Measuring the Economic Benefits of America’s

Everglades Restoration

An Economic Evaluation of Ecosystem Services Affiliated with the World’s Largest Ecosystem 

Restoration Project

Prepared for The Everglades Foundation

18001 Old Cutler Road, Suite 625 

Palmetto Bay, Florida 33157 

www.evergladesfoundation.org

305.251.0001

by

Mather Economics

43 Woodstock Street,

Roswell, Georgia 30075

www.mathereconomics.com

770.993.4111

Bobby McCormick, Ph.D., Principal Investigator

Robert Clement, MA

Daniel Fischer, MBA

Matt Lindsay, Ph.D.

Reed Watson, JD MA

with assistance from

Danielle Alderman 

Kristina Catani

Joanna Fister

Gabi Huber, Ph.D.

Exley McCormick 

Arvid Tchivzhel

Emily Wood, MA
Summary of Results

Everglades restoration will have important and significant economic impacts on several basic services 

provided by this massive and complex ecosystem. We have split these services into six distinct divisions. For 

each of these categories, we conservatively estimated, using best available data and economic methods, the 

increase in economic value of a restored Everglades ecosystem.

Our analysis strongly suggests that restoration of the Everglades as described and planned in CERP will have 

large economic benefits. Our best estimate is that restoration will generate an increase in 

economic welfare of approximately $46.5 billion in net present value terms that could range 

up to $123.9 billion. The return on investment, as measured by the benefit-cost ratio, assuming a cost of 

restoration of $11.5 billion, is also high and significant, 4.04, which means for every one dollar invested in 

Everglades restoration $4.04 dollars are generated. Everglades restoration will also have an incremental 

impact on employment of about 442,000 additional workers over 50 years. In addition, the Corps of 

Engineers estimates there will be 22,000 jobs created as a result of the actual restoration projects. 

Throughout our analysis, we have taken a very conservative approach to estimation. Accordingly our best 

estimates almost surely understate the return on investment of Everglades restoration.

Summary of Jobs Results

Sector Incremental Jobs

Commercial Fishing 6,798 

Recreational Fishing 36,868 

Residential Construction & Real Estate Services 273,601 

Tourism (Lodging, Eating & Drinking, Transportation, Retail, Entertainment) 48,552 

Agriculture (3,724)

Wildlife Habitat & Hunting 80,569

TOTAL 442,664 
b

Table of Contents

Summary of Results............................................................................................................................................a

Preamble and Executive Summary......................................................................................................................i

Details............................................................................................................................................................iv

Introduction........................................................................................................................................................1

Our Assignment..............................................................................................................................................7

Our Methods, Approach and Assumptions....................................................................................................8

What Others Have to Say About Everglades and Everglades Restoration...................................................10

On Costs........................................................................................................................................................13

Introduction References...............................................................................................................................14

Appendix to Introduction .............................................................................................................................16

Chapter 1: Ground Water Purification and Aquifer Recharge .........................................................................19

Avoided Desalination Costs..........................................................................................................................20

General approach and data sources.........................................................................................................20

Technical details.......................................................................................................................................21

Results ..........................................................................................................................................................26

Chapter 1 References...................................................................................................................................28

Appendix to Chapter 1..................................................................................................................................28

Part 1: Total water withdrawals model ....................................................................................................28

Part 2: Details on U.S.G.S. data collection................................................................................................29

Part 3: Locations of and other information on existing SFWMD desalination plants..............................30

Chapter 2: Water Quality and Residential Real Estate Valuation.............................................................40

Impact of Improved Water Quality ..............................................................................................................40

Real Estate Change-in-Value Estimation Results..........................................................................................41

Appendix to Chapter 2..................................................................................................................................45
c

Chapter 3: Recreation and Park Visitation Valuation.......................................................................................48

Methodology ................................................................................................................................................48

Results and Sensitivity Analysis....................................................................................................................55

Chapter 4: Open-Space Valuation ....................................................................................................................56

Primary Methodology...................................................................................................................................56

Alternative Methodologies...........................................................................................................................59

Information Sources.....................................................................................................................................61

Chapter 5: Commercial and Recreational Fishing Valuation............................................................................66

Literature Review and Background ..............................................................................................................66

Impact on Fish Population............................................................................................................................66

Impact on Commercial Fishing .....................................................................................................................68

Methodological Approach ........................................................................................................................68

Impact on Recreational Fishing ....................................................................................................................77

Additional Commercial Fishing Figures ........................................................................................................83

Chapter 5 References...................................................................................................................................84

Chapter 6: Wildlife Habitat and Hunting Valuation..........................................................................................85

Impact on Hunting........................................................................................................................................85

Methods and Literature............................................................................................................................85

Impact on Habitat and Wildlife Viewing.......................................................................................................91

Chapter 7: Other Everglades Valuations, Miscellany .......................................................................................96

The Potential Benefit of Cleaner Water from Restoration...........................................................................97

Nutrient Loading.......................................................................................................................................97

Harmful Algal Blooms, Beach Closures, and Public Health Impacts.......................................................101

Conclusions Regarding Water Quality Impacts ......................................................................................105

Fire..............................................................................................................................................................106

Chapter 7 References.................................................................................................................................107

Chapter 8: Impact On Job Creation And Earnings..........................................................................................110

Commercial Fishing ....................................................................................................................................112
d

Recreational Fishing ...................................................................................................................................113

Residential Construction & Real Estate Services........................................................................................115

Tourism.......................................................................................................................................................117

Agriculture ..................................................................................................................................................119

Wildlife Habitat and Hunting......................................................................................................................122

Direct Jobs Created as a Result of Restoration Construction.....................................................................124

Chapter 9: Last Words....................................................................................................................................126

Diamonds and Water..............................................................................................................................126

Outrunning the Bear...................................................................................................................................128

Chapter 10: Acknowledgements ....................................................................................................................130

Chapter 11: Mather Economics Everglades Valuation Team Biographies.....................................................131
Preamble and Executive Summary

We have been commissioned by the Everglades Foundation to place an economic valuation on 

Everglades restoration. The Everglades are sub-tropical wetlands – a ―River of Grass‖ and much, 

much more. In order to catalogue the huge array of potential products and services flowing out of 

the Everglades, we envision this vast natural cauldron as a firm. Ponder General Electric. Among 

many other things, General Electric produces medical imaging, jet engines, and financial 

services. Each of its product lines has revenues and costs. GE manufactures and creates the 

products, and buyers purchase them. In almost every case, the buyer places a higher value on the 

product than the purchase price. The Everglades system is like GE, except that buyers do not 

directly pay for the products they consume. Instead, consumption is enjoyed in large measure 

without any compensation to the owner or producer, because there is no well-defined owner and 

nature is the producer.

We approach our job as if the Everglades were a multi-product firm like GE, and we task 

ourselves with estimating the values that consumers place on its products and services. In that 

taxonomy, Everglades restoration is akin to a business opportunity, and the Comprehensive 

Everglades Restoration Plan, CERP, is a detailed business plan. Our job is to produce a set of pro 

forma financial statements to complement and complete that plan. As with all pro forma 

projections, we have made assumptions about the future. We have attempted to make our 

assumptions as reasonable, visible, and transparent as possible so that readers can adjust our 

findings based upon their own assessment of the proper assumptions. As in any analysis of this 

type, the best assumption is not always obvious. Therefore, in many cases, we have provided a 

range of estimates, but we also offer what we think is our best estimate. In all cases where there 

was no clear choice regarding an assumption, we took the conservative approach. Accordingly, 

in the analysis you see below, we believe that our estimates are at the lower end of the range 

(lower bound) and follow best practices in economic methodology.

We have broken this multi-product firm, the Everglades, into six distinct divisions and a seventh 

catch-all branch. These are:

$ Groundwater purification and aquifer recharge

$ Real estate

$ Park Visitation

$ Open space

$ Fishing

$ Wildlife habitat and hunting

$ Water quality, biodiversity, and carbon sequestration

Take groundwater purification and aquifer recharge as the first of many services produced by the 
ii

Everglades. CERP, if enacted as planned, will restore Everglades sheet flow. Restored sheet flow 

will, in turn, provide additional fresh surface water and groundwater. Consequently, water 

available for municipal and private use will be less saline, that is, ground water extracted for use 

by South Floridians will be less saline and require less electricity to become usable and potable. 

Because it costs money to desalinate water, one service that a restored Everglades would provide 

is reducing the cost of desalinating increasingly brackish groundwater. In order to assay this 

revenue stream, we have assumed that restoration will return South Florida groundwater and 

surface water to its 1970 levels.1 Using data from that period, and assuming that restoration 

would create water of similar salinity to that period, we can project how much money the people 

of South Florida will not have to spend desalinating groundwater as restoration unfolds. In other 

words, Everglades restoration means that groundwater will not be as salty and that less energy 

will be required to prepare it for human use. Salty water must be treated to remove chlorides. As 

the groundwater is more salty, it takes more electricity to purify the water for humans. 

Restoration reduces the amount of electricity required and thus is a direct benefit in terms of 

energy cost savings. We estimate these restoration savings to come primarily from reduced 

expenditures on energy which would otherwise be used to filter out more saline pushed through 

membranes to create usable water.2

In Table A below, we report in summary format our results of computing the value of services 

for all the product lines listed above. In our detailed document that follows, we provide thorough 

insight into our methods, sources, and our exact assumptions. They are only sketched and 

summarized here. Each division has associated with it a table detailing the best estimates and a 

range of estimates that we deem plausible. Again, for parsimony of presentation here, we have 

not included all the details of our calculations. They are available in the full document below.

 

1

Our empirical analysis of ground and surface water supports this assumption. Salinity levels appear 

relatively constant in ground water test wells up until the early 1970s when they began to grow commensurate with 

Everglades flow reduction.

2While it might be argued that fewer plants will have to built for water purification after restoration, this is 

not accurate according to our models. Population and income growth will likely necessitate the construction of new 

plants, but restoration will not preclude these investments. Hence, the virtue and benefit of restoration on 

groundwater purification comes only from the lower expenditures required to clean the salt from the less briny water 

not from less capital investment in plants. Plants will have to be built to accommodate increased demand for water, 

which will not be impacted by restoration. 
iii

Our analysis strongly suggests that restoration of the Everglades as described and planned in 

CERP will have large and important economic benefits. Our best estimate is that restoration will 

generate an increase in economic benefits of approximately $46.5 billion in net present value 

terms.3The range of this estimate can be as high as $123.9 billion.

The return on investment, assuming a cost of restoration of $11.5 billion, is also high and 

significant. Our best estimate is that the benefit-cost ratio is 4.04 with a range as high as 9.78. 

The bottom line, as our analysis strongly suggests, is that the rewards of restoration far outweigh 

the economic costs. It is important to note that these are the changes in value to a restored 

Everglades. Our valuation does not represent the total value of services that flow from this 

ecosystem, currently or in its restored state. It is the incremental or marginal increase in value 

from implementing restoration.

To provide perspective, Table B below reports computations on (1) the total value of services per 

person in the 16-county South Florida region, (2) the ratio of total services to total income in 

2007, and (3) the present value of total income in 2007.4These calculations say that the total 

value of ecosystem services from a restored Everglades amount to an increase in wealth for each 

person in the region of about $5,129 on a one-time basis, which is approximately a 0.3 percent 

increase in their wealth (narrowly defined for purposes here as the present value of income over 

 

3 We believe that the overall welfare impacts, as distinct from the simple benefits, are even larger. Details 

on this economic distinction are provided later in this report.

4

Using the 2007 Census data on population and income.
iv

the next 50 years or an 12.9 percent wealth increase when compared to their annual income). 

These computations suggest that the impacts of restoration are not only real and economically 

meaningful, but also reasonable. 

TABLE B Relevance and Impact of Restoration with respect to Income 

and Wealth

Value of Services per capita $ 5,129

Value of Services per dollar of annual income 12.9%

Value of services per npv of income 0.30%

Details

Groundwater Purification and Aquifer Recharge Valuation

Avoided Groundwater Desalination Costs

Groundwater in the coastal counties of the South Florida Water Management District (SFWMD) 

is growing increasingly brackish. It will have to be desalinated before most uses. The capital cost 

of desalination, given the current state of reverse osmosis (RO) technology, is driven by the 

volume of fresh water that must be produced, which in turn is driven by population growth and 

perhaps other factors (for instance, climate and income).5The operating cost of desalination, on 

the other hand, is a direct function of the salinity of the water input. Saltier water must go 

through the RO membranes at a higher pressure, which requires more energy. The restoration of 

sheet flow according to CERP can be expected to decrease groundwater salinity, because the 

additional fresh water filtered into the aquifer from above will displace seawater seeping into the 

aquifer from below. So, conservatively, restoring the Everglades can be expected to result in at 

least the energy cost savings from desalinating less saline groundwater. We ignore any capital 

cost savings that might come from possibly having to build fewer desalination plants in the first 

place. We also ignore labor and maintenance cost savings from using less saline input (instead of 

assuming, for instance, that RO membranes fail at higher rates when higher-pressure, more saline 

water is pushed through). This is in keeping with our desire to be ultra-conservative with respect 

to our estimates. It is reasonable to subjectively estimate that our metrics of benefits are biased 

on the low side because of this conservative approach.

 

5 Our use of the phrase desalination might be confusing to some people. Here we are not talking about 

taking salt out of ocean water instead we are referring to the act of removing salt from brackish or slightly salty fresh 

groundwater.
v

Under assumptions detailed below, we estimate that these energy cost savings would be 

substantial and vary by county within the region. Growing energy costs would increase these 

estimates. Improvements in desalination technology would decrease them. One assumption that 

affects our cost savings estimates is whether all the groundwater withdrawn must be desalinated. 

We have made two different assumptions: first, that all groundwater is to be desalinated, and 

second, that only the groundwater currently classified as saline must be desalinated. 

General Approach and Data Sources

Our model has three steps. First, we used the volume of groundwater withdrawn and its salinity 

as observed over time to infer the change in salinity over the next 50 years without Everglades 

restoration. Next, we inferred the yearly desalination cost over the same period using regression 

analysis and engineering data published by the Texas Water Development Board (TWDB). 

Finally, we repeated the cost calculations assuming that, if the Everglades were restored,

groundwater salinity would return to its 1970 level and stay there even as the volume of water 

withdrawn grows as population and demand grow.6

In other words, we assumed that implementing CERP would result in a new steady state, where 

the aquifer would be replenished with fresh water to a sufficient extent that it could sustain 

increased withdrawals with no increase in its salinity. The difference between the discounted 

streams of yearly groundwater desalination cost with and without the Everglades restored is our 

estimated economic benefit in the form of avoided desalination costs that can be credited to 

CERP. In the next 40 or 50 years, south Floridians will still need to desalinate their water, but it 

will cost them less because after restoration, the water will be less saline.

We collected data on ground and surface water use in SFWMD, by county and by year, from the 

US Geological Survey (USGS). We collected salinity data from DBHYDRO, the official 

SFWMD data repository of water research results, and from the National Water Information 

System (NWIS) maintained by the USGS.

Technical Details on Water Supply Calculations

The USGS collects county-level data on water withdrawals every five years. We are interested in 

 

6 We have not made any adjustment to our predicted levels of ground-water salinity based on any sea-level 

rise that might accompany global climate change. Restoration is a marginal adjustment to ground-water salinity. If 

climate change increases sea level and that leads to higher salinity of ground water, it will cost more to clean the 

water, but that impact is separate and independent of our estimate of any changes in salinity that occur as a result of 

restoration of sheet flow.
vi

data for the 16 counties in the SFWMD. The earliest available records are from the 1985 data set. 

The latest available are from 2005. Using these data and yearly population figures by county 

over the same time span, we extrapolated water use 50 years into the future. Details are provided 

in the full report below.

One of the DBHYDRO measurements is chloride concentration in milligrams per liter. Each 

measurement comes with the location of the station and the date it was taken, so it is 

straightforward to combine them into yearly averages per county. The USGS maintains the 

National Water Information System (NWIS), a similar online database with its own chloride 

records, with the same unit of measurement, also with locations and time stamps. Both 

DBHYDRO and NWIS record salinity separately by groundwater and surface water. In the case 

of groundwater, we are interested in measurements taken in wells no deeper than 500 ft. Below 

this depth, the water is saline. Southern Florida's fresh groundwater comes from surficial 

aquifers, with water withdrawn from depths well above 500 feet.

Groundwater in the 16 counties has been growing increasingly brackish over time. This result 

occurs even after discarding any samples taken from depths either unknown or greater than 500 

feet (Figure 1). It is reasonable, then, to assume that desalination will be needed for all 

0

500

1,000

1,500

2,000

2,500

1900 1950 2000

year

 44,735 samples

NWIS, Chloride, water, filtered (p00940), All GW Sites

0

1,000

2,000

3,000

4,000

1970 1980 1990 2000 2010

year

6,205 samples

DBHYDRO, Test Name: Chloride (32), Matrix: GW, All Stations

Chloride mg/L at depths above 500 ft.

Groundwater salinity in the 16 counties of SFWMD

Figure 1 Groundwater Chloride Levels
vii

groundwater withdrawn in SFWMD in the future, whether by private or public water supply 

systems. Restoring the Everglades will help decrease the expected cost of desalination to the 

extent that it will succeed in reversing the trend of increasing groundwater salinity. We 

conservatively assume that surface water will not be affected.

The exercise assumes that CERP would result in groundwater salinity restoring to its steady state 

1970 level and have no effect on surface water salinity. Without CERP, we assume that salinity 

would continue to grow along its current path as shown in the right panel of Figure 1. 

 

The Cost of Desalination

Desalination requires a capital investment (building the plants) and an ongoing operating cost 

(energy used, materials, maintenance, and labor). As the water input becomes more saline, it 

must be pushed through RO membranes at a higher pressure. Though the baseline of this 

relationship is dropping as RO technology improves, it remains true that the higher the pressure, 

the higher the energy expended, and there are no economies of scale in this process. This is of 

interest to us, because everything else is subject to either scale effects or factors depending on 

local characteristics. For example, larger plants, as well as plants designed to operate at a higher 

baseline pressure, have some efficiencies built-in. The cost of disposing of the brine via deepwell injection depends on local geographic options for doing so. The same goes for the cost of 

disposing of the concentrate (sludge saturated with impurities other than salt).

7 We have not 

imputed any benefits-estimate to the expected lower cost of brine disposal that will follow from 

restoration and less desalination. We are uncertain what these cost savings might be, and hence 

our conservative approach is to note this fact and move on until further information is available.

We estimated the annual cost of energy as a function of water input salinity assuming an energy 

price of $.08 per kW/h, based on the average electricity price in Florida for industrial use ($.0767 

in 2007). Then we projected this annual desalination cost for each SFWMD county--given its 

projected water withdrawals (ground and surface) and their respective salinity levels given their 

current path (groundwater salinity expected to rise at a growing rate as shown in Figure 1; 

surface water salinity, not shown, expected to remain unchanged). Then we repeated the 

calculations with salinity levels held at their 1970 level.

 

7 We assume that it takes 200 psi to treat 3,000 mg/L of chloride water, and it takes about 1,000 psi to treat 

30,000 mg/L seawater. Therefore we assume that as salinity grows by a factor of 10, the pressure required grows by 

a factor of 5. Filling in a few intermediate values, we estimated, via linear regression, the functional relationship 

between and pressure and salinity.
viii

Water Supply Results

Our avoided desalination cost estimate is the difference between projected desalination costs 

given the current path of rising salinity versus projected desalination costs holding salinity

constant at its 1970 level (our expected environmental effect of CERP). We performed this 

calculation under two assumptions regarding water withdrawn by public and private parties in 

the SFWMD over the next 50 years. First we assumed that all water will have to be desalinated; 

second we assumed that only the water classified as saline will have to be desalinated. Details 

are provided in the full report below. Though the latter sounds obvious and results, as expected, 

in a lower estimate, the former is also deemed plausible. Current readings show that all 

groundwater in SFWMD tested at depths above 500 ft. is saline, to some extent, and growing 

more saline on average. If not all of it is treated now, it might need to be in the future. Net 

present values of the yearly savings between 2010 and 2060 are shown in Table 1.

Assuming lowered desalination resulting from restoration of the Everglades, the cost savings 

from energy-use reduction will be substantial. For purposes here, we made some additional 

assumptions. First, we accumulated the cash flows over 30-, 40-, and 50-year periods. Second,

we discounted the dollar amounts by the current real cost of capital to municipalities in South 

Florida, 2.1 percent.8

We next report our calculations in pro forma format for the other services and products listed 

above. While we have gone to some length in this section to give a sense of our methods, in the 

summary sections below we are more succinct and parsimonious, however, complete discussion 

of all our methods and technical details are provided in each relevant section of the main 

document.

 

8 Details on our use of this particular discount rate are discussed later in the document.
ix

Assumptions:

Total Growth 3%

Income Growth 0%

Adjusted for 

Growth Unadjusted Adjusted Unadjusted

Population Growth 1% $ 27,974,488,275 $13,150,812,909 50 Years 131% 9%

Energy Cost Growth 2% $ 18,671,662,550 $10,306,678,952 40 Years 54% -15%

Technology 0% $ 11,222,040,888 $7,408,688,810 30 Years -7% -39%

SF Muni Bond Rates 4.50%

Inflation 2.40%

Discount Rate 2.10%

Initial Investment $ 12,100,000,000

County Estimates, Adjusting for Growth

Years B ro ward C harlo tte C o llier Glades H endry H ighlands Lee M artin

NPV 50 $4,609,492,133 $1,753,556,508 $3,037,706,282 $1,919,983,244 $1,162,162,385 $698,345,814 $424,886,022 $1,914,496,540

NPV 40 $3,109,313,065 $1,269,883,770 $2,155,116,915 $939,722,627 $853,459,336 $481,608,784 $267,666,580 $1,268,848,876

NPV 30 $1,896,237,894 $857,682,344 $1,407,512,215 $266,441,931 $571,550,030 $298,391,864 $145,288,674 $759,955,278

M iami-D ade M o nro e Okeecho bee Orange Osceo la P alm B each P o lk St. Lucie

NPV 50 $1,007,782,981 $844,489,817 $445,303,896 $1,933,953,018 $968,626,070 $5,004,265,681 $1,120,046,038 $1,129,391,846

NPV 40 $725,449,099 $592,881,240 $280,842,498 $1,157,340,508 $624,711,897 $3,478,682,745 $701,642,250 $764,492,361

NPV 30 $478,860,798 $377,843,554 $151,122,484 $587,782,360 $361,506,661 $2,205,447,197 $384,229,243 $472,188,362

Return on Investment, 

Total Benefits water supply only

Table 1 Value of Groundwater Purification and Aquifer Recharge Services from Everglades Restoration
x

Water Quality and Residential Real Estate Valuation

Impact of Improved Water Quality

We anticipate that a restored Everglades will improve the quality of surface water in the 16-

county South Florida Water Management District. 

Water plays an important role in the determination of residential real estate values. Proximity, 

type (ocean, bay, lake, river, etc.), view, size and quality are among the water attributes that are 

valued by real estate buyers. For example, lakeside or seaside properties sell at a premium to 

properties located away from bodies of water. A home on a clear stream trades at a premium to a 

similar home on a polluted stream. Of course, water and its attributes are only a small part of the 

bundle of attributes that determine a property‘s value. House size, quality of finish, proximity to 

a city, and a great many other factors also play important roles. But imagine a thought 

experiment of taking a given house and property on some body of water and changing nothing 

but the quality of the water. Now observe the change in property value associated with that one 

single environmental change. That thought experiment describes our method. 

Economists have developed techniques to quantify the incremental value of environmental 

attributes. One of the often used and robust techniques employed is hedonic pricing. This method 

estimates the price people are willing to pay for individual product characteristics, such as a 

swimming pool or air conditioning, and environmental goods, such as air and water quality, 

holding other attributes constant. Studies consistently show that the water quality effect is 

positive; that is, property located on or around high quality water is more valuable, other things 

the same, than property located on or around lower quality water. The magnitude of this effect is

generally in the 0.5 percent to 7.0 percent range. That is, some level of water quality 

improvement can have up to a 7 percent impact on real estate values. The same techniques also 

find, for example, positive effects on air quality and negative effects on proximity to toxic waste 

sites. These results are both intuitively and scientifically robust. 

For the purposes of this study, our role is to estimate the impact on residential real estate values 

that will derive from a restored Everglades due to improvements in water quality. The aggregate 

owner-occupied residential real estate value in the 16-county SFWMD is approximately 

$976.217 billion. Based on a survey of hedonic estimates of water quality effects, the elasticity 

of real estate values with respect to water quality is .07054.9 Assuming that water quality, as 

 

9

A 100 percent improvement in water quality will produce a 7.054 percent increase in real estate values.
xi

measured by dissolved oxygen, can be returned to 1970 levels as a result of restoring the 

Everglades, this implies that there is a potential 23.4 percent improvement in water quality.

Combining these estimates, we estimate the incremental value of a restored Everglades on real 

estate across all 16 counties as:

$976.217 Billion .07054 X .234 = $16.08 Billion

This change represents a 1.65 percent increase in the aggregate value of real estate, which is 

well within the range of typical studies on water quality effects. However, we have also done 

what-if analysis, to examine the impacts based on different levels of water quality 

improvements. The results of that analysis are reported in Table 2, which also lists the countyby-county best estimates of additional ecosystem services forthcoming from cleaner surface 

water via a restored Everglades. We also estimated the increased value of real estate by 

assuming that nitrogen levels would not achieve the high levels of 2004 and 2005 hurricane 

years. These estimates are also reported in Table 2.

Next we discuss the additional change in value of services relating to recreation and park 

visitation that we expect will flow from restoration of this teapot we call the Everglades.
xii

County Incremental Real 

Estate Value

Years Until 

Water Quality 

Goals Met

Potential Increase 

in Real Estate 

Value at 2.1% 

Discount Rate

Broward $ 3,032,000,000 1 $ 15,777,000,000

Charlotte $ 261,000,000 2 $ 15,452,000,000 Basis 1% 5% 23% - Best Estimate 25% 50% 100%

Collier $ 974,000,000 3 $ 15,134,000,000 Suspended Solids Model $ 536,000,000 $ 5,357,000,000 $ 16,108,000,000 $ 13,392,000,000 $ 26,785,000,000 $ 53,570,000,000

Dade $ 4,379,000,000 4 $ 14,823,000,000 Nitrogen Model $ 689,000,000 $ 6,887,000,000 $ 17,216,000,000 $ 34,433,000,000 $ 68,865,000,000

Glades $ 7,000,000 5 $ 14,518,000,000

Hendry $ 21,000,000

Highlands $ 96,000,000 Discount Rate 2.10%

Lee $ 1,058,000,000

Martin $ 333,000,000

Monroe $ 307,000,000

Okeechobee $ 21,000,000

Orange $ 1,561,000,000

Osceola $ 340,000,000

Palm Beach $ 2,807,000,000

Polk $ 557,000,000

St. Lucie $ 353,000,000

Totals $ 16,108,000,000

Real Estate Value Improvement - Best Estimate

Potential Real Estate Value Improvement Using Various % Change in Water Quality

Sensitivity Analysis

Table 2 Value of Everglades Restoration on South Florida Real Estate via Improved Water Quality
xiii

Recreation and Park Visitation Valuation

The Everglades are one of South Florida‘s main tourist and recreational attractions. The rivers, 

lakes, and wetlands unique to the Everglades invite sightseeing, photography, bird watching,

manatee watching, camping, cycling, boat tours, sailing, airboat tours, canoeing, nature hikes, 

kayaking, hunting, shelling, saltwater fishing, and freshwater fishing. Logic dictates that 

Everglades restoration would increase the quality of these activities and, consequently, the 

number of resident and non-resident visitors to the Everglades. This increase in recreational and 

tourist activity translates to an economic value that we estimate here.

In economic studies similar to this one, sometimes, tourism is seen as a catch-all category. Here 

we have tried to use a more laser-like approach and break tourism down into smaller categories 

of recreation, park visitation, bird watching and wildlife habitat, hunting, and fishing. Thus, we 

have no overall category called ―tourism‖ per se. However, our approach is deemed superior 

because it subsumes all the sub-categories and avoids the temptation or problem of doubling 

counting.

To estimate this economic value, we employed the travel-cost method. The basic premise of the 

travel-cost method is that expenses people incur while traveling to a recreation site or tourist 

destination represent the price of admission in the economic sense of opportunity cost. This 

outlay of expenditures reflects the traveler‘s willingness-to-pay, that is, the value that a 

recreationist or tourist places on accessing a particular site. By aggregating the travel 

expenditures of all visitors to an unrestored Everglades, then projecting a marginal increase in 

those expenditures attributable to Everglades restoration, we estimated the recreational and 

tourism component of CERP‘s economic value. 

Our approach has five stages. First, we collected historical data on park visitation in South 

Florida.10 Because many recreationists and tourists who travel to the Everglades visit the area‘s 

national parks, preserves, state parks, and sanctuaries, we assume changes in park visitation 

reflect changes in overall tourist and recreational demands. Second, we used data from National 

Park Service visitor surveys to determine the ratio of residents to non-resident visitors for each 

park. Third, we estimated county-specific, per-person, per-day travel expenditure figures for both 

residents and non-residents who visit the Everglades parks, preserves and sanctuaries.11

 

10 For the Everglades National Park, Big Cypress National Park, Biscayne National Park, The Dry 

Tortugas, Loxahatchee National Wildlife Reserve and Corkscrew Swamp Sanctuary, we obtained data specific to 

the total number of annual visits by their recreational activity. For the state parks, we obtained county-specific 

visitor data.

11 There were ten counties with specific data on the average daily expenditure for non-resident tourists. For 

counties that did not have a non-resident per day expenditure, we used an average daily expenditure of $104.00, 

calculated by the Fish and Wildlife Conservation Commission for wildlife-viewing in Florida. To estimate resident 

travel expenditures, we used the National Park Service visitor survey data to calculate an average per day resident 

expenditure for counties that overlap with a national park: Collier, Monroe and Miami-Dade. For counties that did 
xiv

In our fourth stage of analysis, we established a baseline of recreational and park visitation 

expenditures by multiplying the county-specific resident and non-resident expenditures by the 

number of resident and non-resident park visitors. Finally, in our fifth stage, we estimated the 

marginal increase in recreational and park visitation expenditures under a 2 percent increase in

park visitation projected out 50 years. Preliminary regressions of water quality and tourist 

expenditures confirm this to be a likely scenario. See Table 3.1.

12

Table 3.1 Recreational and Park Visitation 

Expenditures 2 Percent Increase over 50 years

County NPV Incremental Increase

Broward $103,206,003

Charlotte $58,458,420

Collier $178,150,740

Lee $122,795,151

Martin $13,306,731

Miami-Dade $201,075,047

Monroe $518,206,430

Okeechobee $987,239

Orange $25,849,076

Palm Beach $49,055,665

Polk $5,519,029

St. Lucie $34,978,795

Total $1,311,588,326

Our best estimate of the change in tourism valuation is based on a 2 percent increase over 50 

years. This amounts to an increase in economic well-being of $1.311 billion in net present value 

terms.

Open-Space Valuation

If completed, CERP will produce approximately 157,555 acres of preserved open space in South 

Florida. In the absence of CERP, this land would likely be inaccessible to the public and or 

developed as Florida‘s population grows. But with Everglades restoration pursuant to CERP, this 

land will provide enhanced recreational opportunities and aesthetic benefits to the residents of 

 

not have specific data on the per day expenditure for residents, we used the same FWCC wildlife-viewing report 

which estimated an average daily expenditure of $58.00 for residents.

12 The counties not listed in this table have tourism benefits in other categories, hunting, wildlife viewing, 

and fishing.
xv

South Florida. In this section we quantify these values. 

To estimate the value of open-space preservation, we employed a multi-stage process. First, we 

used data from the Trust for Public Lands to estimate type-specific and county-specific 

willingness-to-pay (WTP) values per acre of preserved open space.13We estimated type-specific 

WTP values because open space preservation projects of different scale and proximity produce 

different bundles of aesthetic and recreational benefits.14 Specifically, we grouped the open space 

and conservation projects into three types: local open-space bond initiatives, state-wide 

conservation projects and federally funded wetland preservation projects. 

We estimated county-specific WTP values because the marginal value of open-space 

preservation depends on numerous geographic and demographic variables such as population 

density and proximity to population centers. Everglades restoration under CERP will encompass 

restoration projects throughout South Florida, so using geographically specific values adds 

precision to the open-space valuation. 

Averaging across all counties, we estimated WTP values per acre of open-space preservation of 

$12,133 for county projects, $4,505 for state projects, and $740 for federally funded wetland 

projects. These figures comport with economic rationale; voters are willing to tax themselves at a 

higher rate for open space that they can enjoy more often and more easily, that is, local open 

space.

In the second stage of our analysis, we estimated county-specific open-space value ranges for 

each CERP project. We did this by multiplying the county, state and federal WTP values by the 

number of acres yet to be acquired under each specific CERP project. For instance, the ―Lakes 

Park Restoration‖ project is in the ―Lower West Coast‖ CERP region and has a remaining 40 

acres yet to be restored. Because the ―Lower West Coast‖ CERP region overlaps Hendry, Glades 

and Lee counties, we multiply an average of those three counties‘ local ($12,133)

15

, state 

($2,716) and federal ($740) WTP values by 40 to estimate a range of open-space values 

attributable to that particular CERP project. Our open-space value estimates for that project 

range from $485,331 (local WTP) at the upper bound to $29,600 (federal WTP), with our best 

estimate being $108,652 (state WTP).

In the final stage of our analysis, we aggregated the range of open-space values across the 

remaining acres of each CERP project. We report these aggregations for county, state and federal 

 

13 We gathered acreage and expenditure data by cross-referencing the Land Almanac and other 

conservation databases reported by the Trust for Public Land.

14 For instance, a municipal park in Broward County generates significantly different open space values 

than does a federally funded wetland restoration in Glades County.

15 Because we did not have data for local open space bond initiatives in these counties, we used the statewide average of $12,133.
xvi

WTP values. These type-specific value estimates define the range of possible open-space values 

from Everglades restoration. Because CERP most closely matches the kind of open-space 

preservation projects used to calculate the state-level WTP value, the state-level WTP estimate is 

our best estimate of the total open-space value attributable to Everglades restoration under 

CERP. That estimate is $830,733,000 in net present value terms.

Table 4.1 Open Space Valuation Increase from Everglades Restoration

CERP Region Counties

Open Space 

Value Increase

Everglades Agricultural Area Palm Beach and Hendry $31,187,000

Everglades, Florida Bay, and 

Keys Broward and Miami $318,739,000

Lake Okeechobee Watershed

Okeechobee, Glades, and 

Highlands $30,509,000

Lower West Coast Hendry, Glades, and Lee $41,611,000

Miami Dade County Miami-Dade $115,507,000

North Palm Beach County Palm Beach $5,752,000

Upper East Coast Martin and St. Lucie $215,220,000

Water Preserve Area Palm Beach, Broward, and Miami $72,208,000

Total $830,733,000

Table 4.2 summarizes these calculations, our assumptions, and our sensitivity analysis.

Table 4.2 Changes in Value of S. Florida Open Space Associated with Everglades 

Restoration

Lagged Response Possible Range of Values

Years Until 

Increase

Begins

Present Value of 

Delayed Increase Various WTP/Acre of Open Space

1 $813,646,000 Local State Federal

2 $796,911,000 $2,763,345,000 $830,733,000 $116,593,000

3 $780,520,000

4 $764,467,000

5 $748,743,000
xvii

Fishing Valuation

Everglades fishing is a big business, and it stands to be even bigger business if the Everglades 

are restored along CERP guidelines. Florida is fishing. To best catch the changes in fishing 

associated with restoration, we have broken our analysis into commercial and recreational 

components. There is little difference, however, in the analysis or the methods used. 

Commercial Fishing

We obtained data on commercial catch per species for each of the relevant South Florida 

counties for the years 1986 through 2008.16 Earlier data are considered unreliable. We assumed

that restoration will enhance commercial fish catch, owing to increased sheet flow. We estimated

the change by comparing current levels to peak levels in the late 1980s. To be conservative, we 

assumed that a restored Everglades would provide 75 percent of the difference between current 

catch levels and catches in 1989, the first year in which there are reliable data.

The estimates for expected post-CERP value (75 percent of 1989) and total future dockside value 

depend on the length of time it takes the fishery to recover after the Everglades project is 

completed.17 We calculated future dockside value by summing catch in all Everglades counties 

for each species, multiplying this by .75, then multiplying these estimated numbers for future 

catch by the per-pound 2009 price for each species.18 We summed these values to obtain the 

expected future dockside value post restoration. We estimate that there will be an increase of 

$23,271,221 per year in catch, after the fishery is fully restored. This is a 43.3 percent increase 

from current (2008) value. Table 5.1 shows the present value of commercial fishing value 

increases over a 50-year period assuming a 0, 20-, and 30-year fishery restoration timetable. 

