Oregon and Washington). The second major study used for this report is "Parks and Recreation Information

Transcription

1 Chapte 2 AN ECONOMIC ESTIMATE FOR SPORTFISHING ON SAN FRANCISCO BAY Jennife Cohen Intoduction San Fancisco Bay is a valuable esouce because it povides people with eceational and aesthetic pleasue, sustains commecial fishing, and is the home fo many species of floa and fauna. Like othe natual esouces and habitats, the Bay's continued healthy existence is theatened by human activities. Of majo concen ae the many wate pojects which divet feshwate ive inflows away fom the Bay to cental and southen Califonia. This deceased inflow has esulted in inceased salinity and concenta tion of pollutants, and affects many uses of the Bay. At the pesent time, legislatos ae debating whethe to set wate quality standads to egulate the amount of feshwate coming into the Bay. A tool sometimes used by officials to fomulate policies affecting theatened natual esouces such - as San Fancisco Bay is an economic evaluation of the esouce. In the case of the Bay, fo example, legislatos could make a decision on whee the wate should go based in pat on the economic benefit eceived by the uses of the wate. Making this type of evaluation is a difficult task, howeve, because no two people place the same value on what these benefits ae. Futhemoe, people do not agee on the best methods fo estimating these values. Nevetheless, it is possible to estimate an economic value fo San Fancisco Bay as a esouce based on eceational costs and benefits. The objective of this study is to obtain a dolla value fo the benefits eceived by eceational fishemen who fish on San Fancisco Bay. This value is fo one secto of the total economy suppoted by the Bay, and theefoe is just one contibution to the oveall economic assessment of San Fancisco Bay. Past Studies This epot is based pimaily on two majo studies. One is by Rowe et al_. (1985) entitled, "Valuing Maine Receational Fishing on the Pacific Coast." Its main objective was to estimate goss and net economic values fo typical tips and in-aggegate acoss all tips by fishing mode (beach, bank, man-made stuctues, paty boats, ental and pivate boats), and by egion (nothen and southen Califonia, Oegon and Washington). The second majo study used fo this epot is "Paks and Receation Infomation System" (State Depatment of Paks and Receation, Planning Division, 1980), efeed to heein as PARIS. It estimates spotfishing paticipation days fo San Fancisco Bay

2 Methodology Most economic evaluations of eceational activities such as spotfishing ae based in pat on some fom of estimated goss and net economic values. Goss economic value is defined in the Rowe study as the "total willingness to pay" by spotfishemen, and includes actual expenditues, tavel costs and "uncaptued values" elated to paticipating in the spot. Uncaptued values ae the benefits eceived fom spotfishing that do not have dolla figues associated with them, such as aesthetics of the site, elaxation and excitement. They ae impotant values because they indicate the magnitude of the benefits eceived, even when no fish ae caught. Net economic value is defined as the total willingness to pay minus actual expenditues and tavel costs. Theefoe net economic value is a measue of the benefits, o what economists call consume suplus (Rowe et al_., 1985). Thee ae a vaiety of ways to make economic evaluations using goss and net values. One can estimate total expenditues pe day and multiply by the numbe of paticipation days pe yea at a site. This gives a figue fo estimated dollas spent by fishemen engaging in the spot at a paticula site pe yea. Howeve, this type of analysis leaves out the consume suplus, an impotant value to conside when evaluating a specific site. The consume suplus captues the unique benefits that a fisheman eceives fom fishing at a paticula site. The poblem with consideing expenditues but not consume suplus is that expenditues alone do not measue the value of having, fo example, San Fancisco Bay an available site fo fishing. The Bay may be a site that a fisheman wants to fish at above all othe sites, and theefoe he may be willing to spend S30.00 fo one day of spotfishing on a paty boat, knowing he may not catch a fish. But he knows he will be eceiving pesonal benefits fom being out on the Bay: fesh ai, aesthetics, poximity to a big city, elaxation. Consume suplus measues how much moe he would be willing to pay than he actually has to pay fo fishing at San Fancisco Bay. If San Fancisco Bay wee not an available site fo spotfishing, consume suplus would eflect the value that would be lost because no one could use the Bay. The estimates fo consume suplus povided in this epot ely upon a vaiation of the tavel/cost method of analysis. This method has been used extensively to estimate demand fo benefits at a specific eceational site by ecognizing that visits to a site will vay accoding to tavel costs, tavel time, chaacteistics of the site, chaacteistics of the individual and expected fish catch. A genealized pesentation of this demand estimation is the function: V = f ( I, S, T, C, E ) (adapted fom Rowe et al_., 1985) whee: V = numbe of visits to a site T = tavel time I = chaacteistics of the individual S = chaacteistics of the site C = tavel costs E = expected fish catch

