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UBC Theses and Dissertations

The value of outdoor recreation : a case study Eby, Philip A. 1975

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{ THE VALUE OF OUTDOOR RECREATION A CASE STUDY by P h i l i p A. Eby A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN THE SCHOOL OF COMMUNITY AND REGIONAL PLANNING We accept t h i s t hesis 3g co^ormiDSj 4o the required standard THE UNIVERSITY OF BRITISH COLUMBIA APRIL, 1975 In presenting th i s thes is in pa r t i a l fu l f i lment of the requirements for an advanced degree at the Un ivers i ty of B r i t i s h Columbia, I agree that the L ibrary sha l l make it f ree l y ava i l ab le for reference and study. I fur ther agree that permission for extensive copying of th is thes is for scho lar ly purposes may be granted by the Head of my Department or by his representat ives. It is understood that copying or pub l i ca t ion of th is thes i s for f i nanc ia l gain sha l l not be allowed without my wr i t ten permiss ion. Department of C ^ ^ ^ U ^ H ^ ! ^ cCZ<Yid? $ €^r^r>itt^, ( 3^ !^^ l-<; ?^/ The Univers i ty of B r i t i s h Columbia 2075 Wesbrook Place Vancouver, Canada V6T 1W5 Date ClAruZ a?. T H E V A L U E OF OUTDOOR R E C R E A T I O N - A C A S E STUDY ( A B S T R A C T ) R e s o u r c e p l a n n e r s a r e o f t e n c h a r g e d w i t h t h e r e s p o n s i b i l i t y o f a l l o c a t i n g r e s o u r c e s b e t w e e n c o m p e t i n g b e n e f i c i a l u s e s . W h e r e o n e o f t h e u s e s i s o u t d o o r r e c r e a t i o n , a m a j o r p r o b l e m a r i s e s i n a t t e m p t i n g t o c o m p a r e t h e b e n e f i t s o f o u t d o o r r e c r e a t i o n w i t h t h e b e n e f i t s o f a n a l t e r n a t i v e c o m -m e r c i a l u s e w h i c h g e n e r a t e s r e a d i l y m e a s u r a b l e d o l l a r b e n e f i t s . O n a m o r e g e n e r a l l e v e l , r e g i o n a l p l a n n e r s a r e o f t e n f a c e d w i t h a s i m i l a r t a s k , f o r e x a m p l e , i n s e t t i n g l a n d u s e p o l i c y a n d z o n i n g . I t i s t h e b a s i c p r e m i s e o f t h i s t h e s i s t h a t r e c r e a t i o n a l v a l u e s c a n b e m e a s u r e d , a t l e a s t i n p a r t , i n m o n e t a r y t e r m s , a n d t h a t s u c h m e a s u r e s p r o v i d e e x t r e m e l y u s e f u l a n a l y t i c a l t o o l s t o t h e p l a n n e r a n d d e c i s i o n m a k e r i n e v a l u a t i n g r e s o u r c e u s e c o n f l i c t s . T h e p u r p o s e o f t h e t h e s i s i s t o r e -v i e w a n d c r i t i c a l l y e v a l u a t e t h e v a r i o u s m e t h o d s w h i c h h a v e b e e n d e v e l o p e d f o r m e a s u r i n g o u t d o o r r e c r e a t i o n a l v a l u e , a n d t o i l l u s t r a t e t h e a p p l i c a t i o n o f t h e t e c h n i q u e t h o u g h t t o b e m o s t a p p r o p r i a t e i n a c a s e s t u d y o f t h e r e c r e a -t i o n a l v a l u e s g e n e r a t e d b y a p o r t i o n o f W e l l s G r a y P a r k i n B r i t i s h C o l u m b i a . I t i s c o n c l u d e d t h a t t h e c o n c e p t o f c o n s u m e r s u r p l u s i s t h e m o s t v a l i d m e a s u r e o f n o n - p r i c e d r e c r e a t i o n , a n d t h a t w h e r e a n e x i s t i n g r e c r e a -t i o n a l u s e i s b e i n g t h r e a t e n e d w i t h d e s t r u c t i o n , t h e a p p r o p r i a t e m e a s u r e o f c o n s u m e r s u r p l u s f o r r e s i d e n t s o f t h e r e f e r e n t a r e a i s t h e w e l f a r e l o s s t h e y w o u l d s u f f e r t h r o u g h l o s s o f t h e a r e a , a n d t h a t t h e o n l y w a y t o d e t e r m i n e s u c h v a l u e s i s b y t h e u s e o f t h e d i r e c t o r i n t e r v i e w a p p r o a c h . F u r t h e r , o p t i o n a n d p r e s e r v a t i o n v a l u e s c a n o n l y b e m e a s u r e d i n t h i s w a y . F o r n o n r e s i d e n t s , t h e a p p r o p r i a t e m e a s u r e o f u s e v a l u e i s t h e a m o u n t u s e r s w o u l d b e w i l l i n g t o p a y f o r a c c e s s . T h e a r e a c h o s e n f o r a n a l y s i s i s t h e p o r t i o n o f W e l l s G r a y P a r k w h i c h l i e s w i t h i n t h e d r a i n a g e a r e a o f t h e C l e a r w a t e r R i v e r . W e l l s G r a y P a r k i s a l o n g e s t a b l i s h e d C l a s s B p r o v i n c i a l p a r k w h o s e m a i n a t t r a c t i o n s a r e i t s w i l d e r n e s s a t m o s p h e r e , s p e c t a c u l a r w a t e r f a l l s , s c e n i c l a k e s a n d f r e e - f l o w i n g r i v e r s w h i c h p r o v i d e h i g h q u a l i t y f i s h i n g a n d b o a t i n g o p p o r t u n i -t i e s . T h e C l e a r w a t e r R i v e r h a s b e e n s t u d i e d a n d p r o p o s e d f o r f l o o d c o n t r o l a n d h y d r o e l e c t r i c p o w e r d e v e l o p m e n t a s p a r t o f a s e r i e s o f s i m i l a r p u r p o s e d a m s o n t h e U p p e r F r a s e r , M c G r e g o r , C l e a r w a t e r a n d C a r i b o o R i v e r s . I n o r d e r t o a s s e s s t h e r e c r e a t i o n a l v a l u e s w h i c h w o u l d b e l o s t t h r o u g h p o w e r d e v e l o p m e n t , a n e x t e n s i v e i n t e r v i e w a n d m a i l q u e s t i o n n a i r e s u r v e y w a s c o n d u c t e d a m o n g P a r k u s e r s . A m e a s u r e o f p r i c e e q u i v a l e n t c o n -s u m e r s u r p l u s w a s d e r i v e d f r o m B . C . r e s i d e n t s , w h i l e n o n - r e s i d e n t s w e r e a s k e d t o e s t i m a t e t h e i r p r i c e c o m p e n s a t i n g c o n s u m e r s u r p l u s . A v e r a g e d a y v a l u e s f o r v a r i o u s u s e r g r o u p s a n d p r o j e c t i o n s o f f u t u r e u s e w e r e u s e d t o g e n e r a t e a n e s t i m a t e o f t h e p r e s e n t v a l u e o f P a r k u s e u n d e r b o t h " p r e s e r v a -t i o n " a n d " d e v e l o p m e n t " c o n d i t i o n s . A s i d e f r o m t h e d i s c o v e r y o f l a r g e e c o n o m i c b e n e f i t s , t h i s r e s e a r c h h a s f o u n d a s i g n i f i c a n t d i f f e r e n c e i n t w o t y p e s o f c o m m o n l y u s e d s h a d o w p r i c e s , p r i c e e q u i v a l e n t a n d p r i c e c o m p e n s a t i n g c o n s u m e r s u r p l u s . T h e s e f i n d i n g s a r e t h o u g h t t o h a v e s i g n i f i c a n t i m p l i c a t i o n s f o r r e g i o n a l , a n d p a r t i c u l a r l y , o u t d o o r r e c r e a t i o n a l p l a n n i n g . F i r s t , i t h a s b e e n s h o w n t h e p r i c e e q u i v a l e n t m e a s u r e s o f v a l u e a r e m u c h h i g h e r t h a n p r i c e c o m p e n s a t i n g m e a s u r e s . S e c o n d , i t h a s b e e n f o u n d t h a t p e r s o n a l i n t e r v i e w s e l l i c i t f a r d i f f e r e n t v a l u e e s t i m a t e s t h a n m a i l q u e s t i o n n a i r e s . T h i r d , t h e l a r g e a b s o l u t e v a l u e o f t h e W e l l s G r a y P a r k a r e a , e v e n a t p r e s e n t u s e l e v e l s a n d u s i n g a c o n s e r v a t i v e m e t h o d o f e s t i m a t i n g v a l u e s , s h o u l d e n c o u r a g e r e -c r e a t i o n a l p l a n n e r s a n d g o v e r n m e n t s t o g i v e s e r i o u s c o n s i d e r a t i o n t o t h e p r o -v i s i o n o f a d e q u a t e r e c r e a t i o n a l a r e a s a n d f a c i l i t i e s , e v e n w h e r e t h e l a n d r e q u i r e d f o r o u t d o o r r e c r e a t i o n h a s o t h e r , c o m p e t i n g u s e s a n d v a l u e s . - i i i -Table of Contents Page Abstract i Table of Contents i i i L i s t of Tables v L i s t of Figures v i i Acknowledgements v i i i CHAPTER I INTRODUCTION 1 Hypothesis and Structure of Study 6 CHAPTER II Techniques for Evaluating Non Priced Recreation 8 Kinds of Recreational Values 8 Methods of Measuring Recreational Values 13 The Cost Approach 13 Market Value of Fish and Game Method 14 Expenditures Approach 16 Land Enhancement Measure 20 The Concept of Consumer Surplus as a Measure of Benefits 21 The Travel Cost Approach 25 The Direct or Interview Approach 32 The Measurement of Option, Preservation and Other Social Values 36 Conclusions 41 CHAPTER III THE CASE STUDY 44 Background 45 Study Purpose 52 Study Methodology 52 Present Recreational Use 55 Park User Act iv i ty Patterns and Preferences 57 Potential Recreational Use of Wells Gray Park . . . . 70 The Value of Recreation Under Preservation 72 - iv -Page Interview Results 72 Questionnaire Results 74 The Value of Future Recreational Use 80 The Development Alternative 88 CHAPTER IV CONCLUSIONS AND OBSERVATIONS 95 Literature Cited 101 Appendix A: Questionnaire and Interview Forms Used in Wells Gray Park A-1 - v -L i s t of Tables Table Page 1. Estimated 1971 Recreation Act iv i ty in the Wells Gray Park-Clearwater River Area, by Month and Vi s i to r Origin . . . . 56 2. Estimated Number of Resident Hunters and Estimated Number of Days of Hunting in Wells Gray Park (M.A. 12), 1970-71 . . . 58 3. Act iv i ty Patterns in Wells Gray Park 60 4. Ranking of Act iv i t i e s by 1971 Summer Vis i tors to the Wells Gray Park-Clearwater River Area, by Area of Origin 61 5. Questionnaire Respondents, Ranking of the Wells Gray Park-Clearwater River Area, by Area of Origin 63 6. Interviewee Ranking of the Wells Gray Park-Clearwater River Area 64 7. Incidence of Wildl i fe Sightings in the Study Area by Area of Origin 65 8. Importance of Wildl i fe Sightings to Study Area V i s i to r s , by Area of Origin 66 9. Study Area Vi s i tor s ' Intentions to Return, by Area of Origin 67 10. General Comments made by 1971 Summer Vis i tors to the Wells Gray Park-Clearwater River Area, by Area of Origin 69 11. Projected Maximum Future Recreational Use of the Wells Gray Park-Clearwater River Area, by Area of Origin, 1990 71 12. Average Recreation Values Per Day Based on Interview Responses 73 - v i Table Page 13. Average Recreation Values Per Day Based on Questionnaire Responses 75 14. Expenditures of Vis i tors to the Wells Gray Park-Clearwater River Area, 1971, by Area of Origin 79 15. 1972 Present Value Estimates, Recreational Benefits from Use of the "River Area"; Wells Gray Park-Clearwater River Area 84 16. 1972 Present Value Estimates, Recreational Benefits from Use of the "Lake Area"; Wells Gray Park-Clearwater River Area 85 17. 1972 Present Value Estimate, Recreational Benefits from Resident. Hunting, Wells Gray Park-Clearwater River , 86 18. Present Value of Primary Recreation Use, Wells Gray Park-Clearwater River Area, 1972-2031 87 19. Summary of Economic Values Under Preservation in the Wells Gray Park-Clearwater River Area 89 20. Future Recreational Capacity of the Wells Gray Park-Clearwater River Area After System E Development 91 21. Summary of Residual Present Values Under System E Develop-ment in Wells Gray Park-Clearwater River Area 93 22. Comparison of Net Economic Values, Wells Gray Park-Clearwater River Area, Under Preservation and Development . . 94 - v i i -L i s t of Figures Figure Page 1. Effect of Excluding Time Costs in the Travel Cost Approach . . 30 2. Proposed Location of System E Dams 48 3. The Wells Gray Park Study Area and Potential Campsite Areas . 51 - v i i i -Acknowledgements The author would l ike to express his sincere gratitude to the many people who have helped in the carrying out of this research. Par t i -cular thanks must go to Dr. C. Davis and Dr. W. Rees, without whose encour-agement, understanding and patience this study could not have been completed. Thanks are also due to Gary Bowden and Dr. H. Lewis, who offered both encouragement and helpful c r i t i c i sm during the preparation of this paper. Rose Ce l l a , who typed this paper, and who was equal to the task during the hectic f ina l rush, deserves a special vote of thanks. F i n a l l y , I would l ike to express my appreciation for the encour-agement and constant support of my wife Mary, who endured the seemingly endless process of research and drafting without complaint. CHAPTER I INTRODUCTION The purpose of a competitive market economy is to allocate scarce resources among competing, alternate uses in such a way as to maximize, or optimize, the welfare of both individuals and society in general. The price system is the vehicle through which this objective is reached. It i s perhaps v a l i d , though t r i t e , to state that in a perfectly functioning competitive market economy, there would be l i t t l e or no need for "extra market" forces such as urban and regional.planning to ensure that an e f f i -cient and optimal al location of resources took place. The market would automatically, through the price system, bring about optimal resource a l locat ion, and a l l land, labor and capital resources would be used in their most productive and beneficial ways. Obviously, however, the competitive market i s , at best, imperfect, and society has long recognized the need for "extra market" regulation in areas where the market f a i l s to provide resource allocations which maxi-mize social welfare. .Such cases exist where there are external i t ies , i e . : where one resource user imposes costs (or benefits) on others which i t is not forced to absorb, or internal ize . A common example of this occurs in the case of pol lut ion. In other cases, public or col lect ive goods and ser-vices exist , and cannot be e f f ic ient ly provided by ordinary market mechan-isms. Public goods exist where a l l the beneficiaries cannot easily be identif ied and charged for the service in question. National defense, - 2 -education and f i re protection are often cited as examples of public goods. Public goods are more e f f ic ient ly provided by government, and financed through general taxation. In s t i l l other cases, such as outdoor recreation and parks, goods and services have t radi t ional ly been provided free or at nominal cost to users, and while highly valued by society, monetary mea-sures of this value are not readily available. The provision of a suff icient amount of these "non marketed" goods and services, especially in cases where there are competing market uses for the resources involved, i s one of the prime functions of urban and regional planning. As resource use confl icts increase, the problem of e f f ic ient ly allocating these resources can be expected to intensify, as can the need for analyt ical tools which are adequate to the task, as noted by Puccini : Traditional planning and design methods were well able to cope with the simple single-purpose, single-resource system. Advanced planning tools , among which are the techniques of operations research, w i l l be the only means of analyzing com-plex environmental systems.1 The provision of outdoor recreational opportunities in parks or other natural environments i s an example of the problem of resolving land use confl icts where the benefits of competing uses are in non comparable terms. While the benefits of most industr ia l land and water uses such as hydroelectric power or mining can be measured in dol lar terms, the t rad i -t ional policy of providing outdoor recreation in parks free or at nominal cost prevents an equivalent economic measure of the value of park usage, D. Puccini , "Ecological Models and Environmental Studies," Water  Resources Bul le t in , Vo l . 7, No. 6, (December 1971), p. 1149. See also, F . J . Forbes and R.C. Hodges, "New Approaches to Comprehensive Planning in Canada," Water Resources Bu l le t in , Vo l . 7, No. 5, (October 1971), pp.1059-1070. The authors argue-that sophisticated analyt ical tools are required in comprehensive planning. - 3 -so that cost-benefit analysis or other direct comparisons are not readily available. Thus, while the developer can c i te monetary and employment benefits for industr ia l development, in the absense of an equivalent mea-sure of value planners must argue that the preservation of the natural environment w i l l lead to socia l benefits, including, but not restr icted to , direct usage by recreationists . The impl ic i t assumption is that a l -though recreationists make only nominal payments for the use of recrea-t ional resources, this does not imply that the values created through the provision of outdoor recreational f a c i l i t i e s are also nominal. Rather, the existence of outdoor recreational opportunities adds to the real wealth of the province, and the values created by these opportunities are no less real than the nore readily measured values of mining, agriculture, and other resource uses. The increasing frequency and intensity of resource use confl icts of this nature during the past 3 decades, and the bias which tends to occur for measurable economic benefits as opposed to intangible social benefits, has led to attempts to measure, insofar as possible, recreation-a l benefits in economic terms so that such conflicts can be resolved by the use of tradit ional cost-benefit analysis. 1 There is by now l i t t l e doubt that open space, parks and other non-market land uses generate value to society, and i t i s also generally appreciated that the ab i l i ty to monetize these values would allow for objective resolutions of land use conf l ic t s . The fundamental question is therefore whether such values can be measured in tradit ional economic fashion, and no universal concensus has been reached. Mack and Myers state: - 4 -. . . . in the absense of market mechanisms that function with sufficient breadth and depth, market prices for outdoor recreation do not serve the purpose; nor can other satisfactory dollar measures of merit be contrived. They argue that dollar measures of outdoor recreational values are not widely accepted by decision makers, and that at least some aspects of outdoor recreation are in the nature of public goods; that the value of a day's recreation is greater to society than to the user. Numerous attempts have been made to introduce recreational benefits into cost benefit analysis without monetizing these values, through the use of weighted rank scales and other elaborate techniques."^ However, such attempts present formidable problems of determining the exact re la -tionship between monetary and non-monetary costs and benefits, and thereby f a i l to provide an obj ective way of measuring the relat ive merits of non-comparable land uses. Other authors, however, have argued that outdoor recreational values can, and should, be evaluated in commensurate economic terms. Matthews and Brown state: There is no longer much question that sport fisheries generate considerable economic value. To insure that they receive appropriate consideration when competing for limited water supplies and natural environments with industries and R.P. Mack and S. Myers, "Outdoor Recreation," in Measuring the  Benefits of Government Investments. ed. by R. Dorfman. (Washington D . C : The Brookings Inst i tut ion, 1965), p.72. 3 E . J . Devine, "The Treatment of Incommensurables in Cost-Benefit Analys i s , " Land Economics, (August 1966), pp. 383-387; J . E . Brandl, "On the Treatment of Incommensurables in Cost-Benefit Analys i s , " Land Econo- mics , (November 1968), pp. 523-525; Puccini , "Ecological Models," pp.'1144-1152. - 5 -other resource users whose output t radi t ional ly has been mea-sured i n dol lars , this attributed value can and should be 4 measured in economic terms. Stoevener, Brown and others have also argued convincingly that such values can be measured in dollar terms, and have offered rebuttals to the most common arguments against monetizing recreational values. ~* Thus, a l -though there i s s t i l l no universal agreement on the topic , the des i rabi l i ty of developing monetary estimates of the value of intangible or non-priced environmental and recreational assets i s widely accepted by economists and numerous government agencies, and numerous attempts have been made to i n -troduce environmental or recreational factors into comprehensive social and economic accounting. Once environmental values are made exp l i c i t , for example, they can be readily introduced into regional and multiregional input-output models. Isard has shown that the linkage of economic and en-vironmental functions can be incorporated into an input-output framework 6 and used to evaluate different economic development policy alternatives. Leontief has reached similar conclusions."^ S. Matthews and G. Brown, Economic Evaluation of the 1967 Sport  Salmon Fisheries of V7ashington. Technical Report No. 2 (Seattle: Wash-ington Dept. of Fisheries 1970), p. 1. ^H.H. Stoevener and W.G. Brown, "Analytical Issues in Demand Analy-sis for Outdoor Recreation," Journal of Farm Economics, 49(5), (December 1967), pp. 1295-1304; M.E. Laub, "The Economic Evaluation of Non-Marketed Recreational Resources" (unpublished Ph.D. dissertation, University of Br i t i sh Columbia, 1971). 6 W. Isard, et. a l . "On the Linkage of Socio-Economic and Ecological Systems," Papers of the Regional Science Assoc., XXI, 1967. pp. 79-99. W. Leontief, "Environmental Repercussions and the Economic Struc-ture: An Input-Output Approach," in Economics of the Environment, ed. R. Dorfman and M. Dorfman, (New York: W.W. Norton and Co. 1972). pp.403-422. - 6 -Hypothesis & Structure of the Study It i s the basic premise of this thesis that recreational values can be measured, at least in part, in monetary terms, and that such measures provide extremely useful analytical tools to the planner and decision maker in evaluating resource use confl icts . The purpose of the thesis i s to re-view and c r i t i c a l l y evaluate the various methods which have been developed for measuring outdoor recreational value, and to i l lu s t r a te the application of the technique thought to be most appropriate in a case study of the re-creational values generated by a portion of Wells Gray Park in Br i t i sh Columbia. Chapter II presents a description of the kinds of value which are generated by outdoor recreational use, and evaluates the numerous techniques which have been developed to measure these values. Chapter III contains a description of the methodology which was chosen to evaluate recreational use in Wells Gray Park, and presents the findings of the study. The area chosen for analysis i s the portion of Wells Gray Park which l i e s within the drainage area of the Clearwater River. Wells Gray Park i s a long established provincial park whose main attractions are i t s wilderness atmosphere, spectacular waterfalls , scenic lakes and free flowing rivers which provide high quality f ishing and boating oppor-tuni t ies . The Clearwater River has been studied and proposed for flood control and hydroelectric power development as part of a series of similar purpose dams on the Upper Fraser, McGregor, Clearwater and Cariboo Rivers. In order to estimate the impact of this development on recrea-t iona l use, an attempt has been made to estimate the economic value of recreation in the affected area. Dollar estimates have been generated for direct recreational use of the area by an extensive mail questionnaire and personal interview program of users. Other values which do not depend on direct use of the area, but which may be s ignif icant , have been described. Chapter IV presents a summary of the findings of the case study, and discusses the significance of differences in value estimates for d i f -ferent user groups, as well as the differences obtained in the questionnaires and interviews. The results obtained i n this study are compared to the f ind-ings of other similar studies, and areas where improvements in the process of economic evaluation would prove useful are noted. Research for this thesis was conducted during 1971 while the author was employed by Pearse Bowden Economic Consultants Ltd. of Vancouver B . C . , under contract to the Ecology Committee of the Fraser River Board. - 8 -CHAPTER II TECHNIQUES FOR EVALUATING NON PRICED RECREATION It i s the basic premise of this thesis that a monetary evalua-tion of non priced recreational values provides a useful method of dealing with resource use conf l ic t s , especially where the value of one use can be supported by readily measured market values. Given the va l id i ty of this premise, which in i t s e l f has been the subject of considerable controversy, i t is appropriate to ask the follow-ing questions: 1. What kinds of value flow from the use and existence of the recreational resource? 