National Park Service 

U.S. Department of the Interior 

Economic Values of National Park System Resources

Along the Colorado River:

A Proposal for Estimating Magnitude and Significance 

Environmental Quality Division 

1201 Oakridge Drive 

Fort Collins, Colorado 80525 

July 13, 2006 
ACKNOWLEDGEMENTS 

This report was prepared by the National Park Service Environmental Quality Division with 

substantial assistance from Dr. John Duffield of the University of Montana (cooperative 

agreement H1200040001, task J2380050112). 

i
CONTENTS

0. Introduction _____________________________________________________________ 1

1. Economic Values of National Park System Resources____________________________ 2

1.1 What Economic Values are Important? _________________________________________ 2

1.2 Why Estimate Economic Values? ______________________________________________ 3

2. Proposal for Estimating Economic Values _____________________________________ 5

2.1 Methods ___________________________________________________________________ 5

2.2 Schedule ___________________________________________________________________ 7

2.3 Budget ____________________________________________________________________ 7

3. Conclusions______________________________________________________________ 8

4. References_______________________________________________________________ 9

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Economic Values of National Park System Resources Within the Colorado

River Watershed: A Proposal for Estimating Magnitude and Significance

0. Introduction

The Colorado River Steering Committee contacted the Environmental Quality Division 

early in 2005 for assistance in estimating the economic values of National Park System 

resources along the Colorado River. These economic values are needed for purposes of 

planning and for participation in water resource allocation decisions affecting the 

operations of National Park System units along the Colorado River. These decisions also 

affect the visiting public and surrounding local economies. In April 2005, the 

Environmental Quality Division presented a proposal to the Steering Committee for 

producing these estimates. That proposal was structured in the following four phases. 

• Phase I: Produce a white paper that: 1) summarizes how different operating 

scenarios are determined along the Colorado River, 2) describes the types of 

economic values provided by National Park System resources along the river, and 3) 

presents a recommended approach to estimating relevant economic values of 

National Park System resources along the Colorado River. 

• Phase II: Conduct an analysis of existing literature and data relevant to the 

economic values of National Park System resources along the Colorado River, 

synthesize the existing literature and data to present as complete a set of economic 

values as possible for National Park System resources along the river, and identify 

data gaps that must be filled using original research techniques. 

• Phase III: Conduct original research to fill the data gaps identified in Phase II. 

• Phase IV: Integrate the information from Phase II and Phase III to 

comprehensively estimate the economic values provided by National Park System

resources along the Colorado River, relate estimated economic values to existing 

hydrologic models of the Colorado River system in order to evaluate the impact of 

alternative operating scenarios on National Park System resources, and compare the 

economic values provided by National Park System resources along the river to 

other economic values associated with the Colorado River (e.g., hydropower, water 

storage, irrigation water uses, urban water uses). 

Phase I of this project was authorized by the Steering Committee and funded by the 

Water Resources Division through a Cooperative Ecosystem Study Unit task agreement 

with the University of Montana. On October 25, 2005, principal investigator Dr. John 

Duffield presented the draft white paper to the Steering Committee for consideration. 

The white paper was then finalized on April 17, 2006. This paper summarizes that white 

paper. 

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Economic Values of National Park System Resources Within the Colorado

River Watershed: A Proposal for Estimating Magnitude and Significance

1. Economic Values of National Park System Resources 

1.1 What Economic Values are Important? 

There are many services provided by National Park System resources along the Colorado 

River. These include cultural, historical, recreational, and ecological services. A 

measure of the significance of these services to the public is their economic value. Like 

the resources they describe, economic values have different dimensions and manifest 

themselves in different ways. These economic values are broadly categorized by 

economists as welfare measures and regional impacts. These are described below. 

Welfare measures reflect the wellbeing people derive from resources. These are the 

costs and benefits that constitute a cost-benefit analysis for a regulatory action, for 

example. Welfare measures can be further broken down by their association with 

established markets. Market values are associated with resources that are traded in 

established markets. Examples of these values include power revenues from the sale of 

hydropower and the costs paid by farmers for irrigation water. Non-Market values on 

the other hand are not associated with established markets. Examples of non-market 

values include the benefits obtained from scenic views enjoyed at a national park and 

trout fishing in a river.1

 National Park System units along the Colorado River have many 

resource uses that are not allocated in established markets, and therefore have significant 

non-market values. 

Welfare measures can also be broken down by their association with the direct, on-site 

use of resources. Use values are associated with the direct, on-site use of resources by 

people. The benefits derived from camping, fishing, and wildlife viewing are examples 

of use values. Non-Use values are not associated with direct, on-site resource use. 