 

16 Commercial catch data obtained from Steve Brown at the Florida Fish and Wildlife Research Institute; 

this data can also be viewed at http://research.myfwc.com/features/view_article.asp?id=19224.

17 It is plausible that there will be a short period of diminished catch after Everglades restoration as salinity 

levels adjust in Florida Bay and elsewhere. 

18 This method may slightly overestimate the impact of recovery as fish prices may fall as larger quantities 

are brought to market. At this point in our analysis we have not determined the geographic scope of the relevant fish 

markets and hence cannot determine whether the increased catch will impact price.
xviii

Our best estimate is that commercial fishing catch will increase, in present value terms with a 2.1 

percent discount rate, by a total of $524 million (assuming a 20-year time to full recovery for the 

fishery).19

 

19 As a check on our estimates, we also estimated the change in fishery catch using data from the net ban 

that went into effect in Florida in 1995. This method suggests that Everglades restoration will increase catch by 

about 57 percent. To be conservative in our forecasts, we use the earlier, lower estimates already discussed.

Table 5.1 Estimates of Commercial Fish Catch Increase From Everglades Restoration

Time for Fishery to Recover After Everglades 

Restoration

Discount Rate Immediately 20 Years 30 Years

2.1%

NPV 

Increase $716,129,276 $524,131,653 $441,139,562 
xix

Recreational Fishing

Largemouth bass is the most common freshwater fish targeted in the Everglades region.20 Thus, 

we chose to use increase in recreational catch of bass as a proxy to estimate the increase in 

economic benefits for recreational anglers due to CERP restoration. 

On average, each recreational angler catches 59 bass each year in Southeast Florida, with an 

estimated marginal value per fish of $4.32.21 The FWC 2006 survey of Fishing, Hunting and 

Wildlife estimates that each angler in Florida spends 17 days fishing (this is an average of

residents and non-residents). Therefore, we estimated that on average, anglers currently catch 

3.47 bass per day fishing.

We again assumed that restoration will restore 75 percent of total fish population, as used to 

estimate the changes in commercial fishing catch. The estimates for commercial fishing suggest 

that there is potential for a 49 percent to 56 percent increase in commercial fishing catch postCERP. It is assumed that this percent increase in commercial catch can likewise be applied to 

recreational fishing. 

We conservatively used the minimum estimate of a 49 percent increase in commercial fishing 

catch for our estimate of increased recreational fishing catch. This provides a potential estimated 

increase in catch per angler per day of 1.7 bass. The total number of fishing licenses sold22 in 

2008 in the 16 Everglades counties was approximately 362,300.23 However, the FWC states, ―It 

is important to note that only about half of Florida anglers actually have to purchase a license 

due to various exemptions, so these numbers do not reflect participation.‖

24 Therefore, we 

multiplied angler licenses in Everglades counties by two in order to estimate the number of 

anglers fishing in these counties. We assumed this number (724,600) is an appropriate, though 

likely low-end, estimate for the number of anglers fishing in Everglades counties in a given year. 

The FWC estimates the average number of days spent fishing per angler at 17, which leads to an 

estimated 12,318,200 angler-days fishing in the Everglades. We multiplied this estimated 

number of angler days by the estimated increase in Everglades recreational bass catch (per day, 

per angler) post-CERP (1.7) to get an estimated increase of 20,940,940 bass caught each year. 

The estimated increase in value due to restoration (based on a marginal value per bass of $4.32) 

 

20 A survey of Everglades anglers by Fedler provided this information; 40 percent of saltwater angler days 

are spent targeting largemouth bass.

21 http://myfwc.com/CONSERVATION/FishingBassConservationCenter_Value.htm.

22 This includes both residents and nonresidents for freshwater licenses, saltwater licenses and combination 

licenses.

23 Stronge, W.B. The Economics of the Everglades Watershed and Estuaries: Phase 2 - 2010 Update of 

Data Analysis (March 2010). Prepared for the Everglades Foundation.

24 http://myfwc.com/CONSERVATION/Conservation_ValueofConservation_EconFreshwaterImpact.htm.
xx

is then $90,464,861 for each year after restoration is complete.

Table 5.2 shows the present value of recreational fishing value increases over a 50-year period 

using this estimate of a $90,464,861 increase in value each year after CERP is completed. This is 

calculated for both a 20- and 30-year restoration period (assuming catch increases linearly over 

those years), as well as for instant restoration.25

Our best estimate is that Everglades restoration will increase the value of recreational fishing by 

a total of $2.04 billion in net present value terms.

Wildlife Habitat and Hunting Valuation

While fishing is a major recreational activity in Florida, hunting and wildlife viewing are popular 

pastimes as well. In this section, we detail our estimates of these economic impacts.

There are two important hunting groups in the Everglades: deer and waterfowl (primarily ducks). 

Restoration stands to impact hunting, it turns out, both positively and negatively. Deer have 

moved into and flourished in the drained wetlands of the Everglades, and ducks have been driven 

out. Restoration will reverse these recent trends. 

Using data for 17 statewide Wildlife Management Areas, we computed the ratio of the economic 

value of hunting in the WMAs located within the Everglades to the economic value of hunting in 

WMAs statewide. From the lower-bound estimates for each WMA‘s value, we calculated the 

ratio of hunting expenditures in the Everglades to the entire state. We then multiplied this ratio 

by the U.S. Fish and Wildlife Service‘s estimate of the total economic value of hunting in 

Florida, $377,394,000 annually. This method leads to a baseline estimate of $175,000,000 per 

year that hunting in the Everglades contributes to the Florida economy.

Fluctuations in water levels are partly responsible for current high mortality rates among deer in 

 

25 We also estimated the total number of anglers in Everglades counties using the ratio (number Everglades 

counties)/(number counties in Florida) and multiplied this by the estimated 2.8 million anglers fishing in Florida. 

We then used this ratio to estimate the number of anglers in the Everglades to recalculate the increase in bass caught 

and increase in value. The results are numbers that are similar and suggest that either assumption is appropriate.

Table 5.2 Estimates of Recreational Fish Catch Increase From Everglades Restoration

Discount 

Rate Time for Fishery to Recover After Everglades Restoration

Immediately 20 Years 30 Years

2.1%

NPV 

Increase $2,783,890,688 $2,037,516,539 $1,714,891,823 
xxi

South Florida. CERP estimates that, with the restoration of the Everglades, white tail deer 

populations will be reduced to pre-drainage numbers, but that deer mortality due to drowning 

and starvation will decrease. CERP estimates suggest that deer hunting in Big Cypress National 

Preserve should not be impacted in either direction, but that deer hunting in Everglades WMA 

will be adversely affected. For purposes of this model, we assumed no net change in deer hunting 

in Big Cypress and a decrease of 75 percent in Everglades and Rotenberger WMAs. The 

decrease is due to lower deer populations and more difficulty in accessing huntable areas. While 

CERP does not make the Holey Land or Rotenberger as wet as the Conservation Areas, we 

assumed that the Rotenberger deer hunting would respond similarly to the Everglades. In effect, 

as the discussion below reveals, we believe that this is a worst-case scenario for deer. We further 

assumed that Holey Land would undergo half the total effect of Everglades or Rotenberger, 

because it is already partially rehydrated. It has already seen a notable transition from deer 

hunting to waterfowl hunting as a result of these higher water levels.

The Everglades occupy the western portion of the Atlantic Flyway in Florida. Increasing yearround water levels in Everglades and Rotenberger WMAs would provide more ideal habitat for 

waterfowl. It would also induce a shift in hunting patterns in these areas from primarily deer 

hunting to primarily duck hunting, as seen in Holey Land WMA after its restoration.

We used the rehydration of Holey Land WMA as a measure of the consequences of restoration 

on hunting in the Everglades. This rehydration, which began in 1991, drastically changed 

hunting patterns within the Holey Land WMA, and we expect a similar shift in the overall 

Everglades. We used days of hunting to estimate percent changes.

While the marginal impact of Everglades restoration on hunting expenditures might be negative, 

the expected change in wildlife-viewing expenditures is almost surely positive and far larger than 

the potentially negative impact on hunting expenditures. The expansion of habitat produces 

additional services, primarily through viewing of birds and other wildlife. We have already 

computed the additional value of viewing by tourists. Here, we estimate the habitat impact on 

resident viewings in and around their homes, local bird and wildlife watching. The increased 

demand from restoration will also be reflected in increased expenditures on bird watching 

equipment such as feeders, food and binoculars.

The U.S. Fish and Wildlife Service estimates that the State of Florida generates more than $3 

billion in annual expenditures by wildlife watchers.26Of the 1.5 million people who engage in 

away-from-home wildlife watching each year, more than 1.1 million engage in waterfowl 

 

26 Table 31; page 39; FWS – FHWAR. We conservatively excluded from our calculations the ―special 

equipment expenditure‖ category because we are attempting to measure the habitat-only demand and not travel or 

tourism-related demand. If we had included this effect, overall impact of restoration would be calculated to be much 

higher. ―The special equipment‖ category of expenditures is large, as it includes RVs, travel trailers and the like. 

Our intent here was to capture local viewing, not tourism. This avoids a potential double-counting problem.
xxii

watching and 1.29 million watch other non-game water birds. In comparison, only 421,000 

engage in viewing of large land mammals.27 Using data for 17 statewide Wildlife Management 

Areas, for purposes of scaling the state total to the region, we used as a proxy the ratio of the 

economic value of hunting in the WMAs located within Everglades to the statewide value. We 

then multiplied this number by the U.S. Fish and Wildlife Service‘s estimate of the total 

economic value of wildlife watching in Florida, which was $3.08 billion annually. This leads to 

an estimated value of $1.43 billion per year that non-consumptive wildlife recreation in the 

Everglades contributes to the Florida economy.

The primary source of wildlife-watching value in Florida comes from bird-watching, primarily 

of wetlands species, either waterfowl or wading birds.28 CERP estimates significant habitat 

improvement for water-reliant bird populations, specifically waterfowl and wading birds. The 

Everglades occupy the western portion of the Atlantic Flyway in South Florida. Consequently, a 

large portion of migrating waterfowl pass through the Everglades on their way from Canada to 

the Caribbean. Increasing year-round water levels in Everglades and Rotenberger WMAs along 

with Everglades National Park will provide more ideal habitat for waterfowl and non-game 

wetlands birds. It will also induce a shift in wildlife watching demand in these areas due to 

increased quality relative to other areas.29

CERP estimates improved habitat for the following endangered species:

 West Indian Manatee

 American Crocodile

 Snail Kite

 Wood Stork

 Cape Sable seaside sparrow

We estimated the baseline value of habitat and non-consumptive wildlife appreciation in the 

Everglades. We used wading bird populations as our indicator metric for habitat value in the 

Everglades. The University of Florida estimates that, just prior to drainage, there was a stable 

population of approximately 70,000 mating pairs of wading birds. This is our reference 

benchmark for restoration. Using 2006 bird populations, our conservative best estimate is that 

restoration will return these numbers to 75 percent of the 70,000 mating pairs reference 

benchmark. We then estimated the marginal impact of changes in species populations on demand 

for viewing, providing an annual improvement in habitat value of approximately $424 million.

Though we have estimated a portion of these values in our recreation and park visitation model 

which measures park visitation changes, wildlife viewing generates additional values not 

 

27 Table 26; page 35; FWS – FHWAR.

28 Table 26; page 35; FWS – FHWAR.

29 CERP Sections 8.7 and 8.8.
xxiii

captured by our park visitation model. These values should be considered when evaluating 

Everglades restoration, particularly to local residents who derive pleasure from the increased 

number of animals residing around their homes. To fully capture the value of the impact of 

restoration on wildlife habitat and hunting, we summed the values from habitat and hunting 

calculations. Our best estimate is that Everglades restoration will increase wildlife habitat and 

hunting services by $407.4 million annually.

As a final word about habitat and hunting, it is important to note that the impact on hunting will 

only be negative if significant numbers of deer hunters do not transition to duck hunting as duck 

populations expand. The experience with Holey Land restoration suggests that it is complicated 

to forecast the impacts on hunting associated with expansive additional CERP restoration. On the 

one hand, it appears that additional duck populations attract people to duck hunting, and this is 

reasonable from the point of view of economic theory. It may also be true that existing duck 

hunters will chose to hunt locally more often and forego trips to distant duck hunting areas such 

as Louisiana, but we cannot estimate these shifts with any precision. In order to be conservative,

we have assumed a very low elasticity of substitution between deer and duck hunting and a low 

elasticity of new duck hunters. Accordingly, our negative estimate on hunting is probably biased, 

and the likely outcome is not so dire. Additional information on hunter switching could refine 

this estimate.

Other Everglades Valuations, Miscellany 

There are four broad areas of ecosystem services that, at present, we have not conclusively 

valued that might be forthcoming or enhanced as a result of Everglades restoration: the potential 

for carbon sequestration, potential fire-damage reduction, the potential for enhanced water 

purification, peat accretion and soil build-up, and the option value of unknown compounds and 

life forms living in the Everglades. While these values stand to be real and to change in 

important ways as the Everglades are restored, we are not prepared at this point in time to offer 

estimates of the pro forma financial calculations for two reasons. First, the science of these 

services is somewhat unsettled and unclear, compared to the other services, and second, the 

markets for these services are immature and undeveloped. Hence, while there is rampant 

speculation about how these services might be highly valued and special, we are not presently 

prepared to put hard numbers to these theories, regardless of what they might turn out to be.

We can note that if the world moves to a market for carbon sequestration, and such markets are 

developing, the amount of carbon sinking in the Everglades could be important. Our best 

estimate at this time is that the amount of carbon sequestered is small, but we have low 

confidence in that assessment. Moreover, the future of these markets is highly uncertain. So 

basically, while we acknowledge the potential for important values of carbon sequestration 

services and changes that might flow from restoration, in order to maintain our conservative 
xxiv

stance, we will not add any hard numbers. As time proceeds, we will revisit our position on this 

topic.

Another topic for further study is the potential for Everglades restoration to improve South 

Florida‘s water quality in ways not captured by our real estate and recreation value estimates. 

Because wetland ecosystems are known for effectively filtering nutrients, we suspect a restored 

Everglades would produce significant cost savings in water treatment and create opportunities to 

improve poor water quality. In particular, we have researched the potential for CERP to reduce 

water quality treatment costs, beach closures and health impacts in South Florida. However, we 

have chosen to omit the corresponding valuations from this report because there exists 

significant disagreement in the scientific community over the connection between nutrient 

reductions and such water contamination cost drivers as harmful algal blooms, beach clean-ups, 

and shellfish poisoning.30 Like carbon sequestration, this topic should receive additional 

attention as this research continues and progresses.

A third topic we might investigate further is the potential value of unknown compounds and life 

forms in a restored Everglades. These are commonly called ―biodiversity values,‖ and we have 

found evidence of nascent markets in biodiversity. Michele Zebich-Knos reports on a contract 

between Merck Pharmceuticals and INBio, an NGO in Costa Rica for biodiversity 

development.31 The amounts of money at play in this market are not fully public. We are 

confident that there are others, and this appears to be a fertile area for further analysis. At 

present, however, given the high levels of uncertainty, we are not prepared to put hard and fast 

estimates to these option values. Given the scientific and policy uncertainty over these topics, our 

omission makes our valuation estimates more robust. However, future work should probably pay 

close attention to developments here. 

There is speculation that the current Everglades is more fire prone because of reduced sheet flow. 

Fire has been a part of life throughout the nature history of the Everglades, but the real issue here 

is: How might one go about modeling the reduction of fire and then estimating the economic 

impact of fewer and less severe fires? According to our principle of a conservative approach to 

estimating benefits, we refrain from including any air quality or other impacts that a restored 

Everglades might have on fire duration, intensity or frequency. With that said, we suspect that a 

restored Everglades might likely have fewer fires or ones of less severity. And, we know that fire 

can create negative economic impacts. Fires in the Everglades, as they do elsewhere, cause air 

quality issues via smoke, plus they stand to destroy valuable property. Thus, reduced fires, if 

they were to be a result of Everglades restoration, would count as an additional benefit. Clearly, 

 

30 See Chapter 7 in the main document for additional discussion on this topic.

31 ―Preserving Biodiversity in Costa Rica: The Case of the Merck-INBio Agreement.‖ The J. Of 

Environment and Development, 6(2)(1997).
xxv

additional work is warranted here.

Impact On Job Creation And Earnings

Restoration of the Everglades through the implementation of CERP will impact jobs in the state 

of Florida. Changes to the different ecosystem services in the Everglades will impact the number 

of jobs in a variety of industries and the economic activity they generate. In addition, the Corps of 

Engineers estimates there will be 22,000 jobs created as a result of the actual restoration projects.32

It is very important to understand that jobs are not an additional benefit above and beyond the 

present value calculations we have already presented. Instead, they are an alternative way of 

representing the overall change that is likely to be forthcoming from restoration. Economists 

often speak of a circular flow of economic activity where firms purchase inputs (land, labor, 

capital and the like) from households in order to engage production. As compensation for the 

release of these inputs, households are paid income (sometimes broken into finer gradients called 

wages, interest, rents and profit). Firms then sell the outputs made from the inputs to households 

in exchange for money. According to this logical truism, one may count the sales of the goods 

and services as one measure of the output of the firms, but one might also count the value of the 

inputs consumed. They have to be equal by the accounting identity. Jobs then are a loose or 

casual way of talking about the extent of economic activity being one of the primary inputs to 

production (and hence consumption). Most academic economists would prefer to discuss the

sales of the output of the firms rather than the jobs used in production, but for some reason or 

another, policy makers, pundits and politicians seem to prefer the jobs numbers approach. For 

sure, jobs are easier to calculate and perhaps easier for lay people to appreciate. Our point here is 

to respond to that latter audience, but it would be a big mistake for anyone to interpret our 

discussion here as additive. The jobs are not in addition to the calculated benefits. They are an 

alternative way of visualizing the impact of Everglades restoration. We urge the reader to be 

careful and cautious on this point.

Our approach to estimating net job creation relies on an input/output model that uses data 

generated by the key components of this study (inputs) to estimate the number of incremental 

jobs and earnings as a result of CERP (outputs). We calculated outputs using jobs and earnings 

(or total economy) multipliers from different sources. Unless otherwise specified, we used total 

economic output multipliers to reflect the impact on the broader economy (direct, indirect and 

induced jobs). In some cases, we used only direct multipliers to avoid overlap (double counting) 

among the different sectors. We used the following key inputs and multipliers:

Commercial Fishing

 

32 See Kopecky report, January 22, 2010.
xxvi

 Input: Incremental dockside value of commercial fisheries (finfish, invertebrates and 

shrimp).

 Multipliers: Fishing producer employment multiplier (jobs/$ billion export value) from 

the USDA Economic Research Service and Total Economy multiplier.

Recreational Fishing

 Input: Incremental saltwater and freshwater anglers and expenditures in the Everglades 

region. We used a modified (50 percent) tourist (visitor) yearly growth-rate to determine 

the increase in anglers to the region (using the 2 percent tourist growth scenario). The 

incremental number of anglers (over a growing base) due to a restored Everglades was 

multiplied by average yearly ―fishing-only‖ expenditures (to avoid overlap with 

tourism—shopping) to calculate incremental expenditures.

 Multipliers: Employment (jobs per $ million) and earnings (not total economy to avoid 

overlap with tourism) from Tony Fedler‘s report: ―The Economic Impact of Recreational 

Fishing in the Everglades Region.‖

Residential Construction & Real Estate Services

 Input: Incremental value (from the "Potential Value Increase based on 23 percent

Improvement in Water Quality" scenario) and subsequent activity in residential 

construction and real estate services. Elasticity between "increase in real estate value" and 

"increase in construction activity" was set at 0.5. 

 Multipliers: Residential construction and real estate multipliers (Direct + Indirect + 

Induced) we calculated from ―Shimberg Center for Affordable Housing; THE IMPACT 

OF RESIDENTIAL REAL ESTATE ON THE FLORIDA ECONOMY; 2005 update 

(Using Roll Year 2004 Property Appraiser Data).‖

Park Visitation

 Input: Incremental visitors and expenditures in local park visitation by specific NAICS 

sector:

o Hotel and lodging

o Eating and drinking establishments

o Transportation

o Retail trade (shopping)

o Entertainment

 Multipliers: Total effects multipliers from the REMI II model (from the MGM2 model,

the University of Michigan). We utilized Large Metro, Small Metro and Rural multipliers 

depending on the specific county.

Agriculture

 Input: Decrease in crop acreage (mostly sugar cane = 88%) due to repurposing for 

stormwater storage and treatment. We used the EAA Water Retention Scenarios –
xxvii

Agricultural Income Loss model (Marcel Aillery, et al) to determine the present value of 

income loss in an STA+RS (Stormwater Treatment Area + Reservoir = 83,500 acres) 

scenario. We used a 2.5 adjustment factor to include other crops and potential further 

land acquisitions.

 Multipliers: We used the USDA Economic Research Service ―Sugar Cane and Sugar 

Beets) producer employment multiplier.

Table 8.1. Summary of Jobs Impact Results

Sector Incremental Jobs

Commercial Fishing 6,798 

Recreational Fishing 36,868 

Residential Construction & Real Estate Services 273,601 

Tourism (Lodging, Eating & Drinking, Transportation, Retail, Entertainment) 48,552 

Agriculture (3,724)

Wildlife Habitat & Hunting 80,569 

TOTAL 442,664 

In addition to the jobs created by the impacts restoration, there will be jobs created to do the 

actual work of restoration. The Corps of Engineers estimates that there will be approximately 

22,000 jobs created in the construction projects detailed below in Table 8.2 as reported in 

Kopecky (2010). Table 8.2 is reproduced, unaltered, from that report.

Table 8.2. Direct Job Creation as a Result of Construction, COE Estimates33

Appropriation requests were run through IMPLAN (Minnesota IMPLAN Group) software. 

This is an input-output analysis that attempts to project employment, output and 

earnings for a given change or event in the economy’s activity. This model is typically 

set up to run at regional levels, but contains a National function as well and this is what 

was analyzed. There are three types of effects

 Direct effects take place only for the industry immediately affected: 

 Indirect effects concern inter-industry affects 

 Induced effects measure the effects of the changes in household income. These 

changes effect the related industries employment.

The category of construction used was Sector 36 (Construction of other new nonresidential). This is the closest to our construction technique. 

 

33 See Kopecky (2010) which is reproduced here exactly.
xxviii

South Florida Water Management District

Job Creation in Everglades Restoration

AS RUN BY COE USING IMPLAN

February 1, 2009

Project Appropriation 

Request

Direct Indirect Induced Total

Herbert Hoover Dike 

Rehabilitation (3)

$77,000,000 645 382 510 1538

C-44 Reservoir and 

STA

$363,000,000 3042 1801 2406 7249

C-43 Reservoir (1) $473,000,000 3963 2347 3135 9446

Kissimmee River (3) $31,000,000 260 154 205 619

Picayune Strand 

/FAKA Union Pump 

Station Works and 

Road Removal

$57,000,000 478 283 378 1138

Picayune Strand 

/Merritt Canal Pump 

Station Works and 

Road Removal (3)

$52,000,000 436 258 345 1038

C-111 Spreader Canal $35,000,000 293 174 232 699

C-51/STA1E $8,000,000 67 40 53 160

L31 North Seepage 

Pilot Project (3)

$5,000,000 42 25 33 100

Seminole/Big Cypress 

(3)

$3,000,000 25 15 20 60

TOTALS(SFWMD 

PROVIDED)

$1,150,000,000 9636 5707 7623 22966

On Restoration Costs

Since CERP was ratified 10 years ago, it has become obvious that certain aspects of it were 

either unreasonable or inappropriate. Accordingly, for this analysis, the original CERP storage 

projects have been replaced with an alternative storage approach. This adjustment was made due 

to reasonable doubts that have been raised regarding the feasibility of the original storage options 

and their estimated costs. In addition, there exists a viable alternative storage method with sound 

cost estimates. CERP‘s original cost estimate included costs for the Lake Okeechobee ASR, Inground reservoirs, and the EAA reservoir. In 1999 dollars, these three projects cost $2.6 billion, 

which represented 33.2 percent of the total $7.8 billion CERP cost. Since the original plan was 

completed, the feasibility and costs of these storage options have been reconsidered, and it is 
xxix

likely these costs were underestimated by a considerable amount. For our cost estimate, we have 

removed these costs from the CERP estimate and replaced the three storage projects with the 

River of Grass Reservoir storage option that has an estimated cost of $3.2 billion in 2010 dollars. 

The net effect of these changes is to adjust the total Everglades restoration costs to $11.5 billion 

in 2010 dollars.

Notes

Diamonds and Water

Economics has a conundrum called the diamond-water paradox. This conundrum ponders why 

diamonds, which are so unnecessary to life, are so valuable while water, so necessary, is so 

cheap. The paradox is resolved by noting that the prices of diamonds and water are marginal

valuations to society of an additional unit of each, not the total or average value. The implication 

of this line of reasoning is profound. For instance, professional football players earn a much 

higher salary than do high school teachers, yet it is almost surely true that the value of high 

school teachers to the world exceeds the total value of football players. Marginal values do not 

reveal total values.

So it is with ecosystem services (or any other product for that matter). Accordingly, if we were to 

capture the total value of Everglades restoration, we would have to engage a more complicated 

and detailed process. Suffice to say here, our estimates are not total estimates. They only capture 

a portion of the total value of restoration. There is considerable consumer surplus, to use 

economic jargon, that is not captured by our methodology. Thus, our approach understates the 

total value to society of spending resources to restore the Everglades. Indeed, based on other 

studies, our gut feeling is that the true total benefits are several times larger than our marginal 

valuation estimates. 

Consider Figure 2. Our calculations reported here effectively estimate the shaded area labeled E. 

There is potentially a much larger area, labeled CS, that represents economic well-being, or 

willingness to pay, which buyers or consumers of services obtain without paying for them. We 

call this consumer surplus. It is the unrequited or unpaid-for happiness that a consumer gets from 

a purchase, above and beyond the purchase price. We have not attempted to estimate this 

component of economic system services, but as the graph suggests, the area of CS can be 

substantially larger than the area of E, depending upon the price elasticity of demand for the 

particular service. As our work progresses, we will attempt to assay and estimate these 

valuations. They are important to any properly conceived analysis of economic wellbeing or 

welfare.
xxx

Figure 2 Product expenditure and consumer surplus

Regarding the effect of restoration on jobs, from the point of view of economic well-being or 

welfare, the important consideration is not total jobs, but incremental welfare above and beyond 

the opportunity cost of time or leisure. In a way similar to consumer surplus, most workers are 

paid wages higher than the underlying value of their time. This is called economic rent or 

producer. This is measured by the triangle above the supply curve of labor. Therefore, while 

many people view jobs as an economic good, the real increase in welfare comes not from 

employment, but from wages higher than the lost alternatives of leisure or home production. We 

have not estimated these additional benefits in our analysis, but suffice to say that, like the 

uncounted consumer surplus we mention, it stands to be important and non trivial. Our omission 

of this additional welfare makes our estimate of return on investment even more conservative.

Outrunning the Bear

At the outset of this evaluation, we promised to execute our assignment according to best 

practices and methods of economic science. We believe we have lived up to this promise, and we 

invite all readers to evaluate our success. It bears noting that one of the time-honored tenets of 

economic methodology, owed to Nobel Laureate Milton Friedman (and many others) is the 

concept that it takes a theory to beat a theory. In this spirit, while readers may criticize or 

disagree with our assumptions and techniques here, any such complaints will fall on deaf ears 

unless a superior alternative is proposed. Put bluntly, we will not accept criticism that simply 

says, ―Your assumptions are wrong.‖ Let the critic propose adequate or superior alternatives. 

What this means in practical terms is that our work need not be perfect in order to be useful and 
xxxi

acceptable. It just needs to be better than the rest. This does not mean that we believe we have 

done our job as well as it can be done. Rather, it is meant to convey that our minds are open to 

suggestions of better ways to do this project but not to simple statements that our work is wrong 

or incorrect. The Olympic Gold Medalist need not set a world record to climb to the top of the 

podium at the medal ceremony. She only need outrun the woman in second place. Of course, we 

hope that each piece of our work ―sets a world record,‖ but we will sleep soundly if our work is 

better than any other work tendered or suggested.
0

Detailed Report Section

Measuring the Economic Benefits of America’s

Everglades Restoration

An Economic Evaluation of Ecosystem Services Affiliated with the World’s Largest Ecosystem 

Restoration Project
1

Introduction

The Everglades is a vast ecosystem comprising approximately three million acres, a sub-tropic 

wetlands covering a significant portion of South Florida. The wetlands system is fed by rain and 

water from Lake Okeechobee which is filled locally and by the Kissimmee River, which flows 

into the lake from the North. Figures 3 and 4 show the vastness of the wetlands ecosystem. Note 

to the obvious, because of the climate and ocean resources, this is a popular place for humans. 

The population of Miami-Dade County alone is approximately 2.5 million people and has grown 

by 11 percent over the past decade.34 According to official documents from the State of Florida:

The Everglades Ecosystem extends from the Chain of Lakes south of Orlando to 

the reefs beyond the Florida Keys, an area covering 18,000 square miles. 

Historically, freshwater moved south from Lake Okeechobee to Florida Bay in a 

broad, slow moving sheet—120 miles long and 50 miles wide but less than a foot 

deep—creating the Everglades. Known as the River of Grass, the Everglades is 

the second largest wetland on the planet. The Everglades is an enormously rich 

ecosystem, providing habitat to hundreds of species of birds, fish and other 

wildlife. In the late 1800s, primitive canals were dug to drain the vast wetlands in 

South Florida. Additional alterations continued throughout the 20th century, as 

more than 1,700 miles of canals and levees vastly changed the landscape, 

interrupting the Everglades‘ natural sheet flow and sending essential freshwater to 

sea. An astounding 2 million acres, or more than half the Everglades wetlands, 

were lost to development. Marjory Stoneman Douglas was the first to publicize 

the problems of the Everglades in 1947, describing an ecosystem that was 

beautiful yet already clearly suffering. Just one year later, in 1948, a massive 

project to provide essential flood protection and water management to South 

Florida was approved. While the Central and Southern Florida Project allowed the 

region‘s rapid growth, it worsened the Everglades‘ problems. The project includes 

about 1,000 miles of levees, 720 miles of canals and almost 200 water control 

structures. Much of the drained area became sugar farms or was heavily 

urbanized.35

Everglades National Park sits in the midst of the ecosystem and occupies nearly 1.4 million 

acres:

36

Everglades National Park is a subtle place where earth, water and sky blend in a 

 

34 Demographic details of each county in the region are reported below in Table 1.

35 http://www.dep.state.fl.us/ern/restoration/default.htm.

36 http://www.everglades.national-park.com/info.htm.
2

low, green landscape; where mere inches of elevation produce distinct changes in 

vegetation; and where a great wealth of birds and other wildlife find refuge. For 

this is almost exclusively a biological park dedicated to the preservation of a 

complex and precisely ordered living mechanism. It lies at the interface between 

temperate and sub-tropical America, giving a rich diversity of species, many at 

the limit of their ranges. 

The topography is so subdued that a broad sheet of water slowly flows over and 

through the porous limestone bedrock on its way to the sea, rather than following 

well-defined valleys. Most of the park is actually covered with water during 

normal wet seasons, while dry winters cause fresh water to dwindle to a few open 

areas crowded with wildlife. 

The great floral variety of the Everglades is one of the key resources of the park. 

Among its more prominent and colorful plants are Bromeliads and epiphytic 

orchids. As many as 25 varieties of orchids are known to occur in the park, in 

addition to over 1000 other kinds of seed-bearing plants and 120 species of trees. 

Over 36 threatened or endangered animal species reside in Everglades National 

Park, such as the American alligator (Alligator mississippiensis) and crocodile 

(Crocodylus acutus), the Florida panther (Felis concolor coryi), the West Indian 

manatee (Trichechus manatus), and the Cape Sable seaside sparrow 

(Ammodramus maritima mirabilis). More than 300 species of birds have been 

recorded, seven of which are rare or endangered.37

This is a populated wetland, creating a trove of troubles with many actors occupying what is now

little space. Resource conflicts are common in many places on the planet, but this area seems to 

have more than its fair share. 

 

37 http://www.everglades.national-park.com/info.htm.
3

Figure 3 Everglades
4

Figure 4 The Details of the Ecosystem

The sixteen county region of Florida that covers the area of the Everglades is economically and 

demographically diverse. Table 1 reports summary statistics on these counties, and it is 

noteworthy that, like the biodiversity in the surrounding natural environment, there is rich 

demographic diversity amongst the people in this portion of Florida.
5

County

Land area in 

acres

Population in 

2009

Population 

Density, 

persons/sq mi.

Percentage 

Change in 

Population Since 

2000

Housing 

Units, 2008

Median Value 

of Owner 

Occupied 

Housing, 2000

Total Retail 

Sales in 2002 (in 

1000s)

Broward 1,205.4 1,766,476 1,465 8.8% 805,772 $128,600 $ 22,012,210

Charlotte 693.6 156,952 226 10.8% 101,223 $ 97,000 $ 1,434,629

Collier 2,025.3 318,537 157 26.7% 193,808 $ 168,000 $ 4,196,902

Miami-Dade 1,946.1 2,500,625 1,285 11.0% 979,082 $ 124,000 $ 24,568,286

Glades 773.6 10,950 14 3.5% 6,079 $ 72,400 $ 7,812

Hendry 1,152.5 39,594 34 9.3% 13,359 $ 71,500 $ 297,216

Highlands 1,028.3 98704 96 13.0% 55,377 $ 72,800 $ 737,104

Lee 803.6 586,908 730 33.1% 364,932 $ 112,900 $ 6,365,752

Martin 555.6 139,794 252 10.3% 75,920 $ 152,400 $ 1,921,445

Monroe 996.9 73,165 73 -8.1% 53,813 $ 241,200 $ 1,183,949

Okeechobee 773.9 40,241 52 12.1% 16,731 $ 77,600 $ 335,976

Orange 907.5 1,086,480 1,197 21.2% 460,600 $ 107,500 $ 12,403,154

Osceola 1,321.9 270,618 205 56.9% 120,997 $ 99,300 $ 1,751,198

Palm Beach 1,974.1 1,279,950 648 13.2% 640,851 $ 135,200 $ 16,480,821

Polk 1,874.4 583,403 311 20.6% 280,609 $ 83,300 $ 4,522,310

Saint Lucie 572.5 266,502 466 38.3% 132,341 $ 86,100 $ 1,886,487

TOTAL 18,605.23 9,218,899.00 7,212.98 4,301,494 $ 1,829,800 $ 98,218,764

AVERAGE 1,162.83 576,181.19 495.50 17.5% 268,843.38 $ 114,363 $ 6,256,578

Source: US Department of Census at http://quickfacts.census.gov/qfd/states/12000.html

Table 1

Demographic and Economic Facts, 16 county South Florida Region
Copyright 2010 Everglades Foundation and Mather Economics 6

For example, Glades County is rural and basically unpopulated, 14 people per square mile, as 

compared with Broward County, which has over 1,400 people per square mile. The owneroccupied housing in Monroe County is worth more than $241,000 per home (year 2000) 

compared with Hendry County where the median owner-occupied home was worth $71,500 in 

2000. Some of the counties are bustling metropolises, Miami-Dade, Broward, Palm Beach, and 

Orange counties as examples with billions of dollars of retail sales per year (2002), while others 

are small, remote, and rural with miniscule total retail sales of less than $10 million for the year 

2002. Against this backdrop and landscape we have been commissioned to estimate the 

economic impacts of the proposed Everglades restoration plan.38

There is a well-vetted plan to restore the Everglades to which we reference all our work. This is 

the Comprehensive Everglades Restoration Plan (CERP).

39 There are many folk who have 

proposed alternatives and additions to this plan.40 We have not, at this point, evaluated any of 

these alternatives, save one.41 With that said, the proposed rewards of this investment, somewhat 

surprisingly, have not, until now, been measured with any degree of scientific or economic rigor. 

The benefits of Everglades restoration, according to CERP, while arguably noble and substantial, 

are not precise:

The Plan's focus has been on recovering critical ecological features of the original 

Everglades and other parts of the ecosystem. The Plan will restore natural flows of 

water, water quality and hydroperiods. The removal of more than 240 miles of internal 

levees and canals will improve the health of more than 2.4 million acres of the South 

Florida ecosystem, including Everglades and Biscayne National Park. The restoration of 

hydrologic conditions of the original natural areas of the South Florida ecosystem will 

result in Lake Okeechobee once again becoming a healthy lake. Major benefits will be 

provided to the Caloosahatchee and St. Lucie estuaries and Lake Worth Lagoon. The 

Plan will also improve fresh water deliveries to Florida and Biscayne bays. The greater 

 

38 ―In 2000, Congress passed the Water Resources Development Act, authorizing the Comprehensive 

Everglades Restoration Plan. The State of Florida and federal partners—the U.S. Environmental Protection Agency, 

Army Corps of Engineers and Department of Interior—are deeply committed to Everglades restoration. The primary 

state agencies charged with carrying out the restoration are the Department of Environmental Protection and the 

South Florida Water Management District. Since 2000, Florida has invested more than $2 billion to restore water 

quality and flow in America‘s Everglades.‖ (http://www.dep.state.fl.us/ern/restoration/default.htm).

