Final Report of the 

GCMRC Socioeconomic Research Review Panel 

Report of a Workshop held 

December 2 & 3, 2009 

Phoenix, Arizona 

Review Panel: 

Joel Hamilton 

Professor Emeritus of Agricultural Economics and Statistics 

 University of Idaho, Moscow, Idaho 

Michael Hanemann 

Chancellor’s Professor of Agricultural and Resource Economics 

University of California, Berkeley, California 

John Loomis 

Professor of Agricultural and Resource Economics 

Colorado State University, Fort Collins, Colorado 

Lon Peters 

Northwest Economic Research, Inc., Portland, Oregon 

Grand Canyon Monitoring and Research Center 

February 26, 2010 
February 26, 2010 

1. Introduction 

The Grand Canyon Monitoring and Research Center convened a workshop December 2-3, 2009, 

in Phoenix to discuss socioeconomic information needs of the Grand Canyon Dam Adaptive 

Management Program (GCAMP). Attendees included some two dozen members of the Grand 

Canyon Technical Work Group representing a wide range of stakeholder and management 

organizations and agencies. Discussion was stimulated by a series of presentations by technical 

experts with research experience on Grand Canyon issues: 

• Dr. John Duffield, University of Montana, Missoula, Economic Values for National Park 

System Resources within the Colorado River Basin

• Dr. David Harpman, Bureau of Reclamation, Denver, Integrative Recreation Economics 

Tool

• Dr. Yeon-Su Kim, Northern Arizona University, Flagstaff, Assessing Impacts of the LSSF 

Experiment on Regional Recreation Economics

• Mr. David Marcus, independent consultant, Berkeley, Glen Canyon Dam Releases –

Economic Considerations

• Mr. Clayton Palmer, Western Area Power Administration, Salt Lake City, The Alchemy 

of Power Economics: Converting Watts to Dollars

• Dr. Thomas Veselka, Argonne National Laboratories, Chicago, Estimating Colorado River 

Storage Project Power Economics with the GTMax Model

• Dr. Michael Welsh, Christensen and Associates, Madison, GCES Nonuse Value Study

Four of us, designated as independent panelists were also invited to participate in the workshop: 

• Dr. Michael Hanemann, University of California, Berkeley 

• Dr. Joel Hamilton, University of Idaho (Emeritus), Moscow 

• Dr. John Loomis, Colorado State University, Fort Collins 

• Dr. Lon Peters, Northwest Economic Research Inc., Portland 

Our role as an independent panel was to recommend potential approaches, methodologies, and 

anticipated timeframes to address the identified socioeconomic needs of the GCDAMP. This 

document presents our findings and recommendations from the workshop. 

2. Impressions from Two Days in Phoenix 

The first part of the two-day workshop consisted of presentations by seven technical experts who 

had experience with socioeconomic investigations of topics related to the Grand Canyon and Glen 

Canyon Dam. Each presentation was followed by vigorous discussion among all workshop 

attendees. At the conclusion of the presentations, the workshop participants were assembled into 

four small groups to brainstorm about the socioeconomic information needs of the GCAMP. 

These brainstorming results were compiled into a list, and participants were asked to rate the 

importance of each item, and to specify whether they should be addressed in phase I or phase II of 

a research program. In the section which follows we separately address our impressions from the 

presentations and discussions and from the small groups. 

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February 26, 2010 

a. Inferences from the Presentations and Discussions

Physical and biological issues in the river corridor have been the main theme of GCAMP 

information gathering and research efforts in the past. While these investigations have been 

needed and useful (and have provided much information that is a prerequisite for economic 

analysis), the result has been that funding for actual socioeconomic research has been very 

limited. The need for more socioeconomic information to help inform tradeoff analysis by the 

GCAMP has been apparent for some time. This need has been highlighted by several studies 

including a 1999 National Research Council report, but to date there has been little follow up by 

GCAMP to fill this information need. 

A significant gap in socioeconomic information available to the GCAMP is the lack of up to date 

market, non-market and nonuse values for Grand Canyon resources. Some of the benefits of 

Grand Canyon and Glen Canyon resources are defined in or by markets, such as guided tours and 

hydropower production. However, because other uses such as fishing and white water recreation 

are not priced in a market, the use of non-market evaluation techniques is necessary to estimate 

what value these users place on their Grand Canyon experiences. In his workshop presentation 

David Harpman talked about his “Integrative Recreation Economics Tool” that computerizes the 

integration of biological and economic information to allow the user friendly estimation of 

consumers’ surplus from recreation use. Of course, use of Harpman’s tool requires up to date 

information on Grand Canyon River recreation use as input – information that is not now being 

collected in a systematic and comprehensive way for this reach of the Colorado River. 

The presentation by Yeon-Su Kim outlined her work on the regional economic impacts of the 

2000 steady-flow experiment on the river. Clearly regional employment and income impacts are 

very important to regional stakeholders even though national economic efficiency impacts are 

supposed to be the principal basis for making federal resource use decisions (U.S. Water 

Resources Council,1983). Kim noted that the regional impacts are lessened by the fact that much 

of the spending by rafters and outfitters immediately leaks out of the region to pay for items not 

produced locally. In fact several of the larger outfitters are not even based in-state, so their 

impact on the regional economy is small. Furthermore, many of the rafting-related jobs are 

seasonal and low paying. The marginal regional economic impact of any river management 

change would probably be minimal since the number of rafters is strictly controlled and over 

subscribed. Since the rafter numbers and their costs are quite fixed, we need to find out if there is 

any change in consumers’ surplus if their non-market valuations of their trip were to change as a 

result of a management shift. 

The Grand Canyon is also a national treasure, and people all over the United States attach a value 

to the continued existence of the canyon, to the possibility that they might want to visit it 

sometime, and they want to bequeath this treasure to their grandchildren. This nonuse value may 

in fact be the dominant value that people place on the Grand Canyon. In his presentation to the 

workshop, Michael Welsh talked about the results from his 1995 study of nonuse values for the 

Grand Canyon. This work was completed too late to be included in the March 1995 

Environmental Impact Statement (EIS) on the operation of Glen Canyon Dam Colorado River 

Storage Project, although Welsh’s work was cited in the final Record of Decision (ROD). 