Rather, those values obtain from the knowledge that resources exist, or will be preserved, 

in a given state (i.e., the motives of existence and bequest).2

 Non-use values are 

particularly relevant to the management of National Park System resources given the 

mandates of the Organic Act and the Redwood amendment of the General Authorities 

Act. Those mandates establish the fundamental purposes of the National Park System as 

conserving park resources and values, and providing for their enjoyment by the public. 

The conservation of park resources and values directly relates to non-use values through 

the motives of existence and bequest. Non-Use values also relate to the public enjoyment 

of park resources and values since the public includes both people who directly 

experience parks on-site and those who enjoy them from afar. 

The other broad category of economic values, regional impacts, reflects the level of local 

economic activity that is associated with a particular resource use. For example, boaters 

on a lake purchase gas, stay at hotels, and eat at restaurants. The revenues generated by 

 

1

 While entrance fees may be charged at a national park, and anglers incur costs to fish, fees are typically not charged 

for each scenic view observed at a park or for each fish caught while fishing. 2

 The dichotomies of market vs. non-market and use vs. non-use are not mutually exclusive. 

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Economic Values of National Park System Resources Within the Colorado

River Watershed: A Proposal for Estimating Magnitude and Significance

these market transactions further reverberate through the economy in a domino effect of 

spending by supporting businesses and households. Such impacts are experienced in the 

form of jobs, sales revenues, and tax revenues. Regional impacts measure fundamentally 

different values than welfare measures. However, they are often the most visible 

indicators of economic value and reflect significant importance by local communities. 

All of these economic values (market and non-market values, use and non-use values, 

and regional impacts) are important since they describe different dimensions of the 

interaction between National Park System resources and the public. That is, it is 

important to consider all these values in order to fully understand the importance of 

National Park System resources. This importance is described below. 

1.2 Why Estimate Economic Values? 

The economic values of National Park System resources along the Colorado River should 

be estimated because of their significant implications for resource management. This 

significance is demonstrated in three ways. 

First, use values demonstrate the linkage between resource quality and local economic 

activity. Visitors are drawn to national parks because of the quality resources they offer. 

This demand is reflected in the use values derived by visitors from the direct, on-site use 

of park resources. This demand also generates visitor spending in local communities,

which yields jobs, sales revenues, and tax revenues. Those regional impacts, in turn, 

influence resource management decisions due to their salience with local communities. 

The key point in this linkage is that the quality of park resources directly affects local 

economic activity through visitor demand. Therefore, estimates of use values and 

regional impacts are both indictors of the effectiveness of resource management. 

Second, non-use values demonstrate the national significance of park resources. As 

noted above, non-use values are particularly relevant to the management of National Park 

System resources. A demonstration of that relevance is provided by an earlier study of 

non-use values in Grand Canyon National Park (Welsh et al. 1995). That study was 

conducted as part of the analysis of operating alternatives for Glen Canyon Dam in the 

1990s. Relying on that study, a National Academy of Sciences analysis compared 

economic values associated with three of the dam operation alternatives for hydropower 

revenues, recreation use values, and non-use values (National Research Council 1996). 

This study concluded that national non-use values were as much as two orders of 

magnitude greater than the associated foregone hydropower revenues (Table 1). That is, 

the non-use values swamp the foregone hydropower revenues for the alternatives 

examined, and have tremendous allocative significance in management decisions. 

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Economic Values of National Park System Resources Within the Colorado

River Watershed: A Proposal for Estimating Magnitude and Significance

Table 1 

Annual Economic Values Associated with Alternative Glen Canyon Dam 

Operations (Million Dollars) 

-----Non-Use Values----- 

Flow Alternative 

Foregone 

Hydropower 

Revenues 

Recreation 

Use Values National 

Hydropower 

Marketing 

Area 

Moderate Fluctuating 

 Flows $36.7 - $54.0 $0.4 $2,286.4 $52.2 

Low Fluctuating 

 Flows $15.1 - $44.2 $3.7 $3,375.2 $50.5 

Seasonally Adjusted

 Steady Flow $88.3 - $123.5 $4.8 $3,442.2 $81.4 

Source: National Research Council (1996)

Third, both use and non-use values indicate the significance of park resources vis-à-vis 

other resource uses. The total economic value of a resource is the sum of its use and 

non-use values. It is this total economic value for National Park System resources that is 

relevant for comparison to other values of resource use such as those for hydropower and 

irrigation. This is primarily due to the two National Park System fundamental purposes 

of resource conservation and public enjoyment. Such a comparison is important to 

establish the relative merit of National Park System concerns in Colorado River 

management decisions as they affect the economic values associated with park resources, 

the visiting public, and surrounding communities. Credible estimates of total value 

would enable park managers to fairly represent their resources where such representation 

has not been previously possible. 