3 Once this infomation is obtained, the esults can be pesented gaphically whee visits to a site ae a function of the tavel/cost vaiables (Rowe et aj_., 1985). Afte employing egessional analysis, a statistical technique fo fitting the best line to a seies of points, one has a demand cuve fo a eceational site. This demand cuve may be used to obtain the consume suplus fom changes in any of the tavel/cost vaiables. The paticula tavel/cost model used in the Rowe study is the multinominal logit model. Simila to othe tavel/cost models, the multinominal logit model is based on the demand function fo estimating benefits eceived fom a paticula eceational site. The multinominal logit model obtains values fo these benefits, the consume suplus, based on the pobability that an individual will take a tip to a specific site unde vaious scenaios egading the site chaacteistics (e.g., fish stock, scenic beauty, availability of specific modes of fishing, and elimination of all fishing at the site). Fo this epot the scenaio used is the elimination of all spotfishing at San Fancisco Bay because this scenaio captues the total consume suplus lost if spotfishing on the Bay is unavailable. The multinominal logit model is based on the pobability that an individual will take a tip to San Fancisco Bay; each time a spotfisheman goes fishing, egadless if he goes to San Fancisco Bay, he obtains a cetain amount of benefit fom the.fact that the Bay is available as a site in his set of choices. If the Bay became unavailable fo fishing, the spotfisheman would fogo this benefit. Thee foe, this benefit is the consume suplus fom San Fancisco Bay pe tip to any site. The actual way consume suplus is tanslated into dollas involves a methodology developed by D. Michael Hanemann of the Univesity of Califonia, Bekeley. Details of how this is done can be found in the Rowe epot. The infomation necessay fo detemining consume suplus was obtained by Rowe's consultants, who conducted a telephone suvey of twelve coastal counties in Califonia. The espondents gave infomation on paticipation ates, distibution of tips in tems of county of fishing site, and mode of fishing. Table 2 pesents esulting consume suplus values (in dollas) fo the elimination of all fishing in San Fancisco Bay afte the suvey infomation has been factoed though the multinominal logit model. Once again, the esulting values ae the consume suplus fo San Fancisco Bay pe tip to any site. The emaining fou inteio counties that suound the Bay (Solano, Conta Costa, Alameda and Santa Claa), have consume suplus values that have been detemined by taking aveage of consume suplus fom the five coastal counties suounding the Bay; see discussion section fo moe detail. Once all these consume suplus values ae obtained, the calculations fo detemining the total consume suplus fo spotfishing on San Fancisco Bay pe yea can be caied out, as follows:

4 Step (1 Xn= (Yn)(Z) whee: Xn Yn = aveage individual consume suplus pe tip to San Fancisco Bay = aveage individual consume suplus fo San Fancisco Bay pe tip to any site in nothen Califonia Z = numbe of tips made to all sites in nothen Califonia pe yea (Table 1) W = numbe of tips made to San Fancisco Bay pe yea (Table 1) Step (2) 16 n=l Xn U whee: U = total aveage consume suplus pe tip to San Fancisco Bay Step (3) (U)(W)(CPI) = T whee: CPI = Consume Pice Index T = total consume suplus fo San Fancisco Bay pe yea In step (1) sixteen X values ae obtained because thee ae sixteen Y values (Table 2). Y is multiplied by Z because Y is the consume suplus fo San Fancisco Bay pe tip anywhee in nothen Califonia, and multiplying by Z gives consume suplus fo San Fancisco Bay exclusively. Then, dividing by W, one obtains the consume suplus pe tip to San Fancisco Bay. The summation of the sixteen values is U. This is the total aveage consume suplus pe tip to San Fancisco Bay. Next, U is multiplied by W, the numbe of tips made to the Bay pe yea (Table 1). Finally, to update the values to 1985 dollas, these figues ae multiplied by the Consume Pice Index. The esulting value is the total consume suplus fo spotfishing on San Fancisco Bay in Following these calculations, pojections ae made fo the consume suplus fo spotfishing on San Fancisco Bay fo the yeas 1990, 1995 and 2000, based on the PARIS (1980) model demand pojections fo spotfishing activity on the Bay. In the discussion section of this epot, the limitations inheent

5 in doing an evaluation of this kind ae pesented. This is followed by a compaison of the total consume suplus fo spotfishing on San Fancisco Bay in 1985 with values of othe visito activities in San Fancisco aea. Finally, ecommendations ae given fo impoving this analysis, and fo how the esulting values can be put to use. Results Tables 1 and 2 pesent the data fom the Rowe and PARIS studies necessay fo the calculations. Table 1 Tips made in 1985 (vaiables Z and W) Tips to all sites in,., nothen Califonia Z = 3,641,124 Tips to San Fancisco Bay /gx W = 2,589,097 Souces: (1) Rowe and othes, 1985 (2) State Depatment of Paks and Receation, Planning Division, 1980 Table 2 Aveage Individual Consume Suplus fo San Fancisco Bay pe tip to any site in nothen Califonia (vaiable Y) \! County of Oigin Y value (S) San Luis Obispo 0.12 Monteey 1.94 Santa Cuz 4.23 San Mateo 6.90 San Fancisco 6.45 Santa Claa 6.68* Alameda 6.68* Conta Costa 6.68* Main 6.96 Sonoma 4.60 Solano 6.68* Napa 8.48 Mendocino 2.20 Humboldt 0.30 Del Note 0.06 Sacamento 0.95 Souce: Rowe and othes, 1985 Aveage consume suplus fo five Bay Aea counties included in Rowe epot; see Discussion