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February 26, 2010 

There has been some controversy about estimation and use of nonuse values. However, the 

National Research Council (NRC) Committee 1996 report on River Resource Management in the 

Grand Canyon, while acknowledging the controversy about the measurement of nonuse values, 

states: 

“Although contingent valuation continues to be controversial, there is a growing body of 

evidence that supports its practical usefulness (Harpman et al., 1995). Contingent 

valuation is routinely applied with confidence to estimates of use values, and early work 

on nonuse values is encouraging.” (NRC, 1996, page 120) 

The NRC Committee notes that “nonuse values have been included in a variety of policy analyses 

for which changes in the quality or availability of natural resources are an issue.” (NRC, 1996, 

page 119) It goes on to say: 

“Whether nonuse values can be measured with sufficient accuracy to meet high scientific 

standards is a question still widely discussed among policy analysts and economists. There 

is, however, a theoretical economic framework sufficient to form a foundation for their 

use in the GCES. The literature on CVM indicates that accuracy is sufficient to make 

quantification of nonuse value useful in understanding the balance of values at stake in 

managing Glen Canyon Dam. This is particularly true given all that can be learned in the 

nonuse valuation process regarding public views of the resource issues being addressed 

under GCES. To neglect total values in favor of more narrowly defined use values would 

be to leave a major gap in the economic studies under GCES and in the Glen Canyon Dam 

EIS. This would be unjustifiable given that nonuse values can be estimated.” (NRC, 1996, 

page 120) 

With regard to the measurement of nonuse value, the NRC Committee found that: 

“The GCES nonuse value studies are one of the most comprehensive efforts to date to 

measure nonuse values and apply the results to policy decisions. The studies were subject 

to extensive scrutiny by the interests (agencies, advocacy groups) participating in GCES 

and also to intensive review by a panel of professional economists with no stake in the 

outcome of the studies.” (NRC, 1996, page 135) 

Similarly, the US General Accounting Office Assessment of the Glen Canyon EIS stated that: 

 

"The Glen Canyon Dam’s EIS nonuse value study was carried out in a manner consistent 

with contingent valuation and survey research guidance developed to produce high-quality 

contingent valuation studies. Nonuse values were estimated for the level of change 

associated with each examined alternative compared to the no-action base case. As such, 

no estimate for the level of nonuse values associated with the No-Action Flow alternative 

is provided. The study produced results that suggest that there are substantial nonuse 

values associated with each of the examined alternatives to current operations at the Glen 

Canyon Dam." (GAO, 1996, page 133) 

In short, while there is controversy regarding the use of contingent valuation in general, nonuse 

value was recognized by the National Research Council Committee as being relevant to decisions 

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February 26, 2010 

regarding the operation of Glen Canyon Dam. CV is the only method for estimating nonuse 

values in the Grand Canyon. We do not believe there are grounds for controversy regarding the 

particular implementation of CV done by Welsh. 

Budget constraints, along with a lack of enthusiasm for nonuse values on the part of the Technical 

Work Group have meant that little subsequent work on nonuse values has been done. Our 

impression from listening to the discussion at the workshop (and perhaps partly as a result of what 

people learned at the workshop) is that the TWG is now much more open to a research program 

that would estimate changes in nonuse values due to the implementation of various of 

management alternatives in the Grand Canyon and at Glen Canyon Dam. 

Apparently the National Park Service (NPS) is prepared to proceed with needed socioeconomic 

research. John Duffield’s presentation was evidence that NPS is willing to independently fund 

research, including non-market and nonuse approaches, needed to make management decisions. 

Hydropower economics was a point of contention at the workshop. We heard presentations by 

Tom Veselka, Clayton Palmer, and David Marcus. The main points of difference seemed to 

revolve around the value of Glen Canyon capacity, how changes in the operation of Glen Canyon 

Dam would affect Colorado River Storage Project (CRSP) electricity costs, and the degree to 

which actions at Glen Canyon might be mitigated by the fact that CRSP is closely integrated with 

other hydropower resources markets by the Western Area Power Administration. We comment on 

these issues below. 

b. Lessons from the small groups

Participants met in four small groups at the end of the first day of the workshop to brainstorm 

about information needs for GCAMP decision making. Each group then reported four or five of 

their top information needs or research questions to the meeting facilitation team. Further 

discussion then led to modification, merger or bifurcation of some of the questions, eventually 

resulting in list of 24 questions. Workshop participants were asked to score the questions one 

through five for their importance to GCAMP decision making (five being most important). They 

were also asked to indicate whether the issue should be addressed in phase I or phase II of a 

research program. Participants voted using radio frequency clickers linked to a computer to 

preserve anonymity. The results are presented in table 1. 

Following the voting, the group discussed both the results and the procedure for voting. 

Comments included: “the voting was too hurried to give proper time for thinking”, “several of the 

questions were similar which made it hard to vote, and “we had neither the time not information 

to consider budget realities”. Clearly, both the statements of the questions and the rank ordering 

of their importance should not be accepted as definitive. The phase I – phase II results are 

especially questionable because people did not have any information on budget realities when 

they voted. 

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In developing the recommendations which appear in the following section we chose to use this 

list of questions in the spirit in which they were originally generated – as brainstorming results. 

We took the list as a starting point to stimulate our thinking, and as a check-list to be sure we did 

not miss important subject areas. We tried to account for the overlap between several of the 

statements. We tried to account for the inherent sequential nature of some of these tasks – you 

need to collect this information before you can do that kind of study. We tried to anticipate likely 

future agency budget realities. 

3. Context for Economic Analysis 

Before we discuss recommendations, it is important to first outline some basic concepts of 

economic analysis that provide important background for our recommendations. 

a. The economic measure of value

Federal principles and guidelines state that the federal objective of water and related land 

resources planning is to contribute to the national economic development, consistent with 

protecting the environment (U.S. Water Resources Council, 1983) In addition, the principles 

and guidelines state that contributions to national economic development are increases in the net

value of the national output of goods and service, expressed in monetary units. This is a 

restatement of the conventional monetary metric of value used in economics. Economists measure 

welfare in monetary terms by its income equivalent – the change in income that is equivalent, in 

terms of its impact on a person’s welfare, to the change in question. The source of the welfare 

change could be an increase in net income, in which case the change in net income is the direct 

measure of economic value. If the welfare change is a change in the price, quality, or access to 

items that are of value to a person (regardless of whether they are marketed goods and services or 

non-marketed items), the economic value, in monetary terms, of the change in the price, quality or 

access to those items is the change in the person’s income that would have an equivalent impact 

on his or her welfare. 

In general, there are two ways to define an income equivalent, known as the willingness to pay

(WTP) measure of income equivalence and the willingness to accept (WTA) measure. Suppose the 

change generates an improvement in the person’s welfare. The WTP measure of income 

equivalence is the maximum amount of money the person would be willing to pay (i.e., the 

maximum reduction in his net income he would be willing to endure) in order to obtain the 

change rather than go without it. The WTA measure of income equivalence is the minimum 

amount of compensation (i.e., the minimum increase in his net income) he would be willing to 

accept in return for foregoing (giving up) the change. If the change is directly a change in net 

income, then there is no difference between the WTP and WTA measures of income equivalence 

– they are both equal to the change in net income. If there is some type of change other than a 

direct change in net income, then the WTP and WTA measures can be different. Based on 

existing research, a general presumption is that the WTP measure is likely to be somewhat 

smaller in absolute value than the WTA measure, but this may not always be true. More 

importantly, the federal principles and guidelines state that the WTP measure of value is to be 

used in water and related land resource planning. 