The linkages of all economic values to resource management and resource quality are 

illustrated below in Figure 1. This figure indicates that resource quality affects visitor

demand and national significance, which are measured by use values and non-use values, 

respectively. Use values directly stimulate regional impacts in the form of jobs, sales 

revenue, and tax revenue. Both use and non-use values are directly relevant in a costbenefit analysis of river management alternatives vis-à-vis other resource uses such as

hydropower and irrigation. Regional impacts and cost-benefit analysis are both relevant 

inputs to water resource management decisions. The demonstration of these linkages and 

the fair representation of park resources among competing uses are not possible without 

the estimation of all economic values associated with National Park System resources. 

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Economic Values of National Park System Resources Within the Colorado

River Watershed: A Proposal for Estimating Magnitude and Significance

Figure 1: Linkages between Resource Quality, 

Economic Values, and Resource Management 

2. Proposal for Estimating Economic Values

Duffield (2006) prepared a proposal for estimating the economic values of National Park 

System resources along the Colorado River. That proposal is organized along the fourphase structure described above, and is summarized below. Since Phase I has already 

been implemented, this summary begins with the next phase to be completed, Phase II. 

2.1 Methods 

Phase II - Review existing literature and data: This phase of the project involves 

collecting all existing and available data and studies that are relevant to the estimation of

economic values for National Park System resources along the Colorado River. Much of 

the relevant economics literature has already been collected and summarized for the 

Phase I white paper. However, additional data on park visitation and dam and reservoir 

operations would be collected from the National Park Service and Bureau of 

Reclamation. That data would include management documents and technical reports. 

Additionally, relevant data and studies for resources and settings that are similar to those 

found along the Colorado River would be surveyed to identify possible value estimates 

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Economic Values of National Park System Resources Within the Colorado

River Watershed: A Proposal for Estimating Magnitude and Significance

for use in benefits transfer analyses.3 This information would then be synthesized to 

present as complete a set of economic values as possible for National Park System

resources along the Colorado River. This analysis would also identify data gaps that 

must be filled using original research techniques. 

Phase III - Conduct original research: This phase of the project involves filling the

data gaps identified in Phase II. These gaps likely would include geographic areas that 

have not been previously studied as well as those that have been studied but need 

updating. For example, Bishop, Boyle, and Welsh (1987) estimated regional impacts and 

recreation use values in the Colorado River below Glen Canyon Dam. However, that 

study is limited geographically and is also dated. 

It is proposed that original research efforts for this project be focused on the major tworeservoir and river corridor system that includes Glen Canyon National Recreation Area, 

Grand Canyon National Park, and Lake Mead National Recreation Area. This study area 

is where most of the hydropower is produced along the Colorado River, and where most 

of the water-related visitor use occurs. This study area is also significant in that it marks 

the location where the allocation of water between the upper and lower basin states of the 

Colorado River occurs. Finally, this area has national and international significance 

which is relevant to non-use values.4

This phase includes three survey efforts. First, a survey would be conducted to estimate 

recreation use values in the study area using a Random Utility Maximization model. This 

approach would require surveying within the study area as well as in other areas that are 

major substitutes to it. Major substitutes would likely include Black Canyon of the 

Gunnison National Park, Curecanti National Recreation Area, Dinosaur National 

Monument, Canyonlands National Park, and popular floating sections on the Green, 

Upper Colorado, and San Juan rivers. Survey respondents would be recruited by a 

combination of on-site visitor contacts and random digit dialing. Surveys would be 

implemented by a combination of mail and phone methods. 

The second and third survey efforts would be conducted to estimate non-use values along 

the Colorado River and on a national scale. Welsh et al. (1995) found significant 

differences between the non-use values held by people within the Glen Canyon Dam

hydropower marketing area and those held by people nationally. Therefore, a similar 

stratification is recommended for this project. For each area, a survey would be 

conducted to estimate non-use values for the study area using Conjoint Analysis. This 

approach is considered state of the art and is indorsed by the National Research Council 

(2005). These surveys would be implemented by phone or Internet-based methods, or a 

combination of the two approaches. 

All three survey efforts would involve the use of focus groups in the development of 

survey instruments, and would rely on professional survey research firms. Peer review of 

 

3

 Benefits transfer involves using economic values that have been previously estimated and reported in existing studies 

to address similar issues in other contexts. 4

 For example, Grand Canyon National Park was designated a World Heritage Site by the United Nations in 1979. 