39 http://www.evergladesplan.org/index.aspx.

40 The many details of CERP are outlined in a number of fact sheets which are viewable online at 

http://www.evergladesplan.org/facts_info/fact_sheets.aspx.

41 Our project is based on an adjustment to the original CERP which replaces artificial injection of water 

into underground aquifers with the River of Grass concept. We offer details on this adjustment in more detail below.
Copyright 2010 Everglades Foundation and Mather Economics 7

Everglades ecosystem will be much healthier than it is today. Improvements to native 

flora and fauna, including threatened and endangered species, will occur as a result of 

the restoration of the hydrologic conditions.42

Essentially, we do not argue or take any position on any aspect of the proposed restoration. 

We view ourselves as appraisers or estimators, not engineers or policy makers. We do not 

engage the job of deciding how the Everglades should be restored, whether it should be 

restored, who should pay for it if it is, when it should be done, or on what schedule. Instead, 

we approach our assignment from the perspective of the benign economic scientist, asked to 

render a fair, but conservative, estimate of the overall impact of the proposed restoration.

Nothing more, nothing less.

Our Assignment

In February of 2010, we were asked by the Everglades Foundation if we could provide an 

economic analysis of the ecosystem service changes that would be associated with the 

Comprehensive Everglades Restoration Plan.43 We took this task literally. This means that we do 

not do any of the following:

1. We do not evaluate or estimate the costs of restoration. We take these as a given, per se. 

Some have suggested that the estimate of costs is not accurate or appropriate. Be that as it 

may, we were not assigned that task and have not engaged it in any important way.

Rather, we have relied upon cost estimates provided by the Corps of Engineers to the 

Congress and to the public.

2. We do not estimate the marginal or step-wise benefits of any particular portion of the 

CERP plan. Our approach is total. We look at the entire project as a whole.

3. We do not evaluate the scientific certainty or appropriateness of any of the CERP plan. 

Again, we take the plan as others have prepared it and estimate the benefits of it with the 

plan as a given.

4. We do not estimate any probabilities of the plan actually going into effect. We assumed 

that CERP will be implemented as described and planned.

 

42 http://www.evergladesplan.org/about/rest_plan_pt_08.aspx.

43 http://www.evergladesplan.org/index.aspx provides information on this project. The information that 

follows in our discussion here was taken primarily from this source.
Copyright 2010 Everglades Foundation and Mather Economics 8

Our Methods, Approach and Assumptions

There are many ways to estimate the value of an asset. We take the revealed preference 

approach, which means we only use data from actual transactions of people buying things. Other 

methods include contingent valuation and survey techniques. These methods have their place, 

but not in our work. We approach the problem of valuation using market data and real 

transactions and we do not use survey data or other methods to approximate what people might 

pay for a good or service. There is significant literature on these methods, but we are dedicated 

to avoiding speculation as much as possible, and hence we only use actual market transactions as 

metrics of people‘s willingness to pay. For a starting point on this discussion, consult Harberger 

(1971).44

For instance, when it comes to valuing cleaner water, we estimated the increase in value of real 

estate associated with water quality improvements caused by Everglades restoration. While we

or others could ask people how much they might pay for an increase in water quality in their 

neighboring streams, we believe that method is fraught with issues that we seek to avoid. For 

instance, it is very hard for people to estimate how much they might pay for an environmental 

service, particularly when they cannot perfectly visualize what it is they are being asked to price 

hypothetically. On a related note, if survey respondents don‘t actually have to pay for the 

environmental service, they might artificially inflate their response so that they appear and feel 

more environmentally conscious. Our technique avoids these issues by only using prices actually 

paid by real people for real goods and services.45The benefits that will flow from a restored 

Everglades are a capital asset in that the services will accrue over time. In order to compute a net 

present value of these flows of services, it is necessary to discount the future returns or services 

to the present. We made no adjustment for inflation; all our calculations are in 2010-dollar terms, 

discounted to the present. As such, we make no assumption about the adjustment of relative 

prices over time. In effect, we assume that relative prices remain constant at 2010-dollar levels.

We used the current municipal bond rate in South Florida, minus the current inflation rate to 

discount the future expected flows of services. This rate as of spring 2010 was 2.1 percent. We 

 

44 Harberger, Arnold C. "Three Basic Postulates for Applied Welfare Economics: An Interpretive Essay." 

Journal of Economic Literature, 9(3), (1971): 785-97.

45 For additional information on contingent valuation and criticism of that method, see Glenn Harrison.

―Valuing public goods with the contingent valuation method: A critique of kahneman and knetsch.‖ Journal of 

Environmental Economics and Management, (November 1992): 248-257 among a host of others. See also Peter 

Diamond and John Hausman. ―Contingent Valuation: Is Some Number Better than no Number?‖ Journal of 

Economic Perspectives, 8(4), (Autumn 1994): 45-64.
Copyright 2010 Everglades Foundation and Mather Economics 9

note that the current U.S. Treasury inflation adjusted bond rates, depending upon maturity date,

span our choice of discount rate. The 10-year TIPS bonds issued on July 15, 2010 have a yield of 

1.295 percent. The 30-year TIPS bonds issued on February 26, 2010 are currently carrying a 

yield of 2.229 percent. Accordingly, we suggest that our discount rate of 2.1 percent is 

appropriate and conservative.46

As economists, in any attempt to measure value there is always a tension which arises from 

something we call the diamond-water paradox.47 Essentially, there are two ways to measure the 

value of a product. One is the expenditures paid by consumers and received by sellers. This is the 

price of the product or service times the quantity purchased. In economic jargon, this is called the 

rectangle of expenditure or simply the rectangle. This metric is simple, straightforward and easy 

to calculate under most circumstances. More meaningful in many situations, however, is the

concept called consumer surplus, which measures the additional or unrequited joy that a buyer 

gets, above and beyond the price paid, which is also a measure of economic welfare. This 

additional value that consumers place on their purchases is sometimes called the triangle of 

consumer surplus (as opposed to the rectangle of expenditure). In fact, most economists take the 

position that the total value of an asset is not just what the buyer might have paid for it, but the 

price paid plus the additional amounts that buyers would be willing to pay. Note carefully that 

this is not the same as contingent valuation.

Contingent valuation is ascertaining or estimating what something might be worth in the absence 

of a market or transaction or budget constraint. Consumer surplus is the value that a buyer 

receives above and beyond the purchase price of a good or service that is transacted in the 

marketplace.48

Why is this important? We discuss consumer surplus in more detail below, but for now suffice to 

say that the actual benefits from Everglades restoration, according to standard economic theory, 

include not only the direct expenditures, which we measure, but also the consumer surplus which 

we do not measure. We choose not to measure the consumer surplus in this case for two reasons: 

 

46 These data were taken from http://www.treasurydirect.gov/RI/OFNtebnd.

47 It is not exactly clear who first coined this phrase, but the concept and its importance are discussed in 

virtually every principles of economics textbook published in the last century. We discuss this topic in more detail 

below.

48 Estimating consumer surplus requires knowledge or estimation of the consumer‘s entire demand curve, 

not just the point of purchase. In that sense, it is somewhat like contingent valuation, but yet very different as there 

are empirical methods for estimating the actual demand curve that vary considerably from the techniques of 

contingent valuation.
Copyright 2010 Everglades Foundation and Mather Economics 10

first, measuring consumer surplus is a difficult, expensive and time-consuming chore; and 

second, our approach is conservative and avoids controversy. This means that our estimates of 

benefits associated with restoration are very conservative, perhaps by a factor of two or three 

times.

One of the ways we have chosen to be transparent and conservative is to offer sensitivity 

analysis. For instance, we project that most benefits will persist for 50 years, and therefore, we 

compute the present discounted value of restoration gains out to the year 2060. However, we also 

present estimates over just 30 and 40 years as well. As another example, in the case of fisheries 

restoration, the science, as we have come to understand it, does not offer us a precise estimate as 

to when fish populations will return to their natural levels. To cope with this uncertainty, we 

computed gains in fishing from restoration under different scenarios, immediate restoration, 20 

year lagged restoration, and 30 years for the fisheries to fully restore. Details of this method are 

discussed below.

Our approach is designed to let readers and critics see our methods and assumptions. This allows 

readers to make alternative assumptions about facts yet revealed in order to make their own 

conclusions. We chose this conservative approach because the future is uncertain, and a 

modicum of restraint seems appropriate given the risk and uncertainty about such a large project 

as CERP. Furthermore, we are striving to be reasonably non-controversial. In the end,we believe 

that our methods are based on the best, sound science. If anything, we expect that our critics 

might assert that our estimates of benefits of Everglades restoration are too small and not 

reflective of the actual gains that might accrue. We are comfortable with this position.

What Others Have to Say About Everglades and Everglades Restoration

There are more than a few commenters on the current state of the Everglades and the proposed 

restoration of this giant environmental asset. Our task is not to assess the value of the Everglades 

and its ecosystem, nor to comment on the advisability or scientific wisdom of undertaking 

restoration or its many parts. Instead we have the task of estimating, conservatively, the 

economic change that would take place if the proposed CERP is actually implemented in total. 

Our work should not be interpreted as an assessment of any particular part of CERP restoration 

or the advisability or economic consequences of any part. We have not undertaken this marginal 

approach. Instead, owing to time constraints and our directed assignment, we have attempted to 

estimate the impact of undertaking the entire complement of CERP projects taken as a whole. 
Copyright 2010 Everglades Foundation and Mather Economics 11

Caveat emptor, and readers are ill-advised to take our work as speaking on the value or 

subjectivity of any particular aspect of CERP. 

The National Park Service has this to say about the current state of the Everglades ecosystem:

The same rains that fall on South Florida today once ran off the backs of our 

wood stork's forebears, but the similarity ends there. Now, extensive canal and 

levee systems shut off the life-giving bounty of the rain before it can reach the 

national park, which makes up only one-fifth of the historic Everglades. At times 

the water control structures at the park boundary are closed, and no water 

nourishes the wood stork's habitat. Or, alternately, water control structures are 

opened and unnaturally pent-up, human-managed flood waters inundate 

Everglades creatures' nests or eggs and disperse seasonal concentrations of the 

wading birds' prey. Added to these problems is the presence of pollutants from 

agricultural run-off. High levels of mercury are identified in all levels of the food 

chain. 

Many animals are specifically adapted to the alternating wet and dry seasons. 

When human manipulation of the water supplies are ill-timed with natural 

patterns, disasters can results. Alligators build their nests at the high-water level. 

If more water is released into the park, their nests are flooded and destroyed. 

Endangered snail kite birds feed on the aquatic apple snail. Low-water conditions, 

human caused or natural, reduce snail and snailkite populations. In the early 

1960s only 20 to 25 snail kites remained in North America because of prolonged

drought. Snails lay eggs above the water in the wet season. If managers release 

more water, snails fail to reproduce. 

Given present trends, the endangered wood storks may no longer nest in South 

Florida by the year 2000. The wood stork has declined from 6,000 nesting birds to 

just 500 since the 1960s. Their feeding behavior explains their predicament. 

Wood storks feed not by sight, but by touch -"tacto-location"- in shallow and 

often muddy water full of plants. Fish can't be seen in those conditions. Walking 

slowly forward the stork sweeps its submerged bill from side to side. Touching 

prey, mostly small fish, the bill snaps shut with a 25-second millisecond reflex 

action, the fastest known for vertebrates. Only seasonally drying wetlands (mostly 

in drying ponds) concentrate enough fish to provide the 440 pounds a pair of these 
Copyright 2010 Everglades Foundation and Mather Economics 12

big birds requires in a breeding season. When natural wetlands cycles are upset by 

human water management, wood storks fail to nest successfully. The wood stork -

which stands more than three feet tall, and has a 5-foot wing span, and weighs 4 

to 7 pounds - was placed on the endangered species list in 1984.

Native trees, such as mangroves and cypress, are being replaced by exotic 

(introduced) species from other countries. Florida largemouth bass share their 

nesting beds with tilapia and oscars, fish imported from Africa and South 

America. As the Everglades yield to human introduced plants and fish, native 

species diminish.49

The Comprehensive Everglades Restoration Plan lists lofty goals as benefits. With the 

implementation of the plan, improvements will be made by:

 * Restoring natural flows of water, water quality and hydroperiods;

 * Improving the health of more than 2.4 million acres of the South Florida ecosystem, 

including the Everglades and Biscayne National Park;

 * Improving hydrologic conditions will result in Lake Okeechobee once again, 

becoming a healthy lake;

 * Improving native flora and fauna, including threatened and endangered species;

 * Ensuring a reliable, adequate supply of fresh water for use by all – the environment, 

urban and agriculture;

 * Maintaining flood protection set in place by the C&SF project; and

 * Creating wide-ranging economic benefits, not only for Florida, but the entire 

nation.

50

Richard Weisskoff has written extensively about Everglades restoration. In ―The Economics of 

Everglades Restoration,‖ Weisskoff argues that the economy of Florida and the Everglades 

ecosystem are inseparable and that efforts to plan and implement a restoration of the Everglades 

ecosystem without incorporating likely economic effects are profoundly flawed. This premise is 

a response to the Everglades restoration planning Weisskoff observed in the late 1990s, which 

failed to consider the economic activity occurring within the region. To support the argument in 

favor of including economic factors in the restoration planning process, Weisskoff provides 

forecasts of the Florida economy with and without Everglades restoration using a Regional 

Economic Model (REMI) that he has adjusted to incorporate environmental factors specific to 

 

49 http://www.everglades.national-park.com/info.htm.

50 http://www.evergladesplan.org/about/rest_plan_pt_08.aspx.
Copyright 2010 Everglades Foundation and Mather Economics 13

the Florida economy. These economic forecasts provide evidence of 1) the demands placed on 

the Everglades ecosystem in the areas of fresh water supply, urban land and agriculture and 2)

the interdependence between South Florida‘s economic activity and the health of the Everglades 

ecosystem.

The forecasts produced in Weisskoff‘s book are pre-recession, and, although the author provides 

a range of economic growth scenarios, they are likely overestimates of actual economic activity 

in the region. Despite what might be errors in these forecasts, the scale of growth that will occur 

in the vicinity of the Everglades over the next 30 years is undeniable. Weisskoff argues that 

economic growth will be spurred by any restoration efforts and that the enhanced growth will 

lead to further degradation of the Everglades ecosystem. This assumed tradeoff between 

economic growth and environmental restoration is implicit in his work, and little attention is paid 

to the possibility both could occur in tandem.

Weisskoff‘s analysis does provide some estimates of ecosystem services, but they are produced 

using a variation of the approach described by Costanza (Nature, 1997). This approach is distinct 

from the macroeconomic forecasting methods used throughout the book. To estimate the 

ecosystem values for the Everglades, Weisskoff applies average ecosystem service values per 

land and sea acre for the areas included within the Everglades ecosystem. He uses two GIS land 

surveys of the Everglades to arrive at the land areas that are mapped to each ecosystem service. 

He finds that the economic contribution of ecosystem services provided by the land acres within 

the Everglades was $31.66 billion in 1995. This reduction of $2.42 billion from the 1988 value is 

due to changes in land usage. Both values are given in 1994 dollars. The value of ecosystem 

services provided by the water within the Everglades is added to the land totals to arrive at $58.7 

billion in 1995. He notes that this estimate of the Everglades‘ ecosystem services is roughly 

equal to one-third of the South Florida economy. The Costanza methodology is described 

elsewhere in this literature review, but it is worth noting that it includes non-marketed economic

values in the per-acre estimates, which is a substantial departure from the approach used in our 

analysis. Also, the Costanza estimates of per-acre ecosystem values are developed using global 

estimates of economic service values. Applying these global per acre ecosystem values to a 

single ecosystem such as the Everglades is fraught with issues of interpretation.

On Costs

As we mentioned earlier, we were not asked to estimate the costs of Everglades restoration or to 
Copyright 2010 Everglades Foundation and Mather Economics 14

analyze the estimates that others have derived. Our analysis is only about the benefits. However, 

for purposes of comparison, we use the cost estimates that others have derived, but with some 

adjustments. The details of that adjustment are reported in the appendix to this chapter. For our 

purposes, we take the cost of restoration as $11.5 billion in 2010 terms and use it only for 

comparison to the benefits we estimate (also in 2010 dollar terms).

Introduction References

Barnett, Cynthia. Mirage: Florida and the Vanishing Water of the Eastern U.S., University of 

Michigan Press (2007). ISBN 0472115634

Carter, W. Hodding. Stolen Water: Saving the Everglades from its Friends, Foes, and Florida, 

Atria Books (2004). ISBN 0743474074

Caulfield, Patricia. Everglades, Sierra Club/Ballantine Books (1970). ISBN 345023536395

Douglas, Marjory S. The Everglades: River of Grass, R. Bemis Publishing (1947). ISBN 

0912451440

Douglas, Marjory, Rothchild, John. Marjory Stoneman Douglas: Voice of the River, Pineapple 

Press (1987). ISBN 0910923941

George, Jean. Everglades Wildguide, National Park Service (1972): Gov. doc #I 29.62:Ev2

Griffin, John. Archeology of the Everglades, University Press of Florida (2002). ISBN 

0813025583

Grunwald, Michael. The Swamp: The Everglades, Florida, and the Politics of Paradise, New 

York: Simon & Schuster (2006). ISBN 0743251075

Hann, John, ed. Missions to the Calusa, University Press of Florida (1991). ISBN 0813019664

Jewell, Susan. Exploring Wild South Florida: A Guide to Finding the Natural Areas and Wildlife 

of the Everglades and Florida Keys, Pineapple Press, Inc (1993). ISBN 1561640239

Lodge, Thomas E. The Everglades Handbook. Understanding the Ecosystem, CRC Press (2005). 

ISBN 1884015069
Copyright 2010 Everglades Foundation and Mather Economics 15

McCally, David. The Everglades: An Environmental History, University Press of Florida (1999). 

ISBN 0813023025

Ripple, Jeff. Big Cypress Swamp and the Ten Thousand Islands: Eastern America's Last Great 

Wilderness, University of South Carolina Press (1992). ISBN 0872498425

Tebeau, Charlton. Man in the Everglades: 2000 Years of Human History in the Everglades 

National Park, University of Miami Press (1968).

Toops, Connie. The Florida Everglades, Voyageur Press (1998). ISBN 0896583724

U.S. Army Corps of Engineers and South Florida Water Management District "Summary."

Central and Southern Florida Project Comprehensive Review Study, (April 1999).

University of Florida Agricultural Experiment Station and United States Department of 

Agriculture Soil Conservation Service. Bulletin 442: Soils, Geology, and Water Control in the 

Everglades Region, (March 1948).

Whitney, Ellie et al., eds. Priceless Florida: Natural Ecosystems and Native Species, Pineapple 

Press, Inc (2004). ISBN 9781561643097
Copyright 2010 Everglades Foundation and Mather Economics 16

Appendix to Introduction

The following appendix describes our method of converting the original 1999 cost of Everglades 

restoration to 2010 terms, allowing for the so-called River of Grass option as opposed to the 

artificial pumping approach.

Since CERP was ratified 10 years ago, it has become obvious that certain aspects of it were 

either unreasonable or inappropriate. Accordingly, for this analysis the original CERP storage 

projects have been replaced with an alternative storage approach. This adjustment was made due 

to reasonable doubts that have been raised regarding the feasibility of the original storage options 

and their estimated costs. In addition, there exists a viable alternative storage method with sound 

cost estimates. CERP‘s original cost estimate included costs for the Lake Okeechobee ASR, Inground reservoirs, and the EAA reservoir. In 1999 dollars, these three projects cost $2.6 billion, 

which represented 33.2 percent of the total $7.8 billion CERP cost. Since the original plan was 

completed, the feasibility and costs of these storage options have been reconsidered, and it is 

likely these costs were underestimated by a considerable amount. For our cost estimate, we have 

removed these costs from the CERP estimate and replaced the three storage projects with the 

River of Grass Reservoir storage option that has an estimated cost of $3.2 billion in 2010 dollars. 

The net effect of these changes is to adjust the total Everglades restoration costs to $11.5 billion 

in 2010 dollars.
Copyright 2010 Everglades Foundation and Mather Economics 17

Construction Land Total Initial Annual O&M Year of $

3 projects that Bill pointed out within current CERP:

Lake Okeechobee ASR $1,108,797,000 $7,515,000 $1,116,312,000 $25,000,000 1999

In-Ground Reservoirs $783,695,000 $255,277,000 $1,038,972,000 $3,205,753 1999

EAA Reservoir $350,112,000 $86,536,000 $436,648,000 $14,458,409 1999

Total of these projects $2,242,604,000 $349,328,000 $2,591,932,000 $42,664,162 1999

Total CERP $5,598,113,000 $2,221,435,000 $7,819,548,000 $172,000,000 1999

33.15%

Revised LO ASR $1,800,000,000 $19,500,000 $1,819,500,000 $150,000,000 2010

Revised In-Ground $1,680,000,000 $1,744,650,000 $3,424,650,000 $2,000,000 2010

Revised EAA Reservoir $1,152,000,000 $224,000,000 $1,376,000,000 $2,066,667 2010

$4,632,000,000 $1,988,150,000 $6,620,150,000 $154,066,667 2010

Add this back in:

River of Grass Reservoir $2,880,000,000 $350,000,000 $3,230,000,000 $6,400,000 2010

Fed - Corps gets money from two sources - land vs. operations

State does not do it that way; they include operations costs to calculate rate of return & interest rates on bonds

EF best guesses of true costs for these three projects; based upon realistic costs from ongoing projects 

and comparables; remove these from the original estimate

Cost Estimates of Everglades Restoration
Copyright 2010 Everglades Foundation and Mather Economics 18

2005-07-01 124.678 1.12359976 8,786,042,244

2005-10-01 125.751 1.13326965 8,861,656,413

2006-01-01 126.382 1.13895623 8,906,122,900

2006-04-01 127.388 1.14802231 8,977,015,587

2006-07-01 128.312 1.15634941 9,042,129,746

2006-10-01 128.722 1.16004434 9,071,022,392

2007-01-01 129.994 1.17150762 9,160,660,064

2007-04-01 130.908 1.1797446 9,225,069,524

2007-07-01 131.355 1 1.18377297 9,256,569,555

2007-10-01 131.884 1.00402725 1.18854032 9,293,848,115

2008-01-01 132.066 1.00541281 1.19018051 9,306,673,631

2008-04-01 132.540 1.00902135 1.1944522 9,340,076,349

2008-07-01 133.954 1.01978608 1.20719519 9,439,720,743

2008-10-01 133.627 1.01729664 1.20424826 9,416,677,096

2009-01-01 134.317 1.02254958 1.21046655 9,465,301,305

2009-04-01 134.212 1.02175022 1.20952029 9,457,901,969

2009-07-01 134.260 1.02211564 1.20995287 9,461,284,523

2009-10-01 134.376 1.02299874 1.21099826 9,469,459,027

2010-01-01 134.584 1.02458224 1.21287276 9,484,116,760

12,100,000,000 12,397,445,092

0.331468264

8,288,085,490

3,230,000,000

11,518,085,490 2010 dollars
Copyright 2010 Everglades Foundation and Mather Economics 19

Chapter 1: Ground Water Purification and Aquifer Recharge

One of the prime benefits of restoring the Everglades will be that the ensuing increase in sheet 

flow will cause the groundwater extracted by communities, municipalities and individuals in the 

region to be less brackish than it is now or would be in the future absent restoration. As more 

water flows out of Lake Okeechobee into the restored Everglades region, groundwater will be 

recharged at higher rates with clean water mostly free of salt compounds. This higher grade 

water and increased flow will recharge the aquifers underneath South Florida, which will in turn 

reduce the amount of purification required for the current population and in the future as 

population and incomes grow.

Groundwater in the coastal counties of the South Florida Water Management District (SFWMD) 

is brackish, so it must be desalinated before most uses. The capital cost of desalination, given the 

state of the art of the reverse osmosis (RO) technology, is driven by the volume of fresh water 

that must be produced, which in turn is driven by population growth. The operating cost of 

desalination, on the other hand, is a direct function of the salinity of the water input. Saltier water 

must go through the RO membranes at a higher pressure, which requires more energy. Restoring 

sheet flow according to the Comprehensive Everglades Restoration Plan (CERP) can be expected 

to decrease groundwater salinity, because more fresh water allowed into the aquifer from above 

will displace seawater seeping into it from below. So, conservatively, we expect the restoration 

of the Everglades to result in at least the energy cost savings from having to desalinate less saline 

water. We ignore any potential capital cost savings from 1) the likely prospect that fewer 

desalination plants will be built in the first place, and 2) reduced labor and maintenance costs

from using less saline input (assuming, that is, that RO membranes fail at higher rates when 

higher-pressure, more saline water is pushed through).

Using the assumptions detailed below, we estimate that restoration of the Everglades will result 

in energy cost savings amounting to between $13.5 and $29.6 billion over the next 50 years, 

combined across all parties, public and private, who are expected to desalinate water in the 

SFWMD. 

We assume no change in reverse osmosis technology or in the cost of electricity, and we use a 

discount rate of 2.1 percent. Growing energy costs would increase these estimates. 

Improvements in desalination technology would decrease them. The higher figure assumes that 
Copyright 2010 Everglades Foundation and Mather Economics 20

all the water withdrawn must be desalinated. The lower figure assumes that only the water 

currently classified as saline must be desalinated. Current salinity readings indicate that all 

groundwater is brackish, not just that which is currently classified as saline. This makes the 

higher figure above plausible.

Finally, the energy costs are computed based on desalinating a combination of surface water and 

groundwater in proportions projected based on historic observations. Surface water salinity is 

much lower and growing more slowly. We treat it the same way as groundwater for simplicity: if 

it is saline, it will have to be desalinated. Its effect, however, on energy cost is far smaller than 

that of desalinating groundwater.

51

Avoided Desalination Costs

General approach and data sources

Our model has four steps. First, we project population and income growth in the area of interest 

over the next 50 years, and use the projected values to model water withdrawals over the same 

period. Next, we use historical salinity readings to infer the change in salinity over the next 50 

years without the Everglades being restored. Then, we infer the yearly desalination cost over the 

same period using regression analysis and engineering data published by the Texas Water 

Development Board (TWDB). Finally, we repeat the cost calculations assuming that if the 

Everglades were restored, water salinity would drop to its 1970 level and stay there even as the 

volume of water withdrawn grew as driven by population and income growth.

In other words, we assume that implementing CERP would result in a new steady state where the 

aquifer would be replenished with freshwater to a sufficient extent that it could sustain increased 

withdrawals with no increase in its salinity. The difference between the discounted streams of 

yearly desalination cost with and without Everglades restoration is our estimated economic 

benefit in the form of avoided desalination costs that can be credited to CERP. 

 

51 In our forecasting model, predicted groundwater salinity falls over time in some counties before it rises, 

and is predicted to dip below its 1970 baseline for the first few years after 2010. This can result in negative savings 

in the least-discounted years, with a disproportionate effect on the net present value of the savings combined over 

the next 50 years. This is the case of Miami-Dade County, where savings are negative and falling toward zero for 

the next 12 years before they move into positive territory. We could have zeroed out such negative savings under the 

theory that, while CERP might not make things better, it will not make them worse. We decided against it. This 

means that our benefits estimate, on this count, is probably biased downward too low. 
Copyright 2010 Everglades Foundation and Mather Economics 21

We collected data on water use in SFWMD, by county and by year, from the U.S. Geological 

Survey (USGS). We collected salinity data from DBHYDRO, the official SFWMD data 

repository of water research results, and from the National Water Information System (NWIS) 

maintained by the USGS.

Technical details

Water use

The USGS collects county-level data on water withdrawals every five years. We are interested in 

data for the 16 counties in the SFWMD. The earliest available records are from the 1985 data set. 

The latest, from 2005. Table 1.1 reports the information over time.

Table 1.1: Total Water Withdrawals in the 16 SFWMD counties, Mgal/d

1985 1990 1995 2000 2005

Groundwater, fresh 1,961.12 2,475.38 2,371.54 2,705.35 2,386.13

Groundwater, 

saline

0.00 0.00 4.63 0.00 3.26

Surface water, 

fresh

1,284.40 1,777.18 1,868.83 1,987.03 1,560.78

Surface water, 

saline

2,523.58 3,195.40 3,319.94 3,948.82 3,754.76

Total, fresh 3,245.52 4,252.56 4,240.37 4,692.38 3,946.91

Total, saline 2,523.58 3,195.40 3,324.57 3,948.82 3,758.02

Source: USGS Water use survey (http://water.usgs.gov/watuse/).

Using these data and yearly population and income figures by county over the same time span, 

we extrapolated water use into the future 50 years using a fixed-effects panel regression model 

where water withdrawals were modeled as a function of population and per-capita income. This 

model assumes that the effect of population or income on water use is the same across all 

counties of interest, and the differences come from their relative sizes – more populous counties 

draw more water, but at the same per-person rate as less populous ones. This may sound 

simplistic, but absent controls for other reasons why different counties might have different 

water needs (lawns in Palm Beach, industry in Miami) the model gives a fair representation of 

the average water needs. We used this specification for modeling separately four sub-totals of 
Copyright 2010 Everglades Foundation and Mather Economics 22

water withdrawals: saline and fresh groundwater, and saline and fresh surface water. Parameter 

estimates are in the appendix to this chapter.

Salinity

The SFWMD maintains DBHYDRO, an online database of water quality measurements taken 

over time by various parties. One of these measurements is salinity, defined as Chloride in 

milligrams per liter (same as parts per million). Each measurement comes with the location of 

the station and the date it was taken, so it is straightforward to combine them into yearly 

averages per county. 

The USGS maintains the National Water Information System (NWIS), a similar online database 

with its own Chloride records, with the same unit of measurement, also with locations and time 

stamps.

Both DBHYDRO and NWIS record salinity separately by ground and surface water. In the case 

of groundwater, we are interested in measurements taken in wells no deeper than 500 feet. Below 

this depth, the water is saline. Southern Florida's fresh groundwater comes from surficial 

aquifers, with water withdrawn from depths well above 500 feet.

Table 1.1 shows that most groundwater withdrawn inside the SFWMD is classified as fresh. The 

two non-zero measurements for saline groundwater come almost entirely from one county –

Miami-Dade. However, salinity measurements tell a different story: groundwater in the 16 

counties has been growing increasingly brackish over time, even after discarding any samples 

taken from depths either unknown or greater than 500 feet (Figure 1.1). It is reasonable, then, to 

assume that desalination will be needed for all groundwater withdrawn in the SFWMD in the 

future, whether by private or public water supply systems. Restoring the Everglades will help 

decrease the expected cost of desalination to the extent that it will succeed in reversing the trend 

of increasing groundwater salinity.
Copyright 2010 Everglades Foundation and Mather Economics 23

Figure 1.1: Evidence of growing salinity in Southern Florida's groundwater

Even as the DBHYDRO and the NWIS data differ about the extent of the growth in salinity, they 

agree that the trend is positive and accelerating. The estimated cost savings from avoided 

desalination depend on which of the two sets of salinity data we use to extrapolate salinity with 

and without CERP into the future. Though the NWIS data record a far larger number of samples, 

these cover only 7 of the 16 counties of interest as shown in Table 1.2 below. We had to choose 

between using data from fewer samples covering all counties or from more samples covering 

some of the counties. We chose DBHYDRO because we believe that complete coverage is more 

valuable than higher-density sampling of only part of the area of interest. As Figure 1.1 suggests, 

had we chosen NWIS our cost-saving estimates would have been lower, because projected 

salinity would have been lower based on the data summarized in the graph on the left.

0

500

1,000

1,500

2,000

2,500

1900 1950 2000

year

 44,735 samples

NWIS, Chloride, water, filtered (p00940), All GW Sites

0

1,000

2,000

3,000

4,000

1970 1980 1990 2000 2010

year

6,205 samples

DBHYDRO, Test Name: Chloride (32), Matrix: GW, All Stations

Chloride mg/L at depths above 500 ft.

Groundwater salinity in the 16 counties of SFWMD
Copyright 2010 Everglades Foundation and Mather Economics 24

Table 1.2: Coverage of Chloride samples

DBHYDRO NWIS

Broward 278 15,004

Charlotte 38

Collier 533 4,644

Glades 92

Hendry 193 639

Highlands 164

Lee 276 4,694

Martin 242

MiamiDade1,007 15,525

Monroe 3 148

Okeechobee 931

Orange 33

Osceola 432

Palm Beach 1,264 4,081

Polk 263

St. Lucie 456

Total 6,205 44,735

The exercise assumes that CERP would result in groundwater salinity falling back to its 1970 

level. Without CERP, salinity would continue to grow along its current path as shown in the right 

half of Figure 1.1. Surface water would be minimally affected: for the sake of simplicity, we 

treat it the same way as groundwater, but its salinity is low and growing very slowly.

The cost of desalination

Desalination requires a capital investment – building the plants – and an ongoing operating cost 

in the form of energy used, maintenance, and labor. Our understanding of the desalination 

problem comes from a study done for TWDB by LBG-Guyton Associates, available in PDF and 

referenced in the Chapter 1 References below. A brief summary follows:

The relation between the total cost of desalination and the salinity of the water input is a matter 

of very loose approximation because of technological progress, changes in the relative prices of 
Copyright 2010 Everglades Foundation and Mather Economics 25

the various inputs (both in the production of fresh water and the disposal of concentrates and 

brine), and local characteristics. 

We do know that more saline input must be pushed through RO membranes at a higher pressure. 

Though the baseline of this relationship is dropping as RO technology improves, it remains true 

that the higher the pressure, the higher the energy expended, and there are no economies of scale 

in this process. This is the cost of interest to us, because everything else is subject to either scale 

effects or factors depending on local characteristics. For example, larger plants, as well as plants 

designed to operate at a higher baseline pressure, have some efficiencies built-in. The cost of 

disposing of the brine via deep-well injection depends on the local geographic options for doing 

so. The same goes for the cost of disposing of the concentrate (sludge that's saturated with 

impurities other than salt). We did not undertake to estimate any cost savings that might result 

from having to dispose of less salt, a scenario that would be the result of restoration.

The TWDB study documents two values of pressure required in pounds per square inch (psi) at 

given levels of groundwater input salinity in milligrams per liter (mg/L): it takes 200 psi to treat 

3,000 mg/L water, and it takes about 1,000 psi to treat 30,000 mg/L sea water. Absent better 

data, we can only say that, as salinity grows by a factor of 10, the pressure required grows by a 

factor of 5. Filling in a few intermediate values, we estimated, via linear regression, the 

following functional relation between pressure y and salinity x:

(1) y(PSI) = 78.18 + .029*x(mg/L).

Next, we estimated a similar relation between energy, in MWh/year, and pressure. The same 

study documents that a 10MGD (million gallons/day) plant takes 10,600 MWh/yr to operate at 

300psi, 17,700 MWh/yr to operate at 500 psi, and 24,700 MWh/yr to operate at 700 psi. Our 

estimated functional relation between energy z and pressure y is:

(2) z(MWh/yr) = 41.67 + 35.25*y(PSI).

Combining (1) and (2) yields the following relation between energy z and salinity x:

(3) z(MWh/yr) = 2,797.5 + 1.014*x(mg/L).

We used equation (3) as our model of the annual cost of energy as a function of water input 

salinity assuming an energy price of $.08 per kW/h, based on the average electricity price in 

Florida for industrial use ($.0767 in 2007).52

 

52 http://www.ppinys.org/reports/jtf/electricprices.htm.
Copyright 2010 Everglades Foundation and Mather Economics 26

Next, we projected this annual desalination cost for each SFWMD county, given its projected 

water withdrawals (ground and surface) and their respective salinity levels given their current 

path (groundwater salinity expected to rise at a growing rate as shown in Figure 1.1; surface 

water salinity, not shown, expected to remain unchanged for the most part). Then we repeated 

the calculations with salinity levels held at their 1970 level.

Results

Our avoided desalination cost estimate is the difference between projected desalination costs 

given the current path of rising salinity versus holding it constant at its 1970 level, which is our 

expected environmental effect of CERP. Net present values of the yearly savings between 2010 

and 2060 are shown in Table 1.3 below. We assume a 2.1 percent discount rate, quadratic growth 

patterns in population and income, as well as in salinity (without CERP). We use DBHYDRO 

salinity readings. We perform this calculation under two assumptions regarding water withdrawn 

in the SFWMD over the next 50 years, by public and private parties: first, we assume that all 

water will have to be desalinated; second, we assume that only the water classified as saline will 

have to be desalinated. Though the latter sounds obvious and results, as expected, in a lower 

estimate, the former is not implausible. Current readings show that all groundwater in SFWMD 

tested at depths above 500 feet is saline to some extent, and it is growing more saline on average. 

