

account for the temporal nature of such impacts, and to calculate net present value of

future costs and benefits accordingly.
15THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

to changes in visitation alone is well

within the realm of possibility. Now,

considering that an improvement in

the quality of the visitor experience

also increases recreational benefits,

you may conclude that less than an

eight percent increase in visitation

could generate sufficient economic

benefits to justify the proposed

increase in park budgets.

From this analysis it is readily

seen that the threshold is quite low

for justifying the proposed budget

increase for NPS in terms of just

recreational benefits. It is important

to mention that a number of economic benefits enumerated earlier

in this section have not been quantified in this analysis – most of which

do not rely on increased visitation.

If we had included those benefits in

the threshold analysis, the results

would be even more convincing. In

other words, the proposed budget

increase is an economically justifiable public policy decision.

We performed a similar analysis

for our 12 case study sites to illustrate the application of this methodology at a site level (Table 6). As

expected the threshold to justify

proposed budget increases varies,

falling both above and below the

national figure of eight percent.

NPS sites with lower thresholds are

Rocky Mountain, Biscayne, Point

Reyes, Zion, and Joshua Tree. The

most remote and least visited,

Apostle Islands, has the highest

threshold necessary to justify proposed budgetary increases. Again,

we re-iterate that we estimate economic benefits for recreation alone,

which is a function of visitation and

quality of the visitor experience.

Because remote parks such as

Apostle Islands have low visitation,

their recreational benefits are commensurately low, but the other nonquantified benefits (e.g. passive use)

may still be great.

Conclusion

Despite limitations to quantifying

economic benefits of the national

park system, available data are sufficient to demonstrate clearly the justification for funding NPS. More

important, failure to address budget

shortfalls by fully funding needs

delineated in NPS site-level business

plans may cause a decline in economic benefits generated by parks.

Such a decline, involving the deterioration of natural and man-made

assets of the system, could result in

long-term economic losses to society far in excess of the short-term

budgetary savings from failing to

fully fund the NPS budget.

This analysis is carried by quantitative estimates for consumer surplus from recreation at NPS sites.

This however is only the beginning

of the economic value generated by

NPS sites – most values have yet to

be quantified. Once considered, the

full range of use and passive-use values would make an already decisive

analysis even more convincing.
16THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK
17THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

retail spending) are the “direct

effects.” Then multipliers capture

the “secondary effects” of visitor

spending as it re-circulates through

the local economy.8 The MGM2

approach involves segmenting visitors by local residents, non-local visitors on day trips, and overnight visitors (motel or camping), and applying different spending estimates to

each segment. Key visitor spending

categories omitted from the MGM2

model include airfares and transportation expenses outside the local

region, as well as durable goods purchases and other at-home expenses.

Impacts of park operations and construction activity are estimated in a

separate model (Stynes, personal

communication, 4/13/06). 

Economic Impact Estimates:

System-Wide and Case Study Sites

According to MGM2 estimates,

national park visitors spent $11.3 billion in areas local to parks in 2004.9

The direct effects of this spending

supported $9.2 billion in sales and

212,000 jobs at local tourism-related

businesses, generated $3.3 billion in

personal income, and provided $4.9

billion in value added.10 When multiplier effects are taken into account,

the total economic impact of visitor

spending in areas surrounding parks

was $13.3 billion in sales, 267,000

jobs, $4.8 billion in personal income,

and $7.5 billion in value added

(Table 7). However, as noted by

Stynes and Sun (2003), these represent conservative estimates due to

the assumptions of the MGM2

model. They speculate that “estimates counting all visitor spending

would be 2-4 times greater than the

figures reported here.”

Moreover, it should be noted that

MGM2 spending estimates for local

park regions do not reflect public

sector spending by NPS on operations, projects, and so forth.

System-wide, this would add

approximately $2-3 billion to direct

spending estimates – for a total of

about $14 billion (Stynes, personal

communication, 1/10/06).

In addition to system-wide estimates, we examine economic

impacts for our 12 NPS case study

sites. Table 8 presents estimates for

each park produced by the MGM2

model in 2003 (adjusted to 2004 dollars). The sites with the highest total

visitor spending are Rocky

Mountain and Acadia, reflecting

their high visitation levels and park

Chapter 3: Economic Impacts of

National Parks

Economic impact analysis is an

approach used by policymakers,

industry, and others to assess how

flows of economic activity affect

local output, employment, and

income. Such flows may range from

tourism spending to the opening of

a new manufacturing plant. Unlike

cost-benefit analysis (Chapter 2),

which estimates net benefits to society, economic impact analysis measures economic activity for specific

regions or economic sectors.

National parks and surrounding

communities have a shared interest

in understanding the economic

impacts of parks on the local economy. In response to these needs, the

National Park Service (NPS) developed the Money Generation Model

(MGM) in 1990 to estimate park visitor spending in the local area and

the impacts of this spending on a

number of economic indicators,

including sales, personal income,

jobs, and value added.7 The model

was updated in 2000 as MGM2,

with estimates developed for the

overall national park system, as well

as specific parks (Stynes and Sun

2003). New and updated estimates

continue to be made available at

http://web4.canr.msu.edu/MGM2/.

In simplified form, MGM2 estimates economic impacts by multiplying the number of park visitors

by average spending per visitor and

regional economic multipliers. The

initial impact of visitor spending

(e.g., park, restaurant, lodging, and

7

“Sales” (or output) is the dollar value of goods or services produced or sold. “Personal

income” includes wages, salaries, and payroll benefits. “Jobs” reflects the number of

jobs required to produce a given volume of sales/production. “Value added” represents

the contribution to gross regional/local product. It includes personal income, profits

and rents of private firms, and indirect business taxes accruing to regional/local government.

8

Capturing secondary effects generally requires the use of input-output models.

MGM2 relies on IMPLAN, a software and database package for estimating 528 sectorspecific input-output models for any region consisting of one or more counties.

9

Economic impacts reflect the most recent MGM2 estimates for national park systemwide local economic impacts (2001), adjusted for inflation to 2004 dollars.

10The difference between visitor spending ($11.3 billion) and direct sales ($9.2 billion) of

$2 billion occurs because this spending is for goods and services provided outside of

the local economy. 
area spending opportunities. In the

local areas of the two parks, this

spending supports about $400 million in sales, close to 9,000 jobs, and

more than $200 million in value

added. While Zion receives a similar number of visitors as Rocky

Mountain and Acadia, total visitor

spending for Zion is only about half

as much as these parks due to more

limited spending opportunities in

Zion’s local area. Visitor spending

was lowest for Apostle Islands. Due

to the park’s remote location, it

receives fewer visitors and spending

opportunities in the surrounding

area are limited.

Opportunities for Refining and

Extending Impact Estimates

Developing a model for estimating

the economic impacts of each park

and historic site within the national

park system is no easy task. Systemwide, there are a great diversity of

sites and visitors, but limited data on

visitation patterns and spending. In

addressing such problems, MGM2

sets forth a range of modeling

parameters and assumptions as a

basis for estimating park-specific

and system-wide economic impacts.

The model incorporates park-specific visitor survey data where available, and where it is not, favors conservative assumptions as a means of

ensuring estimates (at least as a

lower bound) are defensible.

With system-wide visitor spending around parks of about $11 billion,

generating $13.3 billion in sales and

supporting 267,000 jobs, the MGM2

model provides clear evidence that

the local economic impacts of

national parks are substantial.

