THE ECONOMICS OF WATER USE, RECREATION AND WILDLIFE MANAGEMENT IN OKLAHOMA

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: TERMINATED
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 1006449
• Project No.: OKL02997
• Project Start Date: Oct 1, 2015
• Project End Date: Sep 30, 2017

Project Director
Melstrom, RI, TH.

Recipient Organization
OKLAHOMA STATE UNIVERSITY
(N/A)
STILLWATER,OK 74078

Performing Department
Ag Economics

Non Technical Summary
Environmental and natural resources are a source of significant economic value. While some of this value is transferred through markets in the form of goods, much of it comes in the way of free services provided by the environment, such as clean water for drinking or outdoor recreation. Efficient natural resource management requires knowledge about the value of these "ecosystem services" to determine whether the benefits of a proposed management action exceed the costs. This project will collect data on different natural resource uses and use economic modeling to measure the value, including the non-marketed value, of associated ecosystem services. Specifically, the project will focus on the value of water and wildlife in Oklahoma. It is anticipated that the information collected about the use and value of Oklahoma's natural resources will aid policy makers and managers in meeting the demands of natural resource users.

Animal Health Component

0%

Research Effort Categories

Basic

25%

Applied

50%

Developmental

25%

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
605	0210	3010	67%
605	0899	3010	33%

Knowledge Area
605 - Natural Resource and Environmental Economics;

Subject Of Investigation
0210 - Water resources; 0899 - Wildlife and natural fisheries, general/other;

Field Of Science
3010 - Economics;

Keywords

non-market valuation

demand modeling

ecosystem services

outdoor recreation

wildlife management

climate

natural resources

conservation

Goals / Objectives
Build demand models for water-based recreation activities in Oklahoma.Measure the (active and passive use) value of water and other natural resources in Oklahoma.Analyze water and wildlife management problems in an ecological-economic framework.Measure the impacts of a changing climate on the economic factors related to water use, recreation and wildlife in Oklahoma.

Project Methods
Achieving the objectives requires the collection of data and the application of several different modeling methods.The first objective will combine data on individual preferences for water-based recreation activities and econometric methods to estimate behavioral models. Existing Oklahoma Department of Wildlife Conservation (ODWC) data sets on the activities of individual anglers, although not designed for economic analysis, is partially suitable for use in participation and site choice models (the ODWC has been conducting regular mail surveys of licensed hunters and anglers for several decades). However, statewide-household or visitor-intercept surveys are necessary to characterize the demand for other non-consumptive activities associated with water resources, boating, swimming and habitat preservation. The project will use data collected by on-site visitor and household surveys conducted by the investigator with graduate and undergraduate student support, in addition to the extensive survey data collected by the ODWC and some limited monthly visitor data collected by the Oklahoma Tourism and Recreation Department. Household surveys will be conducted either by mail, web or mixed-mode methods following the procedures outlined in Dillman (2011). Visitor-intercept surveys will be conducted following the procedures in Pollock et al. (1994). This data will be used to parameterize models relating the demand for natural resources and recreation, including at Oklahoma's major public reservoirs such as Fort Cobb Lake and Grand Lake, to environmental quality and climate variability. For statewide demand analysis and valuation, including for recreational demand, site choice models based on the random utility maximization framework will be used because they have the ability to model the large number of substitutes affecting recreational site demand and because they can relate demand to environmental quality (Haab and McConnell, 2003). Environmental quality data will be drawn from existing OWRB, Oklahoma Water Resources Board and Geographic Information System databases, which includes land use characteristics, water clarity, air quality and harvest rates. Furthermore, a unique aspect of Oklahoma is the availability of the Mesonet system to provide weather data at sites across the state. Parameterization of these models to the visitor and household data will be conducted in statistical software packages such as Stata and LIMDEP.The second objective will be accomplished using the travel cost (TC), contingent valuation (CV) and/or choice experiment (CE) valuation methods. These methods combine analytical techniques with the results of the aforementioned econometrically-estimated behavioral models to measure active values. The project will use the travel cost method to value general water-based recreation at lakes in Oklahoma and value specific activities such as angling across the state. Passive values (e.g. the value gained from knowing that a resource is maintained for future generations) can only be measured using CV and CE methods (Whitehead et al., 2012). There is little existing data on contingent environmental behaviors of Oklahomans (although see Roberts et al. (2008)), so the application of either CV or CE methods will require the implementation of new surveys. These surveys will be coordinated with the above-mentioned visitor-intercept and household surveys with student support. The project will use these methods specifically to measure the benefits of improved water quality at Oklahoma lakes and rivers.The third objective will analyze natural resource problems in an ecological-economic framework using dynamic bioeconomic models and interdisciplinary collaboration. Bioeconomic models are mathematical models that link an economic activity and a biological process, using information on economic values (such as those measured using the valuation methods described above), biological growth and interactions, and management actions and costs (Clark, 1976). One application will include analyzing the conflict between grassland bird conservation and energy development in Oklahoma. Simulation and optimization techniques will be used to learn about the policies and management actions that lead to the highest net benefits to society. These models will be developed and analyzed in software packages such as Mathematica and MATLAB. The project will also involve collaboration with natural scientists to model ecological systems, and use the output of these models as inputs to economic models. For example, the investigator will work with fisheries scientists in the College of Agricultural Sciences and Natural Resources at Oklahoma State University to develop a model to predict catch rates at lakes across the states, which will be used as an input into a recreational fishing demand model and allow the valuation of different fisheries management strategies. In general, the project investigator will work with natural scientists to study CHANS problems related to Oklahoma's natural resources.The fourth objective is to measure the impact of climate variability on human behavior related to natural resource use, especially water. Tradeoffs between competing water uses will likely increase over time because climate change is expected to increase the frequency of droughts in existing dry regions (IPCC, 2014). Research predicts that climate change will have significant economic impacts on the agriculture and recreation industries (Deschenes and Greenstone, 2007; Pendleton and Mendelsohn, 1998). For this project, climate effects will be identified by incorporating climate and weather data, such as from the Oklahoma Mesonet and the Soil and Water Assessment Tool (SWAT), into the demand models associated with the first and second objectives. That is, this data will be an input into economic models to assess the response of individuals and local economies to changes in climate characteristics. The project will predict the effect of climate on changes in behavior, economic development and the value of natural resources. By providing information on how climate affects the use and value of natural resources, decision makers will be able to anticipate and manage for future trade-offs.

