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THE OPPORTUNITY COSTS OF REDWOOD NATIONAL PARK: COMMENT AND ELABORATION

John Loomis, Richard Walsh and John McKean

Contemporary Economic Policy, 1984, vol. 3, issue 2, 103-107

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.

Date: 1984
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