While we support the MGM2

model’s approach to estimation, our

analysis of case study sites suggests

there may be opportunities for

refinements that could contribute to

improved park-specific estimates, as

well as a better understanding of

park economic impacts beyond local

areas. Below we explore these

opportunities, highlighting factors

for consideration.

Incorporating park-specific

information to improve visitor

spending estimates. Each national

park is unique, but general spending

averages embedded in the MGM2

model do not capture spending variations associated with these unique

characteristics. As visitor surveys

are conducted, these characteristics

can better be taken into account in

spending profiles. But presently, visitor survey information is only available for a small number of parks.

For other parks MGM2 applies an

assumption of “high,” “medium,” or

“low” spending based on an evaluation of spending opportunities and

other factors (e.g., local retail activi18THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

ty). However, even without visitor

survey data, there may be park-specific information available that, if

taken into account, could contribute

to improvements in the precision of

spending estimates. For example:

• Fort Sumter National Monument –

According to MGM2, Fort

Sumter received 840,000 visits in

2003 and overall visitor spending

was $17.3 million, or about $20

per visitor. However, accounting

for visitor spending on the ferry

ride to Fort Sumter alone would

add about 50 percent to this total.

The ferry charges $12 for adults,

$11 for seniors, and $6 for children ages 6-11, so a rough average

of $10 per visitor would equal

about $8.4 million in visitor

spending.

• Denali National Park and Preserve

– Numerous businesses provide

services within the park, from

lodging and food, to supporting

hiking, mountaineering, and rafting trips, to providing air taxi and

flightseeing services. Denali’s

contracts with these businesses

provide a source of information

on visitor spending, as nearly all

gross receipts of these businesses

reflect visitor spending. In 2002,

gross receipts of these businesses

were over $15 million, with the

major park concession to ARAMARK for lodging, campgrounds, food, and tours

accounting for about 75 percent

of the total. 

Adjusting the definition of “local”

area, where appropriate. MGM2

estimates only capture a subset of

visitor spending, within 50-100 miles

of national parks. This approach is

taken to ensure spending can be

attributed to the park visited. For

some parks, gateway communities

are located outside the 50-100 mile

radius applied by MGM2. Where

challenges of attribution can be surmounted, adjustments to account

for spending in these gateway areas

would improve impact estimates.

For example: 
19THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

the most valuable park visitors are

likely ‘windshield tourists’, who

make a quick tour of the park and

head for souvenir shops, restaurants and other commercial

attractions, usually in the gateway

communities outside the park.

Park visitors do not spend money

while in the backcountry or

engaged in activities such as hiking,

fishing, observing nature, or learning about history within the park.”

Impacts represent an important

measure of the role of national parks

in local economies. But to develop a

more complete picture of parks’

economic significance, a broader set

of indicators needs to be considered

that includes economic benefits,

impacts, and growth.

• Denali National Park and Preserve

– Nearly all visitors to Denali

travel through Anchorage, either

arriving there by air or via a

cruise ship. On their way to

Denali, these visitors may spend

money on lodging in Anchorage,

as well as food, retail, and transportation. While the MGM2

model captures visitor spending

within Denali’s small gateway

community of Glitter Gulch, a

great proportion of visitor spending occurs outside this community, in Anchorage and on travel to

and from the park. For illustration, Alaska visitor expenditure

studies indicate that the average

vacation/pleasure visitor spent

$119/night in 2001 (Northern

Economics 2002). If one additional night of visitor spending

were attributed to Denali visitors

(e.g., spending in Anchorage or

elsewhere outside the park and

Glitter Gulch), this would add

about $50 million to park visitor

spending. Consider that MGM2

estimates visitors to Denali spent

only $22 million in 2003, and it is

clear that assumptions about the

inclusion and attribution of visitor spending can substantially

affect overall spending and

impact estimates. 

Estimating impacts at the state

level, where appropriate. Where

park impacts are substantial and

extend well beyond local areas, conducting an additional impact analysis at the state level may provide a

more complete picture of a park’s

economic impacts. For example:

• Acadia National Park – Nearly all

visitors to Acadia travel there by

car (Littlejohn 1999), following a

travel corridor of more than 200

miles through the state of Maine.

Traveling to and from the park,

many of these visitors spend

money shopping at retail outlets,

and for food and lodging. Acadia

is the primary destination of many

of Maine’s tourists. A recent study

of travel and tourism found that 21

percent of overnight visitors to

Maine in 2004 visited Acadia/Bar

Harbor, and 18 percent of

overnight visitors indicated that

visiting the Acadia/Downeast

region was their primary reason

for travel to Maine (Longwoods

International 2005). 

Estimating economic impacts of

international visitors to national

parks. Little is known about the

role national parks play in attracting

international visitors to the United

States. For example, a recent visitor

study of Joshua Tree National Park

(Le et al 2004) indicates international visitors comprised eight percent

of total visitation, equal to about

100,000 international visitors.

About 30 percent of visitors were

from Canada, 40 percent from

England and Germany, and the

remainder from 15 other countries.

A study might aim to estimate the

number of international visitors at

each park, the importance of

national parks in generating trips to

the U.S., and the spending of these

visitors. 

Conclusion

Conservatively estimated, visitors to

national parks spend over $11 billion

annually in the local regions of the

parks, supporting $13.3 billion in

sales, 267,000 jobs, and 7.5 billion in

value added. If all visitor spending

were taken into account (e.g., spending outside the local area), estimates

might be 2-4 times greater. Clearly,

national parks play an important role

in the economies of their surrounding communities, as well as in the

national tourism economy. 

In considering the economic significance of national parks, however,

caution should be taken in lending

too much weight to local economic

impacts. As noted by Stynes and

Sun (2003), much of the value parks

provide society is not reflected in

economic impacts:

“The values that most people associate with National Parks are very

different from those captured in an

economic impact analysis. From

an economic impact standpoint,
20THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK
ings per job, among others. All of

these measures tell us how the economy, in aggregate, is doing. Further

examination of growth also includes

measuring the distribution of wealth

and affordability of basic necessities,

such as housing, to discern how

economic circumstances are changing for different segments of the

population. It is necessary to look

at this wide variety of measures to

have a complete picture of economic

growth.

Amenity-Driven Economic Growth

In recent years geographers have

turned their attention to the phenomenon of rapid growth rates in

rural areas of the U.S. Most explain

this as amenity-driven growth, where

individuals choose to live near

wilderness areas where quality of

life is considered high due to outdoor recreation opportunities, small

town characteristics, and scenic

beauty. In a recent series of studies

edited by Green et al (2005), geographers examine the importance of

natural amenities versus other drivers of migration. They conclude

that rural areas in the U.S. with protected lands and other natural

amenities (wilderness areas) are

growing faster than other rural

areas, and since 1970 faster than

metropolitan areas (Table 9), and

that natural amenities are one

important factor in determining

growth, as are infrastructure and

accessibility. USDA Forest Service

21THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Chapter 4: Economic Growth and

National Parks

Another aspect of the economic

importance of the national park system is its role in local economic

growth. Since the creation of the

country’s first national park,

Yellowstone in 1872, communities

have debated over the potential economic impact of parks. Debate

most often focused on the conservation of natural resources that might

otherwise be used for economic

purposes, such as timber and minerals, as well restrictions on the development of tourism facilities in areas

of public interest slated to become

protected. Contemporary analysis

of economic growth patterns

around parks and other wilderness

areas in the U.S. suggest that protected lands actually correlate more

with greater economic growth than

do lands utilized for natural

resource exploitation. Indeed, some

analysts today view NPS sites as

engines for rural economic development, especially in an era of rapidly

improving telecommunications and

transportation infrastructure that

allows professionals to locate close

to the natural amenities that national

parks provide. Today, debate is

shifting from whether growth will

happen, to how to manage it. NPS

and neighboring communities may

need to work together to ensure that

the increasing jobs, income, and

population do not threaten the natural amenities that serve as the

engine of this growth.