2. How best can these values be measured? Kinds of Recreational Values The existence and use of outdoor recreational sites can generate numerous kinds of value, both to users and non-users. Following is a l i s t of the kinds of values which can be generated by outdoor recreation. 1. Use Value - The primary benefits of recreation areas accrue direct ly to users. Use of a recreation area has economic value in the same sense as the satisfaction arising from conventionally marketed goods or services. It is this value which would be measured by prices were recrea-tion marketed as a normal good. In the absense of market prices , users derive "free value", often described as consumer surplus, from their recrea-t ional a c t i v i t i e s . Most of the efforts which have been made to measure recreational values revolve around the concept of user values. - 9 -2. Secondary Value - Although recreationists do not pay direct fees for most recreation, they must spend money for t ravel , accommodation and a wide range of equipment. These expenditures may, under l imited c i r -cumstances, represent net income benefits to local and regional economies through the "multipl ier effect".. Recreationists' expenditures and their impact on local economies has often been cited as an important benefit of outdoor recreation, (see pp.18-19). 3. Land Enhancement - In many cases, recreational users who value a particular s i te highly may purchase property on or near the recrea-t ional area, thereby increasing land values. The increase in land values represents at least a par t i a l capita l izat ion of use values for such people. The increase in land values in ski areas such as Whistler, and the rapid r i se of land values in the Gulf Islands are good examples of land enhancement (see p.20). 4. Education and Research Value - The establishment of parks and natural environments i s often partly jus t i f ied by the opportunities such environments provide for education and research. The establishment . of Ecological Reserves under the B.C. Ecological Reserves Act of 1971 is an example of the desire to preserve natural environments. The Act states: And whereas i t i s considered highly desirable in the public interest to set aside and reserve areas of Crown land representative of d i s t inct ive ecosystems for present and future sc ient i f i c study.8 5. Option Value - This represents the value to non-users of the maintenance of opportunities to use a recreational s i te i n the future. Ecological Reserves Act, 1971, cited in North Island Study Group, Ts i t ika- Schoen Resources Study, Summary Report, Report to the Environment and Land Use Committee, Province of Br i t i sh Columbia, February, 1975. p.22. - 10 -Option value can also be described as the premium that a risk-averse i n d i -v i d u a l would be w i l l i n g to pay i n order to preserve the option of future use of an area, and t h i s value e x i s t s i r r e s p e c t i v e o f whether the i n d i v i -dual ever uses the area. Property insurance i s a good example of a type of option value which i s a c t u a l l y marketed. Hospitals and urban t r a n s i t systems also generate option values to people who, although they may never use e i t h e r f a c i l i t y , derive benefits from the f a c t that these f a c i l i t i e s are a v a i l a b l e i n case of need. Weisbrod has discussed the conditions necessary for the e x i s t -ence of option values, which i s a value over and above user values, or i n 9 the case of non p r i c e d goods, consumer surplus. F i r s t l y , some people must be uncertain about future demand f o r the area of good i n question. Second-l y , should the area or good i n question be eliminated, r e e s t a b l i s h i n g i t would be extremely expensive or even impossible. Damming of a uniquely b e a u t i f u l r i v e r , or the e l i m i n a t i o n of an i r r e p l a c a b l e natural environment are obvious examples of t h i s c o n d i t i o n . Weisbrod suggested that such goods are pure " c o l l e c t i v e consumption" goods, and that i t would be impossible f o r a resource owner to a c t u a l l y c o l l e c t option values i n the form of fees. This l a t t e r f a c t provides the j u s t i f i c a t i o n of p u b l i c investment i n recrea-t i o n , since the p r i v a t e market would not supply a s u f f i c i e n t l e v e l or amount of service under t h i s c o n d i t i o n . Others have questioned the v a l i d -i t y and necessity of the t h i r d c o n d i t i o n . " ^ However, t h e r e i s general agreement that for i r r e p l a c a b l e assets such as n a t i o n a l parks or unique 9 B.A. Weisbrod, "Collective-Consumptxon Services of Individual-Consumption Goods," Quarterly Journal of Economics, LXXVIII (Aug. 1964), pp.471-477. "^C.J. C i c c h e t t i and A.M. Freeman I I I , "Option Demand and Consumer Surplus: Further Comment," Quarterly Journal of Economics, (Aug. 1971), pp.528-539. - 11 -ecosystems, option values exist and may be s ignif icant . As K r u t i l l a notes, "When the existence of a grand scenic wonder or a unique and fragi le eco-system is involved, i t s preservation and continued ava i l ab i l i ty are a s ig-nif icant part of the real income of many i n d i v i d u a l s . H ^ 6. Preservation Value - This refers to the satisfaction i n d i v i -duals receive from the knowledge that a park or natural environment exists, even though the individual does not expect to see or use i t . Preservation values are not restr icted to natural environments. Many individuals con-tributed to the costs of repairing works of art damaged by the Venice flood, although many of them probably never expect to d irect ly enjoy these works of art . S imilarly, many individuals contribute to conservation funds such as the World Wildl i fe Fund and Ducks Unlimited, even though they never expect to use the wi ld l i fe being preserved, either in a consumptive or non-consumptive way. The establishment of the Ecological Reserves Act by the B.C. government is another ref lect ion of the recognition of preser-vation values, as are the national park systems of both Canada and the U.S. In practice, i t would be d i f f i c u l t to separate option and pre-servation values empirically, and l i t t l e research has been aimed at actual-ly measuring either option or preservation values, although the efforts by governments and public interest groups to preserve irreplacable natural environments and to protect endangered species of wi ld l i f e i s a testament to the be l ie f that such values are widely held by society. As population increases and industr ia l development encroaches on the few remaining examples of unaltered natural environments, the existence and preservation J .V. K r u t i l l a , "Conservation Reconsidered," American Economic Review, (1967), p.779. - 12 -of some examples of such environments i s l i ke ly to become increasingly important. 7. Bequest Motivation - The concept of bequest motivation is closely a l l i e d to both option and preservation values, but refers speci-f i c a l l y to the benefit derived by individuals from the knowledge that their heirs , future generations in general, w i l l have the option of using a preserved resource. Such individuals would be wi l l ing to pay a fee to secure the option of use for future generations, irrespective of their own demand for use of the area. Again, although there has been no empirical research on the ex-tent of bequest motivation values, the existence of such values is ev i -denced by the large sums paid by governments for parks and natural environ-ments. These expenditures are often at least partly jus t i f ied by the de-sire to preserve such areas for future generations, and i t is believed that such values are widely held by society. In conclusion, where rare or irreplacable natural environments are threatened by industr ia l development, the total economic value of such areas cannot be adequately measured by the values generated by actual use of the area alone. Non-users, and society in general, may value these re-sources as wel l , and there i s no a p r i o r i reason to suggest that these "socia l " values are any less important than direct user values. In fact, i t i s not d i f f i c u l t to suggest examples where option, preservation and be-quest motivation values are l i ke ly to be substantially higher than user values. Few individuals are l ike ly to ever actually see whooping cranes, but there i s a wide concensus that this endangered species should be pro-tected and preserved, both for present and future generations. - 13 -Methods of Measuring Recreational Values While some authors have stated that the best way to measure the value of outdoor r e c r e a t i o n would be to a c t u a l l y e s t a b l i s h entrance fees, i t i s generally recognized that soci e t y has deemed t h i s an unacceptable p o l i c y and free or nominal cost access to parks can be expected to con-12 tinue. Furthermore, except under extremely complex and probably unwork-able systems, p r i c i n g systems would f a i l to provide a measure of option and preservation values. Consequently, numerous methods have been devised to measure r e c r e a t i o n a l values by i n d i r e c t means, and there are abundant examples of the empirical a p p l i c a t i o n of these techniques. The purpose of t h i s s e c t i o n i s to examine these techniques c r i t i c a l l y with a view to se l e c t i n g the method that appears to be most appropriate to the problem of preservation versus h y d r o e l e c t r i c development i n Wells Gray Park. The Cost Approach The cost approach merely assumes that the r e c r e a t i o n a l value of a p a r t i c u l a r s i t e i s equal to the actual costs incurred by the government i n developing and maintaining the s i t e . This method has been roundly condemned 13 by numerous authors. I t automatically j u s t i f i e s any expenditure, and 'A. Scott, "The Valuation of Game Resources: Some T h e o r e t i c a l Aspects," Canadian F i s h e r i e s Reports No. 4, (Ottawa 1965) f pp.27-47. !J.L. Knetsch and R.K. Davis, "Comparisons of Methods f o r Recreation E v a l -uation," i n Economics of the Environment, ed. by R. Dorfman and N.S. Dorfman (New York: W.W. Norton and Co., 1972), p.389.; W.G. Brown, A. Singh and E.N. Cast l e , "Net Value of the Oregon Salmon-Steelhead Sport Fishery", Journal of W i l d l i f e Management, 29 ( A p r i l , 1965), p.267; W.R.D. Sewell and J . Rostron, Recreational F i s h i n g Evaluation, (Ottawa: Dept. of F i s h -e r i e s and Forestry, 1970), p.7. - 14 -cannot be used i n an a l l o c a t i v e sense, since a l l projects are automatically assigned a b e n e f i t cost r a t i o of one. Perhaps the most serious flaw of t h i s technique i s that i t may s e r i o u s l y undervalue re c r e a t i o n areas which generate large net benefits to users and non-users, but which are r e l a t i v e l y inexpensive to provide. Wells Gray Park i s probably a good example of t h i s problem, since i t i s b a s i c a l l y designed to provide a "wilderness" atmosphere,and only rudimentary, inexpensive f a c i l i t i e s have been provided. Market Value of F i s h and Game Method With t h i s method, the value of hunting or f i s h i n g i s imputed as the market value of the f i s h or game harvested. The I l l i n o i s Department of Conservation, f o r example, uses the p o t e n t i a l landed value of f i s h k i l l e d as a measure of p o l l u t i o n damages, even though the only l e g a l use of the 14 f i s h may be f o r sport f i s h i n g . While t h i s approach may be adequate i n the evaluation of commercial f i s h e r y losses, food values bear l i t t l e r e -l a t i o n s h i p to the values derived from hunting and f i s h i n g , and the method i s obviously inappropriate f o r evaluating such non-consumptive a c t i v i t i e s as w i l d l i f e photography. The f a l l a c y of t h i s approach f o r evaluating sport f i s h i n g and hunting can be i l l u s t r a t e d by examining the success/ e f f o r t r a t i o s for hunting b i g game i n B r i t i s h Columbia. In 1970-71, 105,500 hunters harvested 66,000 deer, f o r a success.rate of 63 percent, although only 40 percent of a l l hunters harvested deer.''""' The average deer hunter I l l i n o i s Dept. of Conservation, 1971 Annual Report, ( S p r i n g f i e l d , 111.: 1972) p.7. See also D. Benson and R. Perry, "An Acre of Marsh i s Worth", The New York State Conservationist, (June-July 1965), pp.1-4. B r i t i s h Columbia F i s h and W i l d l i f e Branch, Game Harvest Questionnaire  Analysis 1970, ( V i c t o r i a , B.C.: 1971) pp.12, 19, 20. The apparent d i s -crepancy i n the two percentages i s due to the f a c t that some hunters -harvested more than one deer. - 15 -16 i n 1970 spent 8.2 days hunting deer and incurred expenses of about $180. Thus, assuming that the average deer y i e l d s about 100 l b s . of dressed meat, the cost of the meat harvested averaged $2.90/lb. At the same time, i n 1970 bulk beef could be purchased f o r about $.80/lb. Unless w i l d game i s considered v a s t l y superior to beef by B.C. hunters, i t i s c l e a r that the value of food harvested cannot adequately measure the value of a hunt-ing or f i s h i n g t r i p , and that the use of t h i s technique would undervalue these a c t i v i t i e s . There i s , instead, ample evidence that f o r most people engaging i n hunting or f i s h i n g , value i s generated not by the game harvested, but by the a c t i v i t y i t s e l f . For example, one recent survey of fishermen's motives f o r f i s h i n g found that the two most frequently mentioned motives were "to take i t easy" and "to be outdoors", followed by "to eat fresh f i s h " . ' Only three percent of respondents l i s t e d "to eat fresh f i s h " as 17 thexr primary motive f o r f i s h i n g . Other studies have made s i m i l a r f i n d -18 mgs. Thus, t h i s technique can be considered d e f i c i e n t i n that i t focuses on only a minor aspect of a hunting or f i s h i n g experience, and w i l l Pearse Bowden Economic Consultants Ltd., The Value of Resident Hunting  i n B r i t i s h Columbia, Study Report No. 6, prepared f o r the B r i t i s h Colum-bi a F i s h and W i l d l i f e Branch, ( V i c t o r i a , B.C.), pp.20, 29. r R.C. Bryan, The Dimensions of a Salt-Water Sport F i s h i n g T r i p , (Vancou-ver, B.C.: Environment Canada, F i s h e r i e s and Marine Service, 1974), pp.14, 17. See, f o r example, G. Moeller and J . Engelsen, Fishermen Expectations and  Pay-Lake P r o f i t s , U.S.D.A. Forest Service Research Paper NE-264, (Upper Darby, Penn.: Northeastern Forest Experiment S t a t i o n , 1973); Pearse Bowden Economic Consultants Ltd., Resident Hunting, p.42. - 16 --therefore c o n s i s t e n t l y undervalue consumptive r e c r e a t i o n a l a c t i v i t i e s , while o f f e r i n g no guidance i n the evaluation of nonconsumptive a c t i v i t i e s . I t i s more generally agreed that the value of outdoor r e c r e a t i o n l i e s i n 19 the a c t i v i t y , rather than the harvest of f i s h and game. Expenditures Approach Most of the e f f o r t s aimed at measuring the economic value of outdoor r e c r e a t i o n have concentrated on the d i r e c t and i n d i r e c t b e n e f i t s of actual use, as opposed to the preservation, option and bequest motiva-t i o n values previously described. Of the techniques which have been de-veloped, the expenditures approach has the d i s t i n c t i o n of being both the most o f t e n used and the most often c r i t i c i z e d method. In i t s simplest form, t h i s approach equates the value of rec r e a -t i o n a l use with the costs incurred by r e c r e a t i o n i s t s such as t r a v e l , accommodation, equipment and l i c e n s e costs. The use of gross expenditures as a measure of the value of r e c r e a t i o n has been, and continues to be, 20 popular with numerous government agencies both i n Canada and the U.S. M. Clawson and J . Khetsch, Economics of Outdoor Recreation, (Baltimore, Md.: Johns Hopkins Press, 1966), p.225; M. Laub, "Economic Evaluation," p.11. 'see, f o r example, R.J. S o l i e , Procedure f o r Estimating Tourism B e n e f i t s , Mineral Research Laboratory Report No. 29A (Fairbanks, Alaska: Univer-s i t y of Alaska, 1973); P. Klopchic, A Short Economic Evaluation of Hunt- and F i s h i n g i n Ontario, (Toronto, Ont.: Ontario Dept. of Tourism and Information, 1966); T.A. Walther and J.W. B i r c h , Hunting and F i s h i n g , What i t Means to Wyoming, (Cheyenne, Wyoming: Wyoming Game and F i s h Dept., 1966); R.F. Wallace, An Evaluation of W i l d l i f e Resources i n the State of  Washington, B u l l e t i n No. 28, School of Economics and Business, (Pullman, Wash.: State College of Washington, 1956); W.C. Davis, Values of Hunting  and F i s h i n g i n Arizona, 1960, Special Studies No. 21, Bureau of Business and P u b l i c Research, (Tucson, Arizona, A p r i l 1962). - 17 -Proponents of this technique note that the value of a recreational exper-ience must be at least equal to the expenditures which are required for part ic ipat ion; otherwise people would not incur the expenditures. As such, the expenditures incurred during recreational tr ips must offer at least a 21 minimum measure of the value of the t r i p . While this rationale may have merit, and while gross expenditures may provide an indication of minimum values, this approach may be c r i t i c i z e d on tjie ^ important grounds that i t does not measure either the tota l or the "net" economic value of recrea-t ion . There is no a. p r i o r i reason to believe that people who l ive close to a recreational area and incur few costs receive less value from recrea-t ion than do people who l ive farther away and therefore must incur greater costs to use an area. In fact, the opposite may be the case, especially for people who have chosen to l i ve close to a favorite recreation area. Further, in situations where decisions must be made about the al location of resources between competing uses, i t is the net, not the gross, values which must be compared. As Clawson and Knetsch note: What i s needed is not some gross value but the value added by a part icular recreation opportunity. It is the net increase in the value of the recreation opportunities produced that i s c ruc ia l ; this represents a true net y ie ld that can be compared with what the resource would y ie ld i f i t were to produce other ser-vices . 22 M.H. Coomber and A.K. Biswas, Evaluation of Environmental Intangibles, Review of Techniques, (Ottawa: Ecological Systems Branch, Environment Canada, 1972), p.30. M. Clawson and J . Knetsch, Economics of Outdoor Recreation, p.225. See also W.G. Brown, A. Singh and E.N. Castle, "The Oregon Salmon-Steelhead Sport Fishery," p.268. - 18 -Where a r e c r e a t i o n a l resource i s threatened by degradation through some c o n f l i c t i n g use, the net value of r e c r e a t i o n a l use i s the appropriate measure of the p o t e n t i a l welfare loss which would be incurred-'' by users, and gross expenditures i n themselves cannot measure t h i s wel-23 fare l o s s . r R e c r e a t i o n i s t s ' expenditures are also often used to measure the | • • ,.ut.,. , • : -economic impact of such expenditures on the l o c a l and regional economy. This i s c l o s e l y a l l i e d to the concept of the " m u l t i o l i e r " , wherein invest-ment or expenditures on one commodity set o f f a wave of economic a c t i v i t y i n the economy, r e s u l t i n g i n increases i n incomes and employment. While these " m u l t i p l i e r " e f f e c t s are appropriate measures of net economic bene-f i t s under c e r t a i n conditions, few concepts have been as misused as much as the " m u l t i p l i e r " e f f e c t or the concept of secondary economic b e n e f i t s . This misuse can l a r g e l y be a t t r i b u t e d to the f a i l u r e to consider "oppor-t u n i t y costs", which measure the economic return which would be generated by e i t h e r expenditures or investments i n other a v a i l a b l e uses. The crea-t i o n of employment and incomes due to r e c r e a t i o n a l expenditures can only be considered an economic b e n e f i t to the extent that c a p i t a l and labor would have otherwise been unemployed, or would have earned le s s i n other 25 uses than i n supplying services to r e c r e a t i o n i s t s . 