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Economic Values of National Park System Resources Within the Colorado

River Watershed: A Proposal for Estimating Magnitude and Significance

survey instruments, sampling designs, and reports would be required. Additionally, all 

three survey efforts would require information collection review and approval by the 

Office of Management and Budget (OMB). 

Phase IV - Integrate and communicate results: This phase involves integrating the 

information from Phase II and Phase III to estimate welfare measures and regional 

impacts for National Park System resources along the Colorado River. This integration 

would relate estimated economic values to existing hydrologic models of the Colorado 

River system to evaluate the impact of alternative operating scenarios on park resources. 

In particular, a user-friendly analysis tool would be produced to enable park staff to 

calculate the changes in economic values of park resources that are associated with 

alternative operating scenarios. Finally, the results of this project would be 

communicated through two documents: 1) a technical document detailing the methods, 

data, and results of the project, and 2) a non-technical document describing the results in 

terms that are understandable and relevant for the general public. 

A much more detailed description of this proposal is given in Duffield (2006). 

2.2 Schedule 

The scheduled proposed by Duffield (2006) is presented in Table 2. That schedule 

involves a total of approximately three to three and a half years for project completion, 

depending on the time required for information collection review by OMB. For planning 

purposes, a total of seven months was initially assumed for that review. However, 

substantially more time might be required. While OMB review would impact the timing 

of Phase III and Phase IV, no such review would be required for Phase II of the project. 

Table 2. NPS Colorado River Project Timetable 

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1 Phase II (5 months) Phase III 

2 Phase III cont. (21 months) 

3 

Phase III 

cont. Phase IV (10 months) 

4 

Potential OMB delay of up to 7 months 

2.3 Budget 

The budget proposed by Duffield (2006) is presented in Table 3. This budget assumes 

that the project would continue to be implemented through the Cooperative Ecosystem 

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Economic Values of National Park System Resources Within the Colorado

River Watershed: A Proposal for Estimating Magnitude and Significance

Study Unit task agreement with the University of Montana, and incorporates a 17.5 

percent overhead rate. 

Key personnel for this task agreement would include Dr. John Duffield, Dr. David 

Patterson, and Mr. Chris Neher. Subcontracts would include peer review and survey data 

collection. These budget amounts and the scope of work in this proposal have been 

approved by the University of Montana. 

A detailed itemization of this budget is given in Duffield (2006). 

Table 3 

Proposed Project Budget 

Item Phase II Phase III Phase IV Total 

Direct Costs 

 Labor $91,111 $486,610 $220,532 $798,252 

 Travel $720 $51,452 $1,440 $53,612 

 Subcontracts $4,500 $228,000 $13,500 $246,000 

 Operations $43,000 $43,000 

 Subtotal $96,331 $809,062 $235,472 $1,140,864 

Indirect Costs $16,858 $141,586 $41,208 $199,651 

Total Costs $113,189 $950,647 $276,679 $1,340,515 

3. Conclusions 

This report summarized the white paper prepared under Phase I of the Colorado River 

Economic Values project (Duffield 2006). Economic values that are relevant to National 

Park System resources were discussed, and a rationale for estimating them was presented. 

Finally, the proposal for estimating these values by Duffield (2006) was summarized 

along with some possible alternatives to that proposal. The proposal summarized is 

rigorous, involves a principal investigator with a proven track record, and will yield 

results that are defensible and publishable for maximum credibility. Nevertheless, 

flexibility exists to accommodate the needs of potential partners. 

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Economic Values of National Park System Resources Within the Colorado

River Watershed: A Proposal for Estimating Magnitude and Significance

4. References 

Bishop, R., K. Boyle, and K. Welsh. “Glen Canyon Dam Releases and Downstream

Recreation: An Analysis of User Preferences and Economic Values.” Glen 

Canyon Environmental Studies report 27/87. Bureau of Reclamation, 

Washington, DC. 

Duffield, J. W. “Economic Values of National Park System Resources Within the 

Colorado River Watershed.” Report prepared for the National Park Service, April 

17, 2006. 

National Research Council. River Resource Management in the Grand Canyon. 

National Academy Press, Washington, DC, 1996. 

National Research Council. Valuing Ecosystem Services: Toward Better Environmental 

Decision Making. The National Academies Press, Washington, DC, 2005. 

Welsh, M. P., R. C. Bishop, M. L. Phillips, and R. M. Baumgartner. “GCES Nonuse 

Value Study.” Draft final report, prepared by RCG/Hagler Bailly, Inc., Madison, 

WI, 1995. 

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