Measuring Economic Growth

Economists measure growth of an

economy in a variety of ways. Many

people are familiar with the term

Gross Domestic Product (GDP), for

example, which measures the total

activity in an economy. Other measures include changes in population,

jobs, per capita income, and earn-

(2004) published a review of

approximately 80 studies of amenity-driven growth and arrived at

much the same conclusions.

A facet of this analysis is referred

to as “Old West” versus “New West,”

where amenity-driven growth in

western U.S. states is compared to

growth driven by natural resource

exploitation, such as logging and

mining. A common complaint of

placing lands under protection is the

consequent loss of jobs in these

industries. However, multiple analyses indicate that there is no loss in

economic growth in areas with protected lands, and in some cases

growth exceeds that of similar nearby areas that rely on natural

resource exploitation. In a 1998

study Duffy-Deno found there to be

no difference in growth between

counties in the eight states of the

inter-mountain west that relied on

logging and mining and those that

had protected lands. In a 2000

study, Lorah found that counties

with protected lands are developing

new and more diverse economic

activities that in fact counterbalance

the economic decline of natural

resource industries. Economic

diversification also tends to be complemented by migration of retirees

to areas rich in natural amenities

(McGranahan, 1999). Lorah and

Southwick (2003) go on to find that

growth in areas adjacent to protected areas is faster than other rural

areas throughout the western U.S.

All of these findings are corroborated by further evidence from a series

of empirical studies conducted by

Sonoran Institute (2004).11 As more

studies are completed, the trend

appears to show that natural

resource industries are declining in

the U.S. relative to the types of economic activity that occur in ameni-
22THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

the disparity between those that rely

on earned vs. investment income as

well as new migrants with higher

compensation that work in knowledge-based industries. Third, with

more wealth entering small rural

economies, housing costs tend to

rise. When housing costs rise and

earned income does not keep pace,

housing affordability falls. In those

communities with a large tourism

industry dependent on service workers, these stresses can become acute.

Economic Growth and National

Parks

Specific studies of economic growth

around NPS sites follow the findings

of the more generalized analyses of

amenity-driven growth near wilderness areas. In this section we summarize several case studies found in

the literature, and then present an

analysis of economic growth data

for our 12 case study NPS sites.

The greater Yellowstone area surrounding Yellowstone National Park

and Grand Teton National Park has

shown remarkable economic

growth. A study performed by

Rasker and Hansen (2000) documents the shift in the regional economy from extractive industries to

service occupations, retirement, and

investment income. Rasker and

Alexander (2003) show that the

area’s population grew by 61 percent

over the last thirty years (compared

to 38 percent nationally). In large

part, the establishment of new small

companies has driven economic

growth since 1990, some of which

include high-wage professional services (engineering, finance, legal,

insurance, real estate). Personal

income growth in the greater

Yellowstone area has outpaced state

averages for Idaho, Montana, and

Wyoming. Like many other areas

with amenity-driven growth, however, non-labor income represents a

significant portion of personal

income and earnings among wage

laborers have actually declined.

Flathead County, next to Glacier

National Park, presents another

story of strong economic growth.

National Parks Conservation

Association (2003) compiled three

studies by researchers at University

of Montana that present perspectives on growth in the county. The

studies show that the economy of

Flathead County is vibrant, diverse,

and growing. All indicators studied

(population, workforce, employment, personal income, total labor

earnings, and wage & salary earning) all exceed growth rates for

Montana, western U.S. states, and

the nation.12 Interviews with visitors,

new residents, and lifelong residents

of Flathead County indicate recognition that the main driver of growth

is the natural environment and that

Glacier National Park is the anchor

for Flathead County’s robust economy. There is also a recognition that

the natural amenities of the region

are at risk from economic growth

and that the county must plan to

manage the risks of growth to its

natural amenities.

In an edited volume entitled

National Parks and Rural

Development (Machlis and Field,

2000), contributing author Miles

provides a counter-balance to the

growth story seen around many

other national parks. The three

national parks of the Pacific

Northwest, Mt. Rainier National

Park, Olympic National Park, and

North Cascades National Park, have

all shown remarkably little growth in

neighboring communities. The

study shows that three factors are at

play: proximity to urban areas allowing for convenient day visits; high

seasonality due to poor winter

weather conditions; and development restrictions in surrounding

areas. What the case study does not

consider is the growth benefit

enjoyed by Seattle, from which most

day visits originate. Seattle is often

cited as an example of a city with

ty-rich areas, which attract not only

tourism but also retirees and knowledge-based businesses that need

only good telecommunications and

air travel infrastructure (“modem

cowboys”). 

The eastern U.S. states have not

enjoyed the same level of attention

from researchers of this phenomenon. Some possible reasons are that

the political debate over resource

exploitation versus conservation has

not been as dramatic, or that sprawling development patterns of the

more urbanized east coast produce

less focused examples of amenitydriven growth than the geography of

western states permits. The latter

point raises a broader question

regarding how much large urban

areas may be impacted by varying

degrees of proximity to natural

amenities. Schmidt and Courant

(2005) examined 90 metropolitan

areas in all regions of the U.S. and

determined that those cities with

relatively easier access to national

parks, national seashores, and

national lakefronts served to draw

labor, as measured by a willingness

to accept measurably lower compensation. This demonstrates that

natural amenities may have a further

reach in terms of economic growth

than previous researchers identified.

While economies are growing and

diversifying in rural areas rich in natural amenities, the benefits are not

always shared equally across all

social classes. Rasker (2004) documents three concerning patterns that

have emerged. First, per-capita

income is rising without a commensurate increase in earnings per job.

This reflects the increasing number

of in-migrants, especially retirees,

who have high levels of investment

income. Second, the polarization of

wealth is increasing. This relates to

11Responding to a burgeoning interest in economic growth adjacent to wilderness areas,

the U.S. Bureau of Land Management partnered with the non-governmental organization, Sonoran Institute, to develop a database program that allows rapid assessment of

growth patterns in the U.S. According to Sonoran Institute, the system is now widely

used by additional government agencies such as U.S. Forest Service, National Park

Service, as well as county planners.

11The study cites data from U.S. Bureau of Labor Statistics, U.S. Department of Commerce.
amenity-driven growth, and Schmidt

and Courant (2005) show that proximity to national parks is a factor.

We examined economic growth

patterns around our 12 NPS case

study sites over the period 1970

through 2003 (Table 10). Population,

employment (with the single exception of Shenandoah National Park),

and personal income growth all outpaced the state in which the sites are

located. On an annual average, these

indices were one percent greater,

which over a period of years compounds to very large differences in

growth. However, earnings per job

grew more slowly across the sites.

We did not find a pattern of declining housing affordability, and more

generally housing affordability followed trends similar to state-wide

indices. In several cases we did not

analyze growth patterns due to

parks’ close proximity to urban areas

increasing the potential to confound

park-led growth with other factors

(Biscayne, Fort Sumter, Joshua Tree,

and Point Reyes). In the case of

Denali, economic data are not sufficient to perform the analysis.