Progress 10/01/15 to 09/30/17

Outputs
Target Audience:Professional economists and personnel at government agencies and non-governmental organizations, including the Oklahoma Department of Wildlife Conservation, Oklahoma Water Resources Board, Grand River Dam Authority, Oklahoma City Parks & Recreation, U.S. Fish & Wildlife Service and Playa Lakes Joint Venture; the types of individuals at agencies include responsive management specialists, regional supervisors, natural resource managers, fisheries biologists, wildlife biologists and environmental quality analysts. Non-agency audience targeted includes landowners, chambers of commerce, and individual outdoor recreationalists. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?I have attended conference sessions on research methods in demand analysis, and the human dimensions of wildlife. Feedback my research and outreach activities has been used to further personal development. I have also periodically invited researchers from other institutions to give departmental seminars on topics related to the project. Students have been involved in my research. I have funded and been the major advisor for 3 masters-level research assistants, 2 doctoral-level research assistants and 1 undergraduate assistant on the project. How have the results been disseminated to communities of interest?The results have been disseminated through peer-reviewed outlets, including academic conferences and journals, and through meetings with natural resource management groups. Presentations were given at the annual meetings of the Agricultural and Applied Economics Association, the Midwest Economics Association, the International Symposium on Society and Resource Management, and the American Fisheries Society. Several reports have been prepared for agency personnel and non-academic professional groups. Results have been shared with practitioners and landowners through individual meetings, local conferences, phone calls and webinars. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? My work has supported the development of the Oklahoma Hunting Access Program (OHAP). OHAP contracts with landowners to provide land for public hunting access. I facilitated meetings between the Oklahoma Department of Wildlife Conservation (ODWC), county extension agents and landowners to prepare for the launch of the program in fall 2017. My responsibilities on the project included communicating and educating landowners in Oklahoma about OHAP, and providing the ODWC recommendations about competitive rental rates. With my contributions, OHAP held four public meetings around the state and spoke with over 40 landowners and county extension agents. My rental rate analysis also contributed to the lease rates that will initially be offered by OHAP to landowners. My work has improved fisheries managers' understanding of how regulations affect users. Despite historically low catch rates, the number of anglers targeting paddlefish in Oklahoma is growing rapidly. The ODWC observed repeated annual increases in the number of paddlefish anglers between 2008 (13,098 anglers) and 2014 (22,649 anglers)--an increase of over 70%-despite a decline in the annual bag limit to two fish in 2014. I worked with ODWC personnel to develop a survey to learn about angler preferences for implementing catch and release to protect remaining paddlefish stocks. I used the data collected to inform managers that mandating catch and release at the two most in-demand fishing areas would lower participation modestly. This has provided managers with confidence that catch and release is a viable way to protect the fishery. I have also provided education on the local economic effects of land use regulations to protect imperiled wildlife species. The political and legal controversy surrounding the use of the Endangered Species Act (ESA) to protect imperiled species raises questions about the development restrictions and costs the ESA imposes on private landowners and companies. In Oklahoma the decision to list the lesser prairie chicken (LPC) in 2014 was controversial because the species' habitat lies in close proximity with agriculture and petroleum development. My research shows the economic effects of protecting the LPC have been small. I did not find strong evidence that regulations affected land values. However, after looking for macro-level effects in employment data, I concluded that regulations did modestly reduce the number of jobs, although primarily in priority habitat areas. This work is valued by the Western Association of Fish and Wildlife Agency (WAFWA) and partner organizations such as the ODWC in developing the LPC conservation strategy. My work demonstrates that industry is mindful of the habitat priority designations to a modest degree, which shows that WAFWA is contributing to the recovery of the species by changing behavior. As the result of my work, WAFWA may change the marketing of their habitat offset scheme to encourage a greater response on the part of industry, and ESA regulations may not be deemed necessary to protect the LPC. Maintaining good water conditions is important policy issue in Oklahoma. I have carried out research and education about the effects of water conditions on the value of water-based recreation. Providing state agencies information on the economic effects of water conditions has the potential to improve local economic outcomes. My work shows that declining water conditions negatively affect the demand for water-based recreation. My work also estimates explicit values for reservoir recreation, which helps bring nonconsumptive use values into policy discussions. This work supports decision making at agencies such as the Grand River Dam Authority. I have provided education on agritourism in Oklahoma. My work has improved the knowledge of business owners and specialists at the Oklahoma Department of Agriculture, Food and Forestry (ODAFF) about consumer preferences for agritourism activities. One objective of this work was identifying the location preferences of agritourism travelers. Agritourism marketing in Oklahoma focuses on encouraging residents to drive out and visit farm and rural businesses. My work shows single-day visitors are primarily concerned about driving costs and on-site activities, and are not interested in scenic landscapes. Finally, I have worked to provide education to natural resource agencies on recruiting and retaining users. Recruitment and participation is an important concern in the sustainable management of fish and wildlife stocks. My outreach efforts have aimed at showing the effects of license fees on the demand for hunting and fishing, and changing fee structures to increase participation while at the same time maintaining or raising revenues from fees.