'J.A. C r u t c h f i e l d , "Valuation of Fishery Resources", Land Economics, (May 1962) p.148. See also J.L. Knetsch and R.K, Davis, "Comparisons of Methods", p. 388. i See, for example, R.G. Hoffman and H. Yamauchi, Recreational F i s h i n g ,  Its Impact on State and Local Economies, College of T r o p i c a l A g r i c u l t u r e Departmental Paper 3 (Honolulu, Hawaii: U n i v e r s i t y of Hawaii, 1972), pp.28-35. S.H. Hanke and R.A. Walker, "Benefit-Cost Analysis Reconsidered: An Evaluation of the Mid-State Project", Water Resources Research, Vol.10, No.5, (Oct. 1974), p.904. - 19 -Secondary benefits are also appropriate where they allow economies of scale to be generated, or where it i s deemed desirable to redistribute 26 incomes to a depressed local or regional economy. Thus, only under l imited conditions can secondary benefits be va l id ly included as a benefit of outdoor recreation> especially where the "net" economic value of recreation, or any other economic ac t iv i ty , i s being measured. Local unemployment, economies of scale or a consious decision to generate economic ac t iv i ty in a particular region are neces-sary conditions for the inclusion of secondary benefits. Clawson and Knetsch have found, for example, the total increase in local incomes from a dollar of tourist expenditures amounted to $.66, even where a l l oppor-27 tunity costs were not considered. This contrasts to the more commonly used gross "mult ipl ier" effects, which ranged from $1.31 to $2.19 for 28 dollar expenditures for various items. The expenditures method can therefore be va l id ly c r i t i c i z e d for i t s failure to measure either the tota l or net economic value of recrea-t ional use, and this deficiency makes i t a poor choice in the evaluation 29 of alternate resource uses. 'For a discussion of the d i f f i cu l t i e s inherent in measuring secondary bene-f i t s see J . Margolis, "Secondary Benefits, External Economies and the Just i f icat ion of Public Investment", Review of Economics and S ta t i s t i c s , Vol.39, (1957), pp.284-291. M. Clawson and J . L . Knetsch, Outdoor Recreation, p.241. Ibid, p.243. W.R.D. Sewell and J . Rostron, Recreational Fishing Evaluation, p.8. - 20 -Land Enhancement Measure As has been noted previously, increases i n the value of land adjacent to newly developed r e c r e a t i o n a l areas i s a common phenomenon, and the extent to which land values increase due to the existence of a park or other r e c r e a t i o n a l f a c i l i t y may be viewed as a p a r t i a l c a p i t a l i z a t i o n .' '30 of the use value of the park for people who purchase such p r o p e r t i e s . While the i n c l u s i o n of land enhancement i n estimates of recrea-t i o n a l values i s an appropriate and conceptually sound undertaking) numer-31 ous p r a c t i c a l d i f f i c u l t i e s are evident. Recreational amenities may not be the only f a c t o r s i n f l u e n c i n g increases i n land value, and must be separated out to avoid doublecounting or overestimation. For example, i t i s l i k e l y t h a t much of the r e c r e a t i o n a l property i n the Gulf Islands or i h the Whistler area i s held by people both f o r r e c r e a t i o n a l and speculation rea-sons, as i s suggested by the s u b s t a n t i a l d i f f e r e n c e s commonly observed between leased and freehold land values. In the case of Wells Gray Park, i t s r e l a t i v e i s o l a t i o n from major population centers and the f a c t that much of the land adjacent to the park i s h eld by the Crown preclude the p o s s i b i l i t y of s i g n i f i c a n t land enhance-ment e f f e c t s . J.L. Knetsch, "Outdoor Recreation Demands and B e n e f i t s , " Land Economics, Vol.39, No.4 (1963), p.393. J.L. Knetsch, "The Influence of Reservoir Projects on Land Values," Journal of Farm Economics, Vol.46, No.l, (Feb.1964), pp.231-243. - 21 -The Concept of Consumer Surplus as a Measure of- Benefits A l l of the techniques evaluated previously share a common and important deficiency in that they provide no indication of the net benefit of recreational use. The use of benefit-cost analysis, which is the most widely accepted technique for evaluating the comparative benefits of a l ter-nate resource uses, i s only meaningful when net benefits are being com-pared. The extent to which a user obtains value from a commodity or ser-vice in excess of the amount he is required to pay for i t represents the net, or surplus value to that user, and this extra or "free" value i s termed consumer surplus. Marshall f i r s t defined consumer surplus as the excess of the price which he would be wi l l ing to pay rather than go 32 without the thing, over that which he actually does p a y . . . . " This con-cept was further refined by Hicks, who recognized that two types of con-sumer surplus could exist . "Price compensating" consumer surplus corres-ponds to the willingness to pay for a service or commodity, and corresponds to Marshall's def init ion above. "Price equivalent" -consumer surplus measures the amount that users would have to be paid to compensate them for loss of 33 use of a good or service. The dis t inct ion between these two measures of net value is important, since the price equivalent measure must always be greater than the price compensating measure. While the technical proof of A. Marshall, Principles of Economics, (London: Macmillan Co . , 1930) p.124, quoted in J . Stevens, "Recreation Benefits from Water Pol lut ion Control. A Further Note on Benefit Evaluation," Water Resources Research, Vo l . 3 , N o . l , (First Quarter 1967), p.64. For a technical explanation of these two measures see P.H. Pearse, "A New Approach to the Evaluation of Non-Priced Recreational Resources," Land  Economics, Vol . XLIV, No . l , (Feb.1968), pp.90-91. Also M.E. Laub, "Economic Evaluation", pp.54-61. . - 22 -this difference i s complex, the intu i t ive explanation is more straightfor-ward. By measuring the extra amount a person would be wi l l ing to pay for a good or service which he previously enjoyed free or at lesser cost (price compensating surplus), a reduction in tota l consumption or "real income" is implied. However, fu l ly compensating a person for loss of use of the same good or service (price equivalent surplus) implies that his "real i n -come", or total level of sat is fact ion, w i l l remain the same. Since the price compensating measure leaves an individual less well off than before, while the price equivalent measure leaves him as well off as before, the lat ter measure must y ie ld larger value estimates. That i s , an individual w i l l always require a compensating payment or bribe to discontinue use of a good or service larger than the amount he would be wi l l ing to pay to con-txnue using i t . While researchers have noted that the quantitative difference between these two measures w i l l be small where there are close substitutes 35 for the good or service in question, the corollary may also be stated, that the difference in the two measures may be large where no close substi-tutes exist . As w i l l be shown i n Chapters III and IV, empirical research by this author and others has found highly s ignif icant differences in the magnitude of the two measures. The concept of using consumer surplus as a measure of recreational 36 benefits i s not universally accepted as appropriate. Cr i t i c s argue that 3 4 I b i d . 3 5 I b i d . 36 See, for example, N.H. Coomber and A.K. Biswas, Evaluation of Environmen- t a l Intangibles, p.26. These authors also c i te others who disagree, in whole or i n part, with the consumer surplus concept. - 23 -the net return based on a single market price for a marketed good such as hydroelectric power does not include a measure of consumer surplus, while an estimate of value for non marketed recreational resources does, so that the two measures cannot be compared in a benefit cost or resource a l loca-37 t ion context. It i s therefore considered to be "unfair" to measure con-sumer surplus for outdoor recreation and not for alternative uses, since most people would be wi l l ing to pay more for such things as e lectr ic power or timber i f they were required to do so. Some researchers, in an apparent attempt to make measures of recreational benefits comparable to those of conventionally marketed goods, have suggested that the net benefit of recreation should be measured as the single price which would y ie ld maximum profits to a non-discriminating 38 monopolist. This would make the results comparable to the extent that each resource use would be evaluated at i t s respective single pr ice . However, such measures would s t i l l be incompatable since monopoly prices , which are based on market imperfections, cannot " f a i r l y " be compared to prices set in a competitive market. A more persuasive argument for the use of consumer surplus as an equivalent measure to the value of privately produced goods and services 39 has been made by Clawson and Knetsch. For most marketed goods, of which 37 Ib id . ; W. Beardsley, "Bias and Noncomparability in Recreation Evaluation Models," Land Economics, Vol.47, No.2, (May 1971), p.179. 38 A.Scott , "Valuation of Game Resources," p.37; W.G. Brown, A.Singh and E.N. Castle, "The Oregon Salmon-Steelhead Sport Fishery," p.271. 39 M. Clawson and J .L . Knetsch, Outdoor Recreation, pp.218-220. See also, Idaho Cooperative Fishery Unit , Sport Fishery Economics, A Report to the  National Marine Fisheries Service, (Moscow, Idaho: University of Idaho, 1973), pp.15-18. - 24 -hydroelectric power would be an example, there are many close substitutes to any particular generating f a c i l i t y which could be purchased at the same pr ice . Thus, deprived of the e l ec t r i c i ty from any one f a c i l i t y (which represents a small part of the tota l supply of e lec t r ic power) consumers could purchase power from other plants at the same price , or could switch to other close substitutes such as o i l , gas, or perhaps improved insula-t ion . Since the same product, power, can be purchased elsewhere at a con-stant pr ice , the single price paid for power corresponds to the tota l w i l l -ingness to pay for the power of any particular f a c i l i t y . Under these c i r -cumstances, the single price (an elast ic demand curve) measures the total area under the demand curve and therefore includes the measure of consumer surplus. However, outdoor recreation f a c i l i t i e s and areas are usually s ig-ni f icant ly different from marketed goods. Many parks, for example, are established to preserve and allow access to unique and irreplaceable natural environments, so that there may be no close, substitutes to the s i te in question. Moreover, many large parks constitute a s ignif icant proportion of the total supply of outdoor recreational f a c i l i t i e s , especially for local residents. Consequently, loss of such a f a c i l i t y would force recreation-i s t s to incur higher costs to v i s i t distant, less suitable areas and might also result in crowding at the remaining s i tes . Under these condi-t ions, a highly sloping, or inelast ic demand curve can be expected to exist , and the area under the recreation demand curve measures the same tota l w i l l -ingness to pay as does the single price for power. A l l of these conditions are thought to exist in Wells Gray Park, which is a large wilderness park with unique natural features, and where the power and flood control which would be created by the development of dams could as easily be produced elsewhere. Thus, for the purposes of this - 2 5 -thesis, i t is fe l t that consumer surplus offers an appropriate measure of the benefits of outdoor recreational use, and that these measures can be r ight ly compared to the net value of hydroelectric and flood control de-velopment. In the iabsense of market pr ic ing , indirect methods have been de-vised to estimate the demand for, and value of, outdoor recreation. The most popular techniques, which are evaluated below, both aim at providing an estimate of the "demand curve" for recreation, which under free access 40 represents the relevant measure of consumer surplus. They d i f fer s igni-f icant ly ; however, both in conceptual va l id i ty and method of execution. The Travel Cost Approach In the absense of actual demand-price relationships for outdoor recreation, methods have been developed for the derivation of hypothetical demand curves using "proxy" prices . One of the most popular techniques can be termed the travel cost approach, where the observed relationship between the demand for recreation and associated travel costs i s used as a proxy for estimating a demand curve for recreation based on willingness to pay or price compensating consumer surplus. This technique has a long history of development, beginning in 1947, when Hotell ing suggested in a le t ter to the U.S. National Park Ser-vice that the consumer surplus value of a recreational t r i p could be P.H. Pearse, G.K. Bowden, "Economic Evaluation of Recreational Resources; Problems and Prospects," Transactions of the Thirty-Fourth North Ameri- can Wildl i fe and Natural Resources Conference, (Washington, D . C : w i l d -l i f e Management Institute, March 1969), p .288. - 26 -41 measured by observing the differences in travel costs incurred by users. Assuming that a l l users get the same gross benefit from a recreation t r i p , and that the person travel l ing the farthest to a recreation s i te and who incurs the greatest travel cost derives no net value from use, Hotell ing reasoned that a l l other users must derive a consumer surplus equal to the difference in their travel costs from those of the most distant user. Trice and Wood, in an apparent effort to make the resulting values more reasonable by eliminating the "lunatic fringe", suggested using the 90th percentile of travel costs as the basis with which to compare 42 other users' travel costs. Clawson is credited with being one of the most important founders of the travel cost approach. He suggested deriving a demand curve for the recreational experience as a whole by using estimated costs per v i s i t as a function of the number of v i s i t s per 100,000 population in a given dis-43 tance zone. Clawson assumes that the v i s i t to a part icular s i te is the main purpose of a t r i p so that a l l travel costs can be allocated to the s i te in question. Since empirical research has found that the per capita participation rate for a s i te decreases rapidly as travel distance i n -creases, and travel costs increase with distance, Clawson concludes that 41 Hotell ing's le t ter to the Park Service is quoted in W.R.D. Sewell and J . Rostron, Recreational Fishing Evaluation, pp.10-11. 42 A.H. Tr ice and S.E. Wood, "Measurement of Recreation Benefits ," Land  Economics, Vol . 34, No. 3, (1958), pp. 196-207. 43 M. Clawson, Methods of Measuring the Demand for and Value of Outdoor  Recreation, Reprint No. 10 (Washington, D .C . : Resources for the Future, 1959). 36 pp. - 27 -the money cost of travel wholly explains differences in observed usage rates for people from different distance zones, as i s shown in the follow-ing example: we say that people with costs of $1 per v i s i t travel to the area at the rate of 500 per 1000 popu-la t ion and people with $5 costs have a rate of only 100 per 1000. The calculation of the demand for the resource then assumes that i f $4 were added to the cost of the f i r s t group, making their costs $5, they would then v i s i t the area at the rate of 100 per 1000 4 4 Thus, by assuming that money costs are the only determinant of use rates, Clawson i s able to predict the reaction of users to increased costs (or entrance fees), and derive a demand curve for the s i te in ques-t ion , showing how much use would occur at various prices . Clawson's approach has the advantage of being d irect , simple and easy to apply, since data on user or igin i s widely available, and the wide-spread use of the expenditure approach has yielded a wealth of data on travel costs. Thus, in many cases, a demand curve for either an existing or new recreation area can be derived at l i t t l e cost, and without the need to conduct fieldwork. However, the travel cost approach has serious con-ceptual deficiencies, which remain unresolved and which seriously detract from the usefullness of the approach. These deficiencies derive from the assumptions which are both expl ic i t and impl ic i t in the method, namely: - that the money costs of travel are the sole determinant of use rates, - that travel in i t s e l f generates no value or sat isfaction, M. Clawson and J .L . Knetsch, Economics of Outdoor Recreation, p.87. - 28 -- that a l l users have similar tastes and derive the same amount of gross value from use of an area, - that the user with the highest costs, the most distant user, gets no net value or consumer surplus. Perhaps the most serious deficiency with this approach i s the assumption that money costs of travel alone are a determinant of recrea-t ional use. Travel also requires time, and is d irect ly proportional to travel distance in the same way that money costs are. Clear ly , travel time is a form of cost which is also l ike ly to affect use of an area. If the demand for recreation is a function of both travel cost and travel time, use of travel cost alone to construct a demand curve based on observed behavior of users from varying distances w i l l overstate the reaction of users to a change in money costs alone, thereby undervaluing the resource. Thus, fai lure to include time costs means that the estimated demand curve w i l l be a r t i f i c i a l l y shifted to the l e f t , thereby reducing 45 the measure of value. This problem has been noted by Clawson and others. As i s shown in Figure 1, the use of money costs alone,not only shifts the demand curve to a lower l eve l , but also changes i t s slope, or e l a s t i c i ty . In Figure 1, DD represents a demand curve derived empirically using the Clawson technique in which money costs alone are used to estimate demand. For purposes of i l l u s t r a t i o n , DD' represents the actual demand curve where time costs are assumed to be equal to money costs. This case Ibid, p. 88; W.G. Brown, A. Singh, E.N. Castle, "The Oregon Salmon-Steel-head Sport Fishery", p. 270, Idaho Cooperative Fishery Unit , Sport Fishery Economics, p. 23, M.E. Laub, "Economic Evaluation of Recreational Re-sources," p. 28. would occur, for example, where travel costs were $.10 per mile, the average speed of users r^ was '40 MPH and -where time -were •--valued; at $4 per hour;-ciln thisrcase:£h.en,:?for reach dollar.lof travel- .costs;;-tthe tuser.-ralso:lincurs-'.a-? =• time.:;cost.of. one ;dollar.. : ax Based on the methodology employed i n the travel cost approach -i f travel.vcosts.iW.ere c$:2', $aii increase-ran; money>r£aosts'.s(viavaa$l; entranceirfee):e would ureduce demand nfrbnf/:9 ;-.days;?tcf 6cdays:a(PQ (ter Pj Qt) P .whenrin f artaa- t$l- $ reduction in costs would only reduce use 1.5 days, from 12 to 10.5 (PQ' to P, Q s ' ). This fundamental problem is important because a re la t ive ly elas-t i c (horizontal) demand curve implies the existence of numerous close sub-stitutes and that the part icular good in question has a re la t ive ly low value i n that a small increase in price w i l l cause a re la t ive ly large de-crease in consumption. While Clawson and Knetsch have noted that the f a i l -ure to include time costs underestimates tota l consumer surplus (by shift-ing the demand curve to the l e f t ) , they suggest that the demand for use at Swanson Lake, where the method was applied,, i s highly e la s t ic , so that, "comparatively modest entrance fees might well lead to re la t ive ly large 46 decreases in numbers of v i s i t s . " Thus, for individuals where time costs of travel are as impor-tant, or more important, than money costs, the imposition of an entrance fee would be less important than is implied by the travel cost approach. M. Clawson and J .L . Knetsch, Economics of Outdoor Recreation, p.69. - 30 -FIGURE 1 Effect, .of ExclutJincfaTime .iGosts>r.±n the Travel Cost Approachch - 31 -Another assumption, that the most d i s t a n t user derives no net value from :use of the;'site,3tiay a l s o serve to underestimate values, or s h i f t the demand curve to the l e f t , to the extent that t h i s user does derive net value from use. The assumption that a l l users derive the same gross b e n e f i t from use of a s i t e can also be c r i t i c i z e d , e s p e c i a l l y where t r a v e l costs are used as a proxy for value. F i r s t l y , some people, may locate close to a recrea-47 t i o n a l area because they value i t highly. Secondly, i f people from d i f f e r -ent areas have d i f f e r e n t income l e v e l s , responses to changes i n money costs would not be p r o p o r t i o n a l for d i f f e r e n t groups. This problem has been 48 recognized and compensated for by Pearse. Other c r i t i c i s m s of the t r a v e l cost approach are: - i t cannot be used to estimate p r i c e equivalent consumer surplus, which i s the amount of compensation required for a user to w i l l i n g l y abstain from future use. - i t cannot be used to measure option, preservation or bequest motivation values, since these values are not r e f l e c t e d i n use rates or w i l l i n g n e s s to incur t r a v e l costs for a c t u a l use. I t i s therefore concluded that the t r a v e l cost approach has serious conceptual d i f f i c u l t i e s which tend to r e s u l t i n an underestimate of value, a misrepresentation of the slope of the demand curve, and an i n a b i l i t y to incorporate other values such as compensation values and option values. M.E. Laub, "Economic Evaluation of Recreational Resources", p.20. P.H. Pearse, "A New Approach", pp.87-99. - 32 -The Direct or Interview Method The direct or interview method of estimating demand and use values • •-for outdoor recreation suffers from|norie of the conceptual problems a s s o c i - r n - G j f ated with the use of the travel cost method. This method simply involves • I ! asking recreationists d irect ly how much they value the use of a s i t e , above and beyond the costs they actually incur for t rave l . The use of this tech-nique therefore involves no assumptions about tastes or preferences, does not require any knowledge about actual costs incurred, and can be used to derive either price compensating or price equivalent measures of consumer surplus. The interviewer may ask either the maximum amount a user would be wi l l ing to pay rather than forego use of an area or the minimum amount he would have to be compensated to forego use of an area. ^ Since the measure of value can be expected to dif fer with these two questions, i t is important to determine which question should be used in any part icular case. Mathews and Brown note that: The appropriate question to ask depends on the kind of resource decision to be made. A resource agency may be considering the economic fea s ib i l i ty of investing in a dis-t i n c t l y new outdoor recreation f a c i l i t y . A question of the f i r s t type can be used to determine whether the poten-t i a l users would be wi l l ing to pay at least as much as the anticipated costs of the f a c i l i t y . . . In a second, and pro-bably more important kind of resource decision, the re le-vant question is the one about se l l ing the right to f i s h . . . In cases where there is a potential loss of an existing sport fishery, a determination should be made as to the amount of compensation which the fishermen would have to receive to be no worse off after being precluded from the recreational opportunity they formerly enjoyed.49 S.B. Mathews and G.S. Brown, The 1967 Sport Salmon Fisheries of Washington, pp.9-10. - 33 -The need to measure use values based on the compensation principle vet: rather than willingness to pay in cases where ^n existing recreational use or area may be destroyed by another development has also been noted by 50 ' K r u t i l l a and Cicchet t i . Given the increasing and constant pressure being i put on irreplacable natural environments and existing recreation areas (of which Wells Gray Park is a case in point) by industr ia l development propo-sals, this author believes that the d i s t inct ion between these two measures of economic value are highly s ignif icant , especially since large differences may occur between the willingness to pay and compensation measures of value. Laub has also noted that the choice of the appropriate measure of consumer surplus depends on the terms of reference or jur i sd ic t ional area of the agency or group conducting the re search . 