Smart Growth

Growth is a “double-edged sword” in

that it generates jobs and income but

it also can create stress on the natural

amenities in a region. Development

sprawl is a major issue near those

NPS sites where growth is most

aggressive. The phenomenon of

growth near parks has received

national attention, as exemplified by

USA Today running an article entitled

23THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

“Developers covet areas surrounding

national parks” on March 21, 2006.

Sprawl can result in a reduction in

important wildlife habitat (and subsequent human-wildlife conflicts), environmental pollution, congestion and

loss of the natural aesthetic of a

wilderness area. It is possible to relegate these impacts as necessary costs

of economic growth, but it is important to recognize the magnitude of

that cost and to determine whether

new jobs and income justify it.

In cases where growth threatens

the natural amenities of NPS sites,

there is a cost incurred by society.

That cost can be readily quantified

in terms of diminished visitor experience and a subsequent reduction

in visitation. As we describe in other

chapters of this report, the nationallevel economic benefits in terms of

consumer surplus for recreation

generated by NPS sites is at least

$10.1 billion per year. Add to this the

other sources of consumer surplus

generated by parks and the number

may increase by multiples. We also

describe in this report the economic

impact of tourist spending at NPS

sites. Total annual spending is in the

range of $11 billion, generating

added value (wages, rents, and business profits) of $7.5 billion. The

source of these benefits lays in the

physical condition of NPS sites – the

natural amenities that attract visitors. Congestion, pollution, ecological deterioration, diminished

wildlife viewing or human-wildlife

conflicts all may cause a deterioration of the benefits accruing to visitors (as well as non-visitors).

It is important to emphasize two

policy implications of threats posed

by rapid growth near national parks.

First, to the extent that policy makers justify government spending on

NPS in strict terms of stimulating

local economic growth, they may be

losing sight of the larger and potentially more significant economic

importance of NPS sites. Economic

benefits accruing to park visitors,

and spending associated with those

visits, is threatened by degradation

of NPS sites caused by rapid development. Second, in order to man-
24THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

age the growth that is occurring,

local, state, and federal government

will need to work together to develop smart growth plans. The overlap

of these three government jurisdictions around NPS sites creates a

challenge for planning that will likely

need to be tackled head on in the

very near future. Failing to embrace

these two policy imperatives could

easily result in economic loss.

Conclusion

Both the peer-reviewed academic

literature and our selected case studies demonstrate that economic

growth near national parks outpaces

other areas that lack similar natural

amenities. While growth also

depends on other factors, such as

infrastructure and accessibility, the

case is becoming clear that national

parks play an important role in stimulating regional economies. Indeed,

arguments that protected areas

inhibit growth by making valuable

natural resources unavailable to

extractive industries such as mining

and forestry have proven unfounded. Growth is often higher near

protected areas, and the diversity

and quality of business growth may

be greater especially with regard to

knowledge-based jobs.

Growth also brings challenges.

Some communities near parks suffer

from increasing wealth polarization

and falling housing affordability. In

other communities, growth is beginning to impinge on the natural

amenities that first attracted most

in-migrants. An important lesson is

that an exclusive focus on economic

growth as the main economic contribution of NPS sites loses sight of

the other economic benefits they

generate and that must be protected.

To the extent that growth diminishes

these benefits, a real cost is incurred

by our nation. It is easy to see that a

slight deterioration in visitor experience can generate very large social

costs. For this reason, growth

should be considered one element

of the economic importance of NPS

sites that must be balanced among

the others, and its potentially negative effects must be managed.
all greater than 1, ranging from 1.4

(Denali) to 14.1 (Acadia and Point

Reyes).

• Economic Impacts measure park

visitor spending and its effects on

sales/output, employment,

income, and value-added in the

surrounding area. Visitor spending and the corresponding

impacts are greater for sites with

higher visitation levels and park

area spending opportunities

(Rocky Mountain and Acadia). 

• Economic Growth refers to trends

occurring due to economic activity associated with proximity to

parks. That is, for some sites,

park amenities may contribute to

attracting new businesses and

residents (and retaining old

ones). Indicators for assessing

growth trends in areas surrounding parks include changes in population, employment, personal

income, earnings per job, and

housing affordability. For the

seven sites for which data allow

economic growth analysis (1970-

2003), annual average growth in

population, employment, and

personal income outpace averages for the states in which the

sites are located. Earnings per

job increase more slowly across

the sites, while housing affordability in most cases does not

decline, and more generally follows state-wide trends.

• Budget Shortfalls and Park Needs

are identified in the most recent

business plans of each park, developed under the NPS’s Business

Plan Initiative. The average annual

budget shortfall is just over $5 million per park, ranging from a low

of about $1 million (Biscayne) to a

high of $15 million (Sequoia &

Kings Canyon). In general, the

parks need this funding to address

priorities in resource protection,

facility maintenance, and visitor

services and safety. 

• Threshold Analysis indicates the

degree of change in park quality

25THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

To illustrate the economic significance of national parks, we selected

12 NPS sites for case-level analysis.

These sites represent a diversity of

geographic locations, types of sites

(resource-based and historic), annual visitation levels, proximity to population centers, and levels of funding. This section provides a onepage summary of each site’s economic benefits, impacts, growth

trends, budget shortfalls, and priority needs, as well as assesses each

site’s benefit to cost ratio and

threshold at which funding the

budget shortfall is justified. Table 11

describes the sites selected for caselevel analysis.

Key terms and concepts applied

in assessing the economic significance of each NPS site are described

below. 

Chapter 5: Case Study Sites

• Economic Benefits refer to total

value people derive from national

parks through direct and passive

use. This study only captures

economic benefits of recreation.

Other values (e.g., ecosystem

services, education/science, passive use) could not be estimated

due to a variety of challenges.

Therefore, park benefit estimates

should be viewed as conservative.

Across the 12 sites, annual recreational benefits range from $7

million (Apostle Islands and Fort

Sumter) to over $100 million

(Acadia, Point Reyes, and Rocky

Mountain). 

• Benefit to Cost Ratio reflects the

degree to which a park’s (recreational) benefits exceed expenditures to maintain the site. Across

the sites, benefit to cost ratios are
26THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

that would justify an increase in

spending, keeping in mind that

such an increase may either prevent degradation of the park or

might improve overall conditions.

This threshold reflects a park’s

budget shortfall as a percentage

of the park’s economic (recreational) benefits. Across 12 sites,

the threshold to justify proposed

budget increases varies from a

low of 2.7 percent (Rocky

Mountain) to a high of 54 percent

(Apostle Islands). 
27THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Located along the coast of Maine,

Acadia National Park comprises

approximately 35,000 acres, most of

which are located on Mount Desert

Island. Scenic highlights of the park

include its rocky coast, mountains,

lakes, and glaciated valleys. Over

two million people visited the park

in 2004. Recreational activities

include hiking, picnicking, mountain

biking, bird watching, rock climbing,

camping, boating, canoeing, and

kayaking. Highlights of the park’s

economic importance include:

• $100 million in annual recreational benefits, providing a park benefit to cost ratio of more than 14

to 1.

• $137 million in annual visitor

spending, supporting more than

3,500 local jobs (not including

park staff).