When the change involves the price, quality or access to a marketed commodity and the person 

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February 26, 2010 

whose welfare is being measured is a consumer of the affected item, the WTP and WTA are 

essentially equivalent to what is known as the change in consumer’s surplus – the change in 

consumer’s surplus is used as an approximation to both the WTP and WTA measures. When the 

people whose welfare is affected consist of both producers and consumers, the income equivalent 

of the aggregate impact on their combined welfare is referred to as change in “producers plus 

consumers surplus” – it is the sum of the change in net income for the producers and the change 

in consumers surplus (the income equivalent of their change in welfare) for the consumers. 

It is important to note that, even for a marketed item, the economic value of the item is not the 

same as its price. For example, the total price to fish or raft in the Grand Canyon National Park 

can be quite high; it can include the cost to travel the Grand Canyon area, the fee paid to a guide 

or outfitter, as well as various other costs. The total price could be, say, $350. But that does not 

necessarily measure the value to the individual from fishing or rafting at the Grand Canyon. His 

value cannot be less than the $350 price because – unless he badly miscalculated -- he would not 

have chosen to make the trip. But his value can certainly be more than the $350 price. Suppose 

that his value for the trip, as measured by WTP, is $500.1

 Then, he would have been willing to 

pay up to $500 to take the trip. But, since the price of the trip is only $350, he receives a net 

benefit amounting to $150. Suppose, for example, that it became impossible to take the trip to the 

Grand Canyon due, say, to a change in reservoir operations. He would lose a consumption 

experience which he values in monetary terms at $500 – that is his gross loss of benefit. But he 

avoids an expenditure of $350, and he is now free to spend that money on something else. His net

loss is $150, the amount by which his gross loss would have exceeded his cost – that is his 

consumer’s surplus.2 It is his “profit” as a consumer, and it can be seen as analogous to the profit 

that a firm makes.3 Because it relates in this case to the person’s enjoyment of a marketed item – 

namely, commercial rafting at the Grand Canyon– it is said to be a use value for the Grand 

Canyon. 

The above illustrates the importance of the emphasis on net as opposed to gross benefit -- net 

benefit equals gross benefit minus cost. There is also an important economic issue associated with 

the measurement of cost. The economic cost of an item is defined as the economic value of 

whatever is sacrificed or foregone in order for the item to be provided. This is not limited to the 

actual outlays required to obtain the item; it also includes what economists call the opportunity 

costs associated with the provision of the item. The opportunity cost is the value of the best

alternative that is foregone when the item is supplied. In the recreation context, the time spent 

travelling to the site may have an opportunity cost component, namely the income foregone when 

time is not spent earning money but is used instead for recreation. The opportunity cost of time is 

 

1

 It might be even higher as measured by WTA, e.g., because a trip was already “purchased” and 

was now being withheld or taken away. 

2

 The numerical values used here are made-up in order to illustrate the concept of consumer’s 

surplus. However, empirical studies of commercial rafting in the Grand Canyon demonstrate that 

commercial boaters obtain a sizeable amount of consumer surplus even after quite large 

commercial fees (Bishop, et al, 1987). 

3

 Technically, it is the WTP measure of consumer’s surplus. There is also a WTA measure of 

consumer’s surplus, when gross value is measured with the WTA measure. In practice, 

consumer’s surplus is often measured as an ordinary demand curve, in which case it approximates 

both the WTP and WTA measures of net value. 

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February 26, 2010 

regularly considered in recreation economics studies. 

By a similar logic, the fixed capital costs of currently existing power plants do not constitute a net 

economic cost to society associated with changes in operations. These fixed costs are considered 

‘sunk’ costs because the decision to build the power plant has already been taken and the plant is 

already in operation. Existing fixed costs are not an economic cost of the alternative power plants’ 

operations. But capital costs of new power plants, not currently existing but expected to be built 

in the future to make up for a reduction in hydropower generation at Glen Canyon Dam, do count 

as a real economic cost associated with a change in operations. In economic terminology, 

payments to cover the fixed capital costs of existing power plants would be considered “transfer 

payments.” Transfer payments reflect a redistribution of income from one group in society to 

another, and do not reflect a real economic cost to society. 

 

Similarly, the gross economic value of an output is not necessarily the actual revenue received 

from its sale – it is the value to the recipient of the commodity, based on what it would cost to 

receive a similar flow of service from an alternative source. Thus, if hydropower from Glen 

Canyon Dam is sold for $0.5/Kwh but the cost to supply electricity from an alternative source 

using fossil fuel, say, is $0.8/Kwh, which sets the market price in the Western power grid, the 

value of electric power generated at Glen Canyon Dam is $0.8/Kwh, not $0.5/Kwh. In economic 

parlance, the difference -- $0.3/Kwh -- is an economic transfer from the owner of Glen Canyon 

Dam to the contractors who receive power from Glen Canyon Dam. Like other transfer payments, 

it involves the redistribution of income from one group in society to another, but not a real 

economic cost to society. 

The foregoing discussion, including the distinctive economic treatment of transfer payments, 

highlights the difference between an economic analysis of costs and revenues and a financial or 

accounting analysis of costs and revenues. A financial analysis focuses on the actual revenues and 

costs accruing to a particular agent; an economic analysis focuses on the real economic costs and 

benefits to society associated with those financial flows. Therefore, a financial analysis includes 

transfer payments, while an economic analysis of the sort required by the federal principles and 

guidelines excludes them. 

b. Other Measures – Regional versus National, and Other Metrics

It is sometimes desired to analyze the economic effects of a water project not nationally but 

within a local economic region, for example the region where the project is located. It is 

sometimes desired to assess the economic effects in terms of metrics other than the income 

equivalent of the aggregate impact on welfare (i.e., producers plus consumers surplus); the other 

metrics may include impacts on employment, output, and sometimes tax revenue. It is common to 

use an input-output model for regional analyses and calculation of these other metrics. Here we 

add a note of caution about such analyses. 

While there may be a strong local interest in regional effects, it should be noted that the federal 

principles and guidelines stress the national perspective and assert the primacy of national 

economic development. Moreover, there are some substantive economic issues that arise when a 

regional analysis is conducted using input-output analysis, even if the metric employed is impact 

on local income. 

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February 26, 2010 

First, the conventional input-output models do not account for consumer’s surplus. At best, they 

account for changes in producers’ and consumers’ incomes, but they do not allow for the welfare 

effects of any changes in prices, quality or access to commodities, and they do not account for the 

income equivalent of such welfare changes (i.e., the change in consumers surplus). 