5 1 For example, a provincial agency is concerned with the welfare of the residents of i t s province, while a federal agency is concerned with the welfare of a l l Canadians. Faced with the possible loss of a recreational area then, a provincial agency might consider the potential welfare loss to resident users, as measured by the compensation measure for provincial residents, while for non-residents only the actual and potential income losses to the province are counted, as measured by willingness to pay and, possibly, the net bene-f i t s of expenditures made in the province. Thus, i f B.C. i s the referent area, B.C. residents would be asked the amount of compensation required to maintain their level of "welfare", while non residents would be asked the maximum amount they would be wi l l ing to pay for access to the s i te in ~^J.C. K r u t i l l a and C.J . C icchet t i , "Evaluating Benefits of Environmental Resources with Special Application to the He l l ' s Canyon," Natural Resources  Journal, Vo l . 12, No. 1, (1972), pp.1-29. 5 1 M . E . Laub, "Economic Evaluation of Recreational Resources," p.62. - 34 -question, which would measure the potential loss of income to the province. Use of jthis methodology undervalues the resource-from a Canadian; i'ox^;'global social welfare point of view, and can only be jus t i f i ed on political:'-rather-' than "social just ice" grounds. ^ ' " " u . \i-<-r. L . .-i-'e Since the direct or interview method i s the only way to empiri-ca l ly derive measures of price equivalent consumer surplus, i t i s fe l t by the author to represent the best methodology where analysis i s based on a definite referent area. Furthermore the use of direct questions i s probably the only way to derive estimates of option, preservation and bequest motiva-t ion values. While the direct or interview method provides a conceptually va l id means of estimating recreational values, the use of hypothetical questions may y ie ld hypothetical or biased answers, and numerous authors have dwelt , . 52 upon this problem. Numerous sources of bias or inaccurate information can be derived from a poorly designed and executed questionnaire or interview, as follows: - Respondents may not fu l ly understand the question being asked. This problem is part icular ly acute in mail questionnaires, since only a l imited explanation of the purpose and nature of the question can be given. Since outdoor recreation i s presently enjoyed free, or at nominal cost, an individual may have d i f f i cu l ty in assigning i t a value or pr ice , comparable to the prices paid for other goods and services. This problem can be mini-mized in an interview, where the question can be explained at length, and the respondent can be encouraged through a bidding process to state either his maximum willingness to pay or the minimum amount of compensation re-quired. Many people also feel strongly that outdoor recreation is priceless _ Ibid, p.65; Idaho Cooperative Fishery Unit , Sport Fishery Economics, p. 26; J . L . Knetsch and R.K. Davis, "Comparison of Methods", p.390-392; M. Clawson and J . L . Knetsch, Outdoor Recreation, p.228; P.H. Pearse, "A New Approach", p. 88. - 35 -a n d t h a t . f r e e a c c e s s ^ , t o p a r k s ^ a n d o t h e r ^ r e c r e a t i o n . a r e a s i s . - a l r i g h t i . . ^ S u c h u _ . . p e o p l e - m a y f i n d . t h e p r o c e s s c o f ; h y p o t h e t i O a l i p r i c i n g c r e p u g n a n t > a a t , l e a s t e a s t i n i t i a l l y ^ l a n d m a y r e s p o n d , j a c c o r d i n g c h y v c t i t then*: becomes.iproblematioaixcaj w h e t h e r . t o - d i s c a r d . s u c h . , r e s p o n s e s , . o r . a s s i g n , t h e m , , s o m e ^ a r b i t r a r y ^ b u t h i g h . , , v a l u e " , s i n c e t h e r e - i s - n o - a p r i o r i " w a y t o ' d e t e r m i n e w h e t h e r - s u c h " - a h i n d i v i - " " J d u a l w o u l d e i t h e r a c t u a l l y r e f u s e t o p a y a n y a c c e s s f e e , o r w o u l d , i f f o r c e d t o , p a y a v e r y h i g h " f e e . ~ R e s p o n d e n t s m a y e n g a g e i n " g a m e s m a n s h i p " , o r c h e a t i n g . I f t h e y i n t e r p r e t t h e q u e s t i o n a s a p r e l u d e t o t h e a c t u a l i m p o s i t i o n o f a f e e , t h e y m a y g i v e a r t i f i c a l l y l o w r e s p o n s e s i n a n e f f o r t t o m i n i m i z e t h e f e e l e v e l s t h a t t h e y a n t i c i p a t e b e i n g c h a r g e d . A l t e r n a t i v e l y , i f t h e y i n t e r -p r e t t h e q u e s t i o n a s a n e f f o r t t o " p r o t e c t " t h e a r e a f r o m o t h e r d e v e l o p -m e n t , o r t o j u s t i f y i m p r o v e m e n t s , t h e y m a y g i v e a r t i f i c i a l l y h i g h r e s p o n s e s . T h e m i n i m i z a t i o n o f t h e p r o b l e m o f p u r p o s e l y b i a s e d r e s p o n s e s r e q u i r e s c a r e f u l d e s i g n a n d e x p l a n a t i o n o f t h e q u e s t i o n n a i r e o r i n t e r v i e w . A g a i n , t h e u s e o f p e r s o n a l i n t e r v i e w s r a t h e r t h a n m a i l q u e s t i o n n a i r e s a l l o w s m o r e s c o p e f o r p r o p e r e x p l a n a t i o n , a l t h o u g h t h e h i g h e r c o s t o f p e r -s o n a l i n t e r v i e w i n g i s a s u b s t a n t i a l d e t e r e n t t o i t s u s e i n m o s t p r a c t i c a l a p p l i c a t i o n s . R e s p o n s e b i a s m a y b e g e n e r a t e d b y t h e i n t e r v i e w e r , w h o m a y e n c o u r a g e a r e s p o n d e n t , e i t h e r c o n s c i o u s l y o r u n c o n s c i o u s l y , t o g i v e a n s w e r s w h i c h c o n f o r m t o t h e i n t e r v i e w e r ' s o w n p r e f e r e n c e s . W h i l e s t a n d a r d i z a t i o n o f b o t h q u e s t i o n n a i r e s a n d i n t e r v i e w p r o c e d u r e s c a n m i n i m i z e t h i s p r o b l e m , i t i s d o u b t f u l w h e t h e r t h i s p r o b l e m c a n b e e n t i r e l y e l i m i n a t e d , e s p e c i a l l y i n a n a n a l y s i s b a s e d o n p e r s o n a l i n t e r v i e w s . - 36 -Since the direct method almost always involves the use of a sample, a l l the problems inherent in sample selection and interpretation of results must be considered. From a pract ica l point of view, the high cost of the direct method compared to travel cost or other market simulations, i s an important consideration, and has probably been a major reason why the direct method i s used infrequently. Many agencies, in fact, simply use rule of thumb values for recreation, based either on personal judgement or a survey of 53 other empirical studies. While the problems associated with the direct method are real and may be s ignif icant , they are problems of application and questionnaire de-sign, rather than conceptual l imitat ions. For this reason, and because the direct method must be used to derive measures of price equivalent consumer surplus (the compensation question), i t . i s f e l t by the author that where funds are available, the direct method offers a superior choice over the travel cost or other approaches. Presumably, a careful process of designing and executing questionnaires and interviews can, i f not eliminate, at least reduce response biases to a tolerable l eve l , so that the resulting measure of value represents an accurate, or best guess, result . The Measurement of Optionj Preservation and Other Social Values As has been noted previously, option, preservation and other " soc ia l " values represent externalities which are generally not measured Outdoor Recreation Resources Review Commission, Economic Studies of Out- door Recreation, Study Report No. 24, (Washington D . C . : U.S. Government Printing Office, 1962) . ,' - 37 -by market prices , but which may be s ignif icant where a resource use is uncertain, nonstorable, a large part of tota l supply and where i t s loss would be irreplaceable, or only replacable at high cost. Natural environ-ments and the use of them for recreation often exhibit these 'characteris-t i c s , and the non-user values which they generate should be incorporated into a cost-benefit analysis when a resource use conf l ic t i s being con-sidered and the uses in question cannot both be developed or maintained at a part icular s i te . As Davidson notes: If a mi l l ion people would be wi l l ing to pay one dol lar each for the use of a land as a wi ld l i fe preserve, while ten wealthy individuals were wi l l ing to spend a hundred thousand dollars and one cent each to form a company to produce an exclusive high price vacation resort in this area, then which use of this scarce land resource w i l l provide the greatest good for the greatest number?.... Faced with such market evidence many cost-benefit analysts w i l l search for externalities that prevent individuals from expressing the "true benefits" of the wi ld l i f e preserve. It is not enough however to demonstrate that such externalities exist ; some measure-ment, however imperfect, about the magnitude of these externalities i s essential.54 Unt i l recently however, few i f any efforts have been made to act-ually measure these social values. Gaffney has suggested that land enhance-ment may in fact measure option values, since people pay for land which pro-vides them with options for use of nearby amenities. He asks, "Why would a man pay $70 a month to garage his car in Manhattan when he could park free in Weary Pra i r i e , Montana? He is paying for access to options, and the social cost he imposes is that of occupying l imited space with best access P.A. Davidson, "The Valuation of Public Goods", in M.E. Garnsey and J.R. Hibbs, eds., Social Sciences and the Environment Conference on the Present and Potential Contribution of the Social Sciences to Research and Policy Formation in the Quality of the Physical Environment, (Boulder, Colo. University of Colorado Press, 1967) pp.149-150. - 38 -55 to options." While i t i s undoubtedly true that option demand may be reflected in nearby land values in some cases, land values also ref lect use value and speculation, so that some means of separating land values into their respec-t ive components would be needed to u t i l i z e this measure. Furthermore, people residing far from a recreation area may have option and preservation demand for an area, tota l ly unrelated to the value of land in their own community. As with the measurement of compensation payment consumer surplus, probably the only way to measure " soc ia l " values i s v ia the direct or inter-view approach. Meyer has made what may be a f i r s t attempt to measure option and preservation values empirically. In this study, personal interviews were used to establish the recreational and preservation values of Fraser River salmon stocks to residents of the Fraser River Basin. In an effort to induce respondents to evaluate Fraser River salmon and recreation in the same way that other public goods are valued, respondents were f i r s t presented with a l i s t of annual per household municipal expenditures on various services (for Kamloops and Vancouver) and asked to change the amounts to conform to their own preferences. No budgetary l imitat ion was imposed^ respondents could both transfer funds from education to f i r e protection e tc . , and i n -crease the tota l in any category. Respondents were then asked to place annual dollar values on recreational activit ies , options for recreational use, and preservation of both the Fraser River environment and i t s salmon ^ M . Gaffney, "Discussion", in M.E. Garnsey and J.R. Hibbs, eds., Social  Sciences, p .160. "*^P.A. Meyer, Recreational and Preservation Values Associated with the Salmon of the Fraser River, Information Report Series No. PAC/N-74-1, (Vancouver, B . C . : Environment Canada, Fisheries and Marine Service, 1974), 49p. - 39 resource, using the values they had assigned to municipal services as a guide. Unfortunately, option and preservation values were not reported separately i n the study. However, the results of this study are interest-ing. Respondents placed a mean annual value of $223 on salmon preservation and option values, for a tota l 1972 value of $100,560,000. Recreational use of Fraser River salmon was valued at $185,600,000 annually for residents 57 of the Fraser River Basin. While the magnitude of the estimated values derived in this study are open to serious question (In 1972 the landed value 58 of a l l salmon in B.C. was $50,000,000 ), i t is fe l t by this author that the relationship between preservation and use values is highly s ignif icant . This relationship would appear to indicate that option and preservation values for Fraser River salmon do in fact exist and are large, representing about 35 percent of the total dollar recreational use and preservation value of Fraser River salmon to recreationists in B.C. The large absolute values generated in Meyer's study are i l l u s t r a -tive of the problem of the proper design, execution and interpretation of opinion surveys. For example, while the mean value for preservation of salmon was $223 i n this survey, the median value was only $50. A maximum value l imi t of $100,000 was established for this survey, and any responses over $100,000 were valued at $100,000. Thus, the tota l value i s highly affected by the small minority of respondents who placed extremely high 59 values on use and preservation. Since no budget constraints were placed 57 Ibid, pp.16-17. 58 Fisheries and Marine Service, Annual Summary of Br i t i sh Columbia Catch Sta- t i s t i c s 1972, (Vancouver, B . C . : Department of the Environment, 1973), p.2. 59 P.A. Meyer, private interview, Vancouver, B . C . , February, 1975. - 40 -on respondents, i t could be argued that use of a much lower l imi t should have been used, especially in view of the difference between mean and median values, and the large impact the high responses had on the results . Use of a 90th percentile range of responses, for example, would have eliminated the "lunatic fringe" at both ends of the scale, and given tac i t considera-tion to the probabil i ty that some respondents either misunderstood the exer-cise or engaged in gamesmanship. It i s also possible that since preservation of salmon fisheries is a federal responsibi l i ty , respondents should have been asked to estimate values based on a comparison with federal, rather than municipal, govern-ment expenditures. As a measure of whether respondents agree with present al location of government funds to various services, respondents could also have been asked to reallocate government expenditures without increasing tota l expenditures. F i n a l l y , this survey did not exp l i c i t ly use either the price com-pensating or price equivalent measure of consumer surplus. Rather, respon-dents were asked to "place a value" on recreation and preservation. In a later study, Meyer reported significant differences between values, based on the willingness to pay, compensation, "community decision" and jud ic i a l 60 award approaches. A sample of Victor ia area residents were asked a l l four questions in re lat ion to preservation values for the tota l sa l t water environment of the Victor ia area. The mean household values for these questions were as follows: P.A. Meyer, "A Comparison of Di r e c t Questioning Methods f o r Obtaining D o l l a r Values f o r P u b l i c Recreation and Preservation," forthcoming paper, 1975, 20p. - 41 -Question Mean Value Community dec i s i o n $14,833 you pay $ 2,894 j u d i c i a l award $10,519 pay you $27,079 Again, the absolute values are probably inaccurate f o r the reasons already noted, although the r e l a t i o n s h i p s between the d i f f e r e n t measures are s i g n i f i c a n t . Thus, the mean value for compensation i s nine times higher than the w i l l i n g n e s s to pay measure, with the "community d e c i s i o n " method f a l l i n g i n between these extremes. As w i l l be shown i n Chapter 4, the case study of Wells Gray Park and other s i m i l a r studies have also reported large d i f f e r e n c e s between wi l l i n g n e s s to pay and compensation values, and as has been noted previously, the d i r e c t or interview method i s the only one capable of measuring compen-sat i o n values and other s o c i a l values associated with the preservation of natural environments. Conclusions I t has been the purpose of t h i s Chapter to review some of the more popular techniques used for estimating the economic value of outdoor recrea-t i o n . I t i s i n t e r e s t i n g to note that by f a r the most popular technique, at l e a s t h i s t o r i c a l l y and numerically, has been the expenditures approach, while most economists have denounced t h i s method since i t gives no i n d i c a -t i o n of net values, or consumer surplus. Data on r e c r e a t i o n i s t s 1 expendi-tures i s only u s e f u l as a guide i n the estimation of secondary economic b e n e f i t s , the increase i n net incomes generated by expenditures. Secondary - 42 -benefits are only relevant measures of economic value under special circum-stance, where unemployment exists or where there is an exp l ic i t desire to redistribute incomes to part icular areas. Under normal circumstances, most expenditures merely represent transfer payments from one area or sector of the economy to the other. There i s general agreement that the most va l id method of measur-ing recreation values i s through the estimation of a t radi t ional demand curve, which then allows the estimation of consumer surplus. Both the travel cost method and the direct or interview method provide vehicles for the expression of demand functions. Both of these techniques have problems. However, i t is s ignificant that while the travel cost approach can be c r i t i -cized on theoretical and technical grounds, the direct or interview approach is at least conceptually sound and i t s flaws l i e in the area of application. Its chief problem is that i t i s d i f f i c u l t to obtain unbiased and r e a l i s t i c answers to a hypothetical question. Presumably then, i f i t i s possible to design, execute and interpret a questionnaire or interview survey properly, a va l id estimate of value can be derived, especially where an existing recreational area is threatened by alteration and the proper measure of value is the welfare loss suffered by users (price equivalent consumer surplus). No doubt, the reason why the expenditures approach and the travel cost approach are popular is that data on recreational expenditures and travel distances i s readily available, having been collected for years by various public agencies. Given this broad data base, value surveys can be undertaken at minimal cost since l i t t l e or no fieldwork is required. The direct approach, on the other hand, requires expensive questionnaire or - 43 -interview surveys, the design of which is d i f f i c u l t . It is the author's opinion, however, that where time and budget allow, use of the direct approach offers a superior technique for estimat-ing both user and non-user values. In fact, the direct method appears to be the only pract ica l way to establish option and preservation values, and as has been indicated by Meyer's research, these non-user values may be highly s ignif icant . It i s not unreasonable to suggest that in some cases, non-user values may be more important than user values. An example of this might be the value of preserving whooping cranes, a cause widely supported by the public and governments, even though very few people are ever l i k e l y to see this species, or to enjoy i t d i rect ly . It i s also l i k e l y that, in time, suff icient data w i l l be ava i l -able on user and non user opinions regarding values that the evaluation of specific sites w i l l be possible without the necessity of f i e l d research. Many agencies presently use rule of thumb estimates of day values for recreation, although these estimates are largely based on past expenditure or travel cost studies. To the extent that these rule of thumb methods are va l id , i t would also be va l id to develop rule of thumb estimates based on price equivalent consumer surplus and social value studies. Since neither time nor finances were serious l imitations in the study conducted for Wells Gray Park, and because of the specif ic nature of the problem; potential loss of the resource to hydroelectric development and the need to identify both resident and non-resident values, the direct method was chosen for valuation purposes. The methodology and results of this case study are reported in the following chapter. - 44 -CHAPTER III THE CASE STUDY The preceding chapters have outlined the various methodologies which have been used to evaluate non priced recreational resources. It has been argued that the most relevant measure of user value i s the net economic benefit derived from use and enjoyment of an area or a resource. Consumer surplus, which is a measure of the "free" value enjoyed by people over and above their actual costs , i s believed to represent the best measure of the net worth of outdoor recreational use. It has further been noted that, depending on the particular circumstances of an individual problem, there are two kinds of consumer surplus, price equivalent (the compensation principle) and price compensating (willingness to pay). Generally, where an existing recreational use may be superceded by " industr ia l " development, the principles of welfare