If not all of it is treated now, it likely will need to be in the future.
Copyright 2010 Everglades Foundation and Mather Economics 27

Table 1.3: Projected avoided desalination costs*

under CERP, by county

(1) (2)

Broward 4,874,613,988 3,336,185,306

Charlotte 1,845,151,810 110,230,864

Collier 3,199,893,209 1,264,661,598

Glades 1,219,888,896 0

Hendry 737,265,172 0

Highlands 451,662,287 0

Lee 2,028,597,261 1,125,228,393

Martin 1,058,726,538 0

Miami-Dade 2,076,442,179 1,469,949,796

Monroe 889,385,452 0

Okeechobee 473,328,531 0

Orange 2,065,805,877 1,358,980,032

Osceola 1,028,574,150 403,534,040

Palm Beach 5,279,093,539 3,440,020,286

Polk 1,192,452,967 625,697,186

St. Lucie 1,194,564,609 395,420,582

Total 29,615,446,465 13,529,908,083

(1) Assuming that all groundwater withdrawn must be desalinated

(2) Assuming that only saline groundwater must be desalinated 

* Energy costs only

These avoided desalination costs are energy-cost savings alone. Water desalination using reverse 

osmosis requires pretreatment to prevent membrane fouling, disposal of the byproduct brine and 

concentrates and non-trivial capital investments. We ignored maintenance and disposal costs 

because they are too dependent on local conditions to be believably projected from the TWDB 

study. And we assumed that capital costs would be unchanged with or without CERP, as new 

desalination capacity would be built according to freshwater needs, not to the salinity of the 

input. This makes our estimates above conservative.
Copyright 2010 Everglades Foundation and Mather Economics 28

Chapter 1 References

Cost Analysis of Groundwater Desalination: 

http://www.twdb.state.tx.us/publications/reports/GroundWaterReports/GWReports/Brackish%20

GW%20Manual/35-Ch04.pdf

DBHYDRO data: 

http://www.sfwmd.gov/portal/page/portal/xweb%20environmental%20monitoring/dbhydro%20a

pplication

NWIS data: http://waterdata.usgs.gov/nwis

Appendix to Chapter 1

Part 1: Total water withdrawals model

Withdrawals, Million gallons/day

Groundwater Surface-Water

Saline Fresh Saline Fresh

Population, April 1, thousands 0.001* 0.081 0.556*** 0.086

(2.02) (1.87) (4.76) (1.21)

Per-capita income ($1,000) -0.010 0.306 -1.951 0.431

(-0.90) (0.46) (-1.09) (0.40)

Constant -0.329 105.201*** 6.809 57.524*

(-1.33) (7.24) (0.17) (2.43)

R-squared 0.07 0.13 0.34 0.07

N 80 80 80 80

t-values in parentheses (* p<0.05, ** p<0.01, *** p<0.001)
Copyright 2010 Everglades Foundation and Mather Economics 29

Part 2: Details on U.S.G.S. data collection 

We used the Google Chrome Sessions Manager to obtain water quality data from the U.S.G.S.

1. http://waterdata.usgs.gov/fl/nwis/nwis -- main portal to Florida data

2. http://nwis.waterdata.usgs.gov/tutorial/finding_qwdata.html -- tutorial on how to access historical data for any 

given watershed

3. http://nwis.waterdata.usgs.gov/fl/nwis/qwdata?search_criteria=county_cd&submitted_form=introduction -- GUI 

for downloading Florida data by county. This is where we selected out the 16 SFWMD counties.

4.

http://nwis.waterdata.usgs.gov/nwis/pmcodes/pmcodes?pm_search=salinity&casrn_search=&radio_pm_search=srsn

ame_search&srsname_search=potassium&format=html_table&show=parameter_cd&show=parameter_group_nm&

show=parameter_nm&show=casrn&show=srsname -- water quality parameter code definitions

5. http://nwis.waterdata.usgs.gov/nwis/help/?read_file=site_tp&format=table -- USGS site type codes.
Copyright 2010 Everglades Foundation and Mather Economics 30

Part 3: Locations of and other information on existing SFWMD desalination plants 

Desalination can be a confusing concept. The following information was obtained from the 

SFWMD and is reproduced here, without alternation in its original form and format, for 

information about current and future desalination in the region. (It is interesting to note that the 

last figure in this section (Named ―Growth of Desalination in the SFWMD‖ and unnumbered) 

reveals a forecast of desalination which maps closely to our forecast of ground water salinity in 

Figure 1.1 which is some independent confirmation of our approach to groundwater.)

Desalination in South Florida – Frequently Asked Questions 

What is desalination?

Desalination removes dissolved substances in groundwater, seawater and municipal wastewaters 

making water fit for human consumption, irrigation, industrial use and other purposes. In the 

past, distillation was the most widely used desalination process, but use of electrodialysis and 

particularly reverse osmosis, is increasing. Electrodialysis retains clean water and allows salts to 

pass. Reverse Osmosis (RO) purifies saltwater by forcing it through semi-permeable membranes, 

allowing water to pass, but retaining the impurities of heavy metals and compounds such as lead 

and nitrates called concentrate or reject that must be safely disposed. The filtered water is so pure 

that it must be post-treated and blended with other sources for potable supply. 

What is the difference between brackish water and seawater?

The primary difference between these two sources of water is in the amount of dissolved salts. 

Seawater contains higher amounts of dissolved salts (from 15,000 milligrams per liter (mg/l) to 

over 35,000 mg/l of total dissolved solids). Brackish water has 1,00015,000 mg/l. The greater the 

salt content of the water, the higher the pressure or electric power needed to treat water using 

membranes, resulting in higher energy costs. 

Why is desalination an important issue in Florida?

With more than 120 desalination plants in Florida, our state leads the nation in desalination. 

Texas has 38, California, 33. Florida leads because the water underneath, east and west of the 

peninsular is salty. The increasing demand for water, coupled with the state‘s vulnerability to 

drought events, compel water planners to consider all alternatives. The 2001 and 2007 droughts 

stressed surface water systems, but seawater sources are not affected by drought. 

How does everyone benefit from seawater desalination?

Desalination benefits everyone in Florida through diversification of our choices. Treating 

seawater to serve coastal Florida reduces competition with the Everglades initiatives and relieves 

dependence on existing conventional surface water and groundwater supply sources. Using 
Copyright 2010 Everglades Foundation and Mather Economics 31

seawater by coastal residents could increase availability of surface water for water users located 

away from the coast. Consequently, seawater desalination can indirectly benefit people who live 

farther away from the coast.

How does desalination affect the environment or climate change? 

Environmental Protection Agencies have specific guidelines that must be followed by builders of 

desal facilities to avoid harmful effects to environments. Environmental impact studies are 

conducted to identify, investigate and issue recommendation regarding possible impacts of 

disposing waste on land, air and water. In the recently completed Tampa Bay seawater project, 

monitoring has shown no significant impacts on fauna and flora. Highly concentrated salts, the 

major by-products of desalination, can be safely disposed using best management practices. 

Desalination does not substantially affect climate change because its activities are insignificant 

compared to others. Advances in energy recovery devices and low-pressure RO systems are 

substantially reducing power demand and the carbon footprint. 

How much does desalination cost?

Advancements in reverse osmosis technology have brought desalination costs closer to other 

alternatives. Ten years ago, desalinated water cost more than $9 per 1,000 gallons, but today, the 

range is $2 to $5 per 1,000 gallons. Israel‘s world-largest desal water costs are about $2 per 

1,000 gallons and the recently completed 25 MGD Tampa Bay plant produces water at about $3 

per 1,000 gallons. The cost depends on whether the source water is brackish groundwater or 

seawater. Brackish water desalination costs less than seawater desalination because it contains 

less dissolved salts. The total costs also depend on the amount of pre-treatment and posttreatment needed. Because of available grants, subsidies and innovative financing, the costs are 

not entirely passed to the end user. 

Some pros and cons of water desalination 

Pros:

• Provides a dependable, drought-proof source of water 

• Provides an alternative that could allow other stressed water sources to recover. 

• Prevents water ―wars‖ and addresses the state legislation for source diversification 

• Provides the way of the future either for potable or wastewater treatment due to 

advancing technologies and the associated reduction in costs 

• Provides high quality water 

• Saves construction of future dams and reservoirs. 

Cons:

• Still more expensive than traditional sources due to high energy consumption 

• Concentrate or waste brine from the desal process is an environmental concern 

• Intakes and discharge points may present harm to marine life 

• Permitting desal plants is still difficult
Copyright 2010 Everglades Foundation and Mather Economics 32

Does the District support or fund desalination projects? 

The District‘s Regional Water Supply Plans have recognized desalination as an economically 

viable method and support it through the Alternative Water Supply Grant Program. Other state 

grant programs, federal appropriations and private/public partnering may be used to fund 

desalination projects. 

How many brackish and seawater desalination plants are currently in operation in 

Florida? 

Florida has more than 130 desalination plants. In the SFWMD, there are about 26 facilities using 

brackish water and reverse osmosis treatment with a total capacity of more thanover 140 MGD. 

In addition, there is over 120 MGD of RO capacity under construction within our District. 

Statewide, there are three seawater desalination facilities, the two oldest in Key West with a 

capacity of 3 MGD and the newest in Tampa producing 25 MGD. 

Are there plans to build more desalination plants in Florida? 

Every fiscal year, the District receives applications for new desalination facilities. Regarding 

seawater, the District completed a feasibility study in December 2006. The study identified three 

locations where seawater treatment facilities could be co-located with electric power plants to 

take advantage of abundant plant cooling water and existing intake and discharge facilities. 

Utilities are considering moving forward more thoughtfully and deliberately, in view of the 

experience gained from the new Tampa Bay seawater plant. 

Contact Person: Ashie Akpoji (561) 682-2571, Water Supply Department, SFWMD
Copyright 2010 Everglades Foundation and Mather Economics 33

SFWMD RO Desalination Capacities

Plant Planning 

Region

Yr. Desal 

Cap.

System 

Cap.

Desal 

Percent

Plant completion sorted every two (2) years

MGD* MGD % Facility 2008 2010 2012

Plantation 

Utilities

UEC 1990 0.4 0.4 100% Plantation Utilities 0.4 0.4 0.4

St. Lucie West UEC 2005 3.4 3.4 100% St. Lucie West 3.4 3.4 3.4

Sailfish Point UEC 1978 0.4 0.4 100% Sailfish Point 0.4 0.4 0.4

Sailfish Point 

Golf Club

UEC 2007 0.4 0.4 100% Sailfish Point Golf 

Club

0.4 0.4 0.4

Port St. Lucie 33.7 41.7 81% Port St. Lucie

Port St. LucieJEAUEC 2005 22.5 22.5 Port St. Lucie-JEA 22.5 22.5 22.5

Port St. LuciePrinevilleUEC 2003 11.2 19.2 Port St. LuciePrineville11.2 11.2 11.2

Fort Pierce UEC 2002 16.1 21.0 77% Fort Pierce 16.1 16.1 16.1

South Martin 

Regional

UEC 2003 2.0 8.1 25% South Martin 

Regional

2.0 2.0 2.0

Martin 

County 

Utilities

13.5 19.1 71% Martin County 

Utilities

Martin County 

North

UEC 1994 5.5 8.8 Martin County 

North

5.5 5.5 5.5

Martin 

Tropical 

Farms 

UEC 1996 8.0 10.3 Martin Tropical 

Farms 

8.0 8.0 8.0

Cape Coral 30.1 30.1 100% Cape Coral

Cape Coral -

North

LWC 20

09

12.0 12.0 Cape Coral -

North

12.0 12.0

Cape Coral -

SW

LWC 19

76

18.1 18.1 Cape Coral - SW 18.1 18.1 18.1
Copyright 2010 Everglades Foundation and Mather Economics 34

Plant Planning 

Region

Yr. Desal 

Cap.

System 

Cap.

Desal 

Percent

Plant completion sorted every two (2) years

Clewiston LWC 20

08

3.0 3.0 100% Clewiston 3.0 3.0 3.0

Fort Myers LWC 20

02

13.0 13.0 100% Fort Myers 13.0 13.0 13.0

Greater Pine 

Island

LWC 19

99

3.8 3.8 100% Greater Pine Island 3.8 3.8 3.8

Island Water 

Association

LWC 19

73

4.7 4.7 100% Island Water 

Association

4.7 4.7 4.7

Collier 

County

30.0 54.0 56% Collier County

Collier County 

North

LWC 1999 10.0 22.0 Collier County 

North

10.0 10.0 10.0

Collier County 

South

LWC 2004 20.0 32.0 Collier County 

South

20.0 20.0 20.0

Lee County 

Utilities

9.9 39.0 25% Lee County 

Utilities

Corkscrew LWC 2008 1.0 15.0 Corkscrew 1.0 1.0 1.0

North incl. 

Olga

LWC 2006 5.0 10.0 North incl. Olga 5.0 5.0 5.0

Pinewoods LWC 2008 2.9 5.0 Pinewoods 2.9 2.9 2.9

Green 

Meadows

LWC 2008 1.0 9.0 Green Meadows 1.0 1.0 1.0

Bonita Springs LWC 2003 6.5 15.0 43% Bonita Springs 6.5 6.5 6.5

Marco Island LWC 1992 6.0 12.7 47% Marco Island 6.0 6.0 6.0

Manalapan LEC 2004 1.7 2.4 72% Manalapan 1.7 1.7 1.7

Tequesta LEC 2008 2.4 5.1 47% Tequesta 2.4 2.4 2.4

Jupiter LEC 1989 13.7 29.3 47% Jupiter 13.7 13.7 13.7

PBC - Lake 

Region WTP

LEC 2008 10.0 10.0 100% PBC - Lake Region 

WTP

10.0 10.0 10.0

North Miami LEC 2012 6.0 14.0 43% North Miami 6.0

Hialeah LEC 2011 10.0 24.0 42% Hialeah 10.0

FKAA 9.0 24.0 38% FKAA
Copyright 2010 Everglades Foundation and Mather Economics 35

Plant Planning 

Region

Yr. Desal 

Cap.

System 

Cap.

Desal 

Percent

Plant completion sorted every two (2) years

FKAA -

Marathon

LEC 1980 2.0 2.0 FKAA - Marathon 1.0 1.0 2.0

FKAA - South 

Dade

LEC 2009 6.0 24.0 FKAA - South 

Dade

6.0 6.0

FKAA - Stock 

Island

LEC 1980 1.0 1.0 FKAA - Stock 

Island

2.0 2.0 1.0

North Miami 

Beach

LEC 2008 6.5 32.0 20% North Miami Beach 6.5 6.5 6.5

Highland 

Beach

LEC 2004 3.0 3.0 100% Highland Beach 3.0 3.0 3.0

Seacoast 

Utilities

LEC 2012 4.3 30.5 14% Seacoast Utilities 4.3

Miramar LEC 2009 2.0 14.8 14% Miramar 2.0 2.0

Deerfield 

Beach

LEC 2010 3.0 23.0 13% Deerfield Beach 3.0 3.0

Fort 

Lauderdale 

Dixie

LEC 2010 6.0 88.0 7% Fort Lauderdale 

Dixie

6.0 6.0

Hollywood LEC 1996 2.0 55.5 4% Hollywood 2.0 2.0 2.0

MGD* = Million gallons per day 207.1 236.1 250.4

2008 2010 2012

Updated October 8, 2009FKAA = Florida Keys Aqueduct Authority 

LEC = Lower East Coast of the SFWMD 

UEC = Upper East Coast of the SFWMD 

LWC = Lower West Coast of the SFWMD

Source: South Florida Water Management District
Copyright 2010 Everglades Foundation and Mather Economics 36
Copyright 2010 Everglades Foundation and Mather Economics 37
Copyright 2010 Everglades Foundation and Mather Economics 38
Copyright 2010 Everglades Foundation and Mather Economics 39
Copyright 2010 Everglades Foundation and Mather Economics 40

Chapter 2: Water Quality and Residential Real Estate Valuation

Impact of Improved Water Quality

We anticipate that a restored Everglades will improve the quality of water in the 16-county South 

Florida Water Management District.53

Water plays an important role in the determination of residential real estate values. Proximity, 

type (ocean, bay, lake, river, etc.), view, size and quality are among the water attributes that are 

valued by real estate buyers. For example, lakeside or seaside properties sell at a premium to 

properties located away from bodies of water. A home on a clear stream trades at a premium to a 

similar home on a polluted stream. Of course, water and its attributes are only a small part of the 

bundle of attributes that determine a property‘s value. House size, quality of finish, proximity to 

a city and a great many other factors also play important roles. 

Economists have developed techniques to quantify the incremental value of environmental 

attributes.54 One of the often-used and robust techniques employed is hedonic pricing.55 This 

method estimates the price people are willing to pay for individual product characteristics, such 

as a swimming pool or air conditioning, and environmental goods, such as water quality, holding 

other attributes constant. Studies consistently show that the water-quality effect is positive; that 

is, property located on or around high quality water is more valuable, other things the same, than 

property located on or around lower quality water. The magnitude of this effect is generally in 

the 0.5 percent to 7.0 percent range.56 That is, some level of water quality improvement can have 

up to a 7 percent impact on real estate values. The same techniques also find, for example, 

 

53 The CERP as currently planned leaves some question about the overall impact on water quality 

throughout the 16 county region. However, it is our determination, after consultation with Everglades Foundation 

scientists, that overall water quality will increase throughout all of the counties and probably by more than the 

estimate we provide below. With that said, an extremely conservative approach would be to carefully examine the 

proposed impacts of the CERP on each individual county exploring the expected changes in the relevant water 

quality parameters there. This individualized inquiry would be advised except for the lack of time and precise details 

about exactly how the CERP will improve water quality in each sub-region within South Florida.

54 There is a giant literature on hedonic pricing as a generic method in economics. For the pure theory see 

Sherwin Rosen. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition." Journal of 

Political Economy. 82 (January/February1974): 34-55 or Jack E. Triplett. "The Economic Interpretation of Hedonic 

Methods." Survey of Current Business, 66 (January 1986): 36-40. For a recent paper involving environmental 

amenities, see Frank F. Limehouse, Peter C. Melvin, and Robert E. McCormick. ―The Demand for Environmental 

Quality: An Application of Hedonic Pricing in Golf.‖ Journal of Sports Economics, 11 (June 2010) : 261-286.

55 See, for example, Tom Kauko, Roland Goetgeluk, Ad Straub, and Hugo Priemus. ―Presence of water in 

residential environments – value for money?‖ OTB Research Institute for Housing, Urban and Mobility Studies, 

(2003).

56 Kauko, et al. (2003).
Copyright 2010 Everglades Foundation and Mather Economics 41

positive effects on air quality and negative effects on proximity to toxic waste sites.57 These 

results are both intuitively and scientifically robust. 

For the purposes of this study, our role is to estimate the impact on residential real estate values 

that will derive from a restored Everglades due to improvements in water quality. The 

calculation is:

Δ Real Estate Value = Total Real Estate Value  E wq  Δwq

where,

E wq= home price elasticity of water quality

wq = measure of water quality.

In order to estimate this effect we need several inputs:

 The total value of real estate in the impacted area,

 The extent to which water quality will be improved based on a restored Everglades 

( Δwq), and 

 The sensitivity of real estate values to changes in water quality ( E wq ).

We cannot know any of these inputs with precision. However, there are proxies available and we 

have made assumptions as noted below.

Real Estate Change-in-Value Estimation Results

The aggregate owner-occupied residential real estate value in the 16-county SFWMD is 

approximately $976.217 billion.58 Based on a survey of hedonic estimates of water-quality 

 

57 Boyle, M.A. and K.A. Kiel. ―A Survey of House Price Hedonic Studies of the Impact of Environmental 

Externalities.‖ Journal of Real Estate Literature, 9 (2001): 117-44.

58 Florida County Perspectives 2009, University of Florida Bureau of Economic and Business Research.. 
Copyright 2010 Everglades Foundation and Mather Economics 42

effects, the elasticity of real estate values with respect to water quality is .07054.59,60 Assuming 

that water quality, as measured by dissolved oxygen, can be returned to 1970 levels as a result of 

restoring the Everglades, there is a potential 23.454 percent improvement in water quality.61

Combining these estimates, we estimate the incremental value of a restored Everglades on real 

estate across all 16 counties as:

$976.217 Billion .07054 X .234 = $16.108 Billion.

This change represents a 1.655 percent increase in the aggregate value of real estate, which is 

well within the range of typical studies on water-quality effects. However, we have also done 

what-if analysis, to examine the impacts based on different levels of water-quality 

improvements. The results of that analysis are reported in Table 2.1, which also lists the countyby-county best estimates of additional ecosystem services forthcoming from a restored 

Everglades. We also estimated the increased value of real estate by assuming that nitrogen levels 

would not achieve the high levels of 2004 and 2005 hurricane years. These estimates are also 

reported in Table 2.1. Additionally, we assumed that it would take 1, 2, 3, 4 and 5 years for water 

quality goals to attain. These alternative assumptions are designed to provide the reader and 

analyst with a measure of sensitivity. For instance, if it takes three years for the water quality 

impacts to render, then total effect on real estate is $15.1 billion instead of $16.1 for all 16 

counties.

 

59 Poor, P., J., K. L. Pessagno and R. W. Paul. ―Exploring the Hedonic Value of Ambient Water Quality: A 

Local Waterhsed-Based Study.‖ Ecological Economics, 60(4) (2007).

60 A 100 percent improvement in water quality will produce a 7.054 percent increase in real estate values.

61 Restoring the current water quality to the 1970 level means, increasing the average dissolved oxygen 

content from its 2009 level 4.2359 (unfiltered) milligrams per liter to its 1970-71 level of 5.2485. See the appendix 

to this chapter for more information on the time series of dissolved oxygen in the region. Dissolved oxygen is not 

the only measure of water quality. There is salinity, turbidity, nitrogen content, and others. However, these are 

typically, but not always, correlated. While other metrics can be used, we did in fact create an estimate using 

nitrogen levels and the results were robust, we assert that dissolved oxygen is the best, single metric.
Copyright 2010 Everglades Foundation and Mather Economics 43

Table 2.1: Value of Everglades Restoration on South Florida Real Estate via Improved Water Quality

Table 2.1 Value of Everglades Restoration on South Florida Real Estate via Improved Water Quality

County

Incremental Real Estate Value

Years Until Water Quality Goals MetPotential Increase in Real Estate Value at 

2.1% Discount Rate Basis 1% 5% 23% - Best Estimate 25% 50% 100%

Broward $ 3,032,000,000 1 $ 15,777,000,000 Suspended Solids Model $ 536,000,000 $ 5,357,000,000 $ 16,108,000,000 $ 13,392,000,000 $ 26,785,000,000 $ 53,570,000,000

Charlotte $ 261,000,000 2 $ 15,452,000,000 Nitrogen Model $ 689,000,000 $ 6,887,000,000 $ 17,216,000,000 $ 34,433,000,000 $ 68,865,000,000 Collier $ 974,000,000 3 $ 15,134,000,000 Dade $ 4,379,000,000 4 $ 14,823,000,000 Glades $ 7,000,000 5 $ 14,518,000,000 Hendry $ 21,000,000 Highlands $ 96,000,000 Discount Rate 2.10%

Lee $ 1,058,000,000 Martin $ 333,000,000 Monroe $ 307,000,000 Okeechobee $ 21,000,000 Orange $ 1,561,000,000 Osceola $ 340,000,000 Palm Beach $ 2,807,000,000 Polk $ 557,000,000 St. Lucie $ 353,000,000

Totals $ 16,108,000,000

Real Estate Value Improvement - Best Estimate Potential Real Estate Value Improvement Using Various % Change in Water Quality

Sensitivity Analysis
Copyright 2010 Everglades Foundation and Mather Economics 44
Copyright 2010 Everglades Foundation and Mather Economics 45

Appendix to Chapter 2

Table 2.2 reports the average annual levels of two metrics of water quality in the South Florida 

region, milligrams of dissolved oxygen per liter (unfiltered) and the percentage of saturation of 

dissolved oxygen. These data were obtained from the U.S. Geological Survey. Our benchmark 

for assessing the impact of Everglades restoration on real estate is to assume that the milligrams 

of dissolved oxygen per liter will be returned to the average of the years 1970 and 1971. We 

compared this average, 5.2485 to the 2009 average level, 4.236. The 1970-71 level is 24 percent 

higher. Had we used the alternative measure of water quality, percentage of saturation of 

dissolved oxygen, the benchmark restoration would have been far more dramatic, a 75 percent 

increase in water quality (implying a much larger increase in real estate values, three times as 

large. Using our conservative principle, we used the smaller estimate.

Table 2.2

Dissolved Oxygen In South Florida Waters Overtime

Average Annual Means

Year

Dissolved 

oxygen, water, 

unfiltered, 

milligrams per 

liter

Number of 

Observations

Dissolved 

oxygen, water, 

unfiltered, 

percent of 

saturation

Number of 

Observations

1967 7.3106 85 8.9377 77

1968 6.4565 147 7.5547 148

1969 5.4644 436 6.9519 335

1970 5.0375 589 6.7288 358

1971 5.4596 1518 7.4381 698

1972 4.8122 1453 6.1584 676

1973 5.1197 1758 6.2592 174

1974 5.1655 1287 6.7667 339

1975 5.3458 2531 6.5041 386

1976 5.4192 2300 6.8203 507

1977 5.2386 2133 7.3425 313

1978 4.9491 1940 7.5598 500

1979 4.8722 904 5.9694 252

1980 4.9964 714 6.3149 242

1981 5.1637 658 7.3608 232

1982 5.7734 545 6.6579 254
Copyright 2010 Everglades Foundation and Mather Economics 46

1983 6.1857 481 7.1209 43

1984 5.8818 314 7.3077 13

1985 5.8915 271 6.8250 12

1986 5.2963 187 6.9316 19

1987 5.1434 198 6.2333 30

1988 5.9341 305 4.3400 10

1989 4.8433 217 3.4167 12

1990 5.2206 286 4.7500 8

1991 4.6030 166 4.4000 9

1992 4.9944 178 4.0800 5

1993 3.6132 152 4.1286 7

1994 4.1200 115 4.5143 7

1995 6.0110 82 5.1000 1

1996 4.6989 271 5.0906 32

1997 4.4092 759 5.1321 28

1998 3.8424 1004 4.5971 69

1999 4.5947 758 3.8577 26

2000 5.1187 610 4.2240 25

2001 4.2306 157 4.4622 45

2002 4.0013 149 4.1782 55

2003 4.7906 106 4.1545 44

2004 3.9030 912 4.9691 139

2005 4.5929 1247 5.3142 106

2006 4.4014 568 5.1630 73

2007 3.8034 561 5.5491 53

2008 3.6657 1149 6.1551 69

2009 4.2360 470 4.0500 80

Source: USGS (for details, see discussion in appendix to Chapter 1).
Copyright 2010 Everglades Foundation and Mather Economics 47

Figure 2.1 USGS Data on Dissolved Oxygen, annual averages, all stations, 16-County South 

Florida region

Figure 2.1 displays the decline in dissolved oxygen content over the past 40 years in South 

Florida. Our estimate of the impact of restoration on real estate values is based upon restoring 

dissolved oxygen to its 1970-71 levels.
Copyright 2010 Everglades Foundation and Mather Economics 48

Chapter 3: Recreation and Park Visitation Valuation

The Everglades is one of South Florida‘s main tourist and recreational attractions. The rivers, 

lakes, wetlands and waterbodies unique to the Everglades invite sightseeing, bird watching, 

manatee watching, sailing, camping, diving, snorkeling, boat tours, airboat tours, canoeing, 

kayaking, hunting, shelling, saltwater fishing and freshwater fishing. To the extent Everglades 

restoration will improve the quality of these activities, we expect the demand for these activities 

to increase and, consequently, the number of residents and non-residents visiting the Everglades 

to increase. This increase in recreational and park visitation activity translates to an economic 

value that we estimate in this section.

In economic studies similar to this one, sometimes, tourism is seen as a catch-all category. Here 

we have tried to use a more laser-like approach and break tourism down into smaller, more 

transparent, categories of recreation, park visitation, bird watching and wildlife habitat, hunting, 

and fishing. Thus, we have no overall category called ―tourism‖ per se. However, our approach 

is deemed superior because it subsumes all the sub-categories and avoids the temptation or 

problem of doubling counting.

Methodology

To estimate the economic impact of Everglades restoration on recreational and park visitation

expenditures, we employ the travel-cost method.62 The basic premise of the travel-cost method is 

that expenses people incur while traveling to a recreation site or tourist destination represent the 

price of admission to that site. This outlay of expenditures reflects the traveler‘s willingness-topay, that is, the value that a recreationist or tourist places on accessing a particular site. By 

 

62 The travel-cost method is widely used throughout basic economics and natural resource economics to 

estimate the value that individuals place on events and locations that they visit. See Gardner Brown and Robert 

Mendelsohn. ―The Hedonic Travel Cost Method.‖ Review of Economics and Statistics. 66 (3) (August 1984): 427-

33; K. G. Willis and G. D. Garrod. ―An Individual Travel-cost Method of Evaluating Forest Recreation,‖ Journal of 

Agricultural Economics, 42 (1) (January 1991): 33-42; Eric Bertonazzi, Michael Maloney and Robert McCormick. 

―Some Evidence on the Alchian and Allen Theorem: The Third Law of Demand?" Economic Inquiry, XXXI(3) 

(July 1993): 383-93; and for a detailed discussion see http://www.ecosystemvaluation.org/travel_costs.htm which 

was developed and written by Dennis M. King, Ph.D, Univ. of Maryland, and Marisa J. Mazzotta, Ph.D. and was 

funded by U.S. Department of Agriculture Natural Resources Conservation Service and National Oceanographic 

and Atmospheric Administration.
Copyright 2010 Everglades Foundation and Mather Economics 49

aggregating the travel expenditures of all visitors to an unrestored Everglades, then projecting a 

marginal increase in those expenditures attributable to Everglades restoration, we estimated the 

recreational and park visitation component of CERP‘s economic impact. 

Our approach has five stages. First, we collected historical data on park visitation in South 

Florida.63 Because many recreationists and tourists who travel to the Everglades visit the area‘s 

national parks, preserves, state parks and sanctuaries, we assume changes in park visitation 

reflect changes in overall tourist and recreational demands. Our team contacted Matt Johnson, a 

Supervisory Ranger for the National Park Services at Biscayne National Park, about park 

visitation data. He was very helpful in supplying data on annual park visitations for all of the 

parks in Florida: Everglades National Park, Biscayne National Park, Big Cypress National Park,

and the Dry Tortugas. This data was available online in an interactive format breaking down the 

annual visitors into recreational activities, and it also dated back to the first year each park was 

opened. Our team also contacted Eve Irwin, the Coordinator of Research Program Services for 

the Bureau of Economic and Business Research at the University of Florida, regarding their 

Florida Annual Abstract, which provides data on State Park annual visitation at the county level.

She was extremely helpful in providing all of the yearly data that they had available for countylevel State Park visitation. We took the average increase in park visitations from year to year to 

determine the baseline. 

Our team also contacted Corkscrew Swamp Sanctuary and Loxahatchee National Wildlife 

Refuge regarding annual park visitation, as these were larger parks in other counties within 

 

63 For the Everglades National Park, Big Cypress National Park, Biscayne National Park, The Dry 

Tortugas, Loxahatchee National Wildlife Reserve and Corkscrew Swamp Sanctuary, we obtained data specific to 

the total number of annual visits by their recreational activity. For the state parks, we obtained county-specific 

visitor data. While it might appear that turnstile data do not account for entries by boat, our investigation suggests 

otherwise. Matt Johnson, who is a supervisory park ranger at Biscayne NP, explained that because these four parks 

are part of the national park system they actually keep very good track on the numbers, not just of those entering 

through gates but for those entering by boat as well. Specificallyfor each national park: The Dry Tortugas accounts 

for every visitor because you can only access it by boat. Big Cypress National Preserve allows ―chartered‖ boat 

companies in the area to do guided tours within the park and then those numbers are supposed to be reported 

annually to the park because there is an agreement. The monthly breakdown of visitors includes boat launches (see 

excel file bigcyp02.10YTD) and these numbers make up the annual report numbers that we used. Biscayne National 

Park – this number could be biased downward because there are more ways to participate in recreational activities 

within the park, but again the outside companies that offer tours have charters with the park. There are snorkeling 

companies and chartered boating companies, and the use of these services is already included in the data. 

Everglades National Park – again these numbers could be biased downward, but there are 5 entry points into the 

park that keep up with the visitors. If there are visitors accessing through other channels, we have now way to know 

how many there are or in which spending category (resident, non-resident, overnight, day trip) they fall. Data on all 

park visitation are online at http://www.nature.nps.gov/stats/state.cfm?st=fl.
Copyright 2010 Everglades Foundation and Mather Economics 50

South Florida that kept track of visitation annually. Sirena Rinker at Loxahatchee NWR 

compiled annual data by recreational activity dating back to the early 1970s. Her work was 

essential to our research. We were able to use these data for Palm Beach County in our 

estimation. Our main contact at Corkscrew Swamp Sanctuary, Ed Carlson, provided data for 

annual visitation to the park dating to when the Sanctuary opened in the late 1950s. Carlson and 

his team at the Swamp were very helpful in answering questions and providing data on historical 

park visitation.

Second, we used data from National Park Service visitor surveys to determine the ratio of 

resident to non-resident visitors for each park. We spoke with Matt Johnson of the National Park 

Service (NPS) who directed us to the NPS‘s Project Surveys conducted by the University of 

Idaho. The data that was collected within these studies on the ratio of resident to non-resident 

respondent visitors for each park was used as a random stratified sample to calculate the ratio of 

the total visitors annually. Since there are two national parks in Monroe County, Everglades 

National Park and The Dry Tortugas, the average of the respondents for each survey was taken to 

determine the ratio. These ratios of residents to non-residents were then applied to the counties 

without visitation data that were similar. Counties that were smaller had a ratio of 66 percent

resident to 34 percent non-resident visitors, while larger counties had a ratio of 48 percent to 52 

percent. Because there was a large portion of respondents that were Floridians visiting from 

another county partaking in these recreational activates, they were counted as resident visitors 

because of the high likelihood they were on a day-trip and returned home as shown by their 

estimated time of visiting the park. Non-resident visitors were shown to have a longer average 

stay time and stayed close to the area.

Third, we estimated county-specific, per-person, per-day travel expenditure figures for both 

residents and non-residents who visit the Everglades ecosystem parks, preserves and 

sanctuaries.64 See Table 3.1. Our team contacted Kathy Torian, the Corporate Communications 

Manager for VISIT FLORIDA, Florida‘s official visitor‘s information company located in 

Tallahassee, Florida, because they have a research department that keeps track of tourism 

quarterly and annually for the State of Florida. VISIT FLORIDA produces an Annual Visitor‘s 

 

64 There were 10 counties with specific data on the average daily expenditure for non-resident tourists. For 

counties that did not have a non-resident, per day expenditure, we used an average daily expenditure of $106, 

calculated by the Fish and Wildlife Conservation Commission for wildlife-viewing in Florida. To estimate resident 

travel expenditures, we used the National Park Service visitor survey data to calculate an average per day resident 

expenditure for counties that overlap with a national park: Collier, Monroe and Miami-Dade. For counties that did 

not have specific data on the per day expenditure for residents, we used the same FWC wildlife-viewing report 

which estimated an average daily expenditure of $152 for residents.
Copyright 2010 Everglades Foundation and Mather Economics 51

Study each year which tracks the total visitation within the entire state. The data they have for 

2008 on resident and non-resident visitation in Florida were used to double check our ratios used 

from the NPS Surveys. However, we could not use state-wide data for our purposes. As a result 

of this, we looked up every Convention Bureaus or Tourist Development Councils for each of 

the 16 counties in South Florida, and contacted someone within each, requesting any data on the 

annual visitation to the county they might have and the average per-day travel expenditure. The 

following is a list of all the counties and everyone we contacted there concerning county level 

visitation annually. Some had information, others did not. Most information was available 

online. Some data were for multiple counties, and some counties did not have any data on the 

county level. The data on tourism were compiled by tourist marketing agencies in Miami-Dade, 

Broward, Palm Beach, Monroe, Collier, Lee, Osceola and Orange counties. The data from the 

tourist marketing agencies were obtained from the websites reported in Table 3.1.

Table 3.1 County-Specific Tourism Websites

County Tourism Agency Website 

Miami-Dade Greater Miami CVB http://www.miamiandbeaches.com 

Broward Greater Ft. 