• Amenity values contributing to

annual population, employment,

and personal income growth rates

0.5% to 1% higher than the state

average.

Acadia’s most recent business plan

(FY2000) indicates an annual budget shortfall of $8.0 million (adjusted

to 2004 dollars). This funding is

needed for upgrading utilities and

campgrounds, rehabilitating bridges

and trails, completing boundary surveys and carrying capacity studies,

and restoring disturbed habitats.

Applying a threshold analysis,

Acadia’s budget shortfall represents

8.0% of annual recreational benefits.

Funding the shortfall is justified

where it would increase park benefits, or prevent losses in park benefits, by this amount. Even if the

funding only prevented losses in

benefits, the park would still maintain an annual benefit to cost ratio

greater than 6 to 1. 

Acadia National Park
28THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Located at the northernmost tip of

Wisconsin, Apostle Islands National

Lakeshore encompasses over 750

square miles of Lake Superior and its

shoreline. The park includes a 21

island archipelago, as well as 12 miles

of mainland shoreline and adjacent

lake waters. More than 150,000 people visited the park in 2004.

Recreational activities include walking beaches, swimming, kayaking,

and boating. Highlights of the park’s

economic importance include: 

• $6.8 million in annual recreational benefits, providing a park benefit to cost ratio of at least 2.6 to 1.

• More than $7 million in annual

visitor spending, supporting nearly 200 local jobs (not including

park staff).

• Amenity values contributing to

population, employment, and

personal income growth higher

than the state average.

Apostle Islands’ most recent business

plan (FY2001) shows an annual

budget shortfall of $3.7 million

(adjusted to 2004 dollars). This

funding is needed to address maintenance, safety and security, habitat

restoration, control of non-native

species, cultural resource planning,

and archeological research.

Applying a threshold analysis,

Apostle Islands’ budget shortfall represents 54% of annual recreational

benefits. Funding the shortfall is justified where it would increase park

benefits, or prevent losses in park

benefits, by this amount. Even if the

funding only prevented losses in

benefits, the park would still maintain an annual benefit to cost ratio

greater than 1 to 1. 

Apostle Islands National Lakeshore
29THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Biscayne National Park is located in

the southeastern region of the

Florida peninsula and encompasses

much of Biscayne Bay, making it the

largest marine park in the National

Park System. The park protects part

of the third-largest coral reef system

in the world and the longest stretch

of mangrove forest remaining on

Florida’s east coast. Nearly 500,000

people visited the park in 2004.

Recreational activities include nature

viewing, walking and hiking, fishing,

boating, swimming, diving and snorkeling, picnicking, and camping.

Highlights of the park’s economic

importance include:

• $19 million in annual recreational

benefits, providing a park benefit

to cost ratio of more than 5 to 1.

• $24 million in annual visitor

spending, supporting 425 local

jobs (not including park staff).

State of the Parks: Biscayne National

Park (2006) indicates an annual

budget shortfall of approximately

$0.8 million. Funding is needed to

maintain core staffing and visitor

service levels, support essential operating needs, restore law enforcement

and maintenance capabilities, and

ensure resource protection. Applying

a threshold analysis, Biscayne’s budget shortfall represents 3.9% of annual

recreational benefits. Funding the

shortfall is justified where it would

increase park benefits, or prevent

losses in park benefits, by this

amount. Even if the funding only

prevented losses in benefits, the park

would still maintain an annual benefit

to cost ratio greater than 4 to 1. 

Biscayne National Park
30THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Encompassing six million acres of

sub-arctic Alaska, Denali National

Park and Preserve is larger than the

state of Massachusetts. And with

only one 92-mile road, wilderness is

the park’s defining experience.

Denali (Athabaskan name) or Mount

McKinley is the park’s most famous

feature. At 20,320 feet, it is the highest peak in North America and the

centerpiece of the Alaska Range.

The park’s main recreational activities are wildlife viewing, hiking, and

camping. Highlights of the park’s

economic importance include: 

• $20.0 million in annual recreational benefits, providing a park

benefit to cost ratio greater than

1.4 to 1.

• About $23 million in annual visitor spending, supporting over 500

jobs (not including park staff).

However, this spending estimate

appears to be quite conservative.

Adjustments to the analysis of

visitor spending suggest total

spending by Denali visitors may

be well over $100 million

(Chapter 3). 

Denali’s 2004 business plan indicates

an annual budget shortfall of $3.9

million. This funding is needed to

address resource protection priorities, visitor safety services, facility

operations and maintenance, and

support education and interpretation

programs. Applying a threshold

analysis, Denali’s budget shortfall

represents 19.6% of annual recreational benefits. Funding the shortfall is justified where it would

increase park benefits, or prevent

losses in park benefits, by this

amount. Even if the funding only

prevented losses in benefits, the park

would still maintain an annual benefit to cost ratio greater than 1.1 to 1. 

Denali National Park and Preserve
31THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Located on a small island near the

city of Charleston, South Carolina,

Fort Sumter is the place where the

Civil War began on April 12, 1861.

The site contains more than 40 historic structures including Fort

Sumter, Fort Moultrie, the Major

Robert Anderson monument, and

Battery Huger. Nearly 800,000 people visited this historic site in 2004.

Highlights of the park’s economic

importance include:

• Over $7 million in annual recreational benefits, providing a park

benefit to cost ratio greater than 4

to 1.

• About $18 million in annual visitor

spending, supporting nearly 400

jobs (not including park staff). 

A business plan for Fort Sumter was

not available for this analysis.

According to park management

plans, a chief concern for the park is

historic/cultural asset management,

to minimize the loss or degradation

of culturally significant material.

However, we did not identify any

specific information on budget

shortfalls or investment needs.

Fort Sumter National Monument
32THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Gettysburg National Military Park

Gettysburg National Military Park

preserves and commemorates the

historically significant site of the

Battle of Gettysburg, the largest and

most costly in human lives to occur

in North America. The park encompasses 6,000 acres in south central

Pennsylvania and preserves more

than 1,300 monuments. Over 1.7 million people visited the park in 2004.

Highlights of Gettysburg’s economic

importance include:

• Over $15 million in annual recreational benefits, providing a park

benefit to cost ratio greater than

2.2 to 1.

• More than $95 million in annual

visitor spending, supporting close

to 3,000 jobs (not including park

staff). 

• Amenity values contributing to

annual population, employment,

and personal income growth rates

more than one percent higher

than the state average.

Gettysburg’s most recent business

plan (FY2001) shows an annual budget shortfall of $3.8 million (adjusted to

2004 dollars). This funding is needed for preserving archival and museum collections, historic structures,

and historic landscapes, meeting

demand for interpretation and education programs, and improving services. Applying a threshold analysis,

Gettysburg’s budget shortfall represents 24% of annual recreational benefits. Funding the shortfall is justified

where it would increase park benefits,

or prevent losses in park benefits, by

this amount. Even if the funding only

prevented losses in benefits, the park

would still maintain an annual benefit

to cost ratio greater than 1.4 to 1.
33THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Located 140 miles east of Los Angeles

and comprising nearly 800,000 acres,

Joshua Tree National Park includes

two important desert ecosystems, the

Colorado and Mojave Deserts. More

than 1.2 million people visited the

park in 2004. Recreational activities

include hiking and walking self-guided nature trails, camping, bouldering,

stargazing/viewing the night sky, and

visiting historical and archeological

sites. Highlights of the park’s economic importance include: 

• $48 million in annual recreational

benefits, providing a park benefit

to cost ratio of at least 7.5 to 1.

