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The Opportunity Costs Of Redwood National Park: Comment And Elaboration

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  • JOHN LOOMIS
  • RICHARD WALSH
  • JOHN MCKEAN

Abstract

In a recent issue of this journal, Walker (1984) emphasized the need for good economic analysis in public evaluation of national park expansions. We support this but would like to show that a possible reason the economic analysis referred to in Walker's paper was ignored may be the very narrow way in which his analysis was performed. In particular, the opportunity cost per visitor day of Redwood National Park may have been overstated by a factor of 10 by implying the sole benefits of the park expansion were associated with only 10 percent of the park's use days. More importantly, substantial literature on off‐site economic benefits arising from preservation of natural environments is completely ignored. Since the legal purpose of the national parks is not solely related to recreation, this omission reflects a large error in the analysis. This paper's purpose is to apply sensitivity analysis to the opportunity costs per visitor day and illustrate some policy analysis tools commonly used by natural‐resource economists, in and out of government, for evaluating the economic efficiency benefits of preserving unique natural environments. Applying these tools indicates the cost of Redwood National Park may have been as low as 90 cents per household in the United States.

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  • John Loomis & Richard Walsh & John Mckean, 1984. "The Opportunity Costs Of Redwood National Park: Comment And Elaboration," Contemporary Economic Policy, Western Economic Association International, vol. 3(2), pages 103-107, December.
    • Handle: RePEc:bla:coecpo:v:3:y:1984:i:2:p:103-107
    DOI: 10.1111/j.1465-7287.1984.tb00800.x
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    References listed on IDEAS

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    1. Charles J. Cicchetti & A. Myrick Freeman III, 1971. "Option Demand and Consumer Surplus: Further Comment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 85(3), pages 528-539.
    2. Douglas A. Greenley & Richard G. Walsh & Robert A. Young, 1981. "Option Value: Empirical Evidence from a Case Study of Recreation and Water Quality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(4), pages 657-673.
    3. Richard C. Bishop, 1982. "Option Value: An Exposition and Extension," Land Economics, University of Wisconsin Press, vol. 58(1), pages 1-15.
    4. Brookshire, David S, et al, 1982. "Valuing Public Goods: A Comparison of Survey and Hedonic Approaches," American Economic Review, American Economic Association, vol. 72(1), pages 165-177, March.
    5. John L. Walker, 1984. "Tall Trees, People, And Politics: The Opportunity Costs Of The Redwood National Park," Contemporary Economic Policy, Western Economic Association International, vol. 2(5), pages 22-29, March.
    6. Burton A. Weisbrod, 1964. "Collective-Consumption Services of Individual-Consumption Goods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(3), pages 471-477.
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    Cited by:

    1. John L. Walker, 1984. "REPLY TO LOOMIS, WALSH, AND McKEAN," Contemporary Economic Policy, Western Economic Association International, vol. 3(2), pages 108-109, December.

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