Publications

• Type: Conference Papers and Presentations Status: Submitted Year Published: 2017 Citation: The Petroleum Industry's Response to an Endangered Species Listing, MEA Annual Meeting, Cincinnati, Ohio, April 2017.
• Type: Conference Papers and Presentations Status: Submitted Year Published: 2017 Citation: The Placement of Oil and Gas Wells in Response to Environmental Litigation Risks, Southern Agricultural Economics Association Annual Meeting, Mobile, Alabama, February 2017.
• Type: Journal Articles Status: Published Year Published: 2017 Citation: Melstrom, R.T., D.H. Jayasekera, T.A. Boyer and C. Jager. In press. Scale Heterogeneity in the Demand for Recreational Fishing Sites. Journal of Outdoor Recreation and Tourism.
• Type: Journal Articles Status: Published Year Published: 2017 Citation: Melstrom, R.T. and C. Murphy. In Press. Do Agritourism Visitors Care About Landscapes? An Examination with Producer-Level Data. Journal of Travel Research.
• Type: Journal Articles Status: Published Year Published: 2017 Citation: Boyer, T. C., R.T. Melstrom and L.D. Sanders. In Press. Effects of Climate Variation and Water Levels on Reservoir Recreation. Lake and Reservoir Management.
• Type: Journal Articles Status: Published Year Published: 2017 Citation: Wietelman, D.C. and R.T. Melstrom. 2017. The Effect of Listing the Lesser Prairie Chicken as a Threatened Species on Rural Property Values. Journal of Environmental Management 191: 155-161.