Second, when the economic analysis is conducted for a local region there is almost inevitably 

some economic leakage, defined as the difference between total sales in the region and income 

(value added) generated in the local region (Loomis and Walsh, 1997).This leakage consists of 

payments for goods and services imported into the region from outside, and income payments 

(including interest, rents, profits and taxes) by producers and consumers within the regions to 

economic actors outside the region. Given such leakage, the impact on income generated within 

the region is only a fraction of the total sales generated within the region.4

 The change in total 

regional sales without a correction for leakage is therefore not an economically meaningful 

welfare metric, although it is commonly computed in regional input-output analyses. 

Third, the conventional input-output analyses ignore substitution between economic changes 

occurring within the local region being considered and economic changes occurring elsewhere in 

the national economy. An increase in employment in the local area may cause in-migration to the 

region and a corresponding decrease in employment outside the region. Viewed from a national 

perspective, what is happening may simply be a relocation of production, employment and 

income from one region to another, rather than a net increase nationally. This is a transfer, which 

has no economic significance nationally. Similarly, a change in taxes is simply a transfer, not a 

real economic change. In fact, if there is full employment in the economy generally, the increase 

in regional employment projected by an input-output model is unlikely to be realized: it is simply 

not credible. 

In short, if it is desired to produce a regional analysis, the analysis should at least be consistent 

with sound economic practice. Leakage has to be accounted for. Offsetting economic changes 

occurring outside the region should be noted. The only meaningful monetary measure of welfare 

is income and income-equivalent measures of change in welfare. Other monetary metrics that do 

not measure this, such as changes in regional sales, are not economically meaningful, cannot 

validly be combined with income equivalent welfare measures, and should be discarded. The 

number of jobs created may be a metric of interest, but the credibility of such estimates depends 

on justifying the implied assumptions about existing unemployment. 

c. Long and Short Run Analyses

Any analyses should account for differences between the long run (LR) and the short run (SR). 

For example, the imposition of changes in operations at GCD will change the distribution of 

electricity generation in the SR, before new power plants can be built or the transmission system 

reconfigured. That is, in some periods the output of GCD will fall (rise) and the output of other 

generators will rise (fall). In the LR, changes in GCD operations may cause changes in the 

 

4

 This is less of an issue at the national level, because imports of goods and services from other 

countries and income payments to persons in other countries are a much smaller fraction of 

national value added. 

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February 26, 2010 

quantity and location of newly built generators, as well as investments in transmission. Present 

value analysis can be used to eliminate differences in cash flows of different operating regimes. 

One possibility to keep in mind is that any reductions in capacity at GCD will simply accelerate

the construction of new capacity somewhere in the area covered by the Western Electricity 

Coordinating Council (the WECC coordinates electricity service and system reliability in all or 

parts of 14 western states plus parts of Mexico and Canada), which implies that the economic cost 

of such reductions in capacity is the acceleration of the investment (e.g., moving from 2017 to 

2016), not the entire cost of the investment itself. 

d. Use value, Non-Market Value, Nonuse Value

As noted above, people who visit the Grand Canyon to sightsee or participate in outdoor 

recreation such as fishing or boating obtain a use value from their visit, which can be measured in 

monetary terms by their WTP measure of net welfare change (their consumers surplus). The 

unique nature of the Colorado River through the Grand Canyon and the presence of endangered 

species yield benefits to people who may never set foot in the Grand Canyon. These are nonuse 

values because they occur off-site, usually at homes or households. Nonuse values were also 

called “passive use values” by the U.S. District Court of Appeals (1989) in upholding the 

inclusion of option value and existence values in Department of Interior Natural Resource 

Damage Assessments. Existence values are the benefits individuals receive from the knowledge 

that the natural environment of the Colorado River and its native and endangered species are 

protected for themselves and future generations (Krutilla and Fisher, 1975; Hanemann, 1994; 

Richardson and Loomis, 2009). 

Nonuse values are also measured in monetary terms by people’s WTP for protection of the unique 

natural environment and native and endangered species of the Grand Canyon. Nonusers’ WTP 

may be paid in the form of a higher utility bill or higher taxes, as nonuse values are public goods, 

like national defense. As with other public goods, people generally pay for them through taxes. 

Regardless of whether people actually pay for their nonuse values, the satisfaction they receive 

from the knowledge that the Colorado River through the Grand Canyon is protected, along with 

the native and endangered species, is a real economic benefit to society. There does not need to be 

an actual payment (a financial cash flow) to generate an economic benefit. The benefits exist 

independent of whether an agency can capture these as increased tax revenues or increments to 

utility payments. Figure 1 illustrates the relationship between non-market value (the entire circle) 

and the primary components: (a) use values (e.g., recreation) and (b) nonuse values. 

While the relative proportions of use and nonuse values will vary from resource to resource, 

Loomis, et al.’s (2005) comparison of use values and nonuse values (see also Welsh, et al., 1995) 

in the Grand Canyon indicates that the nonuse values dominate use values in the Grand Canyon. 

In part this is due to the cap on rafting use, but in part due to the public good nature of nonuse 

values. Everyone in the U.S. (or even the world) can receive the satisfaction from knowing the 

Colorado River through the Grand Canyon and its native and T&E species are protected, without 

having to visit. 

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February 26, 2010 

Figure 1. Market and Non Market Values of the Colorado River & 

Native & T&E Species in the Grand Canyon 

Non-Market Uses 

 Use Values 

Market Uses 

 Non Use Values 

e. Relation Between Data Collection, Surveys, and Economic Analysis

Economic analysis requires data. The data used by economists often comes from a variety of 

sources. Economists often use data from published sources. For example, the regional economic 

models presented by Kim during the first day of our workshop relied heavily on published US 

government sources. 

In other cases economic analysis may rely primarily on in-house company or agency information. 

The analysis that we propose below for the hydropower system will rely significantly on Glen 

Canyon operating data and on information on the characteristics and operation of the regional 

power coordinating agencies. 

The economic analysis of recreation and of nonuse values requires a different approach. Since the 

needed data is not available from published sources or agency operating data, it must be obtained 

using surveys. The only way to measure a rafter’s willingness to pay for the rafting experience is 

to elicit that response with a well designed survey of river users. To estimate the net economic 

value of the rafting experience, one also needs estimates of what the rafters actually did pay, 

which can also come from the survey. The estimation of nonuse values also depends heavily on 

contingent valuation survey approaches. A systematic program of survey data collection must be 

an integral part of the GCMRC socioeconomic research program. 

4. Recommendations for Surveys and Studies 

The following are our recommendations for surveys and studies that should be conducted by 

GCMRC. We begin with a discussion of some of the considerations and constraints that shaped 

our recommendations. 