6 The esulting value fo U is $99.33, the total aveage consume suplus pe tip to San Fancisco Bay. When this is multiplied by the total numbe of tips made to San Fancisco Bay in 1985, W, and then multiplied by the Consume Pice Index (1.13 fom the Bueau of Labo Statistics), the final value is 5290,602,756. This is the dolla value fo consume suplus that spotfishemen eceived by using San Fancisco Bay in Pojections fo the futue consume suplus value fo spotfishing on San Fancisco Bay can now be obtained. Based on the PARIS model spotfishing demand pojections and the consume suplus values fom the Rowe epot, pojections fo consume suplus fo spotfishing on San Fancisco Bay in 1990, 1995 and 2000 ae $318 million, S314 million and $364 million, espectively. The majo indication hee is that as population in Califonia gows, demand fo spotfishing on San Fancisco Bay will incease, esulting in an incease in consume suplus value. Discussion The accuacy of the calculated values ae patly dependent on the accuacy of the epots on which they ae based. Thee ae seveal inheent limitations of the Rowe epot that must be kept in mind. One is that "pesevation values" have not been taken into account. Pesevation values of a esouce ae the dolla amount that people ae willing to pay fo potection of the esouce into the futue. Although these types of values ae difficult to quantify, they ae of substantial impotance. Fo example, one study mentioned by Rowe and othes (1985) showed that fo evey dolla spent spotfishing, people wee willing to pay additionally half that amount to have the fishing esouces potected. A second limitation of the Rowe epot is that the analysis leaves out the value of time spent tavelling and fishing. Most analyses assume the value of time to be the houly wage fo each individual (Rowe et al_., 1985). Thidly, the suvey taken fo the Rowe epot collected little data on spotfishing tips made specifically fo catching stiped bass and salmon. These two species of fish, popula with spotfishemen, ae often found in San Fancisco Bay. As a esult, fishemen may pefe San Fancisco Bay ove othe fishing sites. Unfotunately, the effects of this limited data cannot be detemined fom the available infomation (Hanemann, 1986). The Rowe study povides consume suplus values fo coastal counties only. Theefoe, to detemine Y values fo those inteio counties diectly suounding the Bay (Alameda, Conta Costa, Solano and Santa Claa), the aveage consume suplus of the five coastal counties suounding the Bay was assigned to those inteio counties. Accoding to D. Michael Hanemann, the Y values ae based in pat on dis tance fom the site; assigning aveage values fo the inteio counties is valid because they all su ound the Bay, and have elatively equal access. The limitations descibed above ae not the only ones inheent in this study; othes, less impotant o moe complex in natue, can be found in the Rowe epot. As shown above, consume suplus fo spotfishing on San Fancisco Bay in 1985 is appoximately $291 million. Fo this numbe to be meaningful one should compae it to values associated with othe

7 " activities in the Bay Aea. Touism and conventions geneate many millions of dollas. Accoding to the San Fancisco Statistical Abstact (1980), and updated to 1985 dollas, visitos to San Fancisco spent appoximately $558 million on estauants, motels, hotels, food and beveage, $88.7 million on entetain ment, and about $25 million on sightseeing. Conclusion It is impotant to conside the potential economic loss caused by declining wate quality in San Fancisco Bay. This epot has detemined what the loss in consume suplus would be if San Fancisco Bay was not available fo spotfishing. To obtain the oveall impact that spotfishing has on the economy, it wculd be necessay to combine yealy expenditues by spotfishemen who use the Bay with estimates of consume suplus. To detemine futhe the impacts spotfishing has, one might want to conside multiplie effects, that is, how changes in spotfishing costs and benefits filte though the est of the economy. Additionally, it would be beneficial to obtain goss and consume suplus values fo othe industies suppoted o affected by the Bay, such as commecial fishing, touism, eal estate and boating. With all these diffeent values associated with the Bay, legislatos could begin to make clea and ational decisions about how the wate in Califonia should be allocated. Elliot, Vigil, L., REFERENCES CITED San Fancisco statistical abstact 1980; United States, Statistical Pess, 79pp. Hanemann, Michael, Pofesso, Depatment of Agicultue and Resouce Economics, Univesity of Califonia, Bekeley. Pesonal communication, Febuay 17, Rowe, Robet D., E.R. Moey, A.D. Ross, W.D. Shaw, Valuing maine eceational fishing on the Pacific Coast. Enegy and Resouce Consultants, Inc., Boulde, Coloado, 87pp. State Depatment of Paks and Receation, Planning Division, Paks and Receation Infomation System (PARIS); compute database pintout; Sacamento, Califonia. ~