• Annual visitor spending of $49

million, supporting over 1,100 local

jobs (not including park staff).

The most recent business plan for

Joshua Tree (FY2001) shows an annual budget shortfall of $2.8 million

(adjusted to 2004 dollars). This funding is needed to address resource

preservation and management needs,

visitor access, safety, and services, and

external challenges pertaining to

urban encroachment. These include

development of groundwater storage

projects, mega-landfills, hydroelectric- and gas-fired power plants, and

mining operations adjacent to the

park. Applying a threshold analysis,

Joshua Tree’s budget shortfall represents 5.9% of annual recreational

benefits. Funding the shortfall is justified where it would increase park

benefits, or prevent losses in park

benefits, by this amount. Even if the

funding only prevented losses in benefits, the park would still maintain an

annual benefit to cost ratio greater

than 5 to 1.

Joshua Tree National Park
34THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Point Reyes National Seashore

encompasses over 71,000 acres,

including 33,000 acres of wilderness

area and 80 miles of undeveloped

coastline. The park provides an

important link in a chain of protected areas, which combined constitute

one of the few remaining biologically diverse Mediterranean climate

regions on earth. Located about

one hour’s drive from the San

Francisco Bay Area, the park

received about two million visitors

in 2004. Recreational opportunities

include 147 miles of hiking trails,

four back country campgrounds,

and numerous beaches. Highlights

of the park’s economic importance

include:

• More than $120 million in annual

recreational benefits, providing a

park benefit to cost ratio greater

than 14 to 1.

• Annual visitor spending of $89

million, supporting over 2,000

local jobs (not including park

staff).

The most recent business plan for

Point Reyes (FY2002) indicates an

annual budget shortfall of $5.2 million

(adjusted to 2004 dollars). This funding is needed to address maintenance

of facilities and trails, enhancement of

visitor services, control of non-native

species, protection of endangered

species, and reduction of threats to

cultural resources. Applying a threshold analysis, Point Reyes’ budget

shortfall represents 4.3% of annual

recreational benefits. Funding the

shortfall is justified where it would

increase park benefits, or prevent

losses in park benefits, by this

amount. Even if the funding only

prevented losses in benefits, the park

would still maintain an annual benefit

to cost ratio greater than 8.8 to 1.

Point Reyes National Seashore
35THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Located in north central Colorado,

Rocky Mountain National Park preserves 416 square miles of alpine environment, including 114 peaks over

10,000 feet and scenic features including canyons, glaciers, and the headwaters of the Colorado River.

Recreational activities include hiking,

wildlife viewing, fishing, scenic drives,

and camping. Highlights of the park’s

economic importance include: 

• More than $130 million in annual

recreational benefits, providing a

park benefit to cost ratio greater

than 8.4 to 1.

• $194 million in annual visitor

spending, supporting over 5,000

local jobs (not including park

staff).

• Amenity values contributing to

annual population, employment,

and personal income growth more

than one percent higher than the

state average.

Rocky Mountain’s most recent business plan (FY1998) shows a budget

shortfall of $3.5 million (adjusted to

2004 dollars). Likewise, State of the

Parks: Rocky Mountain National

Park (2002) estimates a budget

shortfall for FY 2000 of about $3

million (2004 dollars). This funding

is needed for facility maintenance,

safety and services, elk and vegetation management, and research,

planning, and monitoring. Applying

a threshold analysis, Rocky

Mountain’s shortfall represents 2.7%

of annual recreational benefits.

Funding the shortfall is justified

where it would increase park benefits, or prevent losses in park benefits, by this amount. Even if the

funding only prevented losses in

benefits, the park would still maintain an annual benefit to cost ratio

greater than 6.8 to 1. 

Rocky Mountain National Park
36THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Sequoia and Kings Canyon National

Parks are home to giant sequoia

groves, the largest trees in the world.

Located in central California, the

parks encompass 1,352 square miles,

extending from the Sierra foothills

to 14,494 feet at the summit of

Mount Whitney – the highest peak

in the contiguous 48 states. In 2004,

the parks received 1.5 million visitors. Recreational activities include

hiking, wildlife viewing, camping,

swimming, and touring caves.

Highlights of the park’s economic

importance include:

• Over $58 million in annual recreational benefits, providing a park

benefit to cost ratio greater than

2.5 to 1.

• $74 million in annual visitor

spending, supporting close to

2,000 local jobs (not including

park staff).

Sequoia and Kings Canyon’s business plan (FY2002) shows a budget

shortfall of $14.8 million (adjusted to

2004 dollars). This funding is needed for resource protection, deterring

marijuana cultivation, biodiversity

research/monitoring, fire program

support, facility and trail maintenance, communications, and road

rehabilitation. Applying a threshold

analysis, the parks’ shortfall represents 25% of annual recreational

benefits. Funding the shortfall is

justified where it would increase

park benefits, or prevent losses in

park benefits, by this amount. Even

if the funding only prevented losses

in benefits, the parks would still

maintain an annual benefit to cost

ratio greater than 1.5 to 1.

Sequoia and Kings Canyon National Parks
37THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Comprising 300 square miles of the

Blue Ridge Mountains, Shenandoah

National Park rises 3,500 feet above

the Shenandoah valley in northern

Virginia. Located 80 miles west of

Washington, D.C., the park offers a

rolling landscape of hardwood

forests and historic farms, while protecting a sizeable portion of the Blue

Ridge/ Central Appalachian biome –

one of the world’s most diverse temperate ecosystems. The park received

more than 1.2 million visitors in 2004.

Recreational activities include viewing scenic overlooks, hiking, camping, wildlife viewing, and visiting historic sites. Highlights of the park’s

economic importance include:

• $70 million in annual recreational

benefits, providing a park benefit

to cost ratio greater than 4.4 to 1.

• $44 million in annual visitor

spending, supporting over 1,000

local jobs (not including park

staff).

Shenandoah’s most recent business

plan (FY2003) shows a budget shortfall of $8.0 million (adjusted to 2004

dollars). Increased funding is needed to protect natural and cultural

resources, maintain facilities and

trails, rehabilitate overlooks, and

support interpretation and education

programs. Applying a threshold

analysis, Shenandoah’s budget shortfall represents 11.5% of annual recreational benefits. Funding the shortfall is justified where it would

increase park benefits, or prevent

losses in park benefits, by this

amount. Even if the funding only

prevented losses in benefits, the park

would still maintain an annual benefit to cost ratio greater than 2.9 to 1.

Shenandoah National Park
38THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Zion’s most recent business plan

(FY2000) shows a budget shortfall

of $4.8 million (adjusted to 2004

dollars). This funding is needed for

major investments in rehabilitating

the water system, campgrounds, and

roads, constructing an emergency

operations center, and conducting

an inventory of natural and cultural

resources. Applying a threshold

analysis, Zion’s budget shortfall represents 4.9% of annual recreational

benefits. Funding the shortfall is

justified where it would increase

park benefits, or prevent losses in

park benefits, by this amount. Even

if the funding only prevented losses

in benefits, the park would still

maintain an annual benefit to cost

ratio greater than 6.9 to 1.

Zion National Park

Zion National Park is characterized

by multi-colored cliffs, deep

canyons, high plateaus, striking rock

towers and mesas, and the Virgin

River. Located in southwest Utah,

the park encompasses about 150,000

acres, rising from an elevation of

3,600 feet to 8,700 feet. More than

2.6 million people visited the park in

2004. Recreational activities include

scenic viewing, hiking, wading in the

river, picnicking, and camping.