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February 26, 2010 

a. Considerations

Past GCMRC budgets have focused largely on biological and physical issues. While this has 

provided much useful background information, it has left little of the available resources to 

support socioeconomic studies. We realize that making major shifts in this research program 

budget will be difficult and will take time. In making our recommendations we have tried to be 

sensitive to these budget constraints, personnel constraints, and timing realities. 

Of course, the budget, personnel and timing realities will depend on the perceived urgency of the 

socioeconomic studies. It is our conclusion that the socioeconomic analyses recommended below 

are important for Grand Canyon policymaking, so we recommend that these studies be initiated as 

soon as possible, and pursued expeditiously. However we recognize that the policy making 

context could change in ways that make it more urgent to have the socioeconomic research results 

sooner. If that happens, and if that urgency is backed up by budget and personnel increases, then 

the analysis might proceed faster than shown in the timeline below. 

A socioeconomic research program will follow a logical sequence. Some things must be done 

before others. The process generally starts with problem identification, a search for existing data 

and related work, and discussions of appropriate analytical models. Often information from one 

stage of analysis serves as input to a subsequent stage. (For example, collection of data on river 

use and user spending must precede the building of an economic impact model.) Some studies 

are simply harder to do than others, and might be deferred to give GCMRC more time to acquire 

experience doing socioeconomic research, and to allow more time to plan such studies. (For 

example, studies of Grand Canyon nonuse values are inherently more complex than studies of the 

economic value of river use.) 

All work should be peer-reviewed throughout, to enhance credibility and acceptance. Allowance 

must be made in the research timeline to allow for this peer review. 

b. Hydropower

The main effect of any changes in the operation of Glen Canyon Dam will most likely be a 

change in the timing of hydropower generation during the course of the day, the week and the 

year, rather than any change in the total Kwh generated at GCD over the course of the year. But, 

because electric power has a different economic value at different times of the day, the week, and 

the year, this can translate into an economic cost. To assess the economic cost it is necessary to 

look at the real economic value of the power generated at GCD rather than the contract prices at 

which much of the power is sold. As indicated in section 3a, the GCD contract prices may involve 

economic transfers and therefore understate the economic value of this resource. 

GCD and the CRSP system are embedded in the larger western power grid (the WECC). 

Similarly, the utilities to which CRSP sells power are embedded in the WECC. Therefore, in 

principle, the market by reference to which the economic value of GCD power is determined is 

not the CRSP system but the WECC. At any point in time, it is the marginal price of electricity in 

the WECC that determines the economic value of power generated at GCD. 

As indicated in section 3a, the capital costs of existing power plants, whether in CRSP or the 

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February 26, 2010 

WECC generally, do not constitute a net economic cost to society of changes in operations. They 

are sunk costs, and they do not count as an economic cost of the existing power plants’ 

operations. As a general statement, there currently exists excess capacity in the WECC. But, to 

the extent that, at some point in the future, reductions in power generation at GCD require an 

increment in generating capacity somewhere in the WECC system, the marginal cost of this extra 

capacity would count as a real economic cost. It would not necessarily be the cost of additional 

capacity in CRSP – it would be the cost of additional capacity anywhere in the WECC system to 

which WAPA and/or WAPA contractors have access. Moreover, it would be determined by the 

capital cost associated with the cheapest alternative source of additional capacity, which could be 

based on non-fossil fuel, and could take the form of investments in the promotion of energy 

conservation (a.k.a., “negawatts”). 

We were told at the meeting in Phoenix that the existing power contracts for GCD expire in 2024. 

This creates the possibility that, when new contracts are negotiated for post-2024, it would be 

possible (and desirable) for WAPA to seek contract modifications that take into account the 

power generation impacts of any modification in GCD operations. The opportunity for contract 

adaptation should be factored into the economic assessment of the economic costs of changes in 

GCD operations for the period after 2024. 

The first step is to establish a “base case” against which various scenarios for hydroelectric 

operations can be compared. The base case, and all scenarios, must be developed in sufficient 

detail that existing modeling tools can be used to estimate economic effects. Given the nature of 

markets in the western U.S., such detail should include, at a monthly level, peak (hourly) output, 

and peak and off-peak energy output. More sophisticated analyses may require even more detail, 

e.g., hourly or even within-hour energy production in the base case and relevant scenarios. 

Although the development of a “base case” is likely to be contentious, we recommend that current 

operations be considered the “base case”, but that operations in some historical period, defined by 

a lack of environmental constraints, also be modeled, so that arguments about cumulative changes 

in equity can be considered. 

Once a base case is established, alternative scenarios for future operations must be clearly defined 

at the same level of detail (e.g., peak demand and peak and off-peak energy). Given the 

alternatives, existing models used by WAPA to optimize the operation of the integrated system of 

generation resources should be used to determine if all consequences of changed operations can 

be managed within the WAPA marketing area, or if electrical (and thus economic) “spill-over” 

effects will alter generation patterns, market prices or transmission bottlenecks elsewhere in the 

WECC system. If the effects of changed operations at Glen Canyon can be managed by WAPA 

without economically significant changes in the rest of the western U.S., then the economic 

consequences of such operations will be limited to WAPA’s customers, and the modeling effort 

limited. However, at this point there is no way to know if such changes will spill over into the 

rest of the WECC system beyond WAPA without actually checking this using a model of the 

WAPA system and checking changes at flowgates where WAPA interconnects with the rest of the 

WECC. 

We have focused so far on requirements for the analysis of the economic impacts of changes in 

GCD operation The analysis should also incorporate an assessment of the financial effects on 

individual WAPA contractors. As explained in section 3a, the analysis of financial effects tracks 

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February 26, 2010 

flows of funds, e.g., changes in WAPA’s overall revenue requirement or transfers between 

WAPA customers. Financial effects are important to those who are actually paying the bills, but 

economic effects are important from a national policy perspective. 

We recommend that WAPA’s existing power flow models be used to analyze the expected effects 

of changes in generation at Glen Canyon Dam, including effects on (a) generation (federal or nonfederal) within the WAPA system, (b) loadings on transmission lines, (c) ability to meet 

reliability criteria, and (d) spot market prices at the Palo Verde Hub. These effects should be 

estimated for a near-term year (e.g., 2012) and a long-term year (e.g., 2020), because in the longrun more changes can typically be made via investments that could mitigate any short-term 

effects. 

If WAPA’s power flow models demonstrate changes in flows at the border of WAPA’s system, or 

at interconnection points with other systems, then a more extensive modeling effort will be 

required, to check for changes in the above four indicators (generation, transmission, reliability, 

and hub prices) throughout the WECC. Again, a near-term year and a long-term year should be 

modeled. 