economics dictate that the appropriate measure of use value is the amount users would have to be compensated for loss of an opportunity formerly enjoyed. Where an area is proposed for recrea-t ional development, on the other hand, the appropriate measure is the amount users would be wi l l ing to pay for access to the resource. Further-more, welfare losses (the compensation principle) are only appropriate for residents within the jur i sd ic t ional area of the investigating agency. Thus, for a provincial agency, the loss to i t s residents from destruction of a natural environment would consist of the welfare loss to i t s res id-ents (compensation required) plus the net income losses generated or potential ly generated by non-residents (their willingness to pay for con-tinued access). In addition, net secondary income generated by the expendi-- 45 -tures of both residents and non residents may be relevant, especially where there is a conscious desire to bolster local economies. This chapter i l lus trates the application of these analyt ical pr in-ciples in a case study of Wells Gray Park, and shows the large differences in value estimates which are generated by the two measures of consumer surplus. Addit ional ly , s ignificant differences in value estimates were generated in mail questionnaires and personal interviews, and are reported. Background Wells Gray Park, encompassing some 1,300,000 acres in the inter ior wet belt of B .C . ' s Columbia Mountain Range, was established in 1939 as a Class B provincial park. It includes most of the Clearwater River watershed, including Clearwater and Azure Lakes. Major tr ibutaries such as the Mahood River, which drains Mahood Lake, the Myrtle River and Hemp Creek are also park of the Park. These clear, free flowing r iver s , Clearwater and Azure Lakes, the spectacular waterfalls on the Myrtle and Mahood Rivers, and an undeveloped wilderness atmosphere represent the chief attractions of the Park, and the desire to preserve these attractions was undoubtedly the rea-son for the establishment of the Park. In Class B parks, other uses which do not grossly conf l i c t with park requirements, are allowed. In contrast to Class A parks, for example., hunting is allowed and has occurred throughout the Park's history. Several large forest f ires in the 1920's and 1930's created excellent deer and moose habitat, and the Park's moose population was estimated at about 2000 animals during peak successional stages. In recent years, forest succession has removed much of the browse material favored by moose, and while the - 46 -game population is declining, the Park continues to be popular for hunting, due both to i t s late season (until Dec. 31) and the lack of access res t r ic-tions for hunters. Several hunting guides operate i n the area, and trapping i s carried out on a small scale. There are no active mining operations in the Park at present, although lode gold claims have been worked in the past. At present, an active logging operation is being carried out on the west side of the Clearwater River. While much of the active logging i s in areas adjacent to the Park, Park land is also being logged. A logging road has been bu i l t along the west side of the Clearwater River, to i t s confluence with the Mahood River, and this road provides good access to recreationists , who are attracted to the fishery at the confluence of the two r ivers , as well as Sylvia-Goodwin Fal l s on the Mahood River. Recreational use i s concentrated in the southern portion of the Park. Road access i s available to the outlet of Clearwater Lake, where a campsite is available. Use is concentrated at Helmcken and Dawson F a l l s , the Clearwater River and Clearwater Lake, and on Azure Lake, where several undeveloped camping areas are accessible to canoeists and other boaters. Although recreational use of the Park has increased dramatically in recent years, r i s ing from 19,000 to 39,000 v i s i to r days between 1965 and 1970, the Park remains in a largely primitive, natural state at present. While the Clearwater River system represents a valuable recrea-tional asset, i t has also been investigated for development of i t s hydro-electr ic and flood control potential for a number of years. In 1958 the Fraser River Board presented a preliminary report on i t s investigations into areas where power and flood control dams could be located in the - 47 -Fraser River drainage area. One of these a l t e r n a t i v e s , System A, consisted of a s e r i e s of 11 dams on the Clearwater, Cariboo, McGregor, Upper Fraser 61 and Stuart Rivers. This a l t e r n a t i v e was recommended f o r f u r t h e r i n v e s t i -gation, and i n 1963 the Board published a more d e t a i l e d study of various 62 a l t e r n a t i v e s f o r power and fl o o d c o n t r o l development. This l a t t e r report recommended development of "System E" which now consisted of 8 dams located on the Clearwater, Cariboo, McGregor and Upper Fraser Rivers. The dam on the Stuart River was eliminated, at l e a s t p a r t l y because of the adverse e f f e c t i t would have had on the important sockeye runs to the Stuart system. Fi v e of the proposed'dams would be located i n the Clearwater River basin, and three of these would l i e wholly or p a r t l y i n Wells Gray Park. The l o c a -t i o n of the proposed System E dams i s shown i n Figure 2. Development of System E, and i n p a r t i c u l a r the 3 dams and r e s e r -v o i r s i n Wells Gray Park, would s u b s t a n t i a l l y a l t e r the Park's wilderness character, e l i m i n a t i n g or degrading some of i t s w a t e r f a l l s , and s u b s t a n t i a l l y reducing i t s f i s h and game population. In i t s F i n a l Report, the Fraser River Board summarized the subsmission made to i t by the B.C. Department of Recreation and Conservation. This summary provides a good overview of the nature o f the proposed developments and t h e i r e f f e c t on the Park, and are reproduced here. I t i s considered that from the standpoint of the intended use of the park for re c r e a t i o n , the proposals to create r e s e r v o i r s on the Clearwater River and to r a i s e Fraser River Board, Preliminary Report on Flood Control and Hydro-Electric Power i n the Fraser River Basin, ( V i c t o r i a , B.C.: 1958). Fraser River Board, F i n a l Report of the Fraser River Board on Flood Control and Hydro-Electric Power i n the Fraser River Basin, ( V i c t o r i a , B.C.: 1963). - 48 -FIGURE 2 Proposed Location o f Syrtern E Dams LEGEND PARK BOUNDARY POWER SITES POWER & STORAGE SITES SUB -BASIN DEVELOPED SUB-BASIN ERASER RIVER? BASIN /NDEX s/rr /// GRAND CANYON /Oa LOWER MCGREGOR 89 CAR/BOO FALLS JS3 HOBSON LAKE /42s4 CLEARWATER -AZURE M2 HE MP CREEK W CL EAR WA TER /94A GRAN/TE CANYON SUB-BASJ/VS UPPER ERASER RIVER /yl" GREG OR RIVER CAR/BOO RIVER CL EARWA TER RIVER CLEARWATER RIVER CLEARWATER RIVER CLEARWATER RIVER CLEARWATER RIVER (PORTAGE MOUNTAIN) (PEACE RIVER j 80 SCALE IN MILES Source: Fraser River Board, F ina l Report, p.60. - 49 -the levels of Clearwater, Azure, and Hobson Lakes would be disastrous. These projects, i f constructed, would ruin the scenic wilderness of the park, whether the reservoir margins were cleared or not. The erection of the dams would, of necessity, c a l l for roads, con-struction camps, storage depots, borrow p i t s , and other excavations, a l l of which would contribute in changing the character of the park. Spec i f ica l ly , the reservoirs would affect the amenities of the park in the following ways. The Hemp Creek project would flood out some 23 miles of the Clearwater River and would obliterate both Sylvia and Goodwin Fa l l s on the Mahood River, although the high Helmcken Fa l l s on the Murtle River would lose, at maximum reservoir elevation, only some 25 feet of i t s 420-foot clear drop. The sport fishing in this reach of the Clearwater and Mahood Rivers would be los t , and the scenic aspect of the park in this area would suffer to some extent from the drawdown area which, devoid of growth, would be exposed along the reservoir margin i n varying amounts throughout the-recreational period of the year. The Clearwater-Azure dam would create a reservoir by combining both Clearwater and Azure Lakes and rais ing the water-level approximately 150 feet on each lake. This would flood about 10 miles of the Azure valley at the east end of Azure Lake and the short section of r iver between the two lakes. Lost to the park would be the present beaches along both lake-shores and the attractive Rainbow Fa l l s on Angushorne Creek. The new shoreline would be steep and would lack usable ground for recreational purposes. During the season of maxi-mum use by the public the scenic aspects of the water-ways would, for some part of the time, be marred by the barren drawdown s tr ip along the reservoir rim, although this would not materially detract from the background of fine mountain scenery. The third reservoir, u t i l i z i n g Hobson Lake, would inundate the small acreage of useful lake-frontage on which public use of the present lake would centre. Hobson Lake receives very l i t t l e use at present. Heavy public use of this area is neither expected nor even considered part icular ly desirable. The intended func-tion of the lake, from a park management standpoint, is as part of a wilderness environment, v i s i ted by those seeking a truly adventurous experience in wildly beauti-ful country. It's importance to Wells Gray Park l i e s in the atmosphere of untouched naturalness which i t can offer park v i s i to r s . The proposed works would eliminate this attraction from the park. - 50 -If flood control in the Lower Fraser Valley is the important issue, then the contribution to the total control by reservoirs affecting Wells Gray Park and the p o s s i b i l i -t ies of obtaining this control through other sites and i n other ways should be carefully weighed against the loss of an outstanding wilderness waterway.^3 In 1970 the Fraser River Board again undertook study of System E, including a more comprehensive analysis of i t s effects on other resource uses. As part of this study an Ecology Committee was formed to invest i -gate the impact of System E on f i sh , w i l d l i f e , parks and recreation, forestry, agriculture and mining. The Ecology Committee engaged Pearse Bowden Economic Consultants Ltd. and Howard Paish and Associates Ltd. both of Vancouver, to analyse the effects of System E on f i sh , w i l d l i f e , parks and recreation. The case study presented in this chapter was conducted by the author and other mem-bers of Pearse Bowden while employed with that company, and the findings 64 formed part of a report which was submitted to the Ecology Committee. While that Report dealt with the entire System E proposal, only the research conducted i n Wells Gray Park is included in this thesis. The study area is shown in Figure 3. The proposal for hydroelectric and flood control development i n Wells Gray Park represents a c la s s ica l and highly s ignif icant example of a resource use conf l ic t involving outdoor recreation in a natural environ-, ment. Wells Gray Park's scenic wilderness and clear free flowing rivers were thought f i t for preservation under Park status in 1939, and the 6 3 I b i d . p.94. 64 Pearse Bowden Economic Consultants L t d . , Evaluation of the Impact of the  Proposed System E Dams on F i sh , Wi ld l i f e , Parks and Recreation, A report submitted to the Ecology Committee, Fraser River Board, (Vancouver, B .C . : 1973). i I I i \ \ ' I r i RAY FARI«\ M A H O O D RW£R. DAWSON CAfAPSUE FALLS FIGURE 3 The Wells Potential L a r g e Gray Park Study Area and Campsite Areas, f a c i l i t y p o s s i b l e 30-50 s i t e s S m a l l f a c i l i t y p o s s i b l e 10-20 s i t e s Roads V u:\vh-rY .1 f>?AUAT6 C AIM'S VTE. FALLS CLEAfc-WATf-R., B.C. - 52 -continuous development of other r iver basins in B.C. to hydroelectric and forestry interests has made areas of this type increasingly scarce in the past three decades. The Clearwater River, as i t s name implies, i s some-what ,unique_ i n the Fraser drainage.area, since Clearwater, .Azure and Hobson > Lakes act as catchment basins, resulting in a clear free flowing river_down-stream from Clearwater Lake. The almost tota l lack of human development in the Clearwater drainage basin also means that the r ivers and lakes in the Park are almost to ta l ly unpolluted. The rivers and^lakes, as well as the spectacular waterfalls, represent an irreplacable recreational asset. While the hydroelectric power and flood control benefits of System E development could be duplicated by numerous other alternatives, the natural environment of Wells Gray Park could not, as there are no unalienated areas comparable to i t i n central B.C. Study Purpose The main purpose of the study conducted in Wells Gray Park was to evaluate the impact of System E development on Park use and values. In order to do th i s , i t was necessary to f i r s t determine present and potential future recreational use of the Park under the assumption that System E were not developed (the preservation alternative) . Secondly, suff icient data was required on Park use patterns to allow a prediction to be made of the potential recreational use and value of the Park in the event System E was developed (the development alternative) . By comparing the results of these two alternatives, a conclusion can be drawn about the l i k e l y net im-pact of System E development on Park use and values. Study Methodology Because of the lack of detailed published data on park use, and - 53 -the t o t a l lack of data on values, a program of o r i g i n a l data c o l l e c t i o n was necessary. The d a t a which formed the basis f o r t h i s study was c o l l e c t e d during 1971 using personal observation and an extensive program of personal interviews, and mail, questionnaires.. ..All v i s i t o r s were enumerated by-study personnel at the main entrance to the park, and addresses were obtained. T r a f f i c counters were ruled out both because of the heavy construction t r a f f i c i n the Park during 1971 and because of the need to obtain names and addresses f o r questionnaire purposes, and to separate residents and non r e s i d e n t s . (In any case, the use of automatic t r a f f i c counters i n park areas requires a f a i r l y d e t a i l e d knowledge of l o c a l t r a f f i c patterns and the exer-c i s e of judgement. For example, i t i s p o s s i b l e that the i n j u d i c i o u s use of t r a f f i c counters by the U.S. Army-Corps of Engineers may be r e s p o n s i b l e - f o r the unusually high use f i g u r e s claimed f o r some Corps r e s e r v o i r s . The Corps manages several campsites on Lake Francis Case, a large r e s e r v o i r on the 65 Missouri River. In 1973, 1,4'50,000 user days were estimated. However, during a summer inspection of the area, the author noted that while few v i s i t o r s were present, automatic t r a f f i c counters had been placed at the entrance of each camping area. I t i s considered l i k e l y by the author that campers and casual v i s i t o r s may inspect several camping areas before choos-ing one, thereby g r o s s l y i n f l a t i n g the t r a f f i c count, and hence the v i s i t o r use estimates.) A t o t a l of 266 personal interviews were completed during the 1971 summer and f a l l season, and 1865 mail questionnaires were sent to study area v i s i t o r s . Of these, 1275 usable questionnaires were returned, f o r U.S. Army Corps of Engineers, Unpublished v i s i t a t i o n data, (Pickstown, South Dakota: 1974). - 5 4 -a usable response rate of 68 percent. During the course of the study, i t was necessary to make assump-tions regarding the level of management under both the preservation and development alternatives. Given h i s to r i ca l and expected future growth rates in attendance at Wells Gray Park, i t became clear that severe crowd-ing would occur in the future i n the absence of some policy of either re-str ict ions on use, expansion of f a c i l i t i e s , or both. This problem is es-pecia l ly troublesome since as the Park's presumed maximum capacity i s e reached, and access restr ict ions become necessary to preserve the quality .. of both the Park and the experience enjoyed by users, some decision must be made regarding the treatment of resident and non-resident users. While past Park policy has largely been one of inaction and non-discrimination between residents and non-residents, some form of discrimination would be necessary i f the "value" of the Park were to be maximized, since the value of per capita resident use far exceeds the value of per capita non-resident use to B.C. This i s because the referent area for this study was taken to be B . C . , so that the price equivalent measure of consumer surplus (compensa-t ion required) was used for B.C. residents while the price compensating mea-sure was used for non-residents. Both primary and secondary economic values were estimated based on the data collected during interviews and mail questionnaires, and the relat ive magnitude of option and preservation values were described but not quantified. Values were calculated in their present value equivalents for the period 1972-2032, using various discount rates and rates of growth i n real values for recreation. - 55 -66 Present Recreational Use The v i s i to r enumeration program indicated that a total of 15,750 people v i s i ted Wells Gray Park during the summer of 1971, for a tota l of 44,300 user days. Sl ightly more than half of Park users were B.C. residents. It became apparent during the course of the study that actual use of the Park was lower than would be expected under "normal" circumstances. F i r s t , an extensive reconstruction program was in progress on the Park's only major access road, and this coupled with unusually wet weather deterred many people from using the Park. At times, in fact, study personnel conduct-ing enumeration at the Park entrance advised tourists not to attempt to enter the'Park, due to impassable conditions. Also, depressed economic conditions in North America served to reduce tourism throughout B.C. , and Parks Branch data indicated that tota l Park attendance f e l l by almost 3 percent in 1971, 67 compared to a "normal" growth rate of more than 10 percent. As a result , actual attendance figures were adjusted upward to approximate more closely the "normal" 1971 attendance, to a tota l of 51,000 v i s i t o r days, as shown in Table 1. V i s i to r use was s t ra t i f i ed by area of i origin,-with " loca l " residents including B.C. residents from Kamloops in the south to Valemont i n the north. This s t ra t i f i ca t ion was necessary since different measures of value were required for B.C. residents and non-resid-ents. Furthermore, the response to questions of value varied by area- of-The s t a t i s t i c s , tables and findings presented in this chapter form a por-tion of the report which was submitted to the Ecology Committee. This chapter summarizes some of the findings which are relevant to the theme of this thesis. Parks Branch, "Provincial Park Attendance Drops S l ight ly" , Unpublished news release, Dec. 1971. TABLE 1 Estimated 1971 Recreation A c t i v i t y i n the Wells Gray Park-Clearwater River Area, by Month and V i s i t o r O r i g i n . (Adjusted f o r Abnormal Conditions)  Area of O r i g i n : LOCAL OTHER B.C. OTHER CANADA FOREIGN TOTAL V i s i t o r V i s i t o r V i s i t o r V i s i t o r V i s i t o r Month V i s i t o r s Use V i s i t o r s Use V i s i t o r s : Use V i s i t o r s Use V i s i t o r s Use June 467 1,395 1,038 2,929 678 1,659 715 2,176 2,898 8,159 July 1,013 3,020 2,202 6,216 1,710 4,181 1,619 4,929 6,544 18,346 August 1,112 3,319 2,460 6,945 1,449 3,542 1,649 5,021 6,670 18,827 September 323 960 714 2,018 466 1,139 492 1,495 1,995 5,612 TOTAL 2,915 8,694 6,414 18,108 4,303 10,521 4,475 13,621 18,107 50,944 Source: Pearse Bowden Economic Consultants Ltd., Evaluation of the Impact of the Proposed System E Dams  on F i s h , W i l d l i f e , Parks and Recreation, A report submitted to the Ecology Committee, Fraser River Board, (Vancouver, B.C.: 1973), p.10. - 57 -residence (as would be expected from findings in studies using the travel cost approach), and these differences were used in the estimation of future expected values. In addition to summer use, the study area accounted for some 8100 hunter days, as shown in Table 2. Thus, a tota l of 59,000 v i s i t o r days was estimated for the study area. Park User Act iv i ty Patterns and Preferences The System E proposal includes 5 dams on the Clearwater system, and since i t i s possible that some, but not a l l , of these dams could be b u i l t , or b u i l t in stages over a number of years, i t was considered desir-able to obtain s ite specific data on recreational use and values in the Park. This kind of detailed information on s i te specif ic v i s i t o r ac t iv i ty patterns allows an evaluation to be made of the potential impact of either r iver dams such as the Hemp Creek dam which would innundate 23 miles of the Clear-water River, or the Clearwater-Azure dam which would not substantially affect the Clearwater River but would a l l but eliminate the recreational value of Clearwater and Azure Lakes. Also, none of the proposed dams would substantially alter Helmcken F a l l s , so that even under f u l l development of System E, some of the attractions of Wells Gray Park would s t i l l remain and would continue to support recreational use. It was therefore considered important to determine both v i s i t o r use patterns in various areas of the Park and v i s i to r preferences and motivations for v i s i t i n g the Park. Questions 5 through 10 in the mail questionnaire and 5 through 9 in the personal interview were designed to obtain this information (see Appendix A). TABLE 2 Estimated Number of Resident Hunters and Estimated Number of Days of Hunting i n Wells Gray Park (M.A. 12), 1970-71  Residence Area Number of Hunters Days Deer Hunting Days Moose Hunting Days Other Big Game Days Bird Hunt To t a l Days Vancouver Island Lower Mainland Okanagan Kamloops Cariboo-Chilcotiri Northern B.C. Peace River Kootenays Upper Coast 86 858 321 442 31 107 19 57 1,301 599 394 44 134 201 114 2,739 820 651 .15 247 19 255 179 39 175 112 58 171 4,470 1,419 1,336 59 381 317 A l l Areas 1,864 2,730 4,605 473 . 