Highlights of the park’s economic

importance include:

• Close to $100 million in annual

recreational benefits, providing a

park benefit to cost ratio greater

than 10.5 to 1.

• $83 million in annual visitor

spending, supporting over 2,000

local jobs (not including park

staff).

• Amenity values contributing to

annual population, employment,

and personal income growth

more than 2.5 percent higher than

the state average.
39THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

tional research could alter the conclusions of this report. The U.S.

National Park System provides

national economic benefits far in

excess of the public cost of maintaining and operating them, and

parks are an important engine for

local jobs and income and are a

substantial driver of economic

growth. Federal support of NPS is

a wise economic investment.

nations of site needs are very

helpful.

• Effects of Budget Shortfalls: Costbenefit analysis of the park system could be greatly fortified by a

more comprehensive examination of the effects on parks of

budget shortfalls. This should

include the physical and ecological changes that result from

insufficient budgets, today and

over time. Once completed,

economic analysis will be

required to evaluate the economic benefits of improvements, or

avoidance of deterioration, of

park quality.

• Impact Analyses: MGM2 currently produces conservative and

defensible estimates of the

impacts of local economic activity attributable to park visitation.

Efforts to extend the inclusiveness of site-specific spending

patterns for more NPS sites, as

well as inclusion of broader geographic areas of park-related

spending could make estimates

more accurate.

• Historic Sites: A major subset of

NPS sites are historic, but there

has been very little primary

research conducted on the benefits associated with preserving

these sites and making them

available for public visitation.

Additional visitor survey research

should be a priority for improving estimates of the economic

benefits of historic sites.

Despite a list of substantive work

that could be done to improve our

current estimates of the park system’s economic significance, we do

not envision a scenario where addiThe findings presented in this study

build upon the work of a number of

researchers who have endeavored

to capture the economic significance of the U.S. National Park

System from a variety of angles. We

conclude that national parks play an

important role in local economies

as well as the national economy.

Policy makers at all levels should be

aware of this, and carefully consider

the potential benefits and costs of

budgetary decisions that will affect

NPS sites in the future.

In an effort to make this report as

objective as possible, and to support

informed decision making and

structured debate on the merits of

public funding for NPS, we have

made every attempt to clearly

describe our methods and assumptions. In some cases those assumptions can be challenged and alternative estimates may be made. To

make such a process as constructive

as possible, the spreadsheets and

more complete description of our

approach are available upon

request.

In addition, we believe that further study of the economic significance of the national park system

could yield more robust estimates

of greater precision. We have identified weaknesses in current methods and data throughout the body

of the report. Following is a list of

suggestions for additional study that

will help to fill those gaps.

• Case Studies: This report includes

a cross section of case studies.

Additional case studies will be

useful in building a richer understanding of the characteristics of

the full range of NPS sites. In

order to do so effectively, base

documents, including business

plans, visitor surveys, and examiChapter 6: Next Steps
40THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK
Dearien, C., G. Rudzitis, and J. Hintz. 2005. The role of wilderness and public

land amenities in explaining migration and rural development in the

American Northwest. In eds. Green, G., S. Deller, D. Marcouiller. 2005.

Amenities and Rural Development: Theory, Methods and Public Policy. EE:

Northhampton, MA.

Duffy-Deno, K. 1998. The Effect of Federal Wilderness on County Growth in the

InterMountain United States. Journal of Regional Science, 38(1):109-136.

Green, G., S. Deller, and D. Marcouiller. 2005. Amenities and Rural Development:

Theory, Methods and Public Policy. EE: Northhampton, MA.

Kaval, P., and J. Loomis. 2003. Updated Outdoor Recreation Use Values with

Emphasis on National Park Recreation. Report to National Park Service, Fort

Collins, CO, under Cooperative Agreement CA 1200-99-009, Project Number

IMDE-02-0070.

Krutilla, J. 1967. Conservation Reconsidered. American Economic Review 57:787-

796.

Le, Y., M. Littlejohn, and S. Hollenhorst. 2004. Joshua Tree National Park Visitor

Study, Spring 2004. Visitor Services Project, Report 152, December 2004.

Leggett, C., N. Kleckner, K. Boyle, J. Duffield, and R. Mitchell. 2003. “Social

Desirability Bias in Contingent Valuation Surveys Administered Through InPerson Interviews.” Land Economics, 79(4):561-565.

Littlejohn, M. 1999. Acadia National Park Visitor Study, Summer 1998. Visitor

Services Project, Report 108, May 1999.

Longwoods International. 2005. Travel and Tourism in Maine: The 2004 Visitor

Study Management Report. Prepared for the Maine Office of Tourism, July

14, 2005.

Loomis, J. 2000. Economic Values of Wilderness Recreation and Passive Use:

What We Think We Know at the Beginning of the 21st Century. USDA Forest

Service Proceedings, RMRS-P-15 Vol. 2: 5-13.

Lorah, P. 2000. Population Growth, Economic Security, and Cultural Change in

Wilderness Counties. USDA Forest Service Proceedings RMRS-P-15 Vol. 2:

230-237.

Lorah, P. and R. Southwick. 2003. Environmental Protection, Population

Change, and Economic Development in the Rural Western United States.

Population and Environment 24(3):255-271.

Machlis, G. and D. Field, eds. 2000. National Parks and Rural Development:

Practice and Policy in the United States. Island Press: Washington, DC.

McGranahan, D. 1999. Natural amenities drive rural population change.

Agricultural Economic Report. 781. Washington, DC: U.S. Department of

Agriculture, Economic Research Service.

Money Generation Model 2. 2003. Impact reports.

http://web4.canr.msu.edu/MGM2/

41THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

References
National Park Service. 2004. Statistical Abstract 2004. Public Use Statistics

Office. Denver, CO.

National Parks Conservation Association. 2002. State of the Parks: Rocky

Mountain National Park – A Resource Assessment. Washington, DC. 

National Parks Conservation Association. 2003. Gateway to Glacier: The

Emerging Economy of Flathead County. Washington, DC.

National Parks Conservation Association. 2006. State of the Parks: Biscayne

National Park – A Resource Assessment. Washington, DC. 

Northern Economics. 2002. Alaska Visitor Expenditures and Opinions, Summer

2001. Prepared for State of Alaska, Department of Community & Economic

Development, November 2002.

Rasker, R., B. Alexander. 2003. Getting Ahead in Greater Yellowstone: Making

the Most of Our Competitive Advantage. Published by Sonoran Institute and

Yellowstone Business Partnership.

Rasker, R., A. Hansen. 2000. Natural Amenities and Population Growth in the

Greater Yellowstone Region. Research in Human Ecology 7(2):30-40.

Rosen, H. 1988. Public Finance (Second Edition). Irwin Publishers,

Homewood, Ill.

Schmidt, L. and P. Courant. 2005. Sometimes Close is Good Enough: The Value

of Nearby Environmental Amenities. Williams College, MA. Draft manuscript. 

Sedell, J., M. Sharpe, D. Dravnieks Apple, M. Copenhagen, M. Furniss. 2000.

Water & The Forest Service. USDA Forest Service Policy Analysis,

Washington, DC.

Sonoran Institute. 2004. Public Lands Conservation and Economic Well-Being.

www.sonoran.org.

