National Parks and Economic Development
In this project Andrea Szabo and Gergely Ujhelyi study the impact of the National Park System on local income and employment.
Background
The National Park System (NPS) is the largest and best known national conservation entity in the world. Its mission is to conserve certain areas while making them accessible to the public in a sustainable manner, and this model has been adopted by over 100 countries that have opened national parks in the past 150 years.
When Yellowstone was established in 1872, parks were viewed as detrimental to the economy, and proponents had to argue that the areas to be protected were economically worthless. Today, conservation is often argued to have economic benefits and creating jobs – a notion that figures prominently in the Biden administration’s “30 by 30” initiative aiming to conserve 30% of US lands by 2030.
Perhaps surprisingly, no previous study has attempted to measure the causal effect of National Parks and other NPS parks on the local economy. In this project, we assemble a new, comprehensive dataset on all parks on the NPS that allows us to conduct such an analysis.
Study design
We ask two types of questions. First, when the NPS opens a new park, what happens to employment and incomes in the counties around the park? Do employment and income go down (e.g., because industries like logging or mining decline)? Or do they increase (e.g., because of tourism)?
Second, take a park that is already part of the NPS, but does not have the most prestigious “National Park” designation (instead, it might be called a National Monument, or a National Historic Park). What happens to local employment and income if the park receives National Park designation?
This second question is interesting because National Park designation implies an increase in the level of protection, while also giving a boost to visibility and attracting additional visitors.
Findings
We find that both National Park designation and the opening of a new park raise employment and income in the local economy. The magnitude of the effect is 4-6%, and the full increase takes 3-4 years to realize. Interestingly, these effects are not restricted to National Parks – opening parks with less well-known designations also have positive economic impacts on average.
The evidence shows that direct government spending on or around the parks cannot account for these income and employment effects. The results also cannot be explained by the diversion of economic activity from neighboring counties or from other parks, nor by changes simply in the size of the conserved areas. Instead, the evidence is consistent with economic impacts being driven by visitors.
The finding that visitation is crucial to realizing the positive economic impacts of conservation has implications beyond the NPS. For example, there are 372 national parks in 54 countries on the African continent, but many of these do not have facilities or even allow visitor access. Only a few parks appear to have visitor numbers available. Our results suggest that improving access may be important to realize the economic potential of these areas, and collecting systematic visitor data may be important to measure their impacts.
The impact of park opening on employment and income
Event study coefficient estimates for the impact of park opening on log employment and income. Estimates are relative to the year before the park opening. Standard errors are clustered at the park level. Bars indicate 95 percent confidence intervals, p-values are in brackets. N = 129,744 (employment) 129,730 (income).