345 8,153 Source: Pearse Bowden Economic Consultants Ltd., The Value of Resident Hunting i n B r i t i s h Columbia, A report prepared f o r the Department of Recreation and Conservation, Fish and W i l d l i f e Branch, ( V i c t o r i a , B.C.: 1972). - 59 -The data received from the mail questionnaires was tabulated by v i s i to r area of o r i g in , act iv i ty and area of use. The results of this tabu-lat ion are presented i n Table 3 which presents a summation of ac t iv i ty patterns for a l l users, and provides a measure of the most important ac t i -v i t i e s in the Park. As can be seen in this Table, f ishing was by far the most important ac t iv i ty for a l l groups, representing 51 percent of a l l Park use. Sightseeing was next important and accounted for 26 percent of the time spent in the Park. This data however misrepresents the relat ive impor-tance of fishing and sightseeing as Park attractions. Almost half of the respondents to the questionnaire indicated that viewing the Park's f a l l s was the main reason for their v i s i t , and 61 percent of a l l respondents c las s i -fied sightseeing as "very important", while only 20 percent ranked fishing in the same category. Act iv i ty rankings are presented in Table 4. It was also determined, as expected, that most recreation in the Park is water oriented. About 44 percent of a l l ac t iv i ty centered around Clearwater and Azure Lakes, with a further 28 percent associated with the Clearwater River. Local residents in particular u t i l i z e d the Clearwater River, primarily for fishing along the west side of the River, which is accessible by logging road. The remaining 28 percent of recreational use occurred at Spakats, Dawson and Helmcken F a l l s , and over 80 percent of a l l v i s i tors had seen Dawson F a l l s . Helmcken Fa l l s i s by far the most spectacular attraction of the Park, although due to poor road conditions only 77 percent of v i s i tor s saw this f a l l s in 1972. In order to gain some impression of v i s i t o r s ' qualitat ive assess-ment of the Park, questionnaire and interview respondents were asked to TABLE 3 Act iv i ty Patterns in Wells Gray Park ALL GROUPS  (Based on questionnaire responses and expanded to "normal" 1971 attendance) Clearwater Clearwater Campsite Lake Azure Lake Angus Home Ray Farm Helmcken Fal l s Act iv i ty people days people days people days people days people : days people days camping 2990 610 264 439 227 79 sightseeing 1069 911 440 413 292 209 236 244 1326 571 8813 3558 fishing 1527 3619 2533 5456 971 1657 917 2335 678 1615 65 46 hiking 1649 2365 294 430 171 236 259 362 522 452 523 383 boating 258 421 633 631 245 147 159 138 canoeing 107 267 713 1305 246 296 173 277 other 314 179 340 324 206 93 132 75 72 27 689 313 TOTAL 5548 7762 3564 8559 1497 2638 1148 3431 240 7 2665 9543 4300 Dawson Fal l s Spahats Fal l s Clearwater Sylvia Fal l s Total River people days people days people days peopli e days people days camping 2432 2256 754 54 10105 30305 sightseeing 9278 3999 6219 2457 843 814 117 58 13234 fishing 876 1290 167 276 2403 8836 228 651 25781 hiking 789 880 545 642 407 663 23 32 6445 boating 1337 canoeing 31 18 16 18 2163 other 1080 421 643 211 226 341 1984 TOTAL 11585 6590 8291 3586 3749 10672 325 759 18107 50944 Source: Pearse Bowden, The Impact of System E, p.14. TABLE 4 Ranking of A c t i v i t i e s by 1971 Summer V i s i t o r s to the Wells Gray Park-Clearwater River Area, by Area of Or i g i n AREA OF ORIGIN: Other Local Other B.C. Canada Fo r e i gn TOTAL A c t i v i t y and Rank No. % No. % No. % No. % No. % Sightseeing: Very Impt. 160 75% 195 59% 212 61% 215 56% 782 61% Impt. 43 20 114 35 110 32 137 36 404 32 Not Impt. 10 5 16 5 26 8 33 9 85 7 Camping: Very Impt. 92 43 115 35 110 31 . 139 36 456 36 Impt. 53 25 106 32 104 30 133 34 396 31 Not Impt. 68 32 108 33 134 38 113 29 423 33 F i s h i n g : Very Impt. 47 22 58 18 56 16 98 25 259 20 Impt. 44 21 85 26 81 23 79 21 289 23 Not Impt. 122 57 186 56 211 60 208 54 727 57 Hiking: Very Impt. 33 16 19 6 49 14 82 21 183 14 Impt. 43 20 99 30 80 23 98 25 320 25 Not Impt. 137 64 211 64 219 63 205 53 772 61 Motor Boating : Very Impt. 23 11 6 2 14 4 29 7 72 6 , Impt. 26 12 41 12 29 8 51 13 147 12 Not Impt. 164 77 282 86 305 88 305 80 1056 83 Canoeing: Very Impt. 15 7 21 6 11 3 16 4 63 5 Impt. 11 5 12 4 15 4 16 4 54 4 Not Impt. 187 88 296 90 322 93 353 92 1158 90 Other: Very Impt. 15 7 28 8 34 10 19 .5 96 8 Impt. 5 2 16 5 30 9 18 5 69 5 Not Impt. 193 91 285 87 284 81 348 90 1110 87 The "not important" category includes respondents who made no comment. Source: Pearse Bowden Economic Consultants Ltd., Interim Progress Report, A report submitted to the Ecology Committee, Fraser River Board, (Vancouver, B.C.: 1972), p.29. - 62 -rank the Park. The r e s u l t s of t h i s question are presented i n Tables 5 and 6. I t i s i n t e r e s t i n g to note that the response was s i g n i f i c a n t l y d i f f e r e n t for questionnaire and interview respondents. Whereas 30 percent of i n t e r -viewees ranked the Park as "the best", only 14 percent of questionnaire respondents did so. Several p o s s i b l e explanations for t h i s d i f f e r e n c e are p o s s i b l e . An unknown sample bias may have occurred, although both samples were randomly selected. Some interviewer induced^bias may have occurred, with people g i v i n g answers they thought the interviewer would " l i k e " . A lso, the q u a l i t y of the area may not appear as high i n retrospect as i t does dur-ing the v i s i t . Nevertheless, even f o r questionnaire respondents, 64 percent ranked the area as "the best" or "among the best". V i s i t o r s were also asked to l i s t the w i l d l i f e they had seen and to rank the importance of s i g h t i n g w i l d l i f e , since System E development would s u b s t a n t i a l l y a f f e c t w i l d l i f e populations i n the Park. Tables 7 and 8 pre-sent the r e s u l t s of t h i s question .for interview respondents. Almost h a l f of the persons interviewed had sighted bears (sometimes during the interview, as. numerous bears had determined that the Clearwater campsite was i d e a l bear h a b i t a t ) . About 17 percent had sighted other b i g game, c h i e f l y moose and deer. In a l l , 81 percent of interviewees ranked the s i g h t i n g of w i l d l i f e as very important. Also, as can be seen i n Table, 93 percent of interview respondents planned to return again to the Park. This f i n d i n g has implications f o r the s i g n i f i c a n c e of option demand which may be generated by the Park. Since almost h a l f of the v i s i t o r s contacted i n the study were f i r s t time users of the Park, and since t o t a l use of the Park i s only growing at about 10 percent annually, TABLE 5 Rank the best among the best average poor no comment Questionnaire Respondents, Ranking of the Wells Gray Park-Clearwater River Area, by Area of Ori g i n .  Area of Origin: Local No. Other B.C. No. % 37 123' 37 6 10 17% 58 17 3 5 45 193 56 22 13 14? 59 17 7 4 Other Canada No. % 32 163 79 40 34 9% 47 23 11 10 Foreign No. % 64 165 66 42 48 17% 43 17 11 12 T o t a l No. 178 14? 644 50 238 19 110 9 105 8 Source: Pearse Bowden, The Impact of System E, p.18. TABLE 6 Interviewee Ranking of the Wells Gray Park-Clearwater River Area Area of O r i g i n : Local Other B.C. Other Canada Foreign T o t a l Rank No. % No. % No. % No. % No. % the best 14 41 20 21 13 30 25 37 72 30 among the best 15 44 62 65 23 53 35 51 135 56 average 5 15 13 14 7 17 8 12 33 14 poor TOTAL 34 95 43 68 240 Source: Pearse Bowden, Preliminary Data Analysis, Wells Gray Park-Clearwater River, Submitted to the Ecology Committee, Fraser River Board, (Vancouver, B.C.: 1972), p.18. - 65 -TABLE 7 Incidence of Wildl i fe Sightings i n the Study Area by Area of Origin of Interviewees Wild l i fe Sighted Area of Origin Local Other B.C. Other Canada Foreign Total bears 10 53 28 40 131 other big game 7 15 11 13 46 small animals 7 64 27 32 130 game birds 1 6 6 16 29 Source: Pearse Bowden, Preliminary Data Analysis, p.25. - 66 -TABLE 8 Importance of Wildl i fe Sightings to Study Area Vi s i tor s , Number of Interview Responses by Area of Origin Rank of Importance Area of Origin  - Local Other B.C. Other Canada Foreign Total very important 14 80 34 64 192 important 5 10 13 8 36 unimportant 3 2 3 1 9 TOTAL 22 92 50 73 237 Source: Pearse Bowden, Preliminary Data Analysis, p.26. - 67 -TABLE 9 Study Area V i s i t o r s ' Intentions to Return, Number of Interview Responses by Area or O r i g i n Intend to Return Area of O r i g i n  Local Other B.C. Other Canada Foreign T o t a l 44 62 241 5 8 17 TOTAL 36 103 49 70 258 Yes No 35 1 100 3 Source: Pearse Bowden, Preliminary Data Ana l y s i s , p.30. - 68 -i t i s clear that many people who expressed a desire to r e v i s i t the Park, w i l l not do so, or w i l l not do so as often as intended. Consequently, i t i s reasonable to conclude that there are a great number of people in B.C. and elsewhere who have v i s i ted the Park, would l ike to return sometime in the future, and who could therefore be expected to attach some value to i t s continued existence and ava i l ab i l i ty . At the end of both the questionnaire and interview forms, space was provided for general comments, and the information received in response to this question i s highly indicative of the attributes which draw people to Wells Gray Park. A tabulation of the comments received in the mail questionnaire survey is presented in Table 10. It i s important to note that the request for comments was completely non-directive. The most fre-quent comment was a desire to have the area remain a wilderness with only rudimentary improvements. During 1972, the access road to Clearwater Lake was being improved by the Parks Branch, and a great many v i s i tor s expressed keen disappointment at the road improvement program, as they fe l t i t would destroy the wilderness atmosphere of the area. Almost half of the comments received were of this nature. Only 15 percent of v i s i tor s wanted to see the road improved, which is surprising considering the almost impassable conditions which existed during much of the summer, as a result of road-work. At times, vehicles had to be pulled through impassable areas near the Park entrance with bulldozers, a process which resulted. in substantial damage to many vehicles. As a further indication of v i s i t o r preferences, i t i s s ignificant to note that only one percent of respondents wanted stores or other commer-c i a l f a c i l i t i e s established within the Park. - 69 -TABLE 10 General Comments made by 1971 Summer Vis i tors Gray Park-Clearwater River Area, bv Area of to the Wells Orig in . Comment Number of Responses by Area of Origin Local Other B .C. Other Canada Foreign Total keep as a wilderness 66 103 140 148 457 more f a c i l i t i e s ; t r a i l s needed 11 • 10 30 49 100 fix road 16 28 72 32 148 f a l l s beautiful 4 11 3 16 34 beautiful area 17 48 81 89 235 do not bui ld dams 20 21 17 9 67 area i s "priceless" 28 70 9 2 109 need stores - . 1 8 4 13 need better supervision 5 23 39 23 90 other 19 50 34 78 181 Source: Pearse Bowden, Interim Progress Report, p.29. - 70 -P o t e n t i a l Recreational Use of Wells Gray Park Park planners a r e ( i n c r e a s i n g l y being faced with the problem of t r y i n g to accommodate r a p i d l y increasing demands f o r access and f a c i l i t i e s w i thin parks, without degrading the park q u a l i t i e s which users are seeking; This problem i s p a r t i c u l a r l y acute i n "wilderness" parks such as Wells Gray Park, since the wilderness atmosphere i n large p a r t depends upon l i g h t usage and uncrowded conditions. Wells Gray Park's 60 developed campsites are f u l l during most of the summer, and use has been inc r e a s i n g r a p i d l y i n the past few years. In order to make proj e c t i o n s of the amount of use which could be expected to occur i n the Park i n future, i t was necessary to consider the extent to which present f a c i l i t i e s could be expanded, without destroying the wilderness atmosphere of the Park which i s i t s main a t t r a c t i o n . As i s shown i n Figure 3, i t was f e l t that approximately 200 a d d i t i o n a l campsites could be developed i n the Park without s e r i o u s l y eroding i t s wilderness character. Major f a c i l i t i e s were proposed f o r the F a l l s areas, since these areas are already heavily used by the p u b l i c . Smaller campsites were assumed to e x i s t i n the future along the Clearwater River and on Clearwater and Azure Lakes. Based on the p r o v i s i o n of these f a c i l i t i e s , and a continuation of past growth rate i n use, an ultimate capacity of 238,000 v i s i t o r days was projected to occur by 1990. By 1985 however, camping f a c i l i t i e s would be f u l l y used and further growth would be r e s t r i c t e d to day users. Projected use was also broken down in t o river-based, general and hunting by v i s i t o r area of o r i g i n , so that an a n a l y s i s could be made of the impact of e i t h e r r i v e r or lake dams, as noted previously. Table 11 presents a breakdown of a n t i c i p a t e d maximum use. - 71 -TABLE 11 Projected Maximum Future Recreational Use of the Wells Gray Park-Clearwater River Area, by Area-of .Origin, 1990 (in v i s i t o r days) Area of Origin Type of Recreation Local Other B.C. Other Canada Foreign Total River-based 12,900 15,100 7,400 7,000 42,400 General 32,600 97,000 24,000 34,200 187,800 Sub-total 45,500 112,100 31,400 41,200 230,200 Hunting 1,300 6,800 8,100 TOTAL 46,800 118,900 31,400 41,200 238,300 Source: Pearse Bowden, The Impact of System E, p.21. - 72 -The Value of Recreation Under Preservation The primary purpose of the study of Wells Gray Park was to deter-mine the economic value of the recreation which would be foregone by devel-opment of System E, either in whole or in part. The determination of the methodology used to assess user values was based on the following consid-erations : 1. The referent area for the study was the province of B . C . , so that the potential loss to B.C. would consist of the welfare loss to B.C. residents as determined by the amount resident users would have to be com-pensated for loss of use, plus the amount that non-residents would be w i l l -ing to pay for continued access to the area, plus any net secondary bene-f i t s to the B.C. economy which would be lost as a result of a reduction in expenditures associated with use of the area. 2. The Hemp Creek and other r iver dams would affect only the Clearwater River d i rec t ly , while the Clearwater-Azure dam would affect only Clearwater and Azure Lakes d i rec t ly . In order to assign losses to each part of System E, i t was necessary to determine the values placed on the river and lake environments, respectively. Accordingly, both in the interview and questionnaire programs, resident users were asked the amount of compensation required for a day's recreation, while non-residents were asked to state their willingness to pay, and responses were s t ra t i f i ed into river-based and general categories. Interview Results Table 12 presents the results of the interview survey. Both the magnitude of the compensation values for B.C. residents and the difference - 73 -TABLE 12 Average Recreation Values Per Day Based on Interview Responses. Day Values Area of Residence River Based General Loca l 1 $48. 10 $56.70 Other B . C . 1 30. 60 39.20 2 Other Canada 2. 30 2.30 Foreign^ 70 1.60 Price equivalent measure of consumer surplus. 2 . Price compensating measure of consumer surplus. Source: Pearse Bowden, Preliminary Data Analysis, pp.46-49. - 74 -between these values and the willingness to pay values are noteworthy, and indicate a highly significant difference between compensation and wi l l ing-ness to pay evaluations. As was noted in Chapter II , these two measures of consumer surplus can be expected, on theoretical and intu i t ive grounds, to y ie ld different results , and the results of this survey not only con-firm th i s , but also indicate the importance of the use of the proper mea-sure i n resource use confl icts of this nature. Questionnaire Results Table 13 presents the results of the questionnaire survey. While the same general relationship between the two measures of consumer surplus i s evident in both the interview and questionnaire surveys, the magnitude of average day values i s s ignif icantly different. As can be seen in Tables 12 and 13, the interviev/s generated much higher compensation values for residents than the mail questionnaires. At the same time however, the inter-views generated lower willingness to pay values for non residents than did the mail questionnaires, although the relat ive magnitude of differences for non-residents was much less than for residents. As was discussed in Chapter II, while the direct or interview approach offers a conceptually sound method of estimating recreational values, in contrast to other evaluation techniques, i t suffers from problems of application. Chief ly , responses to a hypothetical question can y i e l d inaccurate responses i f : \ - the respondent engages in "gamesmanship", - the respondent f a i l s to understand the question, or gives i t insuff icient attention. - 75 -TABLE 13 Average Recreation Values Per Day Based on Questionnaire Responses Area of Residence River Based General Hunting Local $16. 00 $13.00 . $24.50 Other B.C. 22. 70 17.00 24.50 Other Canada 3. 00 2.40 Foreign 2. 70 2.20 Source: Pearse Bowden, The Impact of System E, p.24. - 76 -Both of these problems may have occurred i n the Wells Gray Park study, and -at l e a s t a p a r t i a l explanation of the d i f f e r e n c e s noted i n the-questionnaire and interview surveys may be p o s s i b l e on t h i s b a s i s . F i r s t l y , while considerable e f f o r t was made during interviews to explain the nature and purpose of the question, e s p e c i a l l y t h a t no fees or compensation payments were a c t u a l l y going to be made, people may have i n t e r p r e t e d the questions as an i n t e n t to a c t u a l l y impose fees or to o f f e r compensation. If interview respondents engaged i n gamesmanship more than question-naire respondents, higher compensation and lower w i l l i n g n e s s to pay responses would be expected i n the interviews. The author's personal experience during the interview program was that many people were, at l e a s t i n i t i a l l y , angered at the idea of monetizing r e c r e a t i o n a l values, e s p e c i a l l y non-residents, who were asked how much they would pay f o r access. The second p o s s i b i l i t y , that the concept of value was not r e a d i l y understood, may a l s o p a r t l y explain the d i f f e r e n c e s i n compensation value. In the personal interviews, the concept of compensation f o r l o s s of access was c a r e f u l l y explained, and a bidding process was used i n an attempt to ob-t a i n minimum compensation values (for B.C. residents) and maximum wi l l i n g n e s s to pay values (for non-B.C. residents) (see Appendix A). I t became apparent during the interviews that many people had d i f f i c u l t y responding to the com-pensation question, and during the bidding process many B.C. residents lowered t h e i r i n i t i a l responses. As a r e s u l t of t h i s experience, i t was f e l t that neither an adequate explanation of the compensation p r i n c i p l e nor a bidding process would be p r a c t i c a l l y f e a s i b l e i n the mail questionnaires. Accordingly, while non-residents were asked the amount they would be w i l l i n g to pay for a day's r e c r e a t i o n , B.C. residents were asked to state "the value" of a day's - 77 -recreation, over and above their actual expenses (see Appendix A) . . Given the rather-nebulous terminology Tised i n the1 B.C. resident^questionnaire, i t would not be unreasonable to expect lower responses than were obtained i n the inter-views. This same phenomenon may also explain differences in value estimates obtained by Meyer,.-where individuals, were asked both "the value" and .the. com-68 pensation required for the natural marine environment near V i c t o r i a . A further explanation of the differences in compensation values in the interview and questionnaire surveys may be the fact that many people re-sponded that recreation in the area was "priceless" . During interviews, how-ever, most people who gave this response were persuaded to consider the ques-t ion more careful ly, and f ina l ly provided a monetary response. An arbitrary l i m i t of $500 was established for dai ly compensation values, and any higher responses were recorded at $500. However, "priceless" responses were dis-carded, so that many people who would l i k e l y have given high values i f pressed to answer this question were discarded in the questionnaire analysis. At any rate, for study purposes values established in the mail questionnaire were used, mainly because of the much larger sample size and because bias introduced by interviewers .was not a problem in the mail ques-tionnaires. ^ 68 P.A. Meyer, "A Comparison of Direct Questioning Methods." 69 While the author and other members of Pearse Bowden conducted most of the interviews, some were completed by untrained enumeration staff , and the values obtained by these people differed greatly from those obtained by Pearse Bowden staff. - 78 -Based on the data, i n Tables 1 and 13, the t o t a l d i r e c t economic value ;of afecreationalvuse-in i'197)l' was •:estima:ted:.atJT$7r2',!000:'~;'' In a d d i t i o n to the primary value of r e c r e a t i o n a l use, question-naire respondents were asked to estimate the expenditures they incurred i n B.C. as a r e s u l t of t h e i r t r i p to Wells Gray Park, and t h i s data was used to estimate the extent of net secondary b e n e f i t s to the economy of B.C. as a r e s u l t of these expenditures. Table 14 provides a summary of estimated 1971 expenditures by v i s i t o r s to the Park, by area or o r i g i n . I t was neces-sary to s t r a t i f y expenditures i n t o resident and non-resident categories, since the net economic e f f e c t of such expenditures d i f f e r s f o r residents and non-r es i dents. As has been noted p r e v i o u s l y , secondary b e n e f i t s are only appro-p r i a t e f o r consideration under s p e c i a l circumstances. F i r s t , only the p o r t i o n of expenditures which represents value added i n B.C. should be con-sidered a net b e n e f i t , and t h i s value added i s only a net economic b e n e f i t i f the expenditures would not have otherwise occurred i n B.C. and i f produc-t i v e resources would have otherwise been unemployed, or underemployed. For B.C. r e s i d e n t s , i t i s l i k e l y that most of the expenditures associated with use of the Park would have otherwise been made i n B.C. even i f Wells Gray Park were not a v a i l a b l e f o r use. However, some of these expenditures would have otherwise been spent outside B.C., e i t h e r on r e c r e a t i o n a l or other goods. Second, i t i s l i k e l y that a reduction of expenditures on t r a v e l accom-modation, etc. would r e s u l t i n lower p r o f i t s to some-businesses which would not be able to adjust t h e i r s c ale of operations. Thus, the motel industry i n B.C. would be u n l i k e l y to adjust to a reduction i n r e s i d e n t or non-resident expenditures i n Wells Gray Park by reducing c a p i t a l or labor, TABLE 14 Estimated Expenditures of V i s i t o r s to the Wells Gray Park-Clearwater River Area, 1971, By Area of Origin Area of O r i g i n : Expenditure Local Other B.C. Other Canada Foreign To t a l Summer V i s i t o r s Food, lodging $29,460 $56,450 $34,300 $48,300 $168,510 Gasoline 16,020 29,070 13,720 30,940 89,750 Other t r a v e l expenses 7,170 20,110 4,310 10,080 41,670 F i s h i n g , tackle, l i c e n s e s 7,280 7,440 5,980 10,640 3l>340 Boat Rental and equipment 4,030 4,060 2,650 8,400 19,140 Other 1,230 2,880 3,430 3,920 11>460 Sub-total (summer v i s i t o r s ) $65,190 $120,010 $64,390 $112,280 $36i;870 • x i Hunters A l l Items $28,810 $146,410 $175,220 TOTAL EXPENDITURES $94,000 $266,410 $64,390 $112,280 $537,090 Source: Pearse Bowden, The Impact of System E, p.29. - 80 -since expenditures associated with Park use.represent only a small"fraction of . most^business incomes;<..;> As resultyi.TSomej:eapi '.talr.