Lauderdale CVB 

http://www.sunny.org/ 

Palm Beach Palm Beach County 

TDC 

http://www.pbcgov.com/touristdevelopment/ 

Collier Naples, Marco Island

Everglades CVB 

http://www.paradisecoast.com/ 

Lee Lee County CVB http://www.leecvb.com

Monroe Monroe County TDC http://www.monroecountyfl.gov/Pages/MonroeCoFL_TDC/index 

Orange Orlando/Orange 

County CVB 

http://www.orlandoinfo.com/ 

Osceola Kissimmee CVB http://www.floridakiss.com/

Correspondence for the data on visitors annually and expenditures were obtained via email for 
Copyright 2010 Everglades Foundation and Mather Economics 52

the counties as listed below in Table 3.2. Some counties do not track these data. For counties 

with no available data, a county with data of similar size was used as a proxy for the average 

daily expenditure.

Table 3.2 County-Specific Information Sources

Palm Beach Chesney, Jackie

JCHESNEY@palmbeachfl.com

http://www.pbcgov.com/touristdevelopment/statistics.htm

St. Lucie Lombard, Charlotte

LombardC@stlucieco.org

http://www.youredc.com/html/visitors.asp

http://www.visitstluciefla.com/media_center.html

Charlotte Huber, Jennifer 

Jennifer.Huber@charlottefl.com

http://www.floridaedo.com/

Broward Flippen, Justin 

jflippen@broward.org

http://www.sunny.org/partners/market-research/

Collier Modys, Jonell

JonellModys@colliergov.net

http://www.paradisecoast.com/media_center/research.php

MiamiDadeAnderson, William

Director, Panning & Research

Telephone: 305.539.3065

Research@GMCVB.com

http://www.miamiandbeaches.com/members/webreports.aspx

Martin Palozer, Mary

(772) 288-5445

Hendry Beer, Kellie

Hendry County Economic 

Development Council 

info@hendryedc.com

http://www.hendryedc.com/

Polk Skinner, Brandy 

brandy@cfdc.org

http://www.cfdc.org/contact

http://www.visitcentralflorida.org/contact/

There were 10 counties with specific data on the average daily expenditure for non-resident 

tourists. For counties that did not have a non-resident, per day expenditure, we used an average 

daily expenditure of $106, calculated by the Fish and Wildlife Conservation Commission for 

wildlife-viewing in Florida. This report was used in lieu of a report conducted by Robert 
Copyright 2010 Everglades Foundation and Mather Economics 53

Kerlinger at Corkscrew Swamp Sanctuary in the early 1990s, which calculated the economic 

impact of birding ecotourism on the Corkscrew Swamp Sanctuary, because Kerlinger‘s report 

could not be obtained from either Corkscrew Swamp or Kerlinger himself. To estimate resident 

travel expenditures, we used the National Park Service visitor survey data to calculate an average 

per day resident expenditure for counties that overlap with a national park: Collier, Monroe and 

Miami-Dade. For counties that did not have specific data on the per day expenditure for 

residents, we used the same FWC wildlife-viewing report, which estimated an average daily 

expenditure of $152 for residents.

 Table 3.3. Expenditure Estimates

County Non-Resident Resident Average

Broward $295.76 $152.00 $223.88

Charlotte $295.45 $152.00 $223.73

Collier $245.67 $140.00 $192.84

Lee $120.08 $152.00 $136.04

Martin $106.00 $152.00 $129.00

MiamiDade $242.76 $104.00 $173.38

Monroe $360.00 $113.00 $236.50

Okeechobee $106.00 $152.00 $129.00

Orange $190.25 $152.00 $171.13

Palm Beach $196.11 $152.00 $174.06

Polk $106.00 $152.00 $129.00

St. Lucie $143.00 $152.00 $147.50

In our fourth stage of analysis, we established a baseline of recreational and park visitation

expenditures by multiplying the county-specific resident and non-resident expenditures by the 

number of resident and non-resident park visitors. 

Finally, in our fifth stage, we estimated the marginal increase in recreational and tourism 

expenditures under a 2 percent increase in park visitation projected out 50 years. See Table 3.4.65

Preliminary regressions of water quality and tourist expenditures confirm this to be a likely 

 

65 The counties not listed here have tourism related benefits in other categories, hunting, fishing, wildlife 

viewing, but they do not have any official parks and hence there is no increment to park visitation. See Table 4.1 

below for instance.
Copyright 2010 Everglades Foundation and Mather Economics 54

scenario.66

Table 3.4 Recreational and Park Visitation 

Expenditures 2 Percent Increase over 50 years

County NPV Incremental Increase

Broward $103,206,003

Charlotte $58,458,420

Collier $178,150,740

Lee $122,795,151

Martin $13,306,731

Miami-Dade $201,075,047

Monroe $518,206,430

Okeechobee $987,239

Orange $25,849,076

Palm Beach $49,055,665

Polk $5,519,029

St. Lucie $34,978,795

Total $1,311,588,326

 

66 Early in our analysis, we investigated a link between species biodiversity, specifically wading bird 

populations, and visitation to parks. Carlson and Jason Lauritsen provided extensive data on Wood Stork nesting 

populations. We were given data on the number of mating couples each year, the date of nesting initiation, and the 

number of young fledged. We were also able to obtain water level data within the Sanctuary as well as the dissolved 

O2 levels, phosphorous counts and nitrate levels within the swamp from the SWFMD interactive database. Matthew 

Harwell, a Senior Ecologist at Loxahatchee NWR, was very helping in establishing an understanding of the 

ecological impact. He sent extensive water data for the park to our team as well as further studies on the ecology of 

the Everglades. Due to the breadth and scope of this assignment, we did not use this approach to determine the 

impact restoring the Everglades pursuant to CERP would have on park visitation. However, we did find some initial 

evidence showing a link between red tide data that were collected and the total number of visitors per year to 

Corkscrew Swamp based on Wood Stork nesting habits and the water quality. Further investigation is required and 

extensive data collection is needed to explore this link further. Though we exhausted every contact at our disposal, 

we were not able to assemble this data set. 
Copyright 2010 Everglades Foundation and Mather Economics 55

Results and Sensitivity Analysis

Our best estimate of the change in tourism valuation is based on an assumption of a 2 percent 

increase over 50 years. This amounts to an increase in economic well-being of $1.146 billion in 

net present value terms.

The following scenario analysis explains how the net present value of park visitation and 

recreational expenditures vary (a) under different percentage increases in park visitation and (b) 

projected to different time horizons. See Table 3.5.

Table 3.5 Sensitivity Analysis

Percent Changes in Park Visitation 

Time 

Horizon 1% 2% 4%

30 years $470,784,000 $941,567,000 $1,883,134,000

40 years $572,867,000 $1,145,734,000 $2,291,467,000

50 years $655,794,000 $1,311,588,000 $2,623,177,000
Copyright 2010 Everglades Foundation and Mather Economics 56

Chapter 4: Open-Space Valuation

If implemented in its entirety, the Comprehensive Everglades Restoration Plan will produce 

approximately 157,555 acres of preserved open space in South Florida. In the absence of the 

CERP, this land would likely be inaccessible to the public and or developed as Florida‘s 

population grows. But with restoration, this land will provide enhanced recreational 

opportunities and aesthetic benefits to the residents of South Florida. In this section, we quantify 

these values.

Primary Methodology

To estimate the value of open space preservation, we employed a multi-stage process. First, we 

used data from the Trust for Public Lands to estimate type-specific and county-specific 

willingness-to-pay (WTP) values per acre of preserved open space.67 Our assumption is that 

open-space ballot initiatives reveal information on the open space values of Florida voters, 

namely, the per acre rate at which voters are willing to tax themselves in order to protect or 

enhance open space.

To collect information on voters‘ willingness to pay for open space, we communicated on 

4/12/2010 and 4/30/2010 with Andrew DuMoulin, the National Programs Director of the Center 

for Conservation Finance Research for Trust for Public Lands. He assisted in creating the Land 

Almanac, which documents all land initiatives for a total of 10 states. Mr. DuMoulin explained 

and confirmed that the Land Almanac contains information on all voting initiatives specific to 

preserving land. Below is his description of the data from the Land Almanac:

All of the COUNTY data in the Almanac has been derived from contacting every 

county in Florida that has passed a conservation finance ballot measure. All the 

dollars you see are those used for conservation purposes. In [TPL], the LandVote 

database which has the details on the ballot measures, you can see how much the 

bond, sales tax, prop tax, might generate, and how much of that would be 

dedicated to new land conservation. So in short LandVote will show you what 

was generated on Election Day, and the Almanac will show you what was spent.

 

67 We gathered acreage and expenditure data by cross-referencing the Land Almanac and other 

conservation databases reported by the Trust for Public Land.
Copyright 2010 Everglades Foundation and Mather Economics 57

From the Land Almanac, we searched and extracted all data that pertained to Florida, which 

included initiatives at the federal, state, municipal and county level of government. We created 

individual datasets for every county in Florida that aggregated all county or municipal bond 

initiatives. We excluded Broward County from our value-per-acre county average because it was 

an extreme outlier. Specifically, Broward County‘s willingness to pay per open space acre was 

$352,686. This amount is more than 28 times the Florida average ($12,133), and more than 9 

times the second highest value per acre (Palm Beach, $37,304). All of Broward County‘s land 

initiatives were managed by either Broward County Parks and Recreation or an unknown 

manager. Thus, the open space protected under these land initiatives was probably unlike the 

CERP land initiatives in scope and size.

We estimated type-specific WTP values because open space preservation projects of different 

scale and proximity produce different bundles of aesthetic and recreational benefits.68

Specifically, we grouped the open space and conservation projects into three types: local openspace bond initiatives, state-wide conservation projects and federally funded wetland 

preservation projects. 

We estimated county-specific WTP values because the marginal value of open-space 

preservation depends on numerous geographic and demographic variables such as population 

density and proximity to population centers. Everglades restoration under CERP will encompass 

restoration projects throughout South Florida, so using geographically specific values add 

precision to the open space valuation. 

Averaging across all counties, we estimated WTP values per acre of open-space preservation of 

$12,133 for county projects, $4,505 for state projects and $740 for federally funded wetland 

projects. These figures comport with economic rationale; voters are willing to tax themselves at a 

higher rate for open space that they can enjoy more often and more easily, that is, local open 

space.

In the second stage of our analysis, we estimated county-specific open-space value ranges for 

each CERP project. We did this by multiplying the county, state and federal WTP values by the 

number of acres yet to be acquired under each specific CERP project. For instance, the ―Lakes 

Park Restoration‖ project is in the ―Lower West Coast‖ CERP region and has a remaining 40 

 

68 For instance, a municipal park in Broward County generates significantly different open space values 

than does a federally funded wetland restoration in Glades County.
Copyright 2010 Everglades Foundation and Mather Economics 58

acres yet to be restored. Because the ―Lower West Coast‖ CERP region overlaps Hendry, Glades 

and Lee counties, we multiply an average of those three counties‘ local ($12,133),

69 state 

($2,716) and federal ($740) WTP values by 40 to estimate a range of open-space values 

attributable to that particular CERP project. Our open-space value estimates for that project 

range from $485,331 (local WTP) at the upper bound to $29,600 (federal WTP), with our best 

estimate being $108,652 (state WTP).

In the final stage of our analysis, we aggregated the range of open-space values across the 

remaining acres of each CERP project. We report these aggregations for county, state and federal 

WTP values. These type-specific-value estimates define the range of possible open-space values 

from Everglades restoration. Because CERP most closely matches the kind of open-space 

preservation projects used to calculate the state-level WTP value, the state-level WTP estimate is 

our best estimate of the total open space value attributable to Everglades restoration under the 

CERP. That estimate is $830,733,000 in net present value terms.

Table 4.1 Open Space Valuation Increase from Everglades Restoration

CERP Region Counties

Open Space 

Value Increase

Everglades Agricultural Area Palm Beach and Hendry $31,187,000

Everglades, Florida Bay, and Keys Broward and Miami $318,739,000

Lake Okeechobee Watershed Okeechobee, Glades and Highlands $30,509,000

Lower West Coast Hendry, Glades and Lee $41,611,000

Miami Dade County Miami-Dade $115,507,000

North Palm Beach County Palm Beach $5,752,000

Upper East Coast Martin and St. Lucie $215,220,000

Water Preserve Area Palm Beach, Broward and Miami $72,208,000

Total $830,733,000

If we had used the county-level averages, within their county lines, the value of CERP 

restoration would have an aggregate value of $2,763,345,000. If we had used the federal-level 

averages for the specific counties with CERP projects, the open-space values of restoration 

would have an aggregate value of $116,593,000. We believe that CERP restoration, as planned, 

mostly closely reflects state-level valuations for the relevant open space and accordingly that is 

 

69 Because we did not have data for local open space bond initiatives in these counties, we used the statewide average of $12,133.
Copyright 2010 Everglades Foundation and Mather Economics 59

our best estimate.

Though the benefits of open-space preservation accrue most directly to residents who live in 

close proximity to the conservation area, people who are not part of the local electorate and have 

no intention of visiting the Everglades may also be willing to pay for Everglades restoration. 

Though we did not include these so-called existence values in our open-space valuation, we can 

estimate them using a benefit-transfer method from the existing literature. However, because 

these values are based on stated preference (surveys) rather than revealed preference (ballot 

initiative voting) and because these values would not impact the South Florida economy, but 

rather the larger world economy, we have left them out. This makes our estimate of open space 

conservative.

Table 4.2 summarizes these calculations, our assumptions and our sensitivity analysis.

Table 4.2 Changes in Value of S. Florida Open Space Associated with Everglades 

Restoration

Lagged Response Possible Range of Values

Years Until 

Increase 

Begins

Present Value of 

Delayed Increase Various WTP/Acre of Open Space

1 $813,646,000 Local State Federal

2 $796,911,000 $2,763,345,000 $830,733,000 $116,593,000

3 $780,520,000

4 $764,467,000

5 $748,743,000

Alternative Methodologies

If we had decided to use contingent valuation studies, we would have focused on studies that 

measured the value of an area similar in size and type to the Everglades. Two studies we found 

that measured the open space of large, vast areas were studies on the Adirondacks in New York 

and the Amazon in Brazil. Both studies surveyed individuals who were not in close proximity to 

the large areas. The study of the Adirondacks surveyed individuals who didn‘t necessarily live 

close to the Adirondack Park, but still had a willingness to pay $48 to $107 per year, per 

household for ecological improvements to the park. The study of the Amazon surveyed 
Copyright 2010 Everglades Foundation and Mather Economics 60

individuals from the UK and Italy and concluded that individuals who may never visit the 

Amazon had a willingness to pay £29.83 per year per household for 5 percent protection of the 

Amazon.

We also looked at the Florida Natural Area Inventory (FNAI) as a possible resource to track the 

value of conserved land. We spoke to Sally Jue there who explained that her reports included all 

land that had natural vegetation where the managing agency had a commitment to manage and 

upkeep the natural state; so this includes recreational parks if they have natural vegetation and 

maintain the natural resources. However, the natural areas that the FNAI reports on did not 

publish the respective costs to conserve those acres. Thus, it was difficult to assign a per acre

value for the natural areas they track. 

We also tried other measures to estimate the open-space value, which included measuring 

Florida Forever projects. Much of Florida‘s conserved land is purchased through Florida Forever 

(formally P2000). Florida Forever does publish the number of acres and the respective costs of 

purchasing those acres. So a value per acre is available. We spoke to Greg Brock at the 

Department of Environmental Protection on May 5, 2010, who explained that: 

Because the state‘s Florida Forever program funds numerous state, regional and 

local land acquisition programs, it is very confusing. The Florida communities 

Trust (FCT), which receives 22 percent of the Florida Forever funds, provides 

grants of matching funds to some local governments and 100 percent grants to 

other qualifying small local governments. The state agencies and water 

management districts also cooperate with local governments to acquire property 

on their overlapping lists, although many of these partnerships may not be as 

formalized as those under FCT. Thus, a local government may be representing 

any of these Florida Forever sources for matching funds or grants. Some local 

governments have specific program requirements or give great emphasis to 

matching local funds with state funds. The state program was authorized by a 

constitutional referendum in 1998 that allowed bonds to be sold for acquiring 

conservation lands but did not specify a specific amount. However, since then the 

state has appropriated more than $3 billion, mostly in bonds, to finance 

conservation land purchases of over 650,000 acres.

We also spoke to Theresa Johnson from the Department of Environmental Protection on May 6, 

2010, who further explained that Florida Forever receives some funding from bonds that are 

bought by individuals. This funding does not accrue by vote of the general electorate and thus 
Copyright 2010 Everglades Foundation and Mather Economics 61

doesn‘t exactly convey the general public‘s willingness to pay. 

Information Sources

The Nature Conservancy:

Our team contacted Thomas Jordan, director of The Nature Conservancy's (TNC) S. Florida 

office; Mary Anne Graves & Victoria Tschinkel in TNC's Tallahassee office; Bob Burns at the 

Orlando office; Dan Speilman at the Disney Wilderness Reserve office; Allison Higgins at the 

Florida Keys office; Jenny Conners, a senior federal policy representative; and Laura Geselbatch, 

a senior marine scientist.

The Conservation Fund:

Our team contacted the national, southeast, Gainesville, Tallahassee and West Palm offices. 

Trust for Public Land:

Our team called the national office, and we were directed to the Florida office. Our contact in the 

South Florida office, Bob McClemins, pointed us to some existing literature. 

Our team spoke with and had email correspondence with Kevin Mooney, the Florida Projects 

manager in the Tallahassee office. He was helpful in clarifying the LandVote data.70 He 

explained that the ballot measures were prior to the land acquisition, so the voter didn‘t know the 

exact acreage they were voting on. Thus we couldn‘t use this data for an acreage value. He 

suggested we speak to his director, Will Abbarger, and the county Forever program contact, 

Doug Weaver.

Our team obtained the empirical data for open-space value in Florida from the Trust for Public 

Land‘s website. Our team used the LandVote database on their website, which reports voting 

measures on land conservation. Our team called the contact on the LandVote website who 

directed us to Andrew duMoulin. Mr. duMoulin is the National Programs Director for the Center 

of Conservation Finance Research. He was extremely helpful, and pointed us to the Land

Almanac. He explained the data behind the Land Almanac database on his website.

American Land Conservancy:

Our team called the national office and spoke to Tim Richardson. He didn‘t have any specific 

data to offer, but he did refer us to a number of individuals listed below.

 

70 See http://www.tpl.org/tier3_cd.cfm?content_item_id=12010&folder_id=2386 for details.
Copyright 2010 Everglades Foundation and Mather Economics 62

Florida Natural Areas Inventory (FNAI):

Our team spoke to Sally Jue, a conservation lands biologist. She was very helpful and supplied 

empirical data regarding the acreage of natural areas that are conserved throughout Florida. She 

said this included all land that had natural vegetation where the managing agency had a 

commitment to manage and upkeep the natural state, so this includes recreational parks if they 

have natural vegetation and maintain the natural resources. Ms. Jue noted that South Florida is 

more lenient on the classifications. This was a backup plan for determining the acreage value of 

conserved land in Florida. We obtained conserved acreage state wide and county wide. 

Florida Forever (DEP):

Our team spoke to Theresa Johnson, who is involved with state lands acquisition. She explained 

how Florida Forever benefits from state bonds. She said that the legislature sets a budget that is 

approved by the governor and his cabinet. Then individuals buy Florida Forever specific bonds.

We obtained Florida Forever (formally P2000) data on acreage and purchase amounts for public 

land. However, we felt this didn‘t accurately capture the general public‘s willingness to pay as 

well as would an initiative to pass a bond measure. Our team also spoke to Ray Petty, Florida 

Forever‘s bond specialist, who explained that the SFWMD sells their own bonds, and that the 

Everglades has one bond per year worth $40 million.

Our team spoke to Sheryl Jones, who supplied us with empirical Florida Forever data that 

contained both the approved commitments and the anticipated acquisitions for all agencies that 

receive Florida Forever funding. We considered this as a possible method to determining acreage 

value. However, we decided that the Land Almanac data captured a more accurate figure for 

estimating the open-space value of the Everglades. This Florida Forever data could not be broken 

down into county-level data. It also included greenways, trails, agriculture and water open 

spaces. This data also included land that was acquired by imminent domain, which definitely 

does show an individual‘s willingness to pay.

Via email correspondence, Greg Brock, director of Florida Forever, explained the Florida 

Forever bonds in the Land Almanac:

Because the state‘s Florida Forever program funds numerous state, regional and 

local land-acquisition programs it is very confusing. The Florida communities 

Trust (FCT), which receives 22 percent of the Florida forever funds, provides 

grants of matching funds to some local governments and 100 percent grants to 

other qualifying small local governments. The state agencies and water 
Copyright 2010 Everglades Foundation and Mather Economics 63

management districts also cooperate with local governments to acquire property 

on their overlapping lists, although many of these partnerships may not be as 

formalized as those under FCT. Thus, a local government may be representing 

any of these Florida Forever sources for matching funds or grants. Some local 

governments have specific program requirements or give great emphasis to 

matching local funds with state funds. The state program was authorized by a 

constitutional referendum in 1998 that allowed bonds to be sold for acquiring 

conservation lands, but did not specify a specific amount. However, since then,

the state has appropriated more than $3 billion, mostly in bonds, to finance 

conservation land purchases of more than 650,000 acres.

Our team was referred to Amy Graham in the DEP and John Atlan who is in the office of the 

secretary and part of the ―Save our Everglades‖ campaign. Our team spoke to John Outland, 

from the DEP Office of Ecosystem Projects, who put us in touch with Jim Muller. Jim Muller 

sent us multiple pieces of literature and links.

Land Trust Alliance:

Our team contacted the national office in Washington, D.C.

Local Florida Land Trust Alliances:

Our team also tried calling all the local land trusts in Florida in efforts to gather more 

information on county specific open-space value. Our team called the Calusa Land Trust in Lee 

County and spoke to Bill Spikowski, who directed us to The Nature Conservancy. He directed us 

to some existing literature on land conservation. We also called the Conservation Foundation 

located in Sarasota County. Our team called the Indian River Land Trust and spoke with Dana 

who directed us to the director, Ralph Monticello. Mr. Monticello gave us contact information. 

Our team contacted Manatee Audubon, Tall Timbers in Leon County, Green Horizon in Polk 

County, the Alachua Conservation Trust, Bay County Conservancy, Tampa Bay Conservancy, 

Putnam Land Conservancy, North Florida Land Trust located in Duval County, Treasured Lands 

located in Martin County, Lemon Bay Conservancy located in Sarasota County, Davie Land 

Trust located in Broward County and Conserve Florida located in Alachua County.

Individuals:

We were referred to a number of individuals from previous contacts at The Nature Conservancy, 

Trust for Public Land, American Land Conservancy and/or Land Trust Alliance:

Our team spoke to Mark Duda from responsive management. He offered some recreational 
Copyright 2010 Everglades Foundation and Mather Economics 64

studies and surveys on his website. However, that open space was not comparable to the open 

space in the Everglades. Our team spoke with Brad Gentner from Gentner Consulting group, 

who specializes in natural resource economics consulting. He pointed us to the Environmental 

Valuation Reference Inventory (EVRI) database, which contains contingent valuation studies for 

all environmental topics. We searched open space and other large open spaces, i.e. Adirondacks,

and found some possible studies. However, our team decided not to use contingent valuation 

studies. Our team spoke with Rob Southwick from Southwick and Associates. Our team spoke to 

Evan Miller from Florida Acquisition & Appraisal. He explained to us different types of bonds 

used for land conservation. He then suggested we call Florida Forever. He also gave us a specific 

Hillsboro bond to look at as an example.

South Florida Water Management District (SFWMD):

Our team spoke with Anita from the SFWMD Palm Beach service center, and she said the entire 

16-county area was serviced by the SFWMD, whose website says the area is a total of 17,930 

square miles (11,475,200 acres) (over 7 million people) and includes 700,000 acres of 

Everglades Agricultural Area. The following map shows the boundaries of SFWMD by county: 

https://my.sfwmd.gov/portal/page/portal/pg_grp_sfwmd_aboutsfwmd/pg_sfwmd_aboutsfwmd_o

verviewmaps.

Our team also spoke to Clarence Tear, director of the Big Cypress SFWMD Office, who told us 

future water data is on the SFWMD website, under water supply plans. There are four areas: 

Upper East Coast, Lower East Coast, Lower West Coast and Kissimmee Basin. Each has its own 

water plan (and model) that projects water usage for the next 20 years. These are updated every 

five years (last one on web, 2005). Then, based on these reports, each county updates its utility 

plan.

County Level Desalination Efforts:

To learn about county-level desalination efforts, our team called the SFWMD regional service 

centers. Our team spoke to Jennifer Drozd in the permit office, and she said there weren‘t 

permits regarding desalination. Our team also spoke to Donna Ricabus, Sr. Scientist. We also

contacted Mark Elsner in the water supply department. He pointed out the desalination section 

on their website: http://www.sfwmd.gov/portal/page/portal/xweb%20-

%20release%203%20water%20supply/desalination. He also showed us the current and projected 

desalination efforts by region: 

http://www.sfwmd.gov/portal/page/portal/xrepository/sfwmd_repository_pdf/desal_comb_2008.

pdf‘. He pointed out the Water supply library, which has different water supply plans by region
Copyright 2010 Everglades Foundation and Mather Economics 65

and lays out project summaries by region: 

http://www.sfwmd.gov/portal/pls/portal/portal_apps.repository_lib_pkg.repository_browse?p_ke

ywords=uecwatersupplyplandocs&p_thumbnails=no. For example, see the Upper East Coast 

Water Supply plan: 

http://www.sfwmd.gov/portal/page/portal/xrepository/sfwmd_repository_pdf/uec-plan_final.pd.

The Water supply development plan, which has utility and project summaries in specific counties 

in Part III (starting on page 29). Mr. Elsner said that he would compile county-level data that 

would show data on each county‘s facilities, water capacity and desalination capacity as of 2012.

Mark followed up in an email on 7/26/2010 with county-level desalination efforts.

Water Utilities:

Our team spoke to Lisa Bockarton, from the SEFLUC, in an effort to obtain water prices. She 

referred us to individual utilities departments to get the different prices of water by county. Our 

team spoke to Andy Potts from Collier County, and he faxed us over some rate tables from 2002 

– 2008. This was our most successful contact at the county utility level.
Copyright 2010 Everglades Foundation and Mather Economics 66

Chapter 5: Commercial and Recreational Fishing Valuation 

Literature Review and Background

Effect of Everglades Degradation on Fish Population

A number of studies and articles point to 1987 as the year when degradation of fish habitat and 

population began. The following statement from Broward and Robblee (1999) implies that the 

majority of occurrences that negatively impacted fish population, such as die-off of seagrasses, 

hypersaline conditions and algal blooms, all began after 1986:

71

The decline roughly coincided with the die-off of seagrasses in western Florida 

Bay beginning in fall 1987, drought-related hypersaline conditions between 1989 

and 1991 and extensive algal blooms that persisted into the 1990s (p. S20).

In addition, a 2002 article in U.S. Water News Online reported the following:

Although increasingly salty, Florida Bay still drew anglers from around the world 

who were attracted by its fabulous fishing and its crystal waters. Then, in the 

summer of 1987, about 100,000 acres of seagrass died off. Algae blooms and 

sponge die-offs followed, spoiling the water's clarity. The population of fish, 

shrimp, sponges and other creatures declined.72

These observations imply that 1986 may be an acceptable base year to use as an estimator of 

fishing value prior to the majority of degradation in Florida Bay. It is assumed that the timing of 

degradation in Florida Bay provides an appropriate estimate for the timing of fish habitat and 

population degradation throughout the rest of the 16 Everglades ecosystem counties.

Impact on Fish Population

From Browder and Robblee (1999), it is hypothesized that CERP will have the following 

consequences on fish population:

 

71 Browder, Joan A. and Robblee, Michael B. ―Pink shrimp as an indicator for restoration of everglades 

ecosystems.‖ Ecological Indicators, 9 (6, Supplement 1), (November 2009): S17-S28.

72 http://www.uswaternews.com/archives/arcquality/2sciwar9.html.
Copyright 2010 Everglades Foundation and Mather Economics 67

Hypothesis 1: CERP will expand the gradient of salinities from near fresh to 

polyhaline to cover a larger nearshore zone and will reduce salinity fluctuation to 

a range and frequency characteristic of natural estuarine conditions, increasing the 

area of optimum salinity conditions for many species and, as a result, expanding 

local distribution, increasing abundance, and allowing a richer species 

assemblage.

Hypothesis 2: CERP will reduce the intensity, duration, and area of coverage of 

hypersaline conditions, thereby increasing the area of optimum salinity conditions 

for nearshore fish and invertebrates.

Hypothesis 3: CERP will increase the area covered by patchy or heterogeneous 

seagrass habitat, thereby increasing the area of optimum habitat for seagrassassociated fish and invertebrate species.

Hypothesis 4: CERP will increase the length of shoreline receiving direct 

freshwater inflow and establish more persistent salinity gradients, thereby 

increasing the area of optimum habitat for fish species spending all or a part of

their life cycle along the shoreline.

Hypothesis 5: CERP will increase the area of overlap of favorable salinities with 

favorable bottom habitats and shoreline features, thereby increasing the 

distribution and abundance of a richer assemblage of species characteristic

of estuaries.73

The Comprehensive Everglades Restoration Plan states that ―not enough is known about the 

linkages between fishing and hydrological changes, which would be brought about by plan 

implementation, nor is enough known about the timing of the linkages between these changes, 

the resulting ecological changes, and ultimately the changes in the value of fishing, to estimate 

the economic effects on fishing in this study.‖ CERP therefore does not currently provide an 

estimate by which to measure the effect of fish population due to restoration.

However, the 2009 paper ―Pink shrimp as an indicator for restoration of Everglades ecosystems‖ 

 

73 Browder and Robblee (2009). 
Copyright 2010 Everglades Foundation and Mather Economics 68

by Browder and Robblee suggests a means by which to measure the success of the CERP in 

terms of marine life post-restoration and suggests they adjust restoration according to this 

measure. The authors state that an appropriate target for CERP to adopt is the maintenance, at a 

minimum, of an annual mean density of pink shrimp at the 75th quartile of the long-term record.

Pink shrimp thrive at particular levels of salinity, and actions could be taken to keep average 

salinity within the optimal range. Their description is as follows:

Annual assessment will consist of determining whether mean shrimp density 

exceeds a threshold based on the available pre-CERP data. Because shrimp 

density is expected to vary from year to year as a result of natural patterns of 

variability in salinity and other influencing factors, annual mean density (fall and 

spring separately) will also be viewed as a three-year running average when 

sufficient data become available. Annual mean density targets for each season are 

to meet or exceed the 75th quartile from the long-term record for each assessment 

area.

74

We assumed that if the CERP adopts this measure, the catch of pink shrimp would also be 75 

percent of the long-term record. It is also assumed that all fish populations would respond 

similarly. Under these assumptions, the year with the largest amount of commercial catch (in 

pounds) would serve as the base by which to calculate the 75th percentile target catch. 

Impact on Commercial Fishing

Methodological Approach

Data on commercial catch per species for each county in Florida were obtained for the years 

1986 through 2008.

75 Earlier data are considered unreliable (according to the Florida Fish and 

Wildlife Research Institute), and 2009 data are currently incomplete. Nine of the 16 Everglades 

counties affected by CERP have local commercial fishing industries. These counties are 

Broward, Charlotte, Collier, Miami-Dade, Lee, Martin, Monroe, Palm Beach and St. Lucie.

In order to determine the total commercial catch in Everglades ecosystem counties in a given 

year, total commercial catch (in pounds) for all species caught in each of the nine counties in that 

year were added together. Figure 5.1 illustrates the general decrease in total catch over the 23

 

74 Browder and Robblee (2009).

75 Commercial catch data obtained from Steve Brown at the Florida Fish and Wildlife Research Institute; 

this data can also be viewed at http://research.myfwc.com/features/view_article.asp?id=19224.
Copyright 2010 Everglades Foundation and Mather Economics 69

years examined.

In order to determine the direct value of commercial catch in the Everglades for a given year, 

commercial catch in each county (in pounds) was summed for each species; these values were 

then multiplied by the 2009 average dockside values for the species to obtain total dockside 

values for catch of each species in all Everglades counties.76 These total dockside values for all 

species were then summed to obtain the total dockside value of commercial catch in all 

Everglades counties. Figure 5.2 shows the values for each of the 23 years examined.

Figure 5.1: Total Commercial Catch in Everglades Counties (pounds)

 

76 Available on the Florida Fish and Wildlife Conservation Commission‘s website 

http://research.myfwc.com/features/view_article.asp?id=19224 under commercial landings, statewide.
Copyright 2010 Everglades Foundation and Mather Economics 70

Figure 5.2: Total Dockside Value of Commercial Catch in Everglades Counties (dollars)

As an initial estimate of the change in the direct value of commercial fishing due to Everglades 

degradation, total dockside value of commercial catch in 2008 was compared with total dockside 

value in 1986 in Table 5.1. It is assumed that commercial fishing regulations are enacted such 

that commercial fishing catch as a percent of fish stock remains constant over time, and thus, as 

fish stock increases with restoration, regulations will change to allow total commercial catch to 

increase linearly.

Table 5.1: Historical Change in Commercial Catch and Dockside Value, 1986 to 2008

1986 2008 Change in 

Value

Percent Change

Total Catch 54,675,865 27,962,536 -26,713,329 - 48.9%

Total Dockside 

Value $93,096,606 $53,717,243 -$39,379,363 - 42.3%
Copyright 2010 Everglades Foundation and Mather Economics 71

Dockside value decreased $53,717,243 or 42.3 percent, from 1986 to 2008. However, there was 

a net ban that went into effect in Florida in 1995: "The net ban which was passed by plebiscite in 

1994 and became effective in July of 1995 has reduced the number of commercial fishermen by 

several thousand."77 In order to eliminate the possibility of this net ban as the cause of this large 

decrease in catch and dockside value, we also calculate the change in dockside value between 

1996 and 2008 in Table 2. The effects in Everglades counties appear to be about the same when 

comparing 1986 to 2008 as they are when comparing 1996 to 2008. Table 5.2 shows that 

dockside value decreased by $51,560,745, or 49 percent, from 1996 to 2008.

Table 5.2: Historical Change in Commercial Catch and Dockside Value, 1996 to 2008

1996 2008 Change in 

Value

Percent Change

Total Catch 55,561,538 27,962,536 -27,599,002 - 48.7%

Total Dockside 

Value $105,277,988 $53,717,243 -$51,560,745 - 49.0%

Based on the recommended CERP measure discussed in Browder and Robblee ̳s 2009 pink 

shrimp study, we assume that total commercial catch post-CERP will be at least 75 percent of the 

highest commercial catch on record. The year with the highest commercial catch in Everglades 

counties is 1989. The estimates for expected post-CERP value (75 percent of 1989) and total 

future dockside value are shown in Table 3. Future dockside value was calculated by adding up 

catch in all Everglades counties for each species, multiplying this by .75, then multiplying these 

estimated numbers for future catch by the per-pound 2009 price for each species. These values 

were summed to obtain the expected future dockside value given in Table 5.3. The difference in 

total dockside value post-CERP using 1989 values and this means of estimation is $23,271,221, 

or a 43.3 percent increase in 2009 dollars from current 2008 value.

 

77 http://www.southeasternfish.org/Documents/EcoValueAquatic.pdf.
Copyright 2010 Everglades Foundation and Mather Economics 72

Table 5.3: Estimated Change in Commercial Catch and Dockside Value Post-CERP

(based on 1989 catch)

1989 Post-CERP 

estimate (89)

2008 Change in 

Value

Percent 

Change

Total Catch 58,302,223 43,726,667 27,962,536 15,764,131 + 56.4%

Total 

Dockside 

Value

N/A $76,988,464 $53,717,243 $23,271,221 + 43.3%

If we look at the years post-1995 in order to take the net ban into account, the largest commercial 

catch landed in Everglades counties was in 1996. The estimation technique used in Table 5.4 is 

the same as that described using the 1989 catch for Table 5.3. The difference in total dockside 

value is $25, 241, 248, or a 47 percent increase, using 1996 values and this means of estimation.

Table 5.4: Estimated Change in Commercial Catch and Dockside Value Post-CERP

(based on 1989 catch)

1996 Post-CERP 

estimate (96)

2008 Change in 

Value

Percent 

Change

Total Catch

55,561,538 41,671,154 27,962,536 13,708,618 + 49.0%

Total 

Dockside 

Value

N/A $78,958,491 $53,717,243 $25,241,248 + 47.0%

The estimated change in commercial dockside value per year in Everglades counties (direct 

value) due to completed CERP restoration, based upon the target measures laid out by Browder 

and Robblee, is estimated as an increase in value between $23,271,221 and $25,241,248. CERP 

is estimated to take 20 to 30 years to reach its complete restoration goals. We assume that CERP 

will cause a linear increase in the dockside value of commercial fish over this period, and then 

remain at a constant dockside value in perpetuity once the restoration point is reached. A 20-year 

restoration period was used for our calculations in Table 5.5, and a 30-year restoration period 

was used for calculations in Table 5.6. Both estimations used a 2.1 percent discount rate. 
Copyright 2010 Everglades Foundation and Mather Economics 73

Using the 20-year restoration period (Table 5.5), we estimate that CERP will increase total 

Everglades commercial dockside value by $1,262,062.40 each year for 20 years (using the 1996-

based estimate of a 49 percent increase in catch). This is followed by a constant expected 

restored dockside value of $25,241,1250 above non-restoration expected value (if conditions 

remain as-is in perpetuity) in perpetuity beginning in year 21. The present value for each year‘s 

increase in value was calculated and discounted back to the present based on a 2.1 percent

discount rate in Table 5.5. The sum of these numbers provides an estimated increase in the 

present value of commercial fishing in the Everglades due to CERP of $1,052,463,057.