Any economic effects should be identified with specific parties, both inside WAPA and elsewhere 

in the WECC system. Candidates for such identification include the following: WAPA’s 

customers, end-users of WAPA’s customers, other end-users in the WECC, other producers inside 

the WAPA marketing area, and producers outside the WAPA marketing area but inside WECC. 

The power modeling effort can be spread out over time, initially focusing on the WAPA 

marketing area using existing models, while soliciting qualification statements from entities 

(vendors) that maintain power flow models of the entire WECC. If the existing models show 

effects outside the WAPA marketing area, additional analysis for the entire WECC should be 

performed. 

Because western power markets probably do not meet the definition of “perfect competition”, 

some effort should be taken to account for market imperfections. It is at least theoretically 

possible that changes in operations at Glen Canyon Dam will provide opportunities for some 

suppliers to exercise market power, at least in the short run. (Entry in the long run may eliminate 

such concerns: additional generation and transmission resources may be built.) 

To the extent that repeated analyses of power market impacts are required as part of the future 

decision-making during the extended experimentation contemplated under the Adaptive 

Management Plan, it may well be possible to ease the calculations by developing a simplified 

response-surface model, embodied in a spreadsheet, linking changes within the CRSP service area 

to impacts on prices and capacity requirements within WECC. 

In addition to the economic and financial analyses discussed above, economic impacts will also 

be of interest to policy makers. Thus, input-output models such as IMPLAN could be used to 

estimate changes in employment, income, and government tax revenues, due to changes in 

operations at Glen Canyon Dam. The relevant geographical area would be the CRSP service area. 

However, the limitations inherent in such models should be noted, and leakage must be accounted 

for. 

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February 26, 2010 

Finally, changes in generation patterns may result in changes in emissions of carbon dioxide and 

other sources of environmental consequence. Again, commercially available models are capable 

of estimating emission changes. Any solicitation of vendor qualifications should include the 

ability to model power flows, economic consequences, and environmental effects. 

USGS should first seek access to a model of the WECC system and may wish to issue an RFQ for 

providers of such access to obtain preliminary estimates of the expected cost of estimating the net 

economic effects of changes in operations at GCD.5

 It would appear that this task could be 

accomplished during the current fiscal year (FY10) if staff is available to formulate (scope) the 

problem, and to seek and evaluate responses. These estimates could then be used to establish a 

budget for FY11, for actual modeling work within the WAPA marketing area based on an RFP 

and bids from qualified firms. During FY11, information generated by the WAPA modeling 

effort would then be used to develop budgets for FY12 and beyond, once a determination is made 

about the potential geographical scope of economic effects. Table 2 summarizes these modeling 

suggestions. 

Table 2 

Date Task(s) Responsible Parties 

FY2010 Define GCD operational base case and change cases GCMRC, with cooperation 

from WAPA 

Solicit firms for WECC analysis (RFQ for 

engineering, financial, and economic analyses) 

GCMRC, with cooperation 

from WAPA 

FY2011 Model WAPA’s system with changes in GCD 

operations; check flowgates between WAPA and 

rest of WECC; establish framework for economic 

and financial analyses 

Consultant, with cooperation 

from WAPA 

FY2012 Conduct economic and financial analyses, for 

WAPA and its customers and, if necessary, WECC 

Consultant, WAPA, GCMRC 

c. Recreation

As noted above, studies of the economics of recreation are generally based on data from surveys 

of recreation users. Table 3 provides a taxonomy of the different users of the Grand Canyon, the 

providers of recreation and the economic impact areas (i.e., counties and reservations) that merit 

detailed economic study. Several of these groups have not been studied in decades, despite the 

regional and national prominence of fishing and rafting in Glen and Grand Canyons. Each row 

can be thought of as one survey that captures multiple values. Repeating surveys over time 

creates consistency of data collection over time, and allows for tests of responses to specific 

events (e.g., experimental releases, extreme weather events). In each case, the first step is to find 

out what related survey data already exists or may be collected in the near future (perhaps by state 

or other federal agencies) 

 

5

 It may be possible to utilize a non-proprietary model of the WECC system such as the SWITCH 

model recently developed at UC Berkeley. 

15
February 26, 2010 

Table 3: Economic Effects of Resource Use Proposed for Near-Term Studies 

Users Providers County/Reservation 

Incomes 

Values Attitudes 

Glen Canyon Anglers 

(FY11) 

Benefits Preferences Outfitters Impacts 

Day Use Rafters 

(FY11) 

Benefits Preferences Outfitters Impacts 

WW Rafters (FY12) Benefits Preferences Outfitters Impacts 

Diamond Creek to 

Mead (FY12) 

Benefits Preferences Enterprise Impacts 

Implementation and Economies of Scale in Recreation Surveys 

For each type of recreational user in each location a single survey will be able to provide 

information on visitor preferences, visitor benefits (i.e., net WTP or consumer surplus) and 

expenditures. This expenditure data can be used in the IMPLAN regional input-output model to 

estimate the positive economic impacts to the surrounding counties and Indian Reservations in 

terms of direct and indirect personal income and employment generated. The indirect effects 

capture the multiplier effects from subsequent rounds of spending in the surrounding region. 

Separate interviews with the guides and the tribes will be needed to obtain their expenditures 

associated with the guiding, access fees, food, and other costs. We recommend that the economic 

impact analysis use two impact areas. For consistency with past research, it would be appropriate 

to use the counties surrounding the Grand Canyon. However, since many outfitters have their 

base of operation in Nevada or Salt Lake City, it would be appropriate to show results using a 

broader multi-state economic impact area. 

FISCAL YEAR 2011 

We recommend that the Glen Canyon angler and rafting surveys begin in FY 2011, as this is a 

small geographic area with a well defined user group. The angler surveys could be done by 

partnering with Arizona Fishing and Game (AZFG). An efficient division of labor would be for 

joint design of the survey, AZFG implementation of the angler survey (as state agencies are not 

subject to federal review by OMB), and data analysis and report writing by USGS/NPS, NAU or 

contractors. The Glen Canyon rafter survey may be able to be done in conjunction with the 

planned river recreation surveys by John Duffield (Bioeconomics) as part of the NPS assessment 

of benefits of river recreation in the Colorado River watershed. The GCMRC surveys should 

build upon Bishop, et al.’s past surveys (1987) and Duffield’s (2009) to maintain consistency in 

questions over time. 