Stynes, D. and Y. Sun. 2003. Economic Impacts of National Park Visitor

Spending on Gateway Communities Systemwide Estimates for 2001.

Michigan State University. http://web4.canr.msu.edu/MGM2

University of Idaho, Park Studies Unit, Visitor Services Project.

http://www.psu.uidaho.edu/vsp.reports.htm

USDA Forest Service (Garber-Yonts, B.). 2004. The Economics of Amenities and

Migrations in the Pacific Northwest: Review of Selected Literature with

Implications for National Forest Management. General Technical Report

PNW-GTR-617.

U.S. Department of Interior. 2006. Budget Justifications and Performance

Information Fiscal Year 2006: National Park Service. Washington, DC.

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Operations Funding Trends and How Selected Park Units Responded to

Those Trends for Fiscal Years 2001 through 2005. GAO-06-431, Washington,

DC.

42THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK
either quite limited or did not exist.

Focusing on recreational use, we

identified a number of important

sources for conducting our analysis,

including:

• Database of Recreational Value

Estimates (Kaval and Loomis

2003) – This database compiles

1,239 estimates of recreational

value from 593 studies. These

estimates span 30 separate outdoor recreational activities,

including wildlife viewing, sightseeing, hiking, and so on.

• Visitor Study Surveys (University

of Idaho, Park Studies Unit,

Visitor Services Project.

http://www.psu.uidaho.edu/vsp.re

ports.htm) – Among other information, these surveys provide

data on the most common activities engaged in by park visitors.

• National Park Business Plans

(Business Plan Initiative,

www.nps.gov) – The National

Park Service, in partnership with

the National Parks Conservation

Association, developed the business plan initiative to support

analysis of park operations. Parks

that have developed a business

plan provide a financial summary

of their current budget, as well as

estimates of their current budget

shortfalls and priority needs. 

• State of the Parks (National Parks

Conservation Association,

www.npca.org) – The National

Parks Conservation Association

initiated these studies to assess

the condition of natural and cultural resources in the parks, and

to determine how well equipped

the National Park Service is to

protect the parks. 

These sources allowed for cost-benefit analysis of the National Park

System, where costs reflect the park

system budget and benefits reflect

recreational values associated with

park visitation. For our case study

sites, we identified the range of

recreational activities engaged in at

each site (based on Visitor Study

Survey information), and weighted

recreational estimates from the

Kaval and Loomis database accordingly. Information on the current

budgets, shortfalls, and priority

needs for case study sites was drawn

from park business plans and/or

State of the Parks reports, where

available.

Economic Impact Analysis

Economic impact analysis measures

park visitors’ spending and the

effects it has on a town or county’s

output, employment, and income.

The National Park Service currently

supports the Money Generation

Model 2 (MGM2) to estimate economic impacts of each park and the

overall system. MGM2 estimates

economic impacts by multiplying

the number of park visitors by average spending per visitor and regional

economic multipliers. 

Our study’s economic impact

estimates reflect the most recent

MGM2 model estimates, with case

study site estimates drawn from

http://web4.canr.msu.edu/MGM2/.

Based on our analysis of case study

sites, we identified some instances

where MGM2 estimates appear

quite conservative (e.g., Denali).

These cases are highlighted along

with potential opportunities for

refining and extending impact

analysis for the parks.

Economic Growth Analysis

Economic growth analysis measures

trends occurring as a result of economic activity associated with proximity to parks. Such economic

activity extends beyond tourism to

include all economic activity attracted to an area by the natural amenities provided by the park. For this

study, we drew upon a range of

existing studies of the relationship

43THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

Appendix: Key Project Steps and

Sources

This appendix provides an overview

of steps taken to carry out the study

and key sources of information. To

begin, we conducted an extensive

literature review of more than one

hundred studies addressing the economic role of protected lands,

including national parks and wilderness areas. This review was complemented by interviews with 30

experts from academia, the National

Park Service and other government

agencies, non-governmental organizations, and the private sector to

gain their perspectives on the economic role of national parks (Box A1).

Based on the literature review

and expert interviews, we determined that providing the most complete picture of the park system’s

economic importance would require

analysis of three types of economic

measures: economic benefits generated by the parks, economic impacts of

park visitation, and the economic

growth patterns associated with

parks. Our approach and data

sources for these analyses are

described briefly below.13

Economic Benefit Analysis

Economic benefit measures the total

value that people derive from the

national park system through direct

and passive use. We determined

through the literature review and

expert interviews that, while extensive data were available on recreational values associated with protected lands, quantitative estimates

of other types of benefits (e.g.,

ecosystem services, biodiversity,

research/education, cultural/spiritual

values, and passive use values) were

13 Spreadsheets showing calculations for

each analysis are available upon request.
Box A-1: Experts Interviewed for Study

1. Hana Blake Community Planning Director, Erie Canal Heritage

Corridor

2. Fred Boyles Superintendent, Andersonville National Historic

Site

3. Steve Colt Associate Professor of Economics, University of

Alaska Anchorage 

4. Suzanne Copping Assistant Coordinator, National Heritage

Areas, National Park Service

5. Ginny Fay Eco-Systems (former Alaska State Tourism Director)

6. Kate Fox Essex National Heritage Area

7. Mary Goundrey Civil War Preservation Trust 

8. Jim Gramann Visiting Chief Social Scientist, National Park

Service

9. Howard Gross California Desert Program Manager, National

Parks Conservation Association

10. John Howard Superintendent, Antietam National Battlefield

11. Bill Jackson Director of Water Resources Division, National

Park Service

12. Grace Johns Senior Natural Resource Economist, Hazen and

Sawyer

13. John Kelly Planning Director, Acadia National Park

14. Chris Leggett Senior Associate, Industrial Economics,

Incorporated

15. John Loomis Professor, Department of Agricultural and

Resource Economics, Colorado State University

16. Paul Lorah Professor and Chair, Department of Geography,

University of St. Thomas (St. Paul, MN)

17. Pete Morton Economist, The Wilderness Society

18. Tom Offut Trustee, Yellowstone Park Foundation

19. Kyle Patterson Public Information Officer, Rocky Mountain

National Park

20. Bruce Peacock Economist, National Park Service

21. Alexandra Picavet Public Affairs Specialist, Sequoia and Kings

Canyon National Parks

22. Thomas Power Professor and Chair, Department of Economics,

University of Montana

23. Ray Rasker Senior Economist, Sonoran Institute

24. Gundars Rudzitis Professor, Department of Geography,

University of Idaho

25. Lucie Schmidt Assistant Professor of Economics, Williams

College

26. Jim Stratton Alaska Regional Director, National Parks

Conservation Association

27. Butch Street Public Use Statistics Office, National Park Service

28. Daniel Stynes Professor Emeritus, Department of Park,

Recreation and Tourism Resources, Michigan State University

29. Bob Unsworth President, Industrial Economics, Incorporated

30. Joe Zarki Joshua Tree National Park

between protected lands and economic growth. In addition, we conducted analysis of our case study

sites using the Bureau of Land

Management and Sonoran Institute

Economic Profile System

(www.sonoran.org). We analyzed

the growth in population, employment, income, earnings per job, and

housing affordability in counties

surrounding or adjacent to the park

site compared to state-wide averages

from 1970 to 2003. 

THE U.S. NATIONAL PARK SYSTEM: AN ECONOMIC ASSET AT RISK

44