Using the 30-year restoration period (Table 5.6), we estimate that CERP will increase total 

Everglades commercial dockside value by $841,375 each year for 30 years (using the 1996-

based estimate of a 49 percent increase in catch). The present value for each year‘s increase in 

value was calculated and discounted back to the present based on a 2.1 percent discount rate in 

Table 5.6. The sum of these numbers provides an estimated increase in the present value of 

commercial fishing due to CERP of $24,603,244 over these 30 years.
Copyright 2010 Everglades Foundation and Mather Economics 74

Table 5.5: Estimated Increase in Dockside Value of Commercial Fishing due to CERP

Using 20-Year Restoration Period.

Year Increase in value/yr (as 

compared to nonrestoration value)

PV20

1 $ 1,262,062 $ 1,237,316 

2 $ 2,524,125 $ 2,426,110 

3 $ 3,786,187 $ 3,567,809 

4 $ 5,048,250 $ 4,663,802 

5 $ 6,310,312 $ 5,715,444 

6 $ 7,572,374 $ 6,724,052 

7 $ 8,834,437 $ 7,690,909 

8 $ 10,096,499 $ 8,617,265 

9 $ 11,358,562 $ 9,504,336 

10 $ 12,620,624 $ 10,353,307 

11 $ 13,882,686 $ 11,165,332 

12 $ 15,144,749 $ 11,941,531 

13 $ 16,406,811 $ 12,682,999 

14 $ 17,668,874 $ 13,390,798 

15 $ 18,930,936 $ 14,065,964 

16 $ 20,192,998 $ 14,709,505 

17 $ 21,455,061 $ 15,322,401 

18 $ 22,717,123 $ 15,905,607 

19 $ 23,979,186 $ 16,460,051 

20 $ 25,241,248 $ 16,986,636 

SUM of 20 year PVs $ 203,131,174 

PV of Perpetuity 

(beginning in yr 21)

 $ 849,331,883 

Total Increase in Value $ 1,052,463,057 
Copyright 2010 Everglades Foundation and Mather Economics 75

Table 5.6: Estimated Increase in Dockside Value of Commercial Fishing due to CERP

Using 30-Year Restoration 
Copyright 2010 Everglades Foundation and Mather Economics 76

Period.

Year Increase in value/yr (as 

compared to nonrestoration value)

PV30

1 $ 841,375 $ 824,877 

2 $ 1,682,750 $ 1,617,407 

3 $ 2,524,125 $ 2,378,539 

4 $ 3,365,500 $ 3,109,202 

5 $ 4,206,875 $ 3,810,296 

6 $ 5,048,250 $ 4,482,702 

7 $ 5,889,625 $ 5,127,273 

8 $ 6,731,000 $ 5,744,844 

9 $ 7,572,375 $ 6,336,225 

10 $ 8,413,750 $ 6,902,206 

11 $ 9,255,125 $ 7,443,555 

12 $ 10,096,500 $ 7,961,021 

13 $ 10,937,875 $ 8,455,333 

14 $ 11,779,250 $ 8,927,199 

15 $ 12,620,625 $ 9,377,310 

16 $ 13,462,000 $ 9,806,338 

17 $ 14,303,375 $ 10,214,935 

18 $ 15,144,750 $ 10,603,739 

19 $ 15,986,125 $ 10,973,368 

20 $ 16,827,500 $ 11,324,425 

21 $ 17,668,875 $ 11,657,496 

22 $ 18,510,250 $ 11,973,152 

23 $ 19,351,625 $ 12,271,948 

24 $ 20,193,000 $ 12,554,422 

25 $ 21,034,375 $ 12,821,101 

26 $ 21,875,750 $ 13,072,495 

27 $ 22,717,125 $ 13,309,101 

28 $ 23,558,500 $ 13,531,403 

29 $ 24,399,875 $ 13,739,870 

30 $ 25,241,250 $ 13,934,959 

SUM of 30 year PVs $ 264,286,741 $ 264,286,741 

PV of Perpetuity 

(beginning in yr 31)

 $ 696,747,966 

Total Increase in Value $ 961,034,707 
Copyright 2010 Everglades Foundation and Mather Economics 77

Our best estimate is that commercial fishing catch will increase, in present value terms, by a total 

of $524 million (assuming a 20-year time to full recovery for the fishery).78 Table 5.7 captures 

these calculations in summary form.79

Table 5.7 Estimates of Commercial Fish Catch Increase From Everglades Restoration

Time for Fishery to Recover After Everglades 

Restoration

Discount Rate 2.1% Immediately 20 Years 30 Years

NPV Increase 716,129,276 $524,131,653 $41,139,562

Impact on Recreational Fishing

The estimates for commercial fishing suggest that there is potential for a 49 percent to 56 percent

increase in commercial fishing catch post-CERP (see table 5.3 and 5.4, percent change in 

commercial catch). It is assumed that this estimated percent increase in commercial catch can 

also be applied to recreational fishing in the Everglades.

According to Fedler (2009), largemouth bass is the most common fish targeted in the Everglades 

region, but we note that it is not the most valuable.

80 Saltwater fish such as bone and tarpon have 

much higher valuation in the eyes of fishermen,81 and these species will be impacted in Florida 

Bay in a positive way by the return of sheet flow. However, as is revealed below, we use a 

conservative approach using time series data from the fresh water species where the impacts of 

restoration are more certain in our eyes. In addition, CERP‘s Lake Okeechobee Performance 

 

78 As a check on our estimates, we also estimated the change in fishery catch using data from the net ban 

that went into effect in Florida in 1995. This method suggests that Everglades restoration will increase catch by 

about 57 percent. To be conservative in our forecasts, we use the earlier, lower estimate already discussed.

79 Keep in mind that we are only forecasting a return to 49 percent of the baseline catch. Therefore, our 

estimates are only 49 percent of the values in Tables 5.5 and 5.6. Again, this emphasizes our conservative approach 

to benefits calculations.

80 A survey of Everglades anglers by Fedler provided this information; 40 percent of saltwater angler days 

are spent targeting largemouth bass.

81 See Fedler and Hayes, ―Economic Impact of Recreational Fishing for Bonefish, Permit and Tarpon in 

Belize for 2007,‖ online at http://www.turneffeatoll.org/fota-action-plan/economic-study where the value of these 

species are estimated in nearby Belize.
Copyright 2010 Everglades Foundation and Mather Economics 78

Measure Documentation Sheet (2007)82 states that desired post-restoration conditions include: 

―Improved density, age structure, and condition of black crappie, largemouth bass and brim in 

the littoral and near-shore regions of the lake. Increased diversity and extent of forage fish. Fish 

are expected to respond directly to changes in habitat structure, caused by more favorable water 

levels, and changes in resource availability, which will be determined in part by external nutrient 

inputs. Setting quantitative targets for the fish populations requires further research and data 

collection.‖ Thus, we choose to use increase in recreational catch of largemouth bass to estimate 

the increase in consumer surplus for recreational anglers due to CERP restoration.

We again assume that quantitative targets are set at 75 percent of total fish population, as 

suggested by Broward and Robblee and used to estimate the changes in commercial fishing catch 

in the previous section. Thus, we estimate that there is potential for a 49 percent increase in 

recreational fishing catch.

On average, recreational anglers catch 59 bass each year in Southeast Florida, with an estimated 

marginal value per fish of $4.32.83 The FWC 2006 survey of Fishing, Hunting and Wildlife 

estimates that each angler in Florida spends 17 days fishing (this is an average of residents and

non-residents); therefore we estimate that on average, anglers currently catch 3.47 bass per day.

Using the potential 49 percent increase in catch due to the CERP estimated for commercial 

fishing, this provides a potential estimated increase in catch per angler, per day of 1.7 bass. The 

total number of fishing licenses sold84 in 2008 in the 16 Everglades counties was found by 

Stronge (2010) to be 362,300.85 However, the FWC states, ―It is important to note that only 

about half of Florida anglers actually have to purchase a license due to various exemptions, so 

these numbers do not reflect participation.‖

86 Therefore, we multiply resident angler licenses in 

Everglades counties by 1.5 in order to estimate the number of resident anglers in these counties.

The number of combination licenses sold was given only in total number rather than by resident 

status; as residents purchased 54 percent of freshwater licenses and 67 percent of saltwater 

licenses, we estimate that about 60 percent of combination licenses will have been purchased by 

residents, and we multiply this number by 1.5 in order to estimate the number of resident fresh 

 

82 http://www.evergladesplan.org/pm/recover/recover_docs/et/lo_pm_fish.pdf.

83 http://myfwc.com/CONSERVATION/FishingBassConservationCenter_Value.htm.

84 This includes both residents and nonresidents for freshwater licenses, saltwater licenses, and combination 

licenses.

85 Stronge, W.B. The Economics of the Everglades Watershed and Estuaries: Phase 2 - 2010 Update of 

Data Analysis. Prepared for the Everglades Foundation (March 2010).

86 http://myfwc.com/CONSERVATION/Conservation_ValueofConservation_EconFreshwaterImpact.htm.
Copyright 2010 Everglades Foundation and Mather Economics 79

and saltwater combination anglers.

We then sum these estimates to obtain the estimated number of anglers who have purchased 

licenses in Everglades counties or fish in Everglades counties, but are exempt from the need to 

purchase a license. We assume this is an appropriate (though on the low-end) estimate for the 

number of anglers fishing in Everglades counties in a given year. Given the FWC estimates the 

average number of days spent fishing per angler at 17.2, the estimate of 467,855 anglers in the 

Everglades leads to an estimated 8,047,113 angler-days fishing in the Everglades. Table 5.8 

reports these details.

Table 5.8: Estimated Number of Recreational Fishermen in Everglades Counties

Estimated # Recreational Saltwater Anglers (x1.5) 173,278.50

Estimated # Recreational Freshwater Anglers (x1.5) 100,005.00

Nonresident Saltwater Licenses 99,913.00

Resident Freshwater Licenses 31,995.00

Estimated # Resident Combo Anglers (x.6x1.5) 43,382.70

Estimated # Nonresident Combo Licenses (x.4) 19,281.20

Sum of Non-residential Licenses and Resident Angler Estimates 467,855.40

EST DAYS (Sum licenses x 17) 8,047,112.88

This estimated number of angler days is multiplied by the estimated increase in Everglades 

recreational bass catch post-CERP (1.7) to get an estimated increase of 13,841,034 fish caught 

each year. The estimated increase in value due to restoration (based on a marginal value per bass

of $4.32) is then $59,793,267.54 for each year after restoration is complete. A 20-year 

restoration period was used for our calculations in Table 5.8. A 30-year restoration period was 

used for calculations in Table 5. 9. A 2.1 percent discount rate was used for both estimations. 

Using the 20-year restoration period (Table 5.8), we estimate that CERP will increase total 

angler surplus in the Everglades by $2,989,663 each year for 20 years. This is followed by a 

constant expected restored dockside value of $59,793,268 above non-restoration expected value 

(if conditions remain as-is in perpetuity) in perpetuity beginning in year 21. The present value for 

each year‘s increase in value was calculated and discounted back to the present based on a 2.1

percent discount rate in Table 5.9. The sum of these numbers provides an estimated increase in 

the present value of recreational fishing in the Everglades due to CERP of $2,287,076,218.
Copyright 2010 Everglades Foundation and Mather Economics 80

Table 5.9: Estimated Increase in Value to Recreational Anglers due to CERP Using 20 

Year Restoration Period.

Year Bass value increase Present Value

1 $ 2,989,663 $ 2,931,043 

2 $ 5,979,327 $ 5,747,142 

3 $ 2,989,664 $ 2,817,228 

4 $ 11,958,654 $ 11,047,947 

5 $ 2,989,665 $ 2,707,832 

6 $ 17,937,980 $ 15,928,413 

7 $ 2,989,666 $ 2,602,684 

8 $ 23,917,307 $ 20,413,191 

9 $ 2,989,667 $ 2,501,620 

10 $ 29,896,634 $ 24,525,653 

11 $ 2,989,668 $ 2,404,480 

12 $ 35,875,961 $ 28,287,950 

13 $ 2,989,669 $ 2,311,112 

14 $ 41,855,287 $ 31,721,077 

15 $ 2,989,670 $ 2,221,369 

16 $ 47,834,614 $ 34,844,924 

17 $ 2,989,671 $ 2,135,111 

18 $ 53,813,941 $ 37,678,335 

19 $ 2,989,672 $ 2,052,203 

20 $ 59,793,268 $ 40,239,155 

SUM of 20 year PVs $ 275,118,470

PV of Perpetuity 

(beginning in yr 21) $ 2,011,957,749

Total Increase in Value $ 2,287,076,218

Using the 30-year restoration period (Table 5.10), we estimate that CERP will increase total 

Everglades commercial dockside value by $1,993,109 each year for 30 years. The present value 

for each year‘s increase in value was calculated and discounted back to the present based on a 

2.1 percent discount rate in Table 5.10. The sum of these numbers provides an estimated increase 

in the present value of recreational fishing to anglers due to CERP of $24,603,244 over these 30

years.
Copyright 2010 Everglades Foundation and Mather Economics 81

Table 5.10: Estimated Increase in Value to Recreational Anglers due to CERP Using 30-

Year Restoration Period.

Year Bass value increase Present Value

1 $ 1,993,109 $ 1,954,028 

2 $ 3,986,218 $ 3,831,428 

3 $ 5,979,327 $ 5,634,453 

4 $ 7,972,436 $ 7,365,298 

5 $ 9,965,545 $ 9,026,101 

6 $ 11,958,654 $ 10,618,942 

7 $ 13,951,762 $ 12,145,849 

8 $ 15,944,871 $ 13,608,794 

9 $ 17,937,980 $ 15,009,699 

10 $ 19,931,089 $ 16,350,435 

11 $ 21,924,198 $ 17,632,822 

12 $ 23,917,307 $ 18,858,633 

13 $ 25,910,416 $ 20,029,594 

14 $ 27,903,525 $ 21,147,385 

15 $ 29,896,634 $ 22,213,639 

16 $ 31,889,743 $ 23,229,950 

17 $ 33,882,852 $ 24,197,864 

18 $ 35,875,961 $ 25,118,890 

19 $ 37,869,069 $ 25,994,494 

20 $ 39,862,178 $ 26,826,103 

21 $ 41,855,287 $ 27,615,106 

22 $ 43,848,396 $ 28,362,854 

23 $ 45,841,505 $ 29,070,662 

24 $ 47,834,614 $ 29,739,807 

25 $ 49,827,723 $ 30,371,535 

26 $ 51,820,832 $ 30,967,056 

27 $ 53,813,941 $ 31,527,545 

28 $ 55,807,050 $ 32,054,149 

29 $ 57,800,159 $ 32,547,981 

30 $ 59,793,268 $ 33,010,122 

SUM of 30-year PVs $ 626,061,222

PV of Perpetuity 

(beginning in yr 31) $ 1,650,506,118

Total Increase in Value $ 2,276,567,341
Copyright 2010 Everglades Foundation and Mather Economics 82

Table 5.11 shows the present value of recreational fishing value increases over a 50-year period 

using this estimate of a $90,464,861 increase in value each year after CERP is completed. This is 

calculated for both a 20- and 30-year restoration period (assuming catch increases linearly over 

those years), as well as for instant restoration.87 Our best estimate is that Everglades restoration 

will increase the value of recreational fishing by a total of $2.04 billion in net present value 

terms.

Discount Rate

2.1% Immediately 20 Years 30 Years

NPV 

Increase $2,783,890,688 $2,037,516,539 $1,714,891,823

Table 5.11 Estimates of Recreational Fish Catch Increase From Everglades 

Restoration

Time for Fishery to Recover After Everglades Restoration

 

87We also estimated the total number of anglers in Everglades counties using the ratio (number Everglades 

counties)/(number counties in Florida) and multiplied this by the estimated 2.8 million anglers fishing in Florida. 

We then used this ratio to estimate the number of anglers in the Everglades to recalculate the increase in bass caught 

and increase in value. The results are numbers that are similar and suggest that either assumption is appropriate.
Copyright 2010 Everglades Foundation and Mather Economics 83

Additional Commercial Fishing Figures

Figure 5.12: Total Finfish Caught Commercially in Everglades Counties (pounds)

Figure 5.13: Total Invertebrates Caught Commercially in Everglades Counties (pounds)
Copyright 2010 Everglades Foundation and Mather Economics 84

Chapter 5 References

Browder, Joan A. and Robblee, Michael B. ―Pink shrimp as an indicator for restoration of 

everglades ecosystems.‖ Ecological Indicators, 9(6, Supplement 1), (November 2009): S17-S28.

Fedler, Tony. ―Estimated Impact of Recreational Fishing in the Everglades Region.‖ Prepared 

for the Bonefish and Tarpon Trust (2009).

Gates, J. M. ―Investing in Our Future: The economic case for rebuilding mid-Atlantic fish 

populations.‖ The PEW Environment Group (2009).

Hazen and Sawyer. Indian River Lagoon Economic Assessment and Analysis Update. For the 

Indian River Lagoon National Estuary Program in cooperation with St. Johns River Water 

Management District and South Florida Water Management District (2008).

Stronge, W.B. The Economics of the Everglades Watershed and Estuaries: Phase 2 - 2010 

Update of Data Analysis. Prepared for the Everglades Foundation (March 2010).

Data used for Commercial Fisheries Landings in Florida available at 

http://research.myfwc.com/features/view_article.asp?id=19224.
Copyright 2010 Everglades Foundation and Mather Economics 85

Chapter 6: Wildlife Habitat and Hunting Valuation

While fishing is a major recreational activity in Florida, hunting and wildlife viewing are popular 

pastimes as well. In this section, we detail our estimates of the economic impacts on these 

pursuits as we model them subsequent to Everglades restoration.88

Impact on Hunting

There are two important hunting groups in the Everglades: deer and waterfowl (primarily ducks).

Restoration stands to impact hunting, it turns out, both positively and negatively. Deer have 

moved into and flourished in the drained wetlands over the last half century, and ducks have 

been driven out. Restoration will reverse these recent trends.89

Methods and Literature

As an initial study into the valuation of non-market resources, we performed a literature review 

on environmental valuation, focusing on the economic impact of ecosystem services that cannot 

be directly valued on a market. Within this type of valuation, the methodology can be broken 

down into two major categories: contingent valuation (CV) and revealed preferences. The 

contingent valuation method of economic analysis can be defined as a means of valuing nonmarket resources by using surveys and questionnaires to estimate the population‘s ―willingness 

to pay‖ for a service. One relevant example of this method in existing literature is found in a 

1995 paper by Fried, Adams, Berren, and Bergland90 in which the authors evaluate the value of 

increased quality of elk hunting in the Starkey Experimental Forest in Oregon. In this 

experiment, hunters in the area were given a ―dichotomous choice‖ survey, offering an increased 

 

83 There is considerable evidence that deer populations might actually increase in certain areas after 

restoration, but as is revealed below, there is evidence from Holy Land Management Area that deer hunting does not 

necessarily follow the growth in species. We can note that deer populations have been increasing throughout the 

United States over the past 30 years, but deer hunting has been declining. The presence of more deer does not by 

itself lead to additional hunting.

89 We fully expect that alligator hunting will increase after restoration, but we have not attempted to assay 

these benefits in any scientific way for three reasons: i) there is considerable uncertainty about the regulatory regime 

for alligator hunting owing to their potential endangered status and the methods required for hunting; ii) we assert 

that the economic benefits are small and compared to the overall effects we are measuring, they are second order or 

smaller impacts here; and iii) we have so far been unable to get any reliable indications on the value of alligator 

hunting, the total extent of it, or a reliable forecast of its impact post restoration. With all this said, out best estimate

is that alligator habitat and populations will increase and that alligator hunting will also go up some.

90 Fried, B., R. Adams, R. Berrens, O. Bergland. ―Willingness to pay for a change in elk hunting quality.‖ 

Wildlife Society Bulletin 23(4), (1995): 680-686.
Copyright 2010 Everglades Foundation and Mather Economics 86

quality of hunting along with an increased fee to hunt the area. This survey had a ―take it or leave 

it‖ format, with different prices assigned at random to survey participants. Based on the 

aggregate of their choices, it is possible to estimate the demand curve for increased hunting 

quality. However, this method is difficult to implement accurately, because it requires boots on 

the ground conducting surveys, and it requires a significant number of surveys to be conducted if 

it is to be accurate. Another example of contingent valuation estimation for non-market assets 

occurs in a 2000 paper by John Loomis91 In this paper, Loomis evaluates different methods of 

―nonmarket valuation concepts and techniques‖ and presents a detailed case study in using 

dichotomous-choice contingent valuation to estimate a community‘s willingness-to-pay for a 

restoration project that would upgrade ecosystem services. He analyzes a 72-kilometer section of 

the South Platte River in Colorado and attempts to estimate the non-use value the community 

puts on the river and associated riparian zone.

The alternative to the contingent valuation method is the revealed preference method. Instead of 

focusing on what affected people would be willing to pay, revealed preference analyses 

determine what those same people have actually spent in the past due to changes in similar 

circumstances. This method is more effective at determining the current value of non-market 

services, as it is unlikely to overestimate or encourage exaggeration on the part of the CV survey 

takers. Among other options, revealed preference estimations can use travel cost, historical fee 

payments or license purchases or visitation statistics to measure willingness to pay. The U.S. 

Fish and Wildlife Service released a report entitled ―National Survey of Fishing, Hunting, and 

Wildlife-Associated Recreation,‖ in which they estimate the economic impact of various 

wildlife-associated recreational activities using the travel-cost method. 

After reviewing the various methods of estimating the valuation of non-market resources, we 

chose to focus -- in this section of our model -- exclusively on revealed preference estimations 

for a number of reasons. First, revealed preference is a more objective, scientific method of 

determining current values of an ecosystem service. When implementing CV surveys, survey 

takers may be inclined to overstate their actual willingness to pay, as they will not actually be 

required to pay any money. Revealed preference estimations use the money that people have 

actually spent, guaranteeing that this method is not overestimating the value of the assets in the 

area. Essentially, contingent valuation estimations attempt to capture the entire consumer surplus 

(or what consumers would be willing to pay in addition to what they are actually paying) for a 

service, while revealed preference merely captures the money consumers spent on the service. 

 

91 Loomis, John. ―Can Environmental Valuation Techniques Aid Ecological Economics and Wildlife 

Conservation?‖ Wildlife Society Bulletin. 28(1). (2000): 52 – 60.
Copyright 2010 Everglades Foundation and Mather Economics 87

This difference ensures that revealed preference is a more conservative, baseline estimate of any 

service‘s value. While contingent valuation might provide a more accurate estimate under some 

conditions, it also greatly increases the risk of overestimating the value of an asset.

Shown below is an illustration of the area under a demand curve that contingent valuation 

estimations attempt to capture compared to the area that revealed preference estimations attempt 

to capture. This further illustrates the conservative nature of the model we have created.

Using data presented in the Florida Fish and Wildlife Conservation Commission‘s 2003 Report 

entitled ―The Economics of Selected Florida Wildlife Management Areas‖ for 17 selected 

statewide Wildlife Management Areas, we computed an estimated ratio of the economic value of 

hunting in the WMAs located within the Everglades to the economic value of hunting in WMAs 

statewide. From the lower-bound estimates for each WMA‘s value, we calculated the ratio of 

hunting expenditures in the Everglades to the entire state. This estimation suggested that 

approximately 46 percent of total expenditures on hunting and fishing in Florida occurred in the 

Everglades watershed. We then multiplied this ratio by the U.S. Fish and Wildlife Service‘s 

estimate of the total economic value of hunting in Florida, $377,394,000 annually. This method 

leads to a baseline estimate of $175,000,000 per year that hunting in the Everglades area 

In this figure, the downward sloping (blue) line represents a demand curve for a service. As the price (P = price 

of service) increases, the number of people demanding the service (Q = quantity of service demanded) 

decreases. Because the actual expenditures in our revealed preference models only captures this smaller area, we 

can ensure that there is a very low probability of overestimation in our base-line estimates. On the other hand, 

contingent valuation attempts to capture the total consumer surplus, so any overstatement by the survey takers 

directly translates to an overestimation on the part of the model.
Copyright 2010 Everglades Foundation and Mather Economics 88

contributes to the Florida economy.

Fluctuations in water levels are responsible for current high mortality rates among deer in South 

Florida. CERP estimates that, with the restoration of the Everglades, white tail deer populations 

will be reduced to pre-drainage numbers, but that deer mortality due to drowning and starvation 

will decrease. CERP estimates suggest that deer hunting in Big Cypress National Preserve should 

not be impacted in either direction, but that deer hunting in Everglades WMA will be adversely 

affected. For purposes of this model, we assumed no net change in deer hunting in Big Cypress

and a decrease of 75 percent in Everglades and Rotenberger WMAs. The decrease is due to 

lower deer populations and increased difficulty in accessing huntable areas. We further assumed 

that Holey Land would undergo half the total effect of Everglades or Rotenberger, because it is 

already partially rehydrated. It has already seen a notable transition from deer hunting to 

waterfowl hunting as a result of higher water levels.

The Everglades occupy the western portion of the Atlantic Flyway as it passes through Florida.

Increasing year-round water levels in Everglades and Rotenberger WMAs would provide more 

ideal habitat for waterfowl. It would also induce a shift in hunting patterns in these areas from 

primarily deer hunting to primarily duck hunting, as seen in Holey Land WMA after its 

restoration. At present, waterfowl hunting in the Everglades does not provide a significant 

portion of total hunting expenditures, but we expect that, after restoration, duck hunting will 

increase significantly in quality, and thus it will become an attraction and increase its 

significance greatly.

We used the rehydration of Holey Land WMA as a measure of the consequences of restoration 

on hunting in the Everglades. This rehydration, which began in 1991, drastically changed 

hunting patterns within the Holey Land WMA, and we expect a similar shift in the Everglades. 

We used days of hunting to estimate percent changes.

Table 6.1 Estimates of Change in Hunting

Waterfowl Hunting (days) Deer Hunting(days) Total Hunting (days)

Prior To Restoration Negligible 972 972

Post Restoration 266 156 422

The calculations in Table 6.1 suggest a notable decline in total hunting in the area due to 

restoration, but we expect the quality of duck hunting in the various areas to be super additive, 

because the benchmark reference case does not properly mimic the substitution that will take 
Copyright 2010 Everglades Foundation and Mather Economics 89

place in the Everglades. In the Holey Land WMA, hunters simply moved their deer hunting to 

adjacent properties. In the case of Everglades restoration, there are no nearby areas for deer 

hunters to go, so we expect many of them to turn to duck hunting, hence the super additive 

effect.

We note that restoration, while leading to flooding of existing deer habitat, may not have a 

dramatic impact on deer population as the wetlands have hammocks and dry spots for deer to 

reside. However, the Holey Land experiment is the best estimate of the impact of restoration on 

hunting, and while it stands to be conservative in the sense that the impact on deer populations is 

not likely to be as severe as a decline of 75 percent, we think the experiment in place is the best 

available science, and hence it is our approach. We concede that deer hunting may not fall as 

dramatically as the Holey Land restoration suggests, but our judgment is to be conservative for 

all the reasons issued earlier.

Figure 6.1 reveals the potential for deer population increases as estimated by Jane Comiskey.92

Accordingly, there is good reason to believe that deer populations will not be negatively 

impacted, overall, by restoration, and might even improve. If this turns to be true, and contrary to 

the Holy Land restoration, then our estimates of benefits are biased downward, and restoration is 

more valuable than we conclude there.

 

92 See Appendix D (Attachment C) of the 1999 Restudy report. The text on D-C-88 suggests that, overall, 

deer herd will be reduced (based on this breeding potential index) only slightly with CERP (Aternative D) compared 

to without CERP (2050 Base.
Copyright 2010 Everglades Foundation and Mather Economics 90

Figure 6.1 Potential for Deer Populations Post Restoration

All said, our best estimate is that, as hunters shift from deer to ducks, there will be a 75 percent 

decrease in deer hunting and a concomitant increase in duck hunting. As a sensitivity test, we 

estimated the change in hunting assuming duck hunting increases proportional to 100 percent, 

200 percent, 250 percent, 300 percent and 500 percent of the relative changes seen in the Holey 

Land WMA benchmark case. Using relative hunting days in all areas, and allowing for no 

change in Big Cypress93 and half the change in Holey Land WMA as is expected in Everglades 

WMA, our best estimate is that there will be an annual reduction in hunting of $16.6 million (-

9.5 percent) per year. We estimate a range from, in the best case, a $50.5 million increase to, in 

the worst case, a decrease of $38.9 million. The actual change that occurs here will depend on 

 

93 According to CERP, Big Cypress National Preserve will not be significantly impacted by restoration.
Copyright 2010 Everglades Foundation and Mather Economics 91

the proportion of deer hunters who cease hunting altogether or move to a different area to deer 

hunters who begin taking advantage of the improved duck hunting in the area instead.

While the marginal impact of Everglades restoration on hunting expenditures might be negative, 

the expected change in wildlife viewing expenditures is almost surely positive and far larger than 

the potentially negative impact on hunting expenditures. The expansion of habitat produces 

additional services, primarily through viewing of birds and other wildlife. We have already 

computed the additional value of viewing by tourists, and, to avoid double counting, in this 

section we only estimate the habitat impact on resident viewings in and around their homes, that 

is, local bird and wildlife watching. The increased demand from restoration will also be reflected 

in increased expenditures on bird watching equipment such as feeders, food and binoculars.

Impact on Habitat and Wildlife Viewing

The U.S. Fish and Wildlife Service estimates that the state of Florida has more than $3 billion in 

annual expenditure by wildlife watchers.94 Of the 1.5 million people who engage in away-fromhome wildlife watching each year, more than 1.1 million engage in waterfowl watching and 1.29 

million watch other non-game water birds. In comparison, only 421,000 engage in viewing of 

large land mammals.95 Using data for 17 statewide Wildlife Management Areas, for purposes of 

scaling the state total to the region, we used as a proxy the ratio of the economic value of hunting 

in the WMAs located within Everglades to the statewide value. We then multiplied this number 

by the U.S. Fish and Wildlife Service‘s estimate of the total economic value of wildlife watching 

in Florida, which was $3.08 billion annually. This leads to an estimated value of $1.43 billion per 

year that non-consumptive wildlife recreation in the Everglades contributes to the Florida 

economy.

The primary source of wildlife watching value in Florida comes from bird-watching, primarily of 

wetlands species, either waterfowl or wading birds.96 CERP estimates significant habitat 

improvement for water-reliant bird populations, specifically waterfowl and wading birds. Due to 

the Everglades‘ position along the Atlantic Flyway, a large portion of migrating waterfowl pass 

through the area on their way from Canada to the Caribbean. Increasing year-round water levels 

in Everglades and Rotenberger WMAs along with Everglades National Park will provide more 

ideal habitat for waterfowl and non-game wetlands birds. It will also induce a shift in wildlife 

 

94 Table 31; page 39; FWS – FHWAR. We excluded for our calculations the ―special equipment 

expenditure‖ category because we are attempting to measure the habitat-only demand and not travel- or tourismrelated demand.

95 Table 26; page 35; FWS – FHWAR.

96 Table 26; page 35; FWS – FHWAR.
Copyright 2010 Everglades Foundation and Mather Economics 92

watching demand in these areas due to increased quality relative to other areas.97

CERP estimates improved habitat for the following endangered species:

 West Indian Manatee

 American Crocodile

 Snail Kite

 Wood Stork

 Cape Sable seaside sparrow

Table 6.2 reports wildlife participation rates in the Everglades region.

Table 6.2

Wildlife Watching Participation Figures

Wildlife Type Participants** % Participants

Waterfowl 1166 74.7%

Wading Birds 1290 82.7%

Birds of Prey 858 55.0%

Total birds 1418 90.9%

Marine Mammals 685 43.9%

Other Wildlife* 985 63.1%

TOTAL 1560 100.0%

* ―Other Wildlife‖ includes reptiles and insects

** Numbers in thousands

On page ii of the CERP‘s Draft Fish and Wildlife Coordination Report, it is estimated that the 

wading bird population has declined by 90 percent from its natural level. In spite of these 

drastically reduced numbers, Florida remains the number one tourist destination in the United 

States for wildlife watching. The state currently draws 746,000 visitors a year to participate in 

wildlife watching. Restoration should return wetland-dependent bird populations to some larger 

percent of their historical population. Ecologists use wading-bird population as an indicator of 

environmental health because these birds are a fragile part of the ecosystem. Due to this frailty, 

their success indicates a successful ecosystem. For this reason, and because of the high 

percentage of wildlife viewing aimed at wading birds, the economic impact of improved habitat 

 

97 CERP Sections 8.7 and 8.8.
Copyright 2010 Everglades Foundation and Mather Economics 93

on demand for wildlife watching can be conservatively estimated by measuring the effect of 

increasing bird populations on wildlife-watching expenditures.

Over the last several years, the number of wading birds residing within the Everglades has grown 

rapidly. The population increase is believed to be a result of several years of high rainfall, and it 

corresponds to a dramatic increase in the economic impact of wildlife watching in Florida. Since 

2001, the total expenditure for non-consumptive, wildlife-associated recreation in the state of 

Florida has approximately doubled. The 1990s were a low-population period for wading birds, 

and their recent recovery is correlated with the large increase in wildlife-watching activity in the 

state. The change in bird numbers along with the change in bird-watching values indicates a 

relatively high elasticity of demand based on the quality of bird watching and changing 

preferences. The implication of this is that Everglades restoration will lead to important and 

significant increases in wildlife populations, viewing and enjoyment. As habitat and bird 

populations increase, the economic impact of wildlife watching should improve at an even more 

rapid rate than it has recently.

To calculate these values, we estimated the baseline value of habitat and non-consumptive 

wildlife appreciation in the Everglades. We used wading-bird populations as our indicator metric 

for habitat value in the Everglades. The University of Florida estimates that, just prior to 

drainage, there was a stable population of approximately 70,000 mating pairs of wading birds

living in the Everglades. This is our reference benchmark for restoration. Using 2005 bird 

populations, our conservative best estimate is that restoration will return these numbers to 75

percent of the 70,000 mating pairs reference benchmark. We then estimated the marginal impact 

of changes in species populations on demand for viewing by extrapolating the changes seen 

between 2000 and 2005 to the increased, restored numbers estimated in the table below. Our best 

estimate, or 75 percent of historical populations restored, provides an annual improvement in 

habitat value of approximately $424 million.
Copyright 2010 Everglades Foundation and Mather Economics 94

Table 6.3

Estimated Nesting 

Pairs 1999 - 2001 2004- 2006

75% 

Restoration

100% 

Restoration

Great Egret 5996 8296 - -

Snowy Egret 4270 6410 - -

White Ibis 16555 24926 - -

Wood Stork 1538 800 - -

Total 28359 40432 52500 70000

Birdwatching Value: $734,174,000 $1,435,977,000 $1,900,427,000 $2,573,934,000

Value of Restoration: $464,450,000 $1,137,957,000

Changes in total number of wading birds inhabiting the Everglades

Δ (2000 - 2005) Δ(2005 - 75% Restored) Δ(2005 - 100% Restored)

12073 12068 29568

Though we have estimated a portion of these values in our recreation and park visitation model, 

which measures park visitation changes, wildlife viewing generates additional values not 

captured by our park visitation model. These values should be considered when evaluating 

Everglades restoration, particularly to local residents who derive pleasure from the increased 

number of animals residing around their homes. To fully capture the value of the impact of 

restoration on wildlife habitat and hunting, we summed the values from habitat and hunting 

calculations. Our best estimate is that Everglades restoration will increase wildlife habitat and 

hunting services by $407.4 million annually.