-<andirLaborKwouldi.be i s l ight ly ,J . v underemployed. In recognition of these facts, i t was assumed for purposes of analysis that the net secondary benefit of resident expenditures was 10 percent of gross expenditures. For non-residents a rate of 25 percent was chosen to ref lect the fact that many of the non-resident expenditures in B.C. would not have been made in B.C. in the absence of the Park. Many non-residents would have either reduced the length of their stay in B.C. or not have come at a l l . Based on these assumptions, and 1971 expenditures of $360,000 for residents and $177,000 for non-residents, net 1971 secondary benefits of $80,000 were calculated. While this method of estimating secondary bene-f i t s may be c r i t i c i s e d as being crude, the gross magnitude of net secondary, benefits i s small and probably does not just i fy a more detailed approach. The Value of Future Recreational Use In order to make the measure of recreational values commensurate with those of power and flood control development, i t was-necessary to ex--press the future time stream of benefits in discounted present value terms. The important parameters for this calculations are as follows: 1. The Discount Rate. The discount rate ref lects the fact that generally, future consumption is deemed to be of less value than present consumption. For purposes of analysis , a discount rate of 7 percent was chosen, and sens i t iv i ty analysis conducted using rates of 6 and 8 percent. 2. Growth in Use. Both the ultimate carrying capacity and the rate of growth of use are important determinants of future recreational - 81 -values. As was noted pr e v i o u s l y , an ultimate use of about 230,000 days was- assumed.-1" For\most; types ;of 'recreation,^'tlie: ;histbrical: rgrowth' rate 1 *of 13 percent was used, although c a p a c i t i e s of various areas and kinds of use were reached at d i f f e r e n t times. Thus, because of d e c l i n i n g moose popula-t i o n s , _ i t was .assumed that. .hunting-would.,not -grow beyond current l e v e l s . .. I m p l i c i t i n the assumption that use would not expand beyond "capacity" i s the assumption that some form of access r a t i o n i n g would be undertaken by the Parks Branch. This assumption was used to s i m p l i f y c a l c u l a t i o n s , since i f excessive crowding occurs at the Park, i t i s i n e v i t a b l e that the qua-l i t y , and hence the value of use, would begin to diminish. 3. R e l a t i v e Growth i n Values. There i s evidence that the value of outdoor r e c r e a t i o n i s growing i n r e a l terms r e l a t i v e to other goods and 69 serv i c e s . F i r s t , the demand f o r use of Wells Gray Park and natural environments generally has been growing f a s t e r than population or income levels.,- suggesting changes i n tastes and. preferences. Second, the supply of high-quality, i r r e p l a c e a b l e n a t u r a l assets such as Wells Gray Park i s at best f i x e d , and i n f a c t i s probably d e c l i n i n g , as h y d r o e l e c t r i c , a g r i c u l -t u r a l , f o r e s t r y and mining developments degrade other such areas. Third, the cost of producing other goods has been d e c l i n i n g i n r e l a t i v e terms due to t e c h n o l o g i c a l progress. As a r e s u l t , i t i s reasonable to assume that the- r e a l r e l a t i v e value.of outdoor r e c r e a t i o n i n .Wells Gray Park and other . D.S. Parker and J.A. C r u t c h f i e l d , "Water Quality Management and the Time P r o f i l e of Benefits and Costs," Water Resources Research, V o l . 4, No. 2 ( A p r i l , 1968), pp.233-246; J.V. K r u t i l l a , "Conservation REconsidered," pp.777-786; A.C. F i s h e r , J.V. K r u t i l l a and C.J. C i c c h e t t i , " A l t e r n a t i v e Uses of Natural Environments: The Economics of Environmental Modifica-t i o n , " i n Natural Environments, ed. by J.V. K r u t i l l a , (Baltimore:Johns Hopkins U n i v e r s i t y Press, 1972), pp.18-53; V.K. Smith, "The Effect, of Technological Change on D i f f e r e n t Uses of Environmental Resources," i n Natural Environments, pp.54-87. - 82 -s i m i l a r areas i s increasing over time, and can be expected to increase -in the- 'future : r o The use of increasing r e l a t i v e values f o r r e c r e a t i o n a l areas such as Wells Gray Park i s extremely important i n the c a l c u l a t i o n of discounted present values/ since "the -resulting answers., are . s i g n i f i c a n t l y . . a f f e c t e d , .and I f a i l u r e to incorporate t h i s concept i n analyses of r e c r e a t i o n a l resources may o f t e n r e s u l t i n improper resource a l l o c a t i o n s . For example, i n a pioneer-ing a n a l y s i s of a resource use c o n f l i c t s i m i l a r to that being i n v e s t i g a t e d i n t h i s t h e s i s , K r u t i l l a and C i c c h e t t i incorporated the in c r e a s i n g r e l a t i v e value of preservation of the H e l l s Canyon i n an a n a l y s i s which concluded that while the i n i t i a l year's preservation value was only about one t h i r d as large as the i n i t i a l year's h y d r o e l e c t r i c development value, the t o t a l present economic value of preservation exceeded that of development by a . , . 70 sub s t a n t i a l margin. For purposes of a n a l y s i s , i t was assumed that the r e a l value of r i v e r based a c t i v i t i e s would grow at 5 percent annually, up to a maximum of $100 per day f o r residents and $60 per day f o r non-residents and that the value of use of the lakes and other, general r e c r e a t i o n would r i s e at 4 percent annually, up to a maximum of $80 for--residents and -$15' "for non- -residents. The value of .hunting was allowed to r i s e at 5. percent, annually..-to a l i m i t of $150. In a l l cases, a s e n s i t i v i t y a n alysis was performed, using rates of from 3 to 6 percent. While these rates of growth and the l i m i t s were based on personal J.V. K r u t i l l a and C.J. C i c c h e t t i , "Evaluating Benefits of Environmental Resources," pp.1-29. - 83 -judgement .rather than any s t a t i s t i c a l evidence, the author feels that the i n - . corporation 'of cbhese; nates <of cgrqwfeh- iresuiteTd"drh benefit: :caloiul3tUicms_-\'whichi ch were both reasonable and a better estimate than would be obtained in their absence. The l imits on day values were incorporated to ref lect the fact that as use of the area increased over time, crowding would l i k e l y occur and the quality of the area would therefore be reduced. Tables 15, 16 and 17 present the results of the present value calculations and the sens i t iv i ty analysis. The importance of the rate of discount and the rate of increase in relat ive values i s immediately appar-ent. As can be seen in Table 15, for example, at a discount rate of 7 per-cent, the present value of use of the Clearwater River varies from about $16,000,000 to $25,000,000 depending on the-assumed rate of growth i n real values. The calculations are also highly sensitive to the rate of discount, so that the range in values i s from $13,000,000 to $34,000,000, based on differences i n the discount and real value growth rates chosen. For pur-.. poses of analysis, the central estimate of $20,000,000 was chosen. Table 18 presents a summary of primary recreational values for the period 1972-2032, using the central values for discounting and real-value increase. Thus, i t was estimated that the primary value of recrea-t ional , use in the. Wells Gray Park study area would tota l $73,563,000 over .. a 60 year term. Of th i s , almost $69,000,000, or over 90 percent of the tota l value was estimated to accrue to B.C. residents. This la t ter finding could have important implications for park planning in B . C . , as i s dis-cussed in Chapter IV. In order to determine the net economic value of recreation, i t was necessary to deduct from primary values the costs associated with - 8 4 -TABLE. " 1 5 1 9 712! •presenfciValuel IEB t imat es:,?: sRe ere at iorial: \:-. \ Benefits from Use of the "River Area"; Wells Gray Park-Clearwater River Area ( $ 0 0 0 ) Rate of Growth i n Real Value per Day of Recreation: Discount" 1 User Rate Group 4% 5% 6% Local $ 6 , 9 2 5 $ 8 , 9 3 9 $ 1 1 , 7 4 8 Other B.C. 1 1 , 3 0 3 1 4 , 6 6 9 1 9 , 4 7 5 Canada 7 3 2 9 4 3 1 , 2 5 9 Foreign 6 3 0 8 1 5 1 , 0 8 4 TOTAL $ 1 9 , 5 9 0 $ 2 5 , 3 6 6 $ 3 3 , 5 6 6 7% Local $ 5 , 5 2 5 $ 6 , 9 8 9 $ 8 , 9 9 1 Other B.O. 8 , 9 8 3 1 1 , 4 0 9 1 4 , 7 2 7 Canada 5 8 4 7 3 6 9 5 1 Foreign 5 0 4 6 3 6 8 1 9 TOTAL $ 1 5 , 5 9 6 $ 1 9 , 7 7 0 $ 2 5 , 4 8 8 Local $ 4 , 5 0 . 7 $ 5 , 0 1 2 $ 7 , 0 5 3 Other B.C. 7 , 3 0 3 9 , 0 8 6 1 1 , 4 8 0 Canada 4 7 3 5 8 6 7 4 2 Foreign 4 0 8 5 0 6 6 3 8 TOTAL $ 1 2 , 6 9 1 $ 1 5 , 1 9 0 $ 1 9 , 9 1 3 Source: . Pearse Bowden, .The..Impact ,of .System.vE, .p..D-.4-8% - 85 -TABLE 16 1972 Present Value Estimates, Recreational Benefits from Use of the "Lake Area"; Wells Gray Park-Clearwater River Area. ($000) Rate of Growth in Real Value per Day of rRecreation: •:: Discount Rate User Group 3% 4% 6% Local Other B.C. Canada Foreign $ 9,279 35,103 1,520 1,961 $11,822 46,037 1,931 2,489 $15,781 61,328 2,507 3,218 TOTAL $47,863 $62,279 $82,834 7% Local Other B.C. Canada Foreign $ 7,070 27,522 1,232 1,591 $ 9,100 35,433 1,535 1,977 $12,145 46,355 1,940 2,501 TOTAL $37,415 $48,045 $62,941 Local $ 5,664 $ 7,153 $ 9,188 8 % Other. B.C. 22,044 27,849 36,720 Canada 1,024 1,247 1,545 Foreign 1,322 1,606 1,994 TOTAL $30,054 $37,855 $49,447 Source.:. Pearse Bowden., - The -Impact--of .System. E, p. D-6. - 86 -TABLE 17 1972^  Present Value Estimate, Recreational Benefits from Resident Hunting, Wells Gray Park-Clearwater River  Rate of Growth i n Real Value per Hunter Day Discount'"1 Rate: 3% v- 4% 4" 5%  6% $5,693,000 $7,220,000 $9,899,000 7% $4,654,000 $5,748,000 $7,654,000 8% $3,894,000 $4,699,000 $6,093,000 Source: Pearse Bowden, The Impact of System E, p. D-7. - 87 -TABLE 18 Present Value of Primary Recreation Use, Wells Gray Park-Clearwater River Area, 1972-2031 ($000) Present Value of Recreation A c t i v i t y : Area of Residence River-based General Hunting TOTAL v: ALL AREAS Local residents $ 6,989 $ 9,100 $ 978 $17,067 Other B.C. 11,409 35,433 4,770 51,612 Canada 736 1,535 n. a. 2,271 Foreign 636 1,977 n. a. 2,613 ALL USERS $19,770 $48,045 $5,748 $73,563 Source: Pearse Bowden, The Impact of System E, p. 27. - 88 -management of the Park, and to add the present value of net secondary bene-fits.; csTable;-'19 contains ubher.resul.ts i of <bheseocalculatiohs.?n indicating lag a tota l net primary and secondary value of $74,338,000 for the period 1972-2032. This' then represents.-the-net-economic value, of recreation . i n the^,-Clearwater River drainage area of Wells Gray Park under the preservation alternative. While this study did not attempt to d i rec t ly measure option and preservation values, the conditions necessary for their existence are 71 present in Wells Gray Park, and they were judged to be highly s ignif icant . The i n a b i l i t y to d i rect ly measure such values can be seen as a serious l imitat ion of this and other empirical surveys, since the danger exists that the values-which are quantified w i l l be considered to represent to ta l value, when in fact they may only represent a small portion of the true value of the resource to society. The Development Alternative Development of the System E dams would s igni f icant ly reduce the recreational value-of Wells Gray Park. The f isheries i n the Clearwater River and Clearwater and Azure Lakes would be v i r tua l ly eliminated by pro-ject development, due to the loss of spawning habitat and the elimination of a .viable l i t t o r a l zone. Big game winter range would be innundated", •= and • - -would thereby substantially reduce wi ld l i f e populations. Of the Park's major f a l l s , only Dawson Fa l l s would be unaffected. Sylvia and Goodwin Fa l l s would be innundated, and the Hemp Creek dam would innundate the 71 Pearse Bowden, The Impact of System E, pp.33-38. - 89 -TABLE 19 Summary of Economic Values Under Preservation in the Wells Gray Park-Clearwater River Area (1972 Present Value Equivalents) Primary Recreation Benefits $73,563,000 deduct: Primary Recreation Costs 2,032,000 NET PRIMARY RECREATION BENEFIT $71,531,000 Net Secondary Benefits 2,715,000 Net Values, Trapping and Guiding 92 ,000 TOTAL NET BENEFITS $74,338,000 Source: Pearse Bowden, The Impact of System E, p.32. - 90 -present plunge pool of Helmcken Fa l l s . Both Clearwater and Azure Lakes would lose their appeal to boaters, due to drawdown, the elimination of campsites and the hazard of slumping. Further, the transmission l ines , power plants and access roads associated with the projects would substan-t i a l l y detract from the wilderness character of the Park which is i t s main attr ibute. Accordingly, i t was estimated that the potential of the Park to support recreation would be seriously reduced with System E development. Table 20 presents an estimate of the maximum remaining recreational capacity of the study area with System E development. Given f u l l development of System E, i t was estimated that tota l capacity would be reduced from 240,000 to 81,000 days, and that most of the remaining use would be day use centered around Dawson and Helmcken Fa l l s . In order to estimate the remaining recreational values under System E development, a series of assumptions were made, based on the re-sults of the questionnaire survey, the specifics of dam construction timing, and judgements regarding the effect development would have on the quality and value of remaining recreational use. Generally, i t was assumed that the day values of remaining use would represent only a fract ion of the amount determined under the preservation alternative, that use would grow at a much slower rate than under preservation, and that while the relat ive value of 72 use would continue to grow, the rate of growth in values would be less. Based on these assumptions, the remaining recreational values subsequent to System E development were calculated in their present value equivalents for See Ibid, pp.44-47, D9-10. - 91 -TABLE 20 Future Recreational Capacity of the V7ells Gray Park-Clearwater River Area After System E Development in V i s i to r Days  River Dams Lake Dams Both River and Type of Recreation Only Only Lake Dams River-based 10,500 42,400 10,500 General 184,000 70,400 66,500 Hunting 5,000 7,000 4,000 TOTAL 199,500 119,800 81,000 Source: Pearse Bowden, The Impact of System E, p.46. - 92 -the period 1972-2032, using a discount rate of 7 percent and reduced rates of real value growth. Net secondary benefits, the costs of Park management and the residual values of trapping and guiding were calculated in the same manner. The results of these calculations are presented in Table 21. Because values were calculated.over the period 1972-2032, and i t was assumed that project construction would take 5 years, much of the remain-ing value would be generated during the 5 year construction period, before the reservoirs were f i l l e d . The values which would be generated after 1978, when the reservoirs were f i l l e d , would be a small fraction of those pre-sented in Table 21. Thus, the values presented in this table overstate the values which would occur subsequent to development. The net impact of System E development on recreational use of Wells Gray Park is given i n Table 22, which indicates that f u l l development of System E would reduce recreational values by $57,300,000. It was also determined that development of the lake dams alone would generate a net loss of almost $33,000,000, while development of the r iver dams alone would generate net losses of about $25,000,000. In addition, the option and preservation values would be seriously reduced, although this loss was not quantified. - 93 -TABLE 21 Summary of Residual Present Values Under System E Development i n Wells Gray Park-Clearwater River Area ($000) River Lake Both River Dams Only Dams Only and Lake Dams Primary Recreation Benefits $49,241 $40,988 $16,666 deduct: Primary Recreation Costs 1,790 810 600 Net Primary Recreation B e n e f i t $47,451 $40,178 $16,066 Net Secondary Benefits 2,171 1,267 948 Net Values, Trapping and , Guiding 57 80 46 . TOTAL NET BENEFITS $49,679 $41,525 $17,060 Source: Pearse Bowden, The Impact of System E, p.52. - 94 -TABLE 22 . Comparison of Net Recreational Economic -Values, Wells Gray Park-Clearwater River Area, Under Preservation and Development ($000) • - • Alternative Recreation: Primary Benefit Secondary Benefit Commercial Uses Total Values PRESERVATION DEVELOPMENT NET IMPACT $71,531 16,066 $-55,465 $ 2,715 948 $-1,767 $ 92 46 $-46 $74,338 17,060 $-57,278 Primary recreation costs have been deducted. Source: Pearse Bowden, The Impact of System E, p.54. - 95 -CHAPTER IV CONCLUSIONS AND OBSERVATIONS It has been the basic premise of this thesis that the economic evaluation of non-priced recreational resource use is a valuable aid to resource planners in cases where land or water resources have competing alternate uses. Planners are often faced with the task of just i fying non-commercial uses of land for parks, green belts and open space i n the face of competing commercial uses. By u t i l i z i n g economic analysis, i t i s poss-ib le to express the value of such land uses i n terms commensurate with those of commercial-land uses, thereby f a c i l i t a t i n g land use decisions. The purpose of this thesis has been to describe and evaluate various methods which have been developed for valuing non-priced outdoor recreation, and to i l lu s t r a te the application of the technique found to be most appropriate in a case study of Wells Gray Park. It has been argued that the concept of consumer surplus i s the most va l id measure of non-priced recreation, and that where an existing recreational use i s being threatened with destruction, the appropriate mea-sure of consumer surplus for residents of the referent area i s the welfare loss they w i l l suffer through loss of the area, and that the only way to determine such values i s by use of the direct or interview approach. Fur-ther, option and preservation values can best be adequately measured direct-l y . For non-residents, the appropriate measure of value is the amount users would be wi l l ing to pay for access. Net secondary benefits may also be mea-sured under certain l imit ing conditions. - 96 -These principles were applied in a case study of Wells Gray Park by the author while employed with Pearse Bowden Economic Consultants Ltd. in 1971. The significant findings of that study are: - The price equivalent measure of consumer surplus (compensation required) yielded much higher day values than the price compensating measure (willingness to pay). Thus, day values for B.C. residents, based on compen-sation required, ranged from $13 to $24.50, while for non residents, w i l l -ingness to pay ranged from $2.20 to $3.00 per day, based on the mail ques-tionnaire. - The mail questionnaire and the personal interview surveys yielded s ignif icantly different day value measures. Compensation values were much higher and willingness to pay values were much lower in the personal inter-view survey than in the mail questionnaire survey. This result might be expected i f interview respondents interpreted the questions as an intent to actually impose fees or offer compensation payments and engaged i n "games-manship" to a greater extent than mail questionnaire respondents. While there is no way to actually determine whether this problem occurred in the study, the differences noted point out the need for careful design, execu-t ion and interpretation of an interview or questionnaire survey. - The measurement of recreational values in their present value equivalents i s highly sensitive to the discount rate and the rate of real growth in recreational day values. Incorporation of the concept of relat ive price trends for irreplaceable recreational -assets repre-sents a s ignif icant improvement in the analysis of resource use confl icts such as the problem of alternative uses for the Clearwater River. It can reasonably be assumed that the relat ive value of outdoor recreational use in wilderness areas such as this i s increasing over time, and fai lure to - 97 -incorporate this exp l i c i t ly in the measurement of recreational values would seriously undervalue the result ing estimates. - The conditions necessary for the existence of option and preser-vation values are present in Wells Gray Park, and i t i s thought that these social values are large and s ignif icant , in comparison with the use values which were quantified. In this survey, these social values were not quanti-f ied, thereby producing a s ignificant undervaluation of recreational values. It is important to note that the best way these values can be measured is by the direct or interview method, and Meyer's attempts to measure option and preservation values represent an important pioneering effort . - The value of recreational use in Wells Gray Park i s large, having been estimated at almost $75,000,000, and development of System E would represent an estimated net loss of almost $60,000,000 in primary and second-ary economic values. The value of an economic measure of the value of non priced recreational resources to planning is therefore clear. It i s f e l t that the use of this kind of methodology, especially i f expanded to include option, preservation, education and other social values, would be of value to planners in many similar situations. Urban parks, open space and other land uses which are proposed, and for which no economic measure of benefit i s readily available, can be analysed in a manner similar to that outlined in this thesis , thereby providing a rational and objective basis for resource allocations. While the methodology outlined here, and the methodo-logy for estimating social values, i s not well developed at this time, further research into questionnaire design and the interpretation of results could reduce, i f not eliminate, the va l id i ty of crit icisms against the direct or interview approach. - 98 -Other studies which have been based on the compensation principle have also found re la t ive ly high values, compared to values estimated with the use of other techniques. Matthews and Brown, for example, in an survey of Washington State fishermen, estimated an average compensation payment of between $27 and $63 would be required for loss of a day's angling, and es t i -mated the total consumer surplus associated with f ishing in that state to be $65,000,000 in 1967. Had the expenditures approach been used, average day values of from $6 to $23 would have been generated, depending on the study area within Washington, and the tota l value would have been $25,000,000. 