FISCAL YEAR 2012 

In FY 2012 we recommend that whitewater boaters (private and commercial) be surveyed in the 

Grand Canyon. For comparability of data and comprehensiveness of analysis, we recommend that 

the survey collect information on preferences, economic benefits to the boaters themselves, and 

their expenditures. Interviews with the outfitters will be needed to obtain the outfitters’ 

expenditures for commercial trips. The data from private boaters, commercial passengers and 

outfitters can then be analyzed to estimate use values of whitewater boaters (i.e., consumer 

16
February 26, 2010 

surplus), and the economic impacts to surrounding counties (and states) of the income and 

employment associated with whitewater rafting. Since several commercial outfitters are located 

outside of the surrounding counties we recommend that the economic impact analysis also be 

performed using surrounding states such as Nevada and Utah to more completely reflect the 

personal income and employment supported by whitewater rafting. This would be consistent with 

the west wide service area used in the hydropower analysis. The GCMRC surveys should build 

upon Bishop, et al.’s past surveys and Duffield’s to maintain consistency in questions over time. 

In addition, surveys should be initiated in the Diamond Creek to Lake Mead stretch of the 

Colorado River. This segment has been experiencing increased use, both as the last days of a 

Grand Canyon trip, but also as separate day and short overnight trips. The Hualapai Tribe uses 

this stretch for their guided trips as well, yet little is known about the recreation benefits to the 

visitors or the regional economic impact of these trips. Discussions with Hualapai Tribe and other 

outfitters to obtain information to perform a regional economic impact analysis should be a high 

priority in FY12. 

Maintaining a Monitoring Cycle and Special Use Surveys Related to Experiments 

Since the Grand Canyon Protection Act specifically mentions recreation as one resource to be 

monitored, GCMRC, NPS and AZGF, should periodically resurvey all users groups and river 

segments specified in Table 1 on a rotating cycle. Thus, once the first pass of surveys is 

completed in FY 2013, in FY 2014 it will be time to repeat the Glen Canyon anglers and day use 

boaters survey. Likewise in FY 2015 it will be appropriate to repeat the Grand Canyon 

whitewater boater and Diamond Creek-Mead surveys. 

In some cases, these surveys will serve as a baseline and allow measurement of effects of 

experimentation in Glen and Grand Canyon. However, if large experiments are planned, it would 

be important to do pre-experiment visitor surveys and post experiment visitor surveys to assess 

the economic effects of these experiments on visitor benefits and the regional economy. 

These proposed recreation use surveys address Questions B, W (part), A, O, L, G (part), C, and R 

identified at the December Socioeconomic meeting. 

d. Tribal 

Native Americans account for a significant portion of the total population most directly affected 

by GCD operations, namely residents of northeast Arizona.6

 About 85% of the most directly 

affected Indian population live on Indian Tribal reservations in that region of Arizona (NRC, 

1996, page 138). The Tribes have a variety of interests in any change in the operations of GCD. 

They claim some degree of sovereignty over portions of the river and its associated environment. 

They were the original inhabitants of this region and have strong religious and cultural 

attachments to the landscape and its fauna and flora. As the National Research Council noted: 

“In terms of cultural and historic traditions and beliefs and practices, the Native American 

peoples are the population at risk relative to dam operations.” (NRC, 1996, page 140) 

 

6

 In 1990, they accounted for 49% of the population of Coconino, Apache and Navajo counties, as 

cited by National Research Council (1996, p. 138). 

17
February 26, 2010 

In addition, in some cases (especially the Hualapai Tribe) they derive significant income from 

river-based recreational and other enterprises. However, while the Native American Tribes were 

belatedly included in the group of Grand Canyon Environmental Studies (GCES) cooperators 

convened by the BOR, their distinctive interests and the impact of dam operations on them 

received very little attention in the GCES studies. The NRC 1996 report criticized GCES for 

having been slow to incorporate the Tribes in the group of GCES cooperators. It clearly implied 

that it felt the Tribes had received inadequate consideration in the GCES process. Clearly, a 

socioeconomic research program for the GCMRC needs to recognize not only the economic

impacts but also the social impacts on the Tribes that result from changes in dam operations. The 

Tribal social impacts may suggest both opportunities and constraints that should be considered as 

changes in river operations are contemplated. 

The most effective way to accomplish this is to design and implement a survey of the Tribal 

populations. Information to be covered in this survey should include: 

• Attitudinal questions 

• Impacts of flow regimes 

Tribal representatives should be invited to participate in the development and testing of the survey 

instrument. To the extent that they may already have information on issues covered by the survey 

from their own sources, that information should be consulted in the design of the survey. For 

example, the survey could be a mail or phone survey of residents of the Tribe reservation, and 

Tribe members living off the reservation, using contact lists provided by the Tribes. 

The tribal survey will address issues O, L and R raised at the December 2009 Socio-Economics 

workshop. 

e. Nonuse Surveys 

Nonuse values were recognized by the National Research Council Committee on River Resource 

Management in the Grand Canyon as “an acknowledged dimension of comprehensive 

environmental studies.” The Committee went on to comment that “nonuse value seems 

particularly relevant in the case of the Grand Canyon because of the high aesthetic and intangible 

values attached to the region nationally and internationally and by Native American Tribes.” It 

noted: “Even so, and perhaps for this very reason, the BOR long resisted inclusion of nonuse 

values but in 1995 acceded to them as an addendum to the EIS.” This is the study by Welsh, et al. 

1995. Referring to the information in this study, the Committee stated “the information itself is 

clearly warranted as a component of GCES.” 7

 (NRC, 1996, page 28) 

It is now almost 15 years since that study was conducted. Much has changed including the 

management scenarios in the Grand Canyon and the demographics of the U.S. population, 

especially in the Four Corners Region. As recommended by the National Research Council in its 

report “Downstream”, these nonuse values are quite important to understanding the public 

 

7

 The Committee also stated that “GCES has illustrated the need for the inclusion of nonuse value 

studies in similar projects” (NRC, 1996, page 6-7). 

18
February 26, 2010 

benefits of alternative management strategies in the Grand Canyon. 

We recommend that in the upcoming fiscal year (2011) that the 1994 nonuse value study be 

reviewed and a determination made of what changes need to be made to the questionnaire. In 

conjunction with this it may be beneficial to hold a one day workshop on the conceptual basis for 

and methods for conducting nonuse value surveys in order to prepare TWG and GCMRC staff for 

this effort. The effort will require an interdisciplinary effort with hydrologists, fish biologists and 

anthropologists to obtain data on key environmental variables such as beaches, game, native and 

endangered fish, and the status of cultural resources in the Grand Canyon. The linkages between 

flow and other management actions and these resources need to be identified so that survey 

scenarios can be developed that better match current management options under consideration by 

AMWG, TWG, and GCMRC. By tying flow-related changes to the environment to the nonuse 

value survey, the incremental or marginal nonuse values can be estimated that are most useful for 

evaluating potential management actions in the Grand Canyon. 