As a final word about habitat and hunting, it is important to note that the impact on hunting will 

only be negative if significant numbers of deer hunters do not transition to duck hunting as duck 

populations expand. The experience with Holey Land restoration suggests that it is complicated 

to forecast the impacts on hunting associated with expansive additional CERP restoration. On the 

one hand, it appears that additional duck populations attract people to duck hunting, and this is 

reasonable from the point of view of economic theory. It may also be true that existing duck 

hunters will chose to hunt locally more often and forego trips to distant duck hunting areas such 

as Louisiana, but we cannot estimate these shifts with any precision. In order to be conservative,

we have assumed a very low elasticity of substitution between deer and duck hunting and a low 
Copyright 2010 Everglades Foundation and Mather Economics 95

elasticity of new duck hunters. Accordingly our negative estimate on hunting is probably biased, 

and the likely outcome is not so dire. Additional information on hunter switching could refine 

this estimate.
Copyright 2010 Everglades Foundation and Mather Economics 96

Chapter 7: Other Everglades Valuations, Miscellany

There are four broad areas of ecosystem services that, at present, we have not conclusively 

valued that might be forthcoming or enhanced as a result of Everglades restoration: the potential 

for carbon sequestration, potential fire damage reduction, the potential for enhanced water 

purification, and the option value of unknown compounds and life forms living in the 

Everglades. While these values stand to be real and to change in important ways as the 

Everglades is restored, we are not prepared at this point in time to offer estimates of the pro 

forma financial calculations for two reasons. First, the science of these services is somewhat 

unsettled and unclear, compared to the other services, and second, the markets for these services 

are immature and undeveloped. Hence, while there is rampant speculation about how these 

services might be highly valued and special, we are not presently prepared to put hard numbers 

to these theories, as good as they might turn out to be.

We can note that if the world moves to a market for carbon sequestration, and such markets are 

developing, the amount of carbon sinking in the Everglades could be important. Our best 

estimate at this time is that the amount of carbon is small, but we have low confidence in that 

assessment. There is evidence that higher temperatures will lead to higher sea levels. As this 

happens, sheet flow, aquifer recharge, and peat accumulation take on increasing importance. 

Accordingly, restoration of the Everglades could be a formidable force for adjustment to climate 

change. However, given the uncertainty of these events, and the lack of any existing markets 

with which we might measure these changes, we take the conservative, not sanguine, approach 

of not including any value to restoration on this count. This is doubtless conservative. For, even 

if climate change does not occur, there is evidence of its possibility. Hence, restoration creates an 

option value mitigating against climate change. Our position is that we are simple incapable of 

putting a dollar figure on this option value. So basically, while we acknowledge the potential for 

important values of carbon sequestration services and changes that might flow from restoration, 

in order to maintain our conservative stance, we will not add any hard numbers. As time 

proceeds, we will revisit our position on this topic.

Another topic for further study is the potential for Everglades restoration to improve South 

Florida‘s water quality in ways not captured by our real estate and recreation value estimates. 

Because wetland ecosystems are known for effectively filtering nutrients, we suspect a restored 

Everglades would produce significant cost savings in water treatment and the secondary impacts 
Copyright 2010 Everglades Foundation and Mather Economics 97

of poor water quality. In particular, we have researched the potential for CERP to reduce water 

quality treatment costs, beach closures and health impacts in South Florida. However, we have 

chosen to omit that research and the corresponding valuations from this report because there 

exists significant disagreement in the scientific community over the connection between nutrient 

reductions and such water contamination cost drivers as harmful algal blooms, beach clean-ups, 

and shellfish poisoning. Like carbon sequestration, this topic should receive additional attention 

as this research continues and progresses. We discuss this topic in more detail below.

A third topic we might investigate further is the potential value of unknown compounds and life 

forms in a restored Everglades. These are commonly called ―biodiversity values,‖ and we have 

found evidence of nascent markets in biodiversity. Michele Zebich-Knos reports on a contract 

between Merck Pharmaceuticals and INBio, a Costa Rican NGO for biodiversity development.98

The amounts of money at play in this market are not fully public. We are confident that there are 

others, and this appears to be a fertile area for further analysis. At present, however, given the 

high levels of uncertainty, we are not prepared to put hard and fast estimates to these option 

values. Given the scientific and policy uncertainty over these topics, our omission makes our 

valuation estimates more robust. However, future work should probably pay close attention to 

developments here. 

The Potential Benefit of Cleaner Water from Restoration

Nutrient Loading

Background 

Environmental degradation of the Everglades has caused several problems in the water flow in 

South Florida. Due to the lack of natural flows southward (from the Kissimmee down to Lake 

Okeechobee and out to Key Biscayne) and the redirecting of these flows east and west (via the 

St. Lucie and Caloosahatchee estuaries), the natural, slow filtration and storage capabilities of the 

Everglades ecosystem no longer function as they had in the past. 

Damming and flow redirection were beneficial for the agricultural industry, but they depleted the 

natural environment. The ―River of Grass‖ has dried up in many areas and has been reduced 

 

98 ―Preserving Biodiversity in Costa Rica: The Case of the Merck-INBio Agreement.‖ The J. of 

Environment and Development, 6(2), (1997).
Copyright 2010 Everglades Foundation and Mather Economics 98

drastically in size. Redirecting the water flow east/west had several negative impacts on the 

environment. Lake Okeechobee receives excess flows from the Kissimmee area, which bring 

nutrients and pollutants through the lake. During dry seasons, the lake stores this runoff instead 

of letting it filter naturally, thereby taking in deposits of these nutrients. 

Fresh water that slowly flowed south now flows east/west, and at times there are sudden 

overflows due to storms and flood control measures. This impacts not only the Everglades, but 

also the estuarine areas where the St. Lucie and the Caloosahatchee flow into the Atlantic and the 

Gulf of Mexico. This excess water not only distorts the natural estuarine water with freshwater,

but also brings runoff from the agricultural areas (phosphorous, nitrogen, potassium and other 

pollutants) into the estuarine ecosystem. Environmental conditions in the estuaries deteriorate 

due to the excess freshwater and nutrient-saturated water. This also has a negative impact on the 

local wildlife. 

Theory and Methods

One option under the Comprehensive Everglades Restoration Plan is to restore the River of 

Grass flowing from Lake Okeechobee to South Florida. This restoration model is designed to 

restore the water filtration function of the wetland habitat prior to its engineered conversion to 

dry-land agriculture. In particular, restoring the River of Grass will enhance the absorption and 

filtration of excess nutrients and pollution coming from agriculture, stormwater, and waste.

In addition to enhancing water filtration, this approach would reduce stresses on stormwater 

treatment facilities because the restored habitat would store and filter the excess runoff. 

Treatment facilities would not be overrun with flows (either from dam discharges, storms or 

flood control maneuvers). Fewer overflows at treatment facilities would reduce unnatural 

saturation of the estuaries, and natural abatement would reduce the stresses on treatment 

facilities. The treatment facilities would be less stressed because less nutrients and pollution 

would need to be treated and filtered. If the water was less saturated with nutrients and 

pollutants, the facilities would have to spend less effort to treat the water because the water 

would flow south and any nutrients or pollutants would be absorbed into the ecosystem through 

the slow-moving River of Grass.

Additionally, reduced overflows of the treatment facilities would reduce the impact of 

agricultural runoff in the two estuaries. With the regulations on the agricultural industry, less 

pollution emanating from farms as well as the restored absorption capabilities of the Everglades, 
Copyright 2010 Everglades Foundation and Mather Economics 99

the environmental conditions in South Florida would improve, and these improved conditions 

would have a measurable economic impact.

The economic impacts of our theorized effects could have been measured by estimating the 

expected reduction in pollution/nutrient runoff and tying that to an ecosystem service. For 

example, a certain reduction in the amount of phosphorous per gallon flowing into the 

Caloosahatchee estuary would improve the overall health of the estuary, which in turn might 

have multiple effects on local economic conditions. Among the possible effects are: improved 

property values (discussed by Michael, et al., (1996) and Krysel, et al., (2003)), a boost in 

tourism and tourism services (hotels, water sports, beach activities), reduced cleanup costs on 

beaches, more fishing revenues, fewer expenditures on treating food poisoning from healthier 

shellfish/fish, reduced cost to treat stormwater, nutrient-saturated water and excess runoff as well 

as reduced need for treatment facilities and other indirect economic effects due to improved 

water quality as discussed in Abbott, et al., (2009); Steidinger, et al., (1999); Parsons, et al., 

(2008); Hoagland, et al., (2002); and Morgan, et al., (2009) as well as numerous other reports.

Results and Discussion

After speaking with several water quality experts in South Florida, we realized that the 

hydrological connections between Everglades restoration, water quality treatment, beach 

closures, and human health impacts were present but too uncertain to quantify and value. Though 

most of the experts agreed that restoration would reduce nutrient loading of the Caloosahatchee 

and St. Lucie estuaries – and that nutrient loading reductions would reduce treatment, beach 

closure, and human health costs – none were willing to speculate on the magnitude of those cost 

reductions.

Helpful information in reaching this conclusion came from Tracy Piccone at South Florida Water 

Management District, Sandra Whitehead at the Florida Department of Health, Rae Ann Wessel 

with the Sanibel Captiva Conservation Foundation, and Eric Bush with the United States Army 

Corps of Engineers. In particular, Tracey Piccone and Eric Bush suggested that restoration of the 

natural habitat and flow would not necessarily reduce the need for stormwater treatment and 

might, in fact, increase it. This suggestion is premised on the belief that the flows redirected from 

Lake Okeechobee southward will have phosphorus concentrations high enough to damage a 

restored Everglades ecosystem. 

Conversations with the SFWMD and local water management districts confirmed disagreement 
Copyright 2010 Everglades Foundation and Mather Economics 100

over the effect of Everglades restoration on nutrient loading in South Florida. Specifically, 

SFWMD staff and treatment facility administrators do not expect restoration of the Everglades 

ecosystem would provide South Florida with a natural water treatment facility. Their belief was 

that the redirected stormwater, runoff, and flows resulting from CERP implementation would 

require additional facilities to be constructed. It was suggested that the newly redirected water 

(south flowing) would need to be filtered down to acceptable levels because the local Native 

American population required a maximum of 10 ppb of phosphorous for all flows. Thus, 

according to SFWMD staff, additional water treatment capacity will be required following 

restoration; not less. The additional capacity will most likely take the form of stormwater 

treatment areas (―STAs‖), which are artificial wetlands constructed to absorb nutrient loads.99

According to Tracey Piccone, in order to achieve high standards for water quality (low parts per 

billion), existing treatment facilities would need to work harder to remove each incremental part 

per billion. Thus, with more stringent regulation expected, the cost per pound of phosphorous 

reduction may increase in coming years. This approach to pollution reduction seems to ignore 

our theory that there are cost savings from the Everglades naturally abating nutrients/pollution.

In addition to conceptual disagreements over the potential water quality improvements flowing 

from Everglades restoration, the South Florida Water Management District took exception to our 

proposed method of measuring water quality improvements in terms of parts per billion (ppb). 

Specifically, the SFWMD only considers whether a water body meets the Total Maximum Daily 

Load (TMDL) promulgated by the Environmental Protection Agency. Theirs is a binary world of 

either compliance or non-compliance; thus, marginal improvements in water quality which do 

not cross the TMDL threshold are irrelevant to the SFWMD. While these TMDL‘s serve as 

measures of clean water, they do not clearly measure the impact from individual projects on 

water quality. In other words, we needed to measure incremental changes in nutrients due to 

specific projects outlined in CERP. SFWMD and the EPA could only provide the required 

nutrient levels regardless of any projects or cleanup efforts. 

Another problem with TMDL‘s mentioned by Rae Ann Wessel is that the process to issue a 

TMDL to a specific body of water is not a quick process and many areas in the Everglades 

ecosystem still do not have TMDL classifications. TMDL‘s do not measure the impact of 

restoration efforts outlined in CERP.

 

99 It should also be noted that CERP clearly outlines construction projects where STAs (including filtration, 

treatment and storage facilities) are an important part in restoring the natural habitat. Thus, while there doesn‘t 

appear to be any cost savings in STAs, the cost of CERP already includes these new construction projects.
Copyright 2010 Everglades Foundation and Mather Economics 101

The final problem with measuring a direct economic impact from water quality improvements is 

that a causal relation between pollutants, nutrients (for example ppb of Phosphorous) and 

environmental conditions is not yet established in the scientific community. Biologists and 

scientists admit that there may be some relation between nutrients and algal blooms/fish kills, but 

that relation is unknown.

It appears that no relevant expert will venture an opinion at this point on the true source of 

increased or decreased algal blooms. If there were only one factor that affected HAB‘s, the 

relation might be measurable. However, in the Gulf of Mexico, there are numerous known and 

unknown sources of nutrients (manmade or natural) that may cause a sudden growth in an algal 

bloom. The source of these events cannot be attributed solely to nutrient runoff from Florida 

farms or stormwater runoff from the two estuaries.

After numerous conversations with experts in South Florida from a variety of organizations, we 

still do not know the impact Everglades restoration will have on nutrient loading in South 

Florida. The relation between different ecosystems within the Everglades, the sum of their roles 

in the larger Everglades Ecosystem, and the roles of the Everglades in the larger South 

Florida/Gulf of Mexico/Atlantic Ocean ecosystem are not understood with sufficient certainty 

for our team to attempt an economic valuation. These relations or ―linkages‖ are still not 

understood completely and in some cases are still debated among biologists and scientists. 

Harmful Algal Blooms, Beach Closures, and Public Health Impacts

Background

Existing literature on algal blooms by Abbott, et al., (2009) and Steidinger, et al., (1999) provide 

some background on the subject. Algae forms naturally in the Gulf of Mexico and has been 

recorded in Florida since the 1800‘s. The algal bloom is swept by ocean currents and 

occasionally makes landfall on beaches. Algal blooms deplete oxygen, thereby inducing fish kills 

or poisoning fish and shellfish. Harmful algal blooms routinely cause beach closures and 

warnings in South Florida. It is generally believed that the recent increases in polluted water 

flowing into the estuarine areas (as well as into Lake Okeechobee and other bodies of water) 

contribute to the blooms of harmful algae. 

As noted by Abbott, et al., (2009); Steidinger, et al., (1999); Parsons, et al., (2008); Hoagland, et 

al., (2002); and Morgan, et al., (2009), beach warnings and closures attributable to harmful algal 

blooms have a negative economic impact on Florida‘s economy, both in terms of reduced tourist 
Copyright 2010 Everglades Foundation and Mather Economics 102

expenditures and increased beach clean-up costs. Morgan et, al., (2006, 2007) report losses of 

$6.5 million due to beach red tides between 1995-2000 in Okaloosa County, as well as losses in 

Pinellas, Sarasota, Lee, and Collier counties and cities of Longboat Key and Naples of $654,890 

between 2004-2007. In addition, harmful algal blooms can impact humans who catch and eat 

polluted fish. Hoagland, et al., (2002) estimates costs per shellfish poisoning to be between 

$1,100-1,400 per case and $700-1,000 for ciguatera fish poisoning. Fish kills and beach closures 

have significant, negative impacts on the South Florida economy. This section explains our 

attempt to quantify those impacts.

Scientific Uncertainty

Much like the impact of Everglades restoration on water quality, the relationship between 

restoration and harmful algal blooms is disputed in the scientific community. According to Rae 

Ann Wessel, Sanibel Captiva Conservation Foundation, nutrient-saturated water from 

agricultural runoff does not necessarily cause the development of algal blooms (red tide, 

bluegreen algae, microalgae and others) but may have some impact on the intensity of algal 

blooms presently occurring.

On the other hand, Stevenson, et al., (2007) note the following relations between nutrient loading 

and algal growth: 

1. Reductions in algal growth rates from maximum rates to 33 or 66 percent lower rates 

with nutrient load reductions should have great benefits for controlling macroalgal 

accumulation.

2. Reductions in TN and TP concentrations to less than 0.591 or 0.026 mg/L, respectively, 

should reduce the extent of cover of spring bottoms by Vaucheria spp. in Florida springs; 

however, greater reductions in TN and TP will likely be necessary to substantially reduce 

Vaucheria cover. 

3. Reductions in TN and TP concentrations to less than 0.250 or 0.033 mg/L respectively 

should reduce the extent of cover of spring bottoms by Lyngbya wollei in Florida springs; 

however, greater reductions in TN and TP will likely be necessary to substantially reduce 

Lyngbya wollei cover.

4. In many springs, nitrogen reductions may be the only practical restoration strategy 

because natural phosphorus concentrations may be higher than the concentrations that 

constrain algal growth.
Copyright 2010 Everglades Foundation and Mather Economics 103

Supporting the assertion that nutrient loading increases algal blooms, Patricia M. Gilbert and 

Daniel E. Terlizzi (1999) also note, ―In aquaculture ponds, dinoflagellate blooms were found on 

10 of 14 occasions to co-occur with concentrations of urea in excess of 1.5 M nitrogen. When 

urea levels were <1.5 M nitrogen, on seven occasions, no evidence of dinoflagellate blooms was 

observed in these ponds.‖

Although a clear and measurable relation is still uncertain between nutrient outflow/saturation 

and algal blooms (such as Red Tide), Hoagland, et al., (2002), Abbott, et al., (2009) and 

Steidinger, et al., (1999) suggest that effects of polluted waters on local fisheries is generally 

accepted. Fish and shellfish can become poisoned or die from excess pollution. Fish poisonings 

and kills can cause human health impacts if the poisoned fish or shellfish are consumed, and they 

can cause beach closures and warnings. The cost of beach closures has been estimated by 

Parsons, et al., (2008), ranging from $25,000-$852,000 depending on location, time of year and 

day of week, as well as by Hoagland, et al., (2002) to be about $170,000 per mile, per year of 

cleanup in Florida. While these estimates may be used to estimate costs per closure due to HAB 

events, estimating HAB events and their incremental change (as well as an economic value of 

that change) would require knowledge of the interaction between nutrient loading from the 

Everglades and red tide incidence and intensity.

If runoff saturated with nutrients exacerbates the intensity of South Florida algal blooms, then a 

reduction in nutrient concentrations following Everglades restoration would likely reduce algal 

bloom intensity and frequency. However, none of the experts with whom we spoke had 

attempted to quantify this potential impact. They were also unwilling to speculate on the 

magnitude of algal bloom reduction given the myriad variables – in addition to nutrient loading –

which influence algae growth. A potential reduction in algal blooms would have significant 

economic impact. For example, Habas, et al., (1974, 1975) report a three- to five-month bloom 

caused $15-$20 million in losses.

Also unknown is the relation between harmful algal blooms intensity and fish kills. Algae 

deplete oxygen and grow from organic matter. Thus, nutrient runoff that increases organic matter 

would likely increase the intensity of the algal blooms and decrease oxygen concentrations, 

thereby killing fish and shellfish. Algae will also feed off the dead fish and continue to bloom, 

potentially creating a positive feedback loop as described by Abbott, et al., (2009) and 

Steidinger, et al., (1999). 
Copyright 2010 Everglades Foundation and Mather Economics 104

Here again, the experts with whom we spoke agreed that reducing nutrient concentrations would 

reduce harmful algal blooms and, therefore, the occurrence and severity of fish kills, but they 

were unwilling to speculate on the likely magnitude of the fish kill reduction. Though the 

economic impact of discrete fish kills and harmful algal blooms has been measured in the past, 

as discussed by Abbott, et al., (2009); Steidinger, et al., (1999); Hoagland, et al., (2002); and 

Morgan, et al., (2009), modeling the impact of Everglades restoration on fish kills and algal 

blooms throughout the South Florida coastline has not yet been done. 

In addition to environmental impacts, there are certain health effects that might be linked to 

reductions in nutrient pollution. The potential health impacts are discussed by Abbott, et al., 

(2009) and Steidinger, et al., (1999) and include, but are not limited to ingestion of tainted 

shellfish/fish and contact with polluted water. For example, Dwight, et al., (2005) estimate the 

economic impact of shellfish and fish poisoning at $33.35 per illness; Rabinovici, et al., (2004) 

employ a more expansive cost model and estimate the impact at $280 per illness; Hoagland, et 

al., (2002) also present a survey of cost estimates; and Sandra Whitehead at the Florida 

Department of Health confirms there is an economic cost of swimming in polluted waters, 

though she has not quantified that cost. A more technical discussion on algal blooms and health 

is presented by Fleming, et al.

Despite these cost estimates, predicting the marginal reduction in illness and illness costs 

attributable to Everglades restoration is fraught with scientific uncertainty. The precise reduction 

in pollution is unknown and none of the experts with whom we spoke has attempted to estimate 

the reduction in pollution, the resulting reduction in harmful algal blooms, or the reduction in 

human health impacts. 

Beach Clean-Up Model

Despite these complexities, our team attempted to model avoided beach cleanup costs following 

Everglades restoration and, more specifically, various reductions in the nutrient concentrations of 

the Caloosahatchee and St. Lucie estuary discharges. Our literature review revealed that the most 

consistent metric for beach clean-up costs is ―feet of beach cleaned per year‖ as indicated by 

Hoagland, et al., (2002). However, the best available data on harmful algal blooms in South 

Florida reported their impact in terms of beach closures and beach warnings (i.e., beach action 

days). As such, our team converted beach action days into linear feet of beach cleaned per year 

using county-specific data from the Florida Fish and Wildlife Conservation Commission (FWC) 

and the FWC‘s 1:4 ration of beach clean-up to beach closure/warning. We use the approach by 
Copyright 2010 Everglades Foundation and Mather Economics 105

Hoagland, et al., (2002) that assumes only about 1:4 of total beach miles is cleaned due to 

patchiness of red tide events. Next, we regressed estimated nutrient concentration reductions 

against beach action days and then we converted the marginal reduction in beach action days to 

the marginal reduction in linear feet beaches cleaned. The results of this modeling effort were not 

statistically significant, so we have excluded them from our final results table.

Public Health Model

We assembled data on shellfish poisoning as presented in Hoagland, et al., (2002), which 

reported all shellfish poisoning cases for several years in several states. We found total 

populations for those states and calculated the ratio of illness to population. We then applied this 

ratio to the counties in South Florida to find an estimated illness rate. We estimated an arbitrary 

reduction in pollution would decrease the number of these incidences and found the economic 

impact of these reductions. Our literature review shows studies of costs per poisoning, which we 

applied to our estimates.

The challenge of measuring health effects is that shellfish poisoning is largely underreported and

when it is reported it may be misdiagnosed as poisoning from other sources. Deaths from 

shellfish poisoning are very few and so far unreported in Florida. Another challenge is, again, to 

measure what the relationship between poisoning incidence and pollution levels is. Not only is 

this difficult to measure, but the source of the poisoning and the pollution may not be clear. 

Following our conservative principle, this model was not used in the final report.

We did not attempt to measure sickness due to swimming in polluted bodies of water. Individual 

characteristics and time spent in the polluted body of water are variable. Assigning a dollar value 

of sickness as a result of pollution/nutrient levels proved impossible given our assessment of the 

current state of the science and the relevant available data.

Conclusions Regarding Water Quality Impacts

To summarize, we have so far been unable to find any record or study of the expected impacts of 

Everglades restoration on nutrient loading, harmful algal blooms, beach closures and clean-ups 

or human health impacts. We were also unable to find any scientist or study willing to predict 

those marginal impacts. Because the precise impact of Everglades restoration on nutrient loading 

is still unknown – and depends in large part on the choice and implementation of various 

restoration plans – our attempts to model the secondary and tertiary economic impacts failed to 
Copyright 2010 Everglades Foundation and Mather Economics 106

produce scientifically significant results.

Fire

There is speculation that the current Everglades is more fire prone because of reduced sheet 

flow:100

The second change to the fire regime has been indirectly caused by human 

changes to the hydrologic regime. In some areas, water has been impounded, thus 

fire frequencies are decreased (Gunderson and Loftus 1993). But the larger 

management problem is where marshes have been drained either by stopping 

sheet flow or by increasing runoff in canal systems. Under these drainage 

scenarios, severe ground fires have become more common resulting in changes to 

plant communities (Gunderson and Loftus 1993, Robertson 1953, Snyder 1991). 

Wildfires under dry conditions in the 1990s have caused at least top-kill of all 

trees on many thousands of tree islands within the water conservation areas 

(Hoffman et al. 1994). Statements by several authors and policies by managing 

agencies dating as far back as the 1950s reflect concern over the perceived 

increase in frequency with which tree islands suffered severe fire due to changes 

in hydrology and fire ignition patterns (Robertson 1953, Taylor 1981). Marshes in 

urban interface areas often have shortened hydroperiods as waters are diverted for 

flood control. These same areas are often subject to increased fire ignition sources 

as accident or arson. Thus these areas often experience increased fire frequencies 

(Lockwood et al. 2003).101

The real issue is: How might one go about modeling the reduction of fire, and then, estimating 

the economic impact of fewer fires?102 According to our principle of a conservative approach to 

estimating benefits, we have decided to not include any air quality or other impacts that a 

restored Everglades might have on fire duration, intensity, or frequency. With that said, we 

suspect that a restored Everglades might likely have fewer and less severe fires. And, we know 

that fire creates negative economic impacts. Fires in the Everglades, as they do elsewhere, cause 

 

100 For a clear and detailed discussion of fire in the Everglades, see 

http://www.forestencyclopedia.net/p/p270.

101 http://www.forestencyclopedia.net/p/p270.

102 See ―Modeling the Effects of Hydrology on Fire, Vegetation Dynamics, and their Interaction in the 

Florida Everglades.‖ USGS, (October 2004): http://pubs.usgs.gov/fs/2004/3110/ for a discussion of modeling fires 

in the Everglades.
Copyright 2010 Everglades Foundation and Mather Economics 107

air quality issues via smoke, plus they stand to destroy valuable property.103

Thus, reduced fires, if they were to be a result of Everglades restoration, would count as an 

additional benefit, but one we eschew economic evaluation of at this time.

Chapter 7 References

Abbott GM, JH Landsberg, AR Reich, KA Steidinger, S Ketchen, C Blackmore. ―Resource 

Guide for Public Health Response to Harmful Algal Blooms in Florida.‖ Fish and Wildlife 

Research Institute Technical Reports, (2009). Florida Fish and Wildlife Conservation 

Commission.

KA Steidinger, JH Landsberg, CR Tomas, JW Burns. ―Harmful Algal Blooms in Florida.‖

Harmful Algal Bloom Task Force Technical Advisory Group, (1999).

Gilbert, Patricia M., and Daniel E Terlizzi. ―Concurrence of Elevated Urea Levels and 

Dinoflagellate Blooms in Temperate Estuarine Aquaculture Ponds.‖ (1999).

Stevenson, et al. ―Ecological Condition of Algae and Nutrients in Florida Springs: The Synthesis 

Report.‖ (2007).

Fleming, Lora E, Easom, Hana, Baden, Daniel, Rowan, Alan and Levin, Bonnie. ―Emerging 

Harmful Algal Blooms and Human Health: Pfiesteria and Related Organisms.‖ Dept. of 

Epidemiology and Public Health. University of Miami School of Medicine.

Habas, E.J. and Gilbert, C.K. 1974. ―The Economic Effects of the 1971 Florida Red Tide and the 

Damage it Presages for Future Occurrences.‖ Environmental Letters, 6 (1974):139-147.

Habas, E.J. and Gilbert, C.K. 1975. ―A Preliminary Investigation of the Economic Effects of the 

Red Tide of 1973-1974 of the West Coast of Florida.‖ (1975): 499-505. First Int. Conf. Toxix 

Dinoflagellate Blooms. LoCicero, V.R.[ed], Massachusetts Science and Technology Foundation, 

Wakefield, MA.

 

103 http://www.forestencyclopedia.net/p/p1769. see also 

http://www.env.gov.bc.ca/epd/bcairquality/topics/forest-fires-air-quality.html and 

http://www.nasa.gov/vision/earth/environment/central_am_fires.html.
Copyright 2010 Everglades Foundation and Mather Economics 108

Michael, Holly J., Boyle, Kevin J., and Bouchard, Roy. ―Water Quality Affects Property Prices: 

A Case Study of Selected Maine Lakes.‖ Maine Agricultural and Forest Experiment Station. 

University of Maine. (February 1996). ISSN 1070-1516.

Krysel, Charles, Boyer, Elizabeth Marsh, Parson, Charles and Welle, Patrick. ―Lakeshore 

Property Values and Water Quality: Evidence from Property Sales in the Mississippi Headwaters 

Region.‖ Mississippi Headwaters Board and Bemidji State University. (May 2003). Submitted to 

the Legislative Commission on Minnesota Resources.

Parsons, George R., Legget, Christopher, Boyle, Kevin, and Kang, Ami. ―Valuing Beach 

Closures on the Padre Island National Seashore.‖ National Oceanic and Atmospheric 

Administration Coastal Response Research Center at the University of New Hampshire and the 

National Park Sercice. (March 2008).

Beckage, B., and W. J. Platt. ―Predicting severe wildfire years in the Florida Everglades. 

Frontiers in Ecology and the Environment. 1(3), (2003): 235-239.

Cohen, A. ―Evidence of fires in the ancient Everglades and coastal swamps of southern Florida.‖

In: P.J. Gleason. Environments of South Florida: Present and Past, Memoir 2. Coral Gables, 

Florida: Miami Geological Society (1974).

Davis, S. M. and J. C. Ogden. ―Introduction.‖ In: S. M. Davis and J. C. Ogden. Everglades: The 

Ecosystem and Its Restoration. Delray Beach, Florida: St. Lucie Press (1994): 3-8.

Deuver, M.J., J.F. Meeder, L.C. Meeder, and J.M. McCollom. 1994. ―The climate of South 

Florida and its role in shaping the Everglades ecosystem.‖ In: S. M. Davis and J. C. Ogden. 

Everglades: The Ecosystem and Its Restoration, Delray Beach, Florida: St. Lucie Press (1994):

225-248.

FNAI. ―Guide to the Natural Communities of Florida.‖ FNAI and FDNR, Tallahassee, Florida

(1990).

Gunderson and Loftus. 1993. ―The Everglades.‖ In: W. H. Martin, S. G. Boyce, and A. C. 

Echternacht. Biodiversity of the Southeastern United States: Lowland Terrestrial Communities,

New York: John Wiley and Sons, (1993): 199-255.

Hoffman, W., G. Bancroft and R. Sawicki. 1994. ―Foraging habitat of wading birds in the Water 
Copyright 2010 Everglades Foundation and Mather Economics 109

Conservation Areas of the Everglades.‖ In: S. M. Davis and J. C. Ogden. Everglades: The 

Ecosystem and Its Restoration, Delray Beach, Florida: St. Lucie Press, (1994): 585-614.

Lockwood, J. L., M.S. Ross, and J.P. Sah. ―Smoke on the water: the interplay of fire and water 

flow on Everglades Restoration.‖ Frontiers Ecol. Environ, 1(9), (2003): 462-468.

Robertson, W. B. Jr. ―A Survey of the Effects of Fire in Everglades National Park.‖ Homestead, 

Florida: Everglades National Park (1953).

Snyder, J. R. ―Fire regimes in subtropical South Florida.‖ In: Proceedings of the 17th Tall 

Timbers Fire Ecology Conference 17 (1991): 303-319.

Taylor, D. ―Fire history and fire records for Everglades National Park 1948-1979.‖ South Florida 

Research Center Report T-619. Homestead, Florida (1981).
Copyright 2010 Everglades Foundation and Mather Economics 110

Chapter 8: Impact On Job Creation And Earnings

Restoration of the Everglades through the implementation of CERP will impact jobs in the State 

of Florida. Changes to the different ecosystem services in the Everglades will impact the number 

of jobs in a variety of industries and the economic activity that restoration will generate. 

It is very important to understand that jobs are not an additional benefit above and beyond the 

present value calculations we have already presented. Instead, they are an alternative way of 

representing the overall change that is likely to be forthcoming from restoration. Economists 

often speak of a circular flow of economic activity where firms purchase inputs (land, labor, 

capital, and the like) from households in order to engage production. As compensation for the 

release of these inputs, households are paid income (sometimes broken into finer gradients called 

wages, interest, rents, and profit). Firms then sell the outputs made from the inputs to households 

in exchange for money. According to this logical truism, one may count the sales of the goods 

and services as one measure of the output of the firms, but one might also count the value of the 

inputs consumed. They have to be equal by the accounting identity. Jobs then are a loose or 

casual way of talking about the extent of economic activity. Most academic economists would 

prefer to discuss the sales of the output of the firms rather than the jobs used in production, but 

for some reason or another, policy makers, pundits, and politicians seem to prefer the jobs 

numbers approach. For sure, jobs are easier to calculate and perhaps easier for lay people to 

appreciate. Our point here is to respond to that latter audience, but it would be a big mistake for 

anyone to interpret our discussion here as additive. The jobs are not in addition to the calculated 

benefits. They are an alternative way of visualizing the impact of Everglades restoration. We 

urge the reader to be careful on this point.

While we do not expect an increase in water supply to have much, if any, direct and significant 

effect on new jobs, we do expect an improvement in water quality to directly affect jobs and 

earnings in commercial fishing, recreational fishing, and real estate (residential construction and 

real estate services). We also expect that habitat and open-space enhancements will have a direct 

impact on the number of tourists who visit Florida. An increase in tourism will positively affect 

jobs and earnings in hotels and lodging, eating and drinking establishments, transportation, retail 

trade, and entertainment. Conversely, we expect the repurposing of crop land (mostly sugar cane) 

for storm water storage and treatment facilities to have a direct and negative impact on the 
Copyright 2010 Everglades Foundation and Mather Economics 111

number of jobs and earnings in the agricultural sector. In sum, we predict Everglades restoration 

will have both positive and negative impacts on the number of jobs in the South Florida 

economy. We have designed our jobs model to account for both impact types and thus to report a 

net impact on jobs creation.

Our approach to estimating net job creation relies on an input/output model that uses data 

generated by the key components of this study (inputs) to estimate the number of incremental 

jobs and earnings as a result of CERP (outputs). We calculated outputs using jobs and earnings 

(or total economy) multipliers from different sources. Unless otherwise specified, we used total 

economic output multipliers to reflect the impact on the broader economy (direct, indirect, and 

induced jobs). In some cases, we used only direct multipliers to avoid overlap (double counting) 

among the different sectors.

As detailed below, our work shows that as a direct effect of Everglades restoration more than 

442,000 new jobs over a 50-year period will be added to the State of Florida with the highest 

number coming in the residential construction and real estate services sector. Total contribution 

to the local economy will be in excess of $17 Billion. Repurposing of mostly sugar cane crop 

land for storm water storage and treatment facilities will result in the loss of 3,724 jobs and $471

Million in earnings. 
Copyright 2010 Everglades Foundation and Mather Economics 112

Commercial Fishing

To determine the impact that an increase of commercial fishing due to a restored Everglades will 

have on jobs, we estimated the net present value (NPV) of the incremental dockside value ($ 

million) of saltwater and freshwater fish (including finfish, invertebrates, and shrimp) caught 

over a 50-year period and applied a commercial fishing jobs multiplier. 

 Input: Net present value of the incremental dockside value of commercial fisheries 

(finfish, invertebrates and shrimp) caught in a restored Everglades.

 Multipliers: Fishing producer employment multiplier equal to 15,409 jobs/$ billion 

export value104.

 Key Formulas: 

o Increase in employment (# jobs) = (NPV dockside value ($ million)/1000) * 

Producer employment multiplier (15,409 jobs/billion $ export value)

o Increase in earnings & economic activity ($ million) = NPV dockside value ($ 

million) * economic output multiplier (1.710).

 Results:

Sector Incremental Jobs 

(over 50 years)

Incremental Value 

($ millions)

Commercial Fishing 6,798 $ 754

 

104 2008 ERS Trade Multipliers, Open Model (USDA Economic Research Service – Updated November 

2009).
Copyright 2010 Everglades Foundation and Mather Economics 113

Recreational Fishing

To determine the impact of the increase of recreational fishing due to a restored Everglades on 

jobs, we estimated the incremental number of freshwater and saltwater anglers over a 40-year 

period and its inherent impact on ―fishing-related expenditures.‖ To the net present value of 

fishing related expenditures, we applied multipliers derived from Tony Fedler‘s105 report to 

estimate impact on jobs and overall economy. Fedler‘s report focuses exclusively on Florida 

residents, but we have used its results to estimate ratios that could be used for a broader group of

anglers.

 Input: Incremental saltwater and freshwater anglers and expenditures in the Everglades 

region. We used a modified (50 percent) tourist (visitor) yearly growth-rate to determine 

the increase in anglers to the region (using the 2 percent tourist growth scenario). The 

incremental number of anglers (over a growing base) due to a restored Everglades was 

multiplied by average yearly ―fishing-only‖ expenditures (to avoid overlap with 

tourism—shopping) to calculate incremental expenditures. Fishing-only expenditures 

include:

o Trip expenditure categories: guide fees; live and cut bait; ice; equipment rental; 

boat fuel; boat launch fees; boat mooring; maintenance and insurance.

o Equipment expenditure categories: Rods and reels; lines and leaders; artificial 

flies; lures and baits; hooks, swivels and sinkers; tackle boxes; creels, stringers 

and nets; minnow traps, seines and containers; electronic devices; scales knives 

and miscellaneous equipment; boats, maintenance and tow vehicles.

Fishing-related expenditures (trip and equipment) account for 66.21 percent of total 

angler expenditures in the Everglades region as calculated from Fedler‘s study. This 

rationale was applied to yearly total expenditures over a 50-year period. Expenditures 

that were not included as fishing-related expenditures include: food, drink and 

refreshments; lodging; airline transportation; other public transportation; private vehicle 

transportation; public access fees; private access fees; and heating and cooking fuels.

