Economic Benefits of Greenbelts and Parks in Anchorage

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Economic Benefits of Greenbelts and Parks in
Anchorage

• Steve Colt
• Institute of Social and Economic Research
• University of Alaska Anchorage
• Celebrating Anchorages Natural Assets
• 26 January 2007

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Preview

• Idea 1 Parks attract and retain visitors
• Idea 2 Parks attract and retain residents
• Idea 3 Greenbelts provide ecosystem services
  with high replacement costs
• Idea 4 Economic benefits of parks are uncertain,
  but growing
• Idea 5 A surprise..stay tuned!

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What on Earth is Value ?

• Value is subjective
• There is no accounting for taste
• Value is determined partly by
• Circumstances (water, in the desert hiking,
  today)
• Skills and interests (piano, to Beethoven)
• Total value depends on number of people
• Markets reveal value where markets exist
• Economists try to measure value

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What benefits are we talking about?

• Current Use
• recreation
• ecosystem services
• Future use
• Non-use
• option to use later, for your kids to use
• existence

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Idea 1 Anchorage parks attract and retain
visitors

• Tourism is Alaskas most important export after
  oil and gas
• Alaska is approaching 2 million visitors per
  year,
• Business travelers count, are especially
  important for Anchorage

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Idea 1A Anchorage is a gateway to Alaska
national parks, and Alaska generally
MOA 2005 CAFR p vi
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Denali National Park Huge Draw

• Denali visitors
• Avg trip expenditure per party 2,295
• Avg trip length 13.6 days
• Avg expenditure/day 169
• Non-Denali visitors
• Avg trip expenditure per party 1,054
• Avg trip length 7.6 days
• Avg expenditure/day 139

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Anchorage is a gateway to Alaska, but

• Anchorage is in a polite tug of war for visitor
  dollars with
• Seward, Juneau, Kenai, Wasilla, Willow, Healy,
• And with Seattle, Los Angeles,
• and everywhere else that people come from

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Capturing gateway value

• Anchorage Visitor Profile ACVB Summer 1997
  Study
• 1.0 million Visitors to ANC
• Spend 3.9 nights in Anchorage, 11.1 nights in
  Alaska
• 85 have attended or graduated from college
• Average household income is 86,300
• Average age is 52 years old
• Each spends 637 in Anchorage
• Each spends 1,600 in Alaska

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Capturing gateway value(estimates for today)

• There are about 5 million visitor-days spent in
  Anchorage
• Anchorage summer visitors spend at the rate of
  200/person/day, or
• 12.50 per person per hour (16-hr day)
• Thats 1 billion of summer visitor spending in
  Anchorage

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Capturing the gateway value

• But, that 1 billion is only about 40 of the
  total spending of these people
• Thought experiment
• 10 of the visitors stay in Anchorage for
• One extra day, for a Coastal Trail day
• This yields
• 26 million in additional visitor spending

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Idea 1B Anchorage is a world-class sports event
destination

• Special Olympics (2001)
• 1,800 athletes 8,000 visitors
• 22 million in Visitor spending
• Of which, 12 million was payroll 400 jobs each
  lasting one year
• source ISER/Goldsmith Larson 2002
• Our parks are our
• outdoor convention
• center.

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Idea 2 Parks attract and retain residents

• Residents are like permanent tourists
• High-quality local parks keep residents in town
• Ski in Anchorage..
• Or ski in Canada?

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• Residents trade off quality of life for other
  economic benefits
• Employers may be able to get higher-quality work
  force for the same salary..
• Is there a skiing cardiac surgeon in the house???
• We have no systematic data on this effect

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QOL is reflected (partly) in property values

• Hedonic theory of market value says that value
  of greenbelt is capitalized into value of nearby
  houses
• Anchorage has 20 billion of assessed value, of
  which about 16 billion is residential
• Creekside property commands a 10-20 premium,
  consistent with national studies (eg Crompton
  2005)

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Property Values

• Thought experiment
• If there are 2,500 houses along creeks
  greenbelts,
• 300,000 value each
• Then, there is .
• 100 million of green property value, using the
  15 premium
• Note, this does not capture the benefits to the
  rest of us

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Idea 3 Parks and greenbelts provide valuable
ecosystem services with high replacement costs

• Wetlands, aquifer protection
• Wildlife habitat
• Flood control
• Improved air quality
• I have no data for this one..Sorry!

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Idea 4Benefits are uncertain, but growing

• Value typically increases with each of these
  factors
• Income
• Education
• Number of people

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Average annual growth rates

• Real per capita income, 1960-2000
• World 2.2
• Richest billion people 2.7
• China 4.3
• Real total income, 1960-2000
• World 4.1
• Richest billion people 3.8
• China 6.0

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U.S. Educational Attainment Share of adults with
some college or more 1984 39 of adults 2001
53
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Average annual growth rates

• Summer Visitors to Alaska
• 1989 - 2004 6
• Cruise passengers to Alaska
• 1989 2004 12

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Recreation visits to AK National Parks
avg annual growth 7.6
Source http//www2.nature.nps.gov/stats/
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Growth soft adventureguided rafting on Chugach
National Forest

• 16 average annual growth for Six-mile River
  (1994-1998)

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Idea 5

• You dont know what youve got

Til its gone
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Boston Reclaiming a park strip
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And adding 1 mile of coastal trail
The cost? 10 billion
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This talk will be atwww.iser.uaa.alaska.edu
Celebrate while you can!
The End