The study and survey revision steps should be in consultation with the National Park Service’s 

nonuse value study that John Duffield is currently leading. Initial focus groups to refine the 

revised survey should occur in Fiscal Year 2011. Formal pre-tests and piloting of the survey and 

OMB clearance would be a priority in Fiscal Year 2012. Full implementation of the study should 

be scheduled and budgeted for Fiscal Year 2013. This survey should be repeated at least every 

decade or when major changes to the operation of Glen Canyon dam or major experiments are 

being considered so as to provide public input on the consequences to nonuse values of different 

management alternatives. 

The non use value surveys will address issues: T, Q, G (part), C (part), and N raised at the 

December Socio-Economics review team meeting. 

5. Implementation 

a. Staffing and Agency Costs 

• Staffing. We have mentioned staffing at various points in this report. As the GCMRC shifts 

to greater emphasis on socioeconomic studies, GCMRC staff with resource economics 

expertise will be required to conceptualize the required studies, to initiate RFPs and help 

secure study funding, and to provide study oversight. Resource economics staff will also be 

needed to help interpret study results and to outline the implications of these results for 

agency policy. Additional resource economics staff will be required to do this effectively. 

This assumes that most of the socioeconomic research will be conducted by outside 

consultants. If some of the studies were to be conducted in-house, the requirement for 

additional staff would be much greater. 

• Agency costs. In addition to the staffing needs noted above, there will be other additional 

agency costs. These will include costs for outside consultants, costs for conducting surveys, 

and perhaps other data acquisition costs. The GCMRC also needs to plan for the additional 

operating costs that will be needed if the added resource economics staff is to be effective. 

19
February 26, 2010 

b. Collaboration

As noted above, the fishing surveys should be undertaken in collaboration with Arizona Fish and 

Game. The recreation use surveys should be undertaken in cooperation with the NPS effort lead 

by Duffield, et al. Other possibilities for collaboration, especially for data collection, should be 

investigated. Possibilities include collaboration with river guide organizations and the tribes. 

c. Budgeting

The following is our suggestion for a budget timeline with our rough estimates of costs. We have 

tried to recognize budget realities, personnel limitations, and logical project sequencing. 

Depending on the perceived urgency of the socioeconomic analysis, and fund availability, it 

might be possible to accelerate the timeline. 

Fiscal Year 2010 

• Initiate RFQs for power models (consultants, perhaps NAU or other qualified entity). No 

additional budget will be required if this is done by existing staff. However, it might be 

worthwhile for GCMRC to consider enlisting some additional socio-economic expertise, 

perhaps from David Harpman or another similarly qualified expert, when developing the 

RFQs, in which case some additional funding may be required to support this activity in FY10 

Fiscal Year 2011 

• Initiate recreation surveys of Glen Canyon anglers and day-use rafters $50,000 - $100,000 

• Identify tribes for specific surveys of preferences and attitudes $5,000 

• Offer “Nonuse Values 101” to educate staff on topic $15,000 (plus participation of David 

Harpman) 

• Power modeling. Cost depends on whether there is a non-proprietary model of WECC and, if 

not, the cost of access to a proprietary model. 

Fiscal Year 2012 

• Conduct power flow studies that show the financial and economic consequences of Glen 

Canyon management alternatives on WAPA, WAPA customers and the Upper Basin Fund. 

$50,000 

• Recreation surveys continue, now covering white water users including Diamond Creek to 

Mead rafters $100,000 - $150,000 

• Prepare surveys of tribal preferences and attitudes $20,000 

• Conduct focus groups and piloting of Non Use Value survey, and initiate OMB clearance. 

($200,000). 

• Power modeling. Cost to be determined. 

Fiscal Year 2013 

• Expand power flow studies to include the financial and economic consequences of Glen 

20
February 26, 2010 

• Recreation surveys continue, repeating the coverage of Glen Canyon and day-use $150,000 

• Add tribal surveys. $60,000 

• Conduct full nonuse value survey. $500,000 

Fiscal Year 2014 

• Develop “real-time decision-making spreadsheet” ($50,000 - $100,000) 

• Recreation surveys continue, repeating coverage of white water users $150,000 

d. Policy and legal analyses

The basic question is: How will the market, non-market use and nonuse values be integrated into 

policy analysis? We recommend that DOI Office of Policy Analysis and/or DOE and/or WAPA 

develop a policy position paper on how the dollar values of market, non market and nonuse values 

will be used in the different decision making processes such as NEPA analysis, adaptive 

management and in any benefit-cost analysis. 

Resolving these questions of how market, non-market use and nonuse values should be integrated 

into Grand Canyon policy formulation would address questions X, J, F raised at the December 

Socio-Economics workshop. 

REFERENCES 

Bishop, R., K. Boyle, M. Welsh, R. Baumgartner and P. Rathburn. 1987. Glen Canyon Dam 

Releaase and Downstream Recreation. Glen Canyon Environmental Studies Report No 27/87. 

NTIS PB88-183546/AS. Springfield VA. 

Duffield, J., D. Patterson and C. Nehr. 2009. Colorado River Economics Study—Phase II, Survey 

Sampling Plan, and Draft Survey Instruments. The University of Montana, Department of 

Mathematical Statistics, University of Montana, Missoula. MT. 

Hanemann, M. 1994. Valuing the Environment Through Contingent Valuation. Journal of 

Economic Perspectives, 8(4): 19-44. 

Krutilla, J. and A. Fisher. Economics of Natural Environments. Resources for the Future, 

Washington DC. 

Loomis, J. and R. Walsh. 1997. Recreation Economic Decisions: Comparing Benefits and Costs. 

2nd Edition. Venture Press, State College, PA. 

Loomis, J., A. Douglas and D. Harpman. 2005. Recreation Use and Nonuse Values of Glen and 

Grand Canyon. Chapter 9 in The State of the Colorado River Ecosystem in the Grand Canyon. 

USGS Circular 1282. U.S. Geological Survey. 

National Research Council, 1996, National Academy of Sciences, Committee to Review the Glen 

Canyon Environmental Studies, River Resource Management in the Grand Canyon, Washington 

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February 26, 2010 

22

DC, National Academy Press. 

Richardson, L. and J. Loomis. 2009. The Total Economic Value of Threatened, Endangered and 

Rare Species: An Updated Meta- Analysis, Ecological Economics 68: 1535-1548. 

U.S. District Court of Appeals, 1989, State of Ohio vs. U.S. Department of the Interior. Case no. 

86-1575. District of Columbia, July 14. 

U. S. General Accounting Office, An Assessment of the Environmental Impact Statement on the 

Operations of the Glen Canyon Dam. GAO/RCED-97-12, October 1996. 

U.S. Water Resources Council. 1983. Economic and environmental principles for water and 

related land resources implementation studies. U.S. Government Printing Office, Washington, 

D.C. 

Welsh, M., R. Bishop, M. Phillips and R. Baumgartner. 1995. GCES Non Use Value Study. 

Hagler Bailly Consulting (now Stratus), Boulder, CO.