 

105The Economic Impact of Recreational Fishing in the Everglades Region; Prepared by Tony Fedler Ph.D. 

for the Bonefish and Tarpon Trust; December 2009.
Copyright 2010 Everglades Foundation and Mather Economics 114

 Multipliers: Employment (jobs per $ million) and earnings (not total economy to avoid 

overlap with tourism) from Tony Fedler‘s report: ―The Economic Impact of Recreational 

Fishing in the Everglades Region.‖

 Key Formulas:

o Increase in fishing-related jobs (# jobs) = NPV Incremental Freshwater and 

Saltwater Angler expenditures in the Everglades Region ($ millions) * 

Employment multiplier (17.14 jobs per $ million) * 66.21%

o Increase in earnings ($ million) = NPV Incremental Freshwater and Saltwater 

Angler expenditures in the Everglades Region ($ millions) * Earnings multiplier 

(0.524)

o NPV Incremental Freshwater and Saltwater Angler Expenditures in the 

Everglades Regions ($ millions) = NPV (1

40) (#anglers 2% change scenario * 

fishing expenditures - #anglers no change scenario * fishing expenditures))

o # anglers no change and 2% change scenarios = 50% growth rates of no change 

and 2% change scenarios in incremental tourism to the Everglades region

 Results:

Sector Incremental Jobs 

(over 50 years)

Incremental Value 

($ millions)

Recreational Fishing 36,868 $ 1,668
Copyright 2010 Everglades Foundation and Mather Economics 115

Residential Construction & Real Estate Services

Everglades restoration will have a direct impact on real estate activity – both construction and 

real estate services. As demand for real estate increases, so will direct and indirect jobs tied to 

the sector. Three types of impacts are estimated for non-residential construction and real estate 

related transactions: direct effects, indirect effects, and induced effects. Direct effects are the 

changes in the industries to which a final demand change was made. Indirect effects are the 

changes made in inter-industry purchases as they respond to the new demands of the directly 

affected industries. Induced effects typically reflect changes in spending from households as 

income increases or decreases due to the changes in production.

 Input: Incremental value (from the "Potential Value Increase based on 23 percent 

Improvement in Water Quality" scenario) and subsequent activity in residential 

construction and real estate services. Elasticity between "increase in real estate value" and 

"increase in construction activity" was set at 0.55. 

 Multipliers: Residential construction and real estate multipliers (Direct + Indirect + 

Induced) were calculated from existing jobs and earnings data.

106

Figure 8.1. Residential Construction & Real Estate Services Multiplier Calculations

New in 2005 Direct Indirect Induced Direct Indirect Induced Total

Residential construction *** $36,940,456,476 $ 12,153,937,000 $ 5,827,958,000 $ 4,315,513,000 0.329 0.158 0.117 0.604

Demand for real estate transactions *** $ 6,352,883,351 $ 46,062,000 $ 39,182,000 $ 23,749,000 0.007 0.006 0.004 0.017

New in 2005 Direct Indirect Induced Direct Indirect Induced Total

Residential construction *** $36,940,456,476 336,216 189,744 165,529 9.102 5.136 4.481 18.719

Demand for real estate transactions *** $ 6,352,883,351 45,725 20,423 11,138 7.198 3.215 1.753 12.165

*** Shimberg Center for Affordable Housing; THE IMPACT OF RESIDENTIAL REAL ESTATE
ON THE FLORIDA ECONOMY; 2005 update (Using Roll Year 2004 Property Appraiser Data)

Earnings Earnings Multiplier

Jobs Employment Multiplier (jobs per $ 1million)

 

106 Shimberg Center for Affordable Housing; THE IMPACT OF RESIDENTIAL REAL ESTATE ON 

THE FLORIDA ECONOMY; 2005 update (Using Roll Year 2004 Property Appraiser Data).
Copyright 2010 Everglades Foundation and Mather Economics 116

 Key Formulas: 

o Increase in residential construction and residential real estate employment (# jobs) 

= Potential Value Increase based on 23% Improvement in Water Quality ($ 

millions) * 0.6 * (Total construction employment multiplier + Total real estate 

services employment multiplier)

o Increase in residential construction and residential real estate economic activity $ 

million) = Potential Value Increase based on 23% Improvement in Water Quality 

($ millions) * 0.6 * (Total construction earnings multiplier + Total real estate 

services earnings multiplier)

 Results:

Sector Incremental Jobs 

(over 40 years)

Incremental Value 

($ millions)

Residential Construction & Real Estate 

Services 273,601 $ 7,319
Copyright 2010 Everglades Foundation and Mather Economics 117

Tourism

A restored Everglades will generate increased tourism activity in the region. Increased 

tourism will positively impact direct and indirect job creation. To determine the impact of 

tourism on jobs and earnings we looked at its impact on five directly and indirectly related 

sectors in all 16 counties. 

 Input: Incremental visitors and expenditures in local tourism by specific NAIC107

sector for all 16 counties:

o Hotel and lodging (NAICS code 7211)

o Eating and drinking establishments (NAICS codes 7221, 7222, 7224)

o Transportation (NAICS codes 485113 , 485119 Other Urban Transit Systems; 

485210, 485310 , 487110, 487210)

o Retail trade (NAICS codes 45211, 4451, 4452, 4453, 4461, 4481, 4482, 4512)

o Entertainment (NAICS code 71).

 Multipliers: We used total effects multipliers from the REMI II model108. We utilized 

Large Metro, Small Metro, and Rural multipliers depending on the specific county. 

Figure 8.2. portrays our county classification for the purpose of assigning multipliers.

Figure 8.2. County Classification for Tourism Specific Multipliers

County Select County Type

Broward Larger Metro

Charlotte Rural

Collier Smaler Metro

Glades Rural

Hendry Rural

Highlands Rural

Lee Smaler Metro

Martin Rural

Miami-Dade Larger Metro

Monroe Smaler Metro

Okeechobee Rural

Orange Larger Metro

Osceola Rural

Palm Beach Smaler Metro

Polk Rural

Saint Lucie Rural

 

107 QWI ONLINE LOCAL EMPLOYMENT DYNAMICS; US Census Bureau.

108 MGM2 MODEL, the University of Michigan.
Copyright 2010 Everglades Foundation and Mather Economics 118

Figure 8.3. Tourism Multipliers

Rural Smaler 

Metro

Larger 

Metro State Total Effect

Hotels And Lodging Places 35.24 33.04 30.26 27.41 1.52

Eating & Drinking 40.41 38.80 37.86 35.05 1.44

Amusement And Recreation 38.85 40.61 39.08 35.47 1.45

Local transportation 42.94 37.71 35.52 32.98 1.43

Apparel from purch mate 19.50 19.70 20.21 19.72 1.36

Sporting goods 12.50 18.48 17.70 17.11 1.42

Manufacturing 16.11 15.83 17.22 17.02 1.33

Retail Trade 44.67 37.00 34.42 31.54 1.38

Wholesale trade 18.84 18.93 18.08 16.40 1.38

Retail is average or sum of the 7 retail trade sectors

* Money Generation Model Version 2 (MGM2); University of Michigan

Sector

Total effects multipliers (Jobs/ MM sales) *

 Key Formulas: 

o Increase in employment (# jobs) = increase in lodging spend * Hotels and lodging 

multiplier + increase in eating & drinking spend * eating & drinking multiplier + 

increase in transportation spend * local transportation multiplier + increase in 

retail trade spend * retail trade multiplier + increase in entertainment spend * 

amusement and entertainment multiplier

o Increase in income ($ millions) = increase in lodging spend * Hotels and lodging 

total effect multiplier + increase in eating & drinking spend * eating & drinking 

total effect multiplier + increase in transportation spend * local transportation 

total effect multiplier + increase in retail trade spend * retail trade total effect 

multiplier + increase in entertainment spend * amusement and entertainment total 

effect multiplier

 Results:

Sector Incremental Jobs 

(over 50 years)

Incremental Value 

($ millions)

Tourism (Lodging, Eating & Drinking, 

Transportation, Retail, Entertainment) 48,552 $ 1,905
Copyright 2010 Everglades Foundation and Mather Economics 119

Agriculture

In order to retain wet-season water flows in the northern watershed instead of diverting it to sea 

and the Everglades, the CERP contemplates the purchase of land in the Everglades Agricultural 

Area (EAA) to develop storm water storage and treatment facilities. These measures to improve 

water retention south of Lake Okeechobee will have a negative impact on agricultural activity in 

the region. Some of the counties impacted by potential loss of sugar cane land are in the process 

of evaluating ways to diversify their agriculturally dependent economies.109

To determine the economic impact of expanding water storage and treatment facilities in the 

EAA, we use a dynamic simulation model of crop production, soil loss, and water retention 

developed by Marcel Aillery, et al.,

110 which addresses the potential cost of forgone agricultural 

profit. The model estimates the NPV of lost crop production over a 15-year period under various 

land acquisition scenarios (for conversion into water storage and treatment areas. (Table 8.1. 

summarizes income loss under different land acquisition scenarios.)

Figure 8.4. EAA Water Retention Scenarios – Agricultural Income Loss

 

109 The Collins Center for Public Policy has information on this adjustment. See 

http://www.collinscenter.org/.

110 Aillery, Marcel, Shoemaker, Robbin, and Caswel, Margriet. ―AGRICULTURE AND ECOSYSTEM 

RESTORATION IN SOUTH FLORIDA: ASSESSING TRADE-OFFS FROM WATER-RETENTION 

DEVELOPMENT IN THE EVERGLADES AGRICULTURAL AREA.‖
Copyright 2010 Everglades Foundation and Mather Economics 120

Scenario Land Acquisition Scenarios (Acres) Total Acres PV Income Loss ($ millions) -- 15 Years

1 STA (43,500) 43,500 $ 13.70

2 STA+RS(25,000) 68,500 $ 15.80

3 STA+RS(40,000) 83,500 $ 50.00

4 STA+RS(50,000) 93,500 $ 65.90

5 STA+RS(50,000)+FR(10,000) 103,500 $ 81.40

6 STA+RS(75,000) 118,500 $ 104.10

7 STA+RS(75,000)+FR(25,000) 143,500 $ 141.30

8 STA+RS(75,000)+FR(50,000) 168,500 $ 180.20

9 STA+RS(75,000)+FR(75,000) 193,500 $ 225.30

STA -- stormwater treatment area FR -- Floodwater retention area

RS -- Reservoir storage area

*Agriculture and Ecosystem Restoration in South Florida: Assessing Trade-Offs From Water-Retention Development 

In The Everglades Agricultural Area; Marcel Aillery, Robbin Shoemaker, and Margriet Caswell

 Input: It is estimated that under the CERP proposal, 60,000 acres of productive 

agricultural land will be repurposed for storm water storage and treatment facilities. To 

err on the conservative side, we used a scenario in which 83,500 acres of productive 

agricultural land would be repurposed (43,500 acres for storm water treatment area and 

40,000 acres for reservoir storage area).

The water-retention model estimates economic loss due to loss of sugar cane agricultural 

acreage. Sugar cane crops are estimated at 88% of total EEA crop production. Output 

results from our model are adjusted to account for all types of crops. 

 Multipliers: We used the USDA Economic Research Service ―Sugar Cane and Sugar 

Beets‖ producer employment multiplier111 (22,173 jobs/billion $ export value). To 

determine the impact on earnings we projected five-year historic weighted average yearly 

wages for NAICS code 111112 and multiplied by the number of incremental jobs. We 

utilized a multiplier of 5 for total economic impact.

 Key Formulas:

o Decrease in employment (# jobs) = NPV of Sugar Cane Agricultural Activity 

Loss ($129 million over 50 years) in 83,500-acre scenario) * Producer 

 

111 2008 ERS Trade Multipliers, Open Model (USDA Economic Research Service – Updated November 

2009).

112 QWI ONLINE LOCAL EMPLOYMENT DYNAMICS; US Census Bureau.
Copyright 2010 Everglades Foundation and Mather Economics 121

employment multiplier (22,173 jobs/billion $ export value) * 1.136 (adjust for 

total crops)

o Decrease in Earnings ($ million) = 5 * Decrease in employment (# jobs) * 

Weighted average of five-year historical yearly wages

o We converted Water Retention model 15-year NPV results to a 50-year baseline

 Results:

Sector Incremental Jobs 

(over 50 years)

Incremental Value 

($ millions)

Agriculture (3,724) $ (471)
Copyright 2010 Everglades Foundation and Mather Economics 122

Wildlife Habitat and Hunting

Variations in Wildlife Habitat and Hunting activity due to Everglades restoration will have a 

direct effect on jobs and economic activity. Since overall hunting activity will decrease, its 

impact on jobs will be negative. However, the net effect of Wildlife Habitat and Hunting on jobs 

is positive and very significant.

 Input: Incremental expenditure in direct goods and equipment for Wildlife Habitat 

and Hunting. This excludes transportation, lodging, food (except bird food and 

feeders), etc.

 Multipliers: We used total effects multipliers from the REMI II model113. We utilized 

the multipliers for sporting goods since we are mostly measuring the impact on direct 

equipment shopping. Multipliers were adjusted as needed.

 Key Formulas: 

o Increase in employment (# jobs) = NPV of Hunting Expenditures over 50

years * Sporting Goods Jobs Multiplier + NPV of Wildlife Habitat 

Expenditures over 50 years * Sporting Goods Jobs Multiplier (adjusted)

o Increase in Economic Activity ($ millions) = NPV of Hunting Expenditures 

over 50 years * Sporting Goods Economic Activity Multiplier + NPV of 

Wildlife Habitat Expenditures over 50 years * Sporting Goods Economic 

Activity Multiplier (adjusted)

 Results: 

Sector Incremental Jobs Incremental Value 

($ millions)

Wildlife Habitat & Hunting 80,569 $ 6,664

 

113MGM2 MODEL, the University of Michigan.
Copyright 2010 Everglades Foundation and Mather Economics 123

Figure 8.5. Summary of Jobs Impact Drivers and Approach

Ecosystem 

Service Industries Value Drivers Incremental Jobs Approach

Water Supply Not relevant

Water Quality

Commercial 

fishing

Lbs & value of fish 

caught (finfish, 

invertebrates & shrimp)

Apply fishing jobs multiplier (USDA 

Economic Research Service) to incremental 

dockside value projections. Use 2008 annual 

wage average to estimate yearly earnings 

increase (projecting at inflation rate). 

Calculate NPV of earnings at 2.1% discount 

rate

Recreational 

fishing

Saltwater & freshwater 

angler expenditure in the 

region

Estimates year-over-year growth in number of 

anglers in the region and determines annual 

expenditure in ―fishing related‖ goods and 

services (to avoid overlap with ―Tourism‖). 

Applies jobs and earnings multipliers from 

Fedler‘s study

Real estate

Residential construction 

& real estate services 

activity

Apply direct, indirect and induced jobs and 

earnings multiplier for residential construction 

and real estate services. Uses the "Potential 

Value Increase based on 23% Improvement in 

Water Quality" as an input. Elasticity between 

"increase in real estate value" and "increase in 

construction activity" is set at 0.55

Habitat & 

Open Space Tourism

Hotel & lodging 

expenditure

Apply direct + indirect jobs multiplier to 

projected incremental spend per sector (i.e., 

lodging, eating & drinking, transportation, 

shopping, entertainment). Multiply jobs by 

average (2011) yearly wages to determine 

total earnings

Eating & Drinking 

expenditure

Transportation 

expenditure

Shopping expenditure

Entertainment 

expenditure

Other Agriculture

Agricultural acreage 

repurposed for storm 

water storage & 

treatment 

Use the Aillery, Shoemaker & Caswell waterretention model to estimate the NPV of lost 

sugar cane income (88% of crops in EAA) 

under proposed land acquisition program. Use 

USDA sugar cane multiplier to estimate the 

number of lost jobs. Use average 2008 annual 

wage as base to estimate lost job earnings. 

The model also uses an 1.136 multiplier to 

adjust for other kinds of crops (other than 

sugar cane) and possibility of purchasing 

further croplands for stormwater storage

Hunting Baseline jobs not available due to low number of current jobs with 
Copyright 2010 Everglades Foundation and Mather Economics 124

unemployment

Figure 8.6. Summary of Jobs Impact Results

Sector Incremental Jobs Incremental Value 

($ millions)

Commercial Fishing 6,798 $ 754 

Recreational Fishing 36,868 $ 1,668 

Residential Construction & Real Estate 

Services 273,601 $ 7,319 

Tourism (Lodging, Eating & Drinking, 

Transportation, Retail, Entertainment) 48,552 $ 1,905 

Agriculture (3,724) $ (471)

Wildlife Habitat & Hunting 80,569 $ 6,664 

TOTAL 442,664 $ 17,840 

Direct Jobs Created as a Result of Restoration Construction

In addition to the jobs created by the impacts restoration, there will be jobs created to do the 

actual work of restoration. The Corps of Engineers estimates that there will be approximately 

22,000 jobs created in the construction projects detailed below in Table 8.7 as reported in 

Kopecky (2010). Table 8.7 is reproduced, unaltered, from that report.

Table 8.7. Direct Job Creation as a Result of Construction, COE Estimates114

Appropriation requests were run through IMPLAN (Minnesota IMPLAN Group) software. 

This is an input-output analysis that attempts to project employment, output and 

earnings for a given change or event in the economy’s activity. This model is typically 

set up to run at regional levels, but contains a National function as well and this is what 

was analyzed. There are three types of effects

 Direct effects take place only for the industry immediately affected: 

 

114 See Kopecky (2010) which is reproduced here exactly.
Copyright 2010 Everglades Foundation and Mather Economics 125

 Indirect effects concern inter-industry affects 

 Induced effects measure the effects of the changes in household income. These 

changes effect the related industries employment.

The category of construction used was Sector 36 (Construction of other new nonresidential). This is the closest to our construction technique. 

South Florida Water Management District

Job Creation in Everglades Restoration

AS RUN BY COE USING IMPLAN

February 1, 2009

Project Appropriation 

Request

Direct Indirect Induced Total

Herbert Hoover Dike 

Rehabilitation (3)

$77,000,000 645 382 510 1538

C-44 Reservoir and 

STA

$363,000,000 3042 1801 2406 7249

C-43 Reservoir (1) $473,000,000 3963 2347 3135 9446

Kissimmee River (3) $31,000,000 260 154 205 619

Picayune Strand 

/FAKA Union Pump 

Station Works and 

Road Removal

$57,000,000 478 283 378 1138

Picayune Strand 

/Merritt Canal Pump 

Station Works and 

Road Removal (3)

$52,000,000 436 258 345 1038

C-111 Spreader Canal $35,000,000 293 174 232 699

C-51/STA1E $8,000,000 67 40 53 160

L31 North Seepage 

Pilot Project (3)

$5,000,000 42 25 33 100

Seminole/Big Cypress 

(3)

$3,000,000 25 15 20 60

TOTALS(SFWMD 

PROVIDED)

$1,150,000,000 9636 5707 7623 22966
Copyright 2010 Everglades Foundation and Mather Economics 126

Chapter 9: Last Words

Diamonds and Water

Economic theory has an ageless conundrum called the diamond-water paradox. This conundrum 

ponders why diamonds, which are so unnecessary to life, are so valuable while water, so 

necessary, is so cheap. The paradox is resolved by noting that the prices of diamonds and water 

are marginal valuations to society of an additional unit of each, not the total or average value. 

The implication of this line of reasoning is profound. For instance, professional football players 

earn a much higher salary than do high school teachers, yet it is almost surely true that the value 

of high school teachers to the world exceeds the total value of football players. Marginal values 

do not reveal total values, as every economist is taught.

So it is with ecosystem services (or any other product for that matter). Accordingly, if we were to 

capture the total value of Everglades restoration, we would have to engage a more complicated 

and detailed process. Suffice to say here, our estimates are not total estimates.115 They only 

capture a portion of the total value of restoration. There is considerable consumer surplus, to use 

economic jargon, that is not captured by our methodology. Thus, our approach understates the 

total value to society of spending resources to restore the Everglades. Indeed, based on other 

studies, our gut feeling is that the true total benefits are several times larger than our marginal 

valuation estimates. 

Consider Figure 9.1. Our calculations that we report here effectively estimate the shaded area 

labeled E. There is potentially a much larger area, labeled CS, that represents economic wellbeing, or willingness to pay, which buyers or consumers of services obtain without paying for 

them. We call this consumer surplus. It is the unrequited or unpaid-for happiness that a consumer 

gets from a purchase, above and beyond the purchase price. We have not attempted to estimate 

this component of economic system services, but as the graph suggests, the area of CS can be 

substantially larger than the area of E, depending upon the price elasticity of demand for the 

particular service. As our work progresses, we will attempt to assay and estimate these 

valuations. They are important to any properly conceived analysis of economic well-being or 

welfare.

 

115 For more discussion on this point, consult http://www.ecosystemvaluation.org/market_price.htm.
Copyright 2010 Everglades Foundation and Mather Economics 127

Figure 9.1 Consumer Surplus (triangles) and Expenditures (rectangles)

Regarding the effect of Everglades restoration on jobs, from the point of view of economic wellbeing or welfare, the important consideration is not total jobs, but incremental welfare above and 

beyond the opportunity cost of time or leisure. In a way similar to consumer surplus, most 

workers are paid wages higher than the underlying value of their time. This is called economic 

rent or producer. This is measured by the triangle above the supply curve of labor. Therefore, 

while many people view jobs as an economic good, the real increase in welfare comes not from 

employment, but from wages higher than the lost alternatives of leisure or home production. We 

have not estimated these additional benefits in our analysis, but suffice to say that, like the 

uncounted consumer surplus we mention, it stands to be important and non trivial. Our omission 

of this additional welfare makes our estimate of return on investment even more conservative.

Why don‘t we attempt to measure the total change in economic welfare, the area of E plus the 

area of CS? There are two good reasons here. First, the time and research costs are substantial. In 

order to properly estimate the total economic welfare, we would have to determine not only the 

prices at which consumers bought ecosystem services, but also their willingness to pay over a 

large range of quantities. In many if not most cases, there are no data available to perform this 
Copyright 2010 Everglades Foundation and Mather Economics 128

calculation. Where it has been done, the estimates suggest that the area of consumer surplus can 

be large compared to the area of expenditure. For instance, Bin et al. estimate that the consumer 

surplus of a day at the North Carolina beach is $11-80 for day visitors and $11-$41 for overnight

visitors. Since there is no charge for visiting the beach, the ratio of consumer surplus to 

expenditure cannot be calculated.116117 Brynjolfsson, Hu and Smith say that:

Our analysis indicates that the increased product variety of online bookstores 

enhanced consumer welfare by $731 million to $1.03 billion in the year 2000, 

which is between 7 and 10 times as large as the consumer welfare gain from 

increased competition and lower prices in this market. There may also be large 

welfare gains in other SKU-intensive consumer goods such as music, movies, 

consumer electronics, and computer software and hardware.

118

What is our point here? It is actually quite simple. We have underestimated the consumer welfare 

increase associated with Everglades restoration. We are not sure by how much, but leaving aside 

all of our earlier conservative assumptions, not counting the consumer surplus associated with 

restoration stands to be substantial. So for those who might wonder about the underestimated 

costs of restoration in the CERP plan, or the ambiguity of some of the estimated benefits, rest 

assured that there are potentially large and significant benefits to consumers of restoration that 

are not being counted, and we have explained why.

Outrunning the Bear

At the outset of this evaluation, we promised to execute our assignment according to best 

practices and methods of economic science. We believe we have lived up to this promise, and we 

invite all readers to evaluate our success. It bears noting that one of the time-honored tenets of 

economic methodology, owed to Nobel Laureate Milton Friedman (and many others) is the 

concept that it takes a theory to beat a theory. In this spirit, while readers may criticize or 

 

116 Bin, Okmyung, Landry, Craig E., Ellis, Christopher L.,Vogelsong, Hans. ―Some Consumer Surplus 

Estimates for North Carolina Beaches.‖ Marine Resource Economics, Volume 20 (2005): 145–161.

117 See also Bapna, Ravi, Janks, Wolfgang, Shmueli, Galit. ―Consumer Surplus in Online Auctions.‖ Information 

Surplus in Online Auctions, 19(4), (December 2008): 400-16.

118 Brynjolfsson, Erik, Hu, Jeffrey, Smith, Michael. ―Consumer Surplus in the Digital Economy:

Estimating the Value of Increased Product Variety at Online Booksellers.‖ paper 176, Center for eBusiness @MIT, 

(November 2003): 1.
Copyright 2010 Everglades Foundation and Mather Economics 129

disagree with our assumptions and techniques here, any such complaints will fall on deaf ears 

unless a superior alternative is proposed. Put bluntly, we will not accept criticism that simply 

says, ―Your assumptions are wrong.‖ Let the critic propose adequate or superior alternatives. 

What this means in practical terms is that our work need not be perfect in order to be useful and 

acceptable. It just needs to be better than the rest. This does not mean that we believe we have 

done our job as well as it can be done. Rather, it is meant to convey that our minds are open to 

suggestions of better ways to do this project but not to simple statements that our work is wrong 

or incorrect. The Olympic Gold Medalist need not set a world record to climb to the top of the 

podium at the medal ceremony. She only need outrun the woman in second place. Of course, we 

hope that each piece of our work ―sets a world record,‖ but we will sleep soundly if our work is 

better than any other work tendered or suggested.
Copyright 2010 Everglades Foundation and Mather Economics 130

Chapter 10: Acknowledgements

We are grateful to a large number of people for their help on this project. First of all, the team at 

the Everglades Foundation, including members of the Board, were especially valuable (natural) 

resources and always available to us with advice, helpful criticism, and comments. We are also 

grateful to them for affording us the opportunity to work on this project. We appreciate the time 

and energy that so many people at various agencies, local, state, and federal took to answer our 

questions, render helpful suggestions, and point us in the right direction, including the U.S. 

Army Corps of Engineers, Jacksonville Office; Everglades National Park; the South Florida 

Water Management District; Florida Forever; Florida Earth Foundation; National Wildlife 

Foundation; Ducks Unlimited and a host of others.

Additionally, we appreciate the remarks, comments, and suggestions received in a number of 

workshops on our work, including individuals at the Army Corps of Engineers, Institute for 

Water Resources, Washington, D.C.; the Property Environment Research Center in Bozeman, 

MT.; and particularly the comments of many at the Everglades Summit in Washington, D.C., 

May, 2010. Kathryn S. Watson provided insightful remarks and opinions that helped move this 

project successfully. Of course, we alone are responsible for all errors remaining in this work.
Copyright 2010 Everglades Foundation and Mather Economics 131

Chapter 11: Mather Economics Everglades Valuation Team Biographies

Bobby McCormick, Ph.D., Principal Investigator

Professor Bobby McCormick attended Clemson University with a two-year interruption for 

military service as 1LT in the U.S. Army, graduating with a B.A. in Economics in 1972 and 

M.A. in1974. Bobby earned the Ph.D. in Economics from Texas A&M University in 1978. He 

served as Assistant Professor of Business Administration at the Graduate School of Business at 

the U. of Rochester and, beginning in 1982, was Associate and then Professor of Economics at 

Clemson. In 2000 he was named BB&T Scholar and Director of the BB&T Center for Economic 

Education at Clemson. 

Bobby has won several Clemson University teaching awards: The Prince Innovative Teacher of 

the Year (1998), the Alumni Professor of the Year (2000), the MBA Professor of the Year 

(several occasions), and the National Scholars Mentor Award (2004 and 2006).

In 2001, Bobby was the Julian Simon Research Fellow at the Property Environmental Research 

Center (PERC) in Bozeman, Montana. The following year, he was recognized as Senior Fellow 

at PERC, a position he still holds today. From 2002-2005, he was the Director of the Kinship 

Conservation Institute housed in Bozeman, MT. Starting in 2006 to the present, Bobby has been 

the Director of TEAM, a training program for environmental scientists and policy makers at 

PERC. 

Bobby has served as an associate editor of the academic journals, Journal of Corporate Finance

and the Southern Economic Journal and is a frequent reviewer of manuscripts for publication in 

a wide array of other academic journals. He consults on corporate financial affairs, litigation 

matters, and a wide range of economics-related matters. His scholarly research and extensive 

publications cover a broad spectrum of microeconomics, including the areas of antitrust, public 

choice, regulation, sports and economics, managerial and financial economics, environmental 

economics, and general microeconomic theory. 

Robert Clement, MA

Robert Clement is a consultant to a variety of businesses. Robert provides consulting in the areas 

of business strategy, business operations, project management, and antitrust economics. In 

addition, Robert has lectured at the PERC Enviropreneur Institute, Clemson University, 

Consortium of Universities for International Studies in Asolo, Italy, and the University of Notre 

Dame.
Copyright 2010 Everglades Foundation and Mather Economics 132

Robert had a 15-year career at Accenture, one of the world‘s largest technology consulting 

companies, from which he retired as a Partner in 2004. Robert‘s work at Accenture included 

consulting with several of the world‘s largest telecommunications companies. Robert has also 

participated in a number of conferences on free market environmentalism at PERC and the 

Liberty Fund.

Robert serves on the boards of PERC and The Reserve at Lake Keowee Foundation. Robert 

holds a BS in Economics and MA in Economics, both from Clemson University.

Daniel Fischer, MBA

Daniel Fischer is an executive and entrepreneur with over 20 years of international experience in 

business strategy and strategic marketing in best-in-class companies and a variety of industries.

Daniel has been a management consultant with several top-tier consulting companies including 

A.T. Kearney, Arthur D. Little and Zyman Group where he led and performed in-depth business 

strategy, branding and marketing spend effectiveness work for best-in-class clients including: 

Vodafone, EDS, Bellsouth, Dell, Alcoa Chick-fil-A, Clorox, InterContinental Hotels, Merck, 

Safeco and Colgate Palmolive.

In addition to being a consultant, Daniel was a senior executive at TLC Vision – a company that 

owns and operates over 80 Lasik eye surgery centers in the US -- where he built and managed 

the Strategic Marketing & Analytics department. 

Daniel also spent five years as an entrepreneur when he founded, managed and ran marketing 

and business development functions at Comerxia -- a company that provides US online retailers 

with a platform (i.e., technology, logistics and marketing) for international cross-border 

ecommerce. The company‘s largest single shareholder is UPS, and it was featured in TIME 

magazine as the leading solution for international ecommerce.

Daniel graduated from The Wharton School‘s Executive Education Program, holds an MBA 

from IESA and a BSEE from Simon Bolivar University and the University of Tel Aviv.

Matt Lindsay, Ph.D.

Matt Lindsay is the Managing Partner of Mather Economics LLC, an economics consultancy 

based in Atlanta, Georgia. He has worked as an applied economist for eighteen years specializing 

in pricing strategy, forecasting, market analysis, and financial modeling. 
Copyright 2010 Everglades Foundation and Mather Economics 133

Prior to founding Mather Economics, Matt worked for Arthur Andersen Business Consulting and 

United Parcel Service. Matt received a Ph.D. in Economics from the University of Georgia, an 

MA in applied Economics from Clemson University, and a BBA in Economics from the 

University of Georgia. Matt speaks frequently on the topics of applied economics at conferences, 

and he has published white papers on applied economics with a focus on using this type of 

analytical framework to increase profits, lower costs, or grow revenues within multiple industry 

contexts. Matt‘s work has led to millions of dollars of increased profits for his clients.

Reed Watson, JD MA

Reed Watson is the Director of Applied Programs and a Research Fellow at the Property and 

Environment Research Center in Bozeman, Montana. Reed is primarily interested in 

entrepreneurial environmental stewardship and the ability of markets to improve environmental 

quality. He conducts research and coordinates workshops on water markets, payments for 

ecosystem services and environmental contracting. He also directs PERC's state-wide 

educational campaign on the link between private resource ownership and environmental 

stewardship.

In addition to his role at PERC, Reed advises state and local governments, non-profits, and 

private landowners on environmental resource contracting. This consulting practice specializes 

in asset specification and measurement, payment structures, and resource valuation.

Reed holds a J.D. and M.A. in Environmental Economics from Duke University and a B.S. in 

Economics from Clemson University. 

Danielle Alderman

As an analyst at Mather Economics, Danielle is proficient in econometric modeling and STATA 

programming. Danielle earned her bachelor‘s degree from Mercer University in International 

Finance and Economics. She also attended Hong Kong Baptist University in Hong Kong, China, 

where she completed a Chinese Language and Business Cultural Studies program, and also 

studied in London, England where she completed an International Studies in Corporation and 

Business Environment program.

Kristina Catani

Kristina Catani was born and raised in Washington Township, New Jersey. She attended 

Clemson University in 2005 as a Clemson National Scholar and obtained her B.S. in Economics 

in 2009. At Clemson, she spent much of her time in Death Valley at Tiger football games and
Copyright 2010 Everglades Foundation and Mather Economics 134

served five years in various roles on Clemson‘s student government. Her college summers were 

spent studying abroad in England, Iceland, Ireland, and the Czech Republic. Kristina also spent 

a summer as an intern at The Property and Environment Research Center in Bozeman,

Montana, where she immediately fell in love with the mountains and the West. She is currently 

pursuing an M.A. in Economics from Clemson and working as a Teach for America corps 

member in Denver, Colorado.

Joanna Fister 

Joanna joined Mather Economics in 2008. She graduated with a B.A. in Economics from the 

University of Georgia. While at Mather Economics, Joanna has created survival analysis that 

demonstrates a customer‘s profitability and helped to develop strategy to retain more customers 

for her clients. She has worked with over 50 newspaper clients in optimizing their renewal 

pricing strategy for new and existing customers. She has also helped to develop revenue models 

that project fiscal year revenue which clients use as a budgetary tool.

Prior to working at Mather Economics, Joanna worked at Culpepper and Associates as a 

Research Analyst for two years. While at Culpepper and Associates, Joanna assisted in 

processing worldwide salary surveys that provided market data on compensation and employee 

benefits. Additionally, Joanna has interned for Athens-Clarke county Human and Economic 

Development Department, where she assisted in creating a housing trust fund plan.

Gabi Huber, Ph.D.

Gabi received his BSc in Economics from the University of Cluj in Romania and the Ph.D. in 

Applied Economics from Clemson University, with concentrations in industrial organization and 

labor economics. He worked in, then managed the Economic Analysis Group at the UPS 

headquarters in Atlanta, where he modeled costs and outputs in the UPS network. Gabi 

specializes in applied microeconometrics using Stata.

Exley McCormick

Exley holds the B.S. in Biomaterials Engineering and B.A. in Economics from Clemson 

University. He has extensive laboratory work while in undergraduate school. He has worked as 

guide and ranch hand in South Africa and Montana. Exley is currently Research Assistant at the 

Property Environmental Research Center in Bozeman, MT. He is past state cross-country 

champion while in high school and an avid kayaker. He is a proficient computer programmer and 

analyst in economics and engineering data.
Copyright 2010 Everglades Foundation and Mather Economics 135

Arvid Tchivzhel

An Analyst with Mather Economics LLC, Arvid has developed numerous econometric and 

financial models that have been applied to a variety of industries. Major projects include: 

predicting ticket sales in state and international lotteries, optimizing newspaper pricing and 

circulation, analyzing revenue channels for international hotels, and valuing ecosystem services. 

In addition to work with the Everglades Foundation, Arvid has conducted independent research 

within the field of environmental economics. An econometric approach successfully measured 

sensitivity of automobile sales to changes in fuel prices and informed a pragmatic discussion of 

viable future options in alternative energy. Also completed was a cost-benefit study of 

converting all university vehicles to alternative fuels, which was submitted for review to the 

Furman Sustainability Planning Council.

Prior to Mather Economics, Arvid worked with various companies in the financial services 

industry, including Waterfield Mortgage and Morgan Stanley. Arvid was born in Petrozavodsk, 

Russia, and immigrated to the United States with his family at a young age. He graduated from 

Furman University in Greenville, South Carolina, with degrees in Economics and Spanish.

Emily Wood, MA

Emily is a freelance copyeditor based in Clemson, South Carolina. She is certified in 

Proofreading Skills by the Business Writing Center and holds a B.A. and an M.A. in English 

Literature, both from Clemson University.

About Mather Economics

Mather Economics is an economics consultancy based in Atlanta, Georgia. Mather Economics 

was founded in 2002, and we work with our clients to improve their performance through 

applied economic analysis. We have worked extensively as economic consultants in multiple 

industries and to complete economic valuations of ecosystem services. In addition to our 

consulting engagements, we work with over 70 clients on a recurring basis to assist them with 

applied analytics and performance reporting. We have particular expertise at helping companies 

that have customers on a subscription or contractual relationship maximize profitability. In this 

work, our analytics focuses on balancing customer acquisition and retention with revenue so that 

each customer‘s lifetime value to the company is maximized. Mather Economics utilizes 
Copyright 2010 Everglades Foundation and Mather Economics 136

econometric modeling and other quantitative modeling approaches to support our 

recommendations, and we use extensive tracking and reporting to monitor the performance of 

our programs. For further information, please contact us at information@mathereconomics.com

or at (770) 993-4111.