7 3 Brown and Hammack, in an empirical study of waterfowl hunters, measured both the price equivalent and price compensating consumer surplus, 74 deriving mean annual values of $1044 and $247, respectively. This re la-tive difference in the two measure is comparable to the results of the mail questionnaire survey conducted for Wells Gray Park users. Laub, in a survey of Kootenay Lake anglers, found a median price equivalent consumer surplus of $135, and a price compensating surplus of $10, for annual use of Kootenay Lake, although he noted that the demand curve based on price'equivalent consumer surplus was highly skewed, with a 75 re la t ive ly small number of anglers giving very high responses. S.B. Matthews and Brown, "The 1967 Sport Salmon Fisheries of Washington," p. 15. G.M. Brown and J . Hammack, "A Preliminary Investigation of the Economics of Migratory Waterfowl," in Natural Environments, pp.171-204. M.E. Laub, "Non-Marketed Recreational Resources," p.120. - 99 -Meyer has also found large differences in the two measures of consumer surplus, although the estimates generated in this study ($21,000 average annual price equivalent consumer surplus for the marine environment near Vic tor ia , and price compensating surplus of $1000 annually) cannot be . 76 considered r e a l i s t i c . While i t i s d i f f i c u l t to compare studies based on different areas kinds of recreation, and time periods, i t i s noteworthy that in general, large differences have been found between the two measures of consumer sur-plus, and i t i s f e l t that the results of these other studies lend credence to the similar findings of the Wells Gray Park survey. The use of different measures of consumer surplus for residents and non-residents i s thought to have important implications for park and recreational planning. For Wells Gray Park, i t was estimated that 90 per-cent of the value of recreational use was generated by residents, who only accounted for 57 percent of use. Since i t is anticipated that the Park w i l l reach maximum capacity by 1990, i t i s evident that i f one of the goals of recreational planning i s the maximization of welfare for B.C. , considera t ion could be given to some form of access rationing or discriminatory pric ing for non-residents. The problem of overcrowding and proposals to res tr ic t non-resident use has received attention recently in B.C. Steel-head fishermen, noting the increasingly crowded conditions on the Thompson River, have cal led for some policy to ration use by U.S. residents. One suggestion has been the issuance of s i te specific license fees for the Thompson, with U.S. anglers paying large fees relat ive to those of B.C. 76 P.A. Meyer, "A Comparison of Direct Questioning Methods," p.12. - 100 -residents. Discriminatory pric ing is already universally used in fishing and hunting license fees throughout North America. The recent imposition of salt water license fees for foreign boaters in B.C. is an example, at least indirect ly , of s i te specific price-discrimination. U.S. boaters wishing to f i sh in B.C. must pruchase licenses, with the fee proportional to the size of boat. This method was chosen at least partly in an effort to res t r ic t use in Campbell River and other northern waters, where larger U.S. boats . . 77 create crowded conditions during peak summer months. Fees range from $15 to $100 for pleasure boats. Because of the different measures of value used in the study of Wells Gray Park, i t was found that most of the value of Park use was generated by B.C. residents. As an exercise, i t was determined that i f B.C. residents were allowed to displace non-residents in the Park once capacity was reached (or i f a price equivalent measure of consumer surplus was applied to non-residents, and they had values s imilar to B.C. residents), the net economic value of use would have been calculated at about $120,000,000, compared to the estimate of $74,000,000 which was used for study purposes. 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L . , "The Influence of Reservoir Projects on Land Values," Journal  of Farm Economics, Vol . 46, No. 1, (Feb. 1964), pp.231-243. Knetsch, J .L . and R.K. Davis, "Comparisons of Methods for Recreation Evalua-t i o n , " in Economics of the Environment, ed. by R. Dorfman and M.S. Dorfman (New York: W.W. Norton and Co. , 1970), pp.384-402. K r u t i l l a , J . V . , "Conservation Reconsidered," American Economic Review, (Sept 1967), pp.777-786. K r u t i l l a , J .C . and C. J . C icchet t i , "Evaluating Benefits of Environmental Resources with Special Application to the He l l ' s Canyon," Natural  Resources Journal, Vol . 12, No. 1, (1972), pp. 1-29. Laub, M . E . , "The Economic Evaluation of Non-Marketed Recreational Resources, (unpublished Ph.D. dissertation, University of B r i t i s h Columbia, 1971). Leontief, W. , "Environmental Repercussions and the Economic Structure: An Input-Output Approach," in Economics of the Environment, ed. R. Dorfman and M. Dorfman, (New York: W.W. Norton and Co. 1972), pp.403-422. - 104 -Mack, R.P. and S. Myers, "Outdoor Recreation" i n Measuring the Benefits of  Government Investments, ed. by R. Dorfman, (Washington, D.C. : The Brookings I n s t i t u t i o n , 1965). Margolis, J . , "Secondary Be n e f i t s , External Economies and the J u s t i f i c a t i o n of P u b l i c Investment," Review of Economics and S t a t i s t i c s , V o l . 39, (1957), pp.284-291. Marshall, A., P r i n c i p l e s of Economics, (London: Macmillan Co., 1930). Matthews, S. and G. Brown, Economic Evaluation of the 1967 Sport Salmon F i s h e r i e s of Washington, Technical Report No. 2, (Seattle: Washing-ton Dept. of F i s h e r i e s , 1970). Meyer, P.A., Recreational and Preservation Values Associated with the Salmon  of the Fraser River, Information Report Series No. PAC/N-74-1, (Vancouver, B.C.: Environment Canada, F i s h e r i e s and Marine Ser-vice,' 1974). Meyer, P.A., "A Comparison of Direct Questioning Methods for Obtaining D o l l a r Values f o r Pu b l i c Recreation and Preservation," Forthcoming paper, 1975. Moeller, G. and J . Englesen, Fishermen Expectations and Pay-Lake P r o f i t s , U.S.D.A. Forest Service Research Paper NE-264, (Upper Darby, Penn. Northeastern Forest Experiment S t a t i o n , 1973). North Island Study Group, T s i t i k a - Schoen Resources Study, Summary Report, Report to the Environment and Land Use Committee, Province of B r i t i s h Columbia, February, 1975. Outdoor Recreation Resources Review Commission, Economic Studies of Outdoor  Recreation, Study Report No. 24, (Washington, D.C. : U.S. Govern-ment P r i n t i n g O f f i c e , 1962). Parker, D.S. and J.A. C r u t c h f i e l d , "Water Quality Management and the Time P r o f i l e of Benefits and Costs," Water Resources Research, V o l . 4, No. 2, ( A p r i l , 1968), pp.233-246. Parks Branch, " P r o v i n c i a l Park Attendance Drops S l i g h t l y , " Unpublished news rel e a s e , Dec. 1971. - 105 -Pearse, P . H . , "A New Approach to the Evaluation of Non-Priced Recreational Resources," Land Economics. Vol . XL1V, No. 1, (Feb. 1968), pp.87-99. Pearse, P.H. and G.K. Bowden, "Economic Evaluation of Recreational Resources: Problems and Prospects," Transactions of the Thirty-Fourth North  American Wild l i fe and Natural Resources Conference, (Washington, D . C . : Wildl i fe Management Institute, March 1969). Pearse Bowden Economic Consultants L t d . , The Value of Resident Hunting i n B r i t i s h Columbia, A report prepared for the Department of Recrea-t ion and Conservation, Fish and Wildl i fe Branch, (Victoria , B . C . : 1972). Pearse Bowden Economic Consultants L t d . , Preliminary Data Analysis , Wells  Gray Park-Clearwater River, A report submitted to the Ecology Committee, Fraser River Board, (Vancouver, B . C . : 1972). Pearse Bowden Economic Consultants L t d . , Interim Progress Report, A report submitted to the Ecology Committee, Fraser River Board, (Vancouver, B . C . : 1972). Pearse Bowden Economic Consultants L t d . , Evaluation of the Impact of the  Proposed System E Dams on F i sh , W i l d l i f e , Parks and Recreation. A report submitted to the Ecology Committee, Fraser River Board, (Vancouver, B . C . : 1973). Puccini , D . , "Ecological Models and Environmental Studies," Water Resources  B u l l e t i n , Vol . 7, No. 6, (December 1971). Scott, A . , "The Valuation of Game Resources: Some Theoretical Aspects," Canadian Fisheries Reports, No. 4, (Ottawa 1965); pp.27-47. Sewell, W.R.D. and J . Rostron, Recreational Fishing Evaluation, (Ottawa: Dept of Fisheries and Forestry, 1970). Smith, V . K . , "The Effect of Technological Change on Different Uses of Environ-mental Resources , " in Natural Environments, ed. by J .V . K r u t i l l a , (Baltimore: Johns Hopkins University Press, 1972), pp.54-87. Sol ie , R . J . , Proceedure for Estimating Tourism Benefits, Mineral Research Laboratory Report No. 29A (Fairbanks: University of Alaska, 1973). - 106 -Stevens, J . , "Recreation-Benefits from Water Pollution Control. A Further Note on Benefit Evaluation," Water Resources Research, Vol . 3, No. 1, (First Quarter, 1967), pp.63-66. Stoevener, H.H. and W.G. Brown, "Analytical Issues in Demand Analysis for Outdoor Recreation," Journal of Farm Economics, Vo l . 49, No. 5, (December, 1967) pp.1295-1304. Tr ice , A.H. and S.E. Wood, "Measurement of Recreation .Benefits," Land Econo- mics, Vol . 34, No. 3, (1958), pp.196-207. U.S. Army Corps of Engineers, Unpublished v i s i t a t ion data, (Pickstown, South Dakota: 1974). Wallace, R . F . , An Evaluation of Wildl i fe Resources in the State of Washing-ton, Bul le t in No. 28, School of Economics and Business, (Pullman, Wash.: State College of Washington, 1956). Walther, T .A . and J.W. Birch, Hunting and Fishing, What i t Means to Wyoming, (Cheyenne, Wyo.: Wyoming Game and Fish Dept., 1966). ~ ~ Weisbrod, B . A . , "Collect ive Consumption Services of Individual-Consumption Goods," Quarterly Journal of Economics, LXXVIII (Aug. 1964), pp.471-477. Appendix A Questionnaire and Interview Forms Used in Wells Gray Park. 108 Questionnaire For-n WELLS GRAY PARK CLEARWATER RIVER RECREATION STUDY The Parks Branch and the Fish and Wildlife Branch of the British Columbia Department of Recreation and Conservation are sponsoring a study of the use and value of the recreational resources of the Wells Gray Park-Clearwater River area. For much of the information needed in this study we must rely on the cooperation of those who have visited the area. We are asking you to provide information on your activity in the study area this year. Phase assist us by answering the questions below and returning the question-naire in the self-addressed envelope. All information will be kept strictly confidential and will be used only in the present study. 1. What was the total length of the trip on which you visited the Wells Gray Park-Clearwater River area? days 2. How many days did you spend in the Wells Gray Park-Clearwater River area itself? days 3. How many previous visits have you made to this area? visits 4. In what year did you first visit this area? 19 5. Was the Wells Gray Park-Clearwater River area the major destination of your journey, or just a stop enroute? please check: major destination stop enroute 6. It is important to know what use people are making of this area at present, and which activities are most important to visitors. Please check each of the activities listed below which you :md members of your party did in the Wells Gray Park-Clearwater River area. Beside each activity that you check, A-1 Questionnaire Form please indicate whether it was the most important, important, or unimportant to your visit to the area! Indicate whether Activity Check the activities done activity was: Most Important Important Unimpc sightseeing D . • • . • camping • D • • fishing • • • • hiking, climbing • • • • boating (motor) • • • • canoeing • • • • other • • • • • • • • Which of the following waterfalls did you see? Please check Spahats Dawson Helmcken Were visits to these waterfalls the main reason you came to this area? Yes . No It is important to our study to know which areas are most attractive to visitors. On the reverse of this questionnaire you will find a map of the Wells Gray Park-Clearwater River area with major points of interest marked. Could you please locate, by writ-ing on the map, the areas which you visited, what you did in those areas, and the amount of time spent at each location. (For example, if your party spent three days fishing on Clearwater Lake write "fishing, 3 days" beside Clearwater Lake on the map). If there is additional information you wish to convey about your activities a note on the map or elsewhere on the questionnaire would be appreciated. A-2 Questionnaire Form 9. Please indicate any other places that you visited in British Columbia on this trip (such as parks, lakes, historic sites, cities, etc.) and note the major activi-ties your party engaged in while in those areas. Area visited Activities 10. How does the Wells Gray Park-Clearwater River area rank as a recreational area, compared to other British Columbia areas you have visited in the past? the best. among the best average. poor. 11. Do you consider the facilities in the Wells Gray Park-Clearwater River area such as roads, trails campsites, etc., to be adequate? ' Yes. No. Comments: :. Please estimate how much you spent on the follow-items during your trips to the Wells Gray Park-Clearwater River area last year: food, alcohol, lodging $ gasoline :— other travel expenses A-3 Questionnaire Form fishing tackle, licenses, other goods purchased boat, equipment rental, and other services Other 13. Which age group do you fall in: less than 19 40-49 20-29 50-59 30-39 60+ 14. Which income group does your household fall in: 0 - 2,999 10,000 - 14,999 3,000 -4,999 15,000- 19,999 5,000 - 6,999 20,000 - 29,999 7,000 -9,999 30,000 + 15. What is your occupation? 16. We would like to gain some insights into the values people place on the recreation opportunities offered by our study area. How much do you think a day of recreation in this area is worth, over and above your expenses, to: a) yourself alone $ per day b) your household group $ per day (if a household head) 17. Please add any further comments you would like to make with regard to the Wells Gray Park-Clearwater River area as a recreation area. THANKS FOR YOUR COOPERATION A-4 Interview Form Date: Time: L o c a t i o n : Weather: I n t e r v i e w e r : 1. How many days have you spent i n t h i s a r e a ' 2. Where i s y o u r home? C i t y P r o v i n c e o r S t a t e 3. What type o f p a r t y a r e you here w i t h ? f a m i l y group o t h e r o r g a n i z e d group f r i e n d s a l o n e k. R e l a t i o n s h i p o f i n t e r v i e w e e to p a r t y . Note to I n t e r v i e w e r : In most cases the answer t o #5 w i l l be obvious and need n o t b asked. 5. What i s y o u r main r e a s o n f o r coming to ( s t u d y a r e a ) ? A-5 Interview Form 113 6 . a) Have you been camping i n remote areas or i n supervised camping areas? Where and how long? b) VJhat a c t i v i t i e s have you engaged i n while i n the Park, eg, f i s h i n g , boating, h i k i n g , etc. (Try not to lead respondent. Use space below f o r a general d e s c r i p t i o n of a c t i v i t i e s . ) c) Please rank your a c t i v i t i e s i n order of t h e i r importance as part of your v i s i t , with the most important being 1, and so on. d) Please i n d i c a t e the number of days you engaged i n each a c t i v i t y . e) Please i n d i c a t e the l o c a t i o n or l o c a t i o n s of each a c t i v i t y on the maps provided. A c t i v i t y Have lone Rank of Import-ance Days Spent Location(s) of A c t i v i t y Remote area camnins Supervised area campine Fishins: Hunting Hiking, Climbing Swimming Boating Photography, nature study P i c n i c i n g Sightseeing Other(specify) General D e s c r i p t i o n of A c t i v i t i e s : A-6 Interview Form 114 7. a) How does the Wells Gray Park-Clearwater River area rank as r e c r e a t i o n a l area, compared to other B r i t i s h Columbia areas you have v i s i t e d i n the past? the "best among the best average poor b) Comment(areas compared wi t h ) : 8. What other areas, i n c l u d i n g parks, lakes, etc. are being v i s i t e d as part of t h i s t r i p , and. what are the major a c t i v i t i e s f o r each area? Area A c t i v i t y What species of w i l d l i f e have you seen during your v i s i t and where were they sighted? Was t h i s an important part of your v i s i t ? Species:_ Location: Importance: A-7 Interview Form 115 10. What i s the t o t a l l e n g t h o f your v a c a t i o n i n B.C.? days 11. How many p r e v i o u s v i s i t s have you made here? v i s i t s Over how many y e a r s . 12. Do you c o n s i d e r the f a c i l i t i e s such as r o a d s , t r a i l s , c a m p s i t e s , e t c . , t o be adequate? Yes No 13. P l e a s e add any comments you have on the f a c i l i t i e s i n t h i s a r e a . 14. Do you p l a n t o r e t u r n i n the f u t u r e ? Yes No I f y es, how o f t e n ? 15« a) For f i s h i n g p a r t i e s : number and type o f B.C. f i s h i n g l i c e n s e s h e l d a d u l t s : -mi n o r s : b) For h u n t i n g p a r t i e s , the same i n f o r m a t i o n s h o u l d be c o l l e c t e d , i n c l u d i n g game tags p u r c h a s e d . A-8 Interview Form 116 16. Which age group do you f a l l i n ? 0-15 4 6 - 6 0 1 6 - 3 0 60 + 3 1 - 4 5 17. What i s y o u r o c c u p a t i o n ? 18. Which income group does y o u r h o u s e h o l d f a l l i n : $ 1 0 , 0 0 0 - 1 4 , 9 9 9 $ 1 5 , 0 0 0 - 1 9 , 9 9 9 $ 2 0 , 0 0 0 - 2 9 , 9 9 9 $ 3 0 , 0 0 0 + ECONOMIC EVALUATION Note to I n t e r v i e w e r : The f o l l o w i n g q u e s t i o n s must be approached c a r e f u l l y . Many r e c r e a t i o n i s t s w i l l be h o s t i l e t o the i d e a o f l i c e n s e f e e s and t h e r e f o r e the h y p o t h e t i c a l n a t u r e o f the q u e s t i o n s must be s t r e s s e d . I f the i n t e r v i e w e e remains unpersuaded, i f he appears n o t to a p p r e c i a t e the s p i r i t o f the q u e s t i o n , t h e n make note o f t h i s and do n o t p r e s s the p o i n t . A. NON-RESIDENTS ONLY I t i s i m p o r t a n t f o r us to know how h i g h l y p e o p l e v a l u e the o p p o r t u n i t i e s f o r r e c r e a t i o n i n t h i s a r e a . One way to f i n d t h i s out i s t o ask p e o p l e how much t h e y would be p r e p a r e d to pay f o r . a c c e s s , permits, to the a r e a . While no charges w i l l be l e v i e d f o r a c c e s s , your c o o p e r a t i o n i n answering some h y p o t h e t i c a l q u e s t i o n s i s v e r y i m p o r t a n t to u s . 1. Suppose t h e r e was an annual f e e f o r the use o f t h i s a r e a , what i s the maximum amount you would be w i l l i n g t o pay? ( I f i n t e r v i e w e e i s head o f a h o u s e h o l d , the f e e s h o u l d r e l a t e t o the whole p a r t y . I f n o t , f e e s h o u l d be f o r i n d i v i d u a l o n l y ) . $ 0 - 2 , 9 9 9 $ 3 , 0 0 0 - 4 , 9 9 9 $ 5 , 0 0 0 - 6 , 9 9 9 $ 7 , 0 0 0 - 9 , 9 9 9 A -9 Interview Form 117 Annual Fee $5 $25 $7 $50 $10 $75 $15 $100 ( c o n t i n u e upwards a t $25 i n c r e m e n t s ) In o t h e r words, i f more than $ ( f e e i n d i c a t e d by i n t e r v i e w e e ) were charged, you would n o t come here? Note: T h i s q u e s t i o n i s i n c l u d e d as a c r o s s — c h e c k i t need o n l y be asked when i n t e r v i e w e r t h i n k s r e c r e a t i o n i s t i s n o t c o m p l e t e l y c l e a r about what i s b e i n g asked o f him. The next s e r i e s r e p r e s e n t s d a i l y u s e r f e e s . A g a i n , p l e a s e t e l l me to s t o p when I r e a d the maximum f e e you would pay f o r each day o f r e c r e a t i o n i n t h i s a r e a , c o n s i -d e r i n g the p l a n n e d d u r a t i o n o f y our v i s i t . ( F o r i n t e r -viewee p l u s p a r t y , i f head o f h o u s e h o l d ) . D a i l y Fee $ 0 . 50 $1. 00 $1. 50 $2. 00 $ 2 . 5 0 $ 3 . 0 0 $ 4 . 0 0 $ 5 . 0 0 ( c o n t i n u e upwards i n i n c r e m e n t s o f $ 1 . 0 0 ) B. FOR RESIDENTS ONLY I t i s i m p o r t a n t f o r us t o g e t some i d e a o f the v a l u e r e s i d e n t r e c r e a t i o n i s t s r e c e i v e from the use o f a r e a s such as t h i s . We would l i k e you t o i n d i c a t e how much a days r e c r e a t i o n i n t h i s a r e a i s worth to you, o v e r and above your expenses. P l e a s e c o n s i d e r t h i s q u e s t i o n c a r e f u l l y as i t i s v e r y i m p o r t a n t . (Note: I f i n t e r v i e w e e i s head o f a f a m i l y group, ask what he t h i n k s i t s worth f o r the whole group; i f a s i n g l e member o f a n o n — f a m i l y p a r t y , ask what i t s worth f o r h i m s e l f o n l y ) . V a l u e o f a days r e c r e a t i o n $ In o t h e r words, i f I was to o f f e r t o pay you t h i s much to g i v e up a day's r e c r e a t i o n h e r e , you would be s a t i s f i e d ? Yes No A-10 Interview Form 118 What i f I o n l y o f f e r e d you (.8) __, would you s t i l l be w i l l i n g t o g i v e up a day's r e c r e a t i o n ? 19. G e n e r a l Comments 20. I n t e r v i e w e r * s n o t e s A - l l 

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