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Economic valuation of alternative land uses in a state park
- Joshi, Omkar, Poudyal, Neelam C., Hodges, Donald G.
- Land use policy 2017 v.61 pp. 80-85
- cost benefit analysis, economic valuation, income, land use, managers, markets, models, operating costs, opportunity costs, parks, public lands, public services and goods, recreation, social benefit, timber production, Georgia
- Public lands such as state parks provide numerous environmental, economic, and cultural benefits. Many of these benefits possess public goods characteristics and are not traded in market, making it difficult to incorporate them in a traditional economic analysis. Agencies responsible for managing public parks often struggle with demonstrating amenity benefits. Consequentially, many state parks in the U.S. are facing reductions in operating hours and in some cases permanent closure. Using the case of Indian Springs State park in Georgia, U.S, this study compares the economic returns of using the area as a recreation park with the alternative land use option of timber production. Lost timber sale revenues were estimated using a timber investment model. The results reveal that if only revenue and operating costs associated with the current land use (i.e., recreation) are considered, the best financial option is to utilize the area for timber production. However, the total economic benefits of using this land as a state park exceeded the operating costs of park by a factor of ten. Furthermore, the ratio ranged from 8.86 to 9.74, even when foregone opportunity costs of timber production were considered in benefit-cost analysis. These results provide further evidence of the net benefit of public recreation lands, and will help managers justify investments in operating and maintaining such resources.