Progress 10/01/15 to 09/30/16

Outputs
Target Audience:Academic economists and personnel in the Oklahoma Department of Wildlife Conservation, Oklahoma Department of Environmental Quality, Oklahoma Water Resources Board, Grand River Dam Authority and U.S. Fish and Wildlife Service; including district supervisors, natural resource managers, fisheries biologist, wildlife biologists, environmental quality analysts, resource analysts and responsive management analysts. Non-agency audience targeted includes chambers of commerce, tourism departments and individual outdoor recreationalists. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?The investigator attended conference sessions on water-based recreation and program assessment to learn research methodologies useful for achieving the project objectives. Feedback on the investigator's own methodologies has been used to further personal development. The investigator has also invited researchers based at other institutions to give departmental seminars on topics related to this project. Students have been involved in the research. The investigator worked closely with and trained 2 masters-level research assistants,1 doctoral-level research assistant and 1 undergraduate assistant on the project. How have the results been disseminated to communities of interest?The project remains at an intermediate stage, and the results have been disseminated partly through peer-reviewed outlets, including academic conferences and journals, and partly through meetings with natural resource management societies. Presentations were given at the annual meeting of the Agricultural and Applied Economics Association, the International Symposium on Society and Resource Management, and the American Fisheries Society, among other meetings. Reports for agency personnel and non-academic professional groups are currently in-progress. Preliminary results have been shared with practitioners through local conferences, individual meetings and webinars. What do you plan to do during the next reporting period to accomplish the goals?An in-progress survey on Oklahoma City recreational anglers will be completed. The data from the survey will then be analyzed to measure the tradeoffs anglers are willing to make for improved fishing conditions. The investigator will continue to work with fisheries professionals to promote the use of economic information in decision making. A report on the effects of water conditions on recreation will be finalized and disseminated to reservoir managers. A report on the effectiveness of the LPC conservation program in protecting habitat will be drafted. The findings from this research will be shared with wildlife conservation practitioners through conferences and webinars.

Impacts
What was accomplished under these goals? The most recent drought put pressure on water resources for recreation by lowering water levels and increasing the chance of swim warnings and fish kills. As a result, water managers grew concerned about runoff into reservoirs and the impact of water conditions on local economies. This created a need for information about the effects of changing water conditions on water-based recreation, an important economic driver in eastern Oklahoma. A primary objective of this project is measuring the tradeoffs people are willing to make to protect environmental quality, and provide this information to decision makers. During the reporting period, several tasks were undertaking to achieve this objective, including: carrying out surveys of water-based recreationalists, collecting data about preferences for water conditions, modeling the effect of changing water conditions on the demand for recreation and disseminating research findings. This research shows swim warnings at lakes and declining fish abundance can lead to significant visitation loss. At major Oklahoma reservoirs this can mean the loss of tens of thousands of visitors and millions in direct spending related to recreation. The economic impacts of these events are pushing managers to invest in water quality technologies to reduce unnecessary warnings and protect recreational water access. Rangeland wildlife have come under pressure due to increasing energy development in western Oklahoma. This prompted the U.S. Fish and Wildlife Service to list the lesser prairie chicken (LPC) as a threatened species and create the risk of penalties for companies that harm LPC habitat. The listing reduced the incentive for companies to develop land in LPC habitat, which is desirable from a conservation standpoint but potentially detrimental to local economies. However, wildlife managers have little knowledge about the effect of LPC habitat protections in discouraging development. This project measured the effect on local jobs and petroleum project locations due to the LPC listing. Analysis of employment and well data showed the effect on economic activity has been small, suggesting that company behaviors were largely unaffected by the listing. Since the start of this project, the LPC was delisted. The information from this project is being used by state wildlife managers to refine their habitat conservation program with petroleum companies to avoid a relisting; if a relisting were to have the same impacts as the original listing, then avoidance would save about 2,000 jobs and avoid a 10% reduction in petroleum projects in the habitat region.

Publications

• Type: Journal Articles Status: Published Year Published: 2017 Citation: Melstrom, R.T. and D.H. Jayasekera. 2017. Two-Stage Estimation to Control for Unobservables in a Recreation Demand Model with Unvisited Sites. Land Economics.
• Type: Journal Articles Status: Published Year Published: 2016 Citation: Melstrom, R.T. 2016. Estimating a Model of Sportfishing Trip Expenditures using a Quasi-Maximum Likelihood Approach. Tourism Economics.
• Type: Journal Articles Status: Published Year Published: 2016 Citation: Long, J.M. and R.T. Melstrom. 2016. Measuring the Relationship Between Sportfishing Trip Expenditures and Anglers' Species Preferences. North American Journal of Fisheries Management 36: 371-373.
• Type: Other Status: Published Year Published: 2015 Citation: Melstrom, R.T., D.W. Shideler, W. Cha and C. Jager. 2015. Economic Analysis of Trout Fishing at Perry Lake, Oklahoma. Department Working Paper AE-15007.
• Type: Other Status: Published Year Published: 2015 Citation: Boyer, T.A., L.D. Sanders, R.T. Melstrom, A. Stoecker and S. Ferrell. 2015. Water-based Recreation in Oklahoma: Water Rights, Valuation and Implications for Public Policy, Economic Development and Management. Oklahoma Cooperative Extension Service Fact Sheet: AGEC-1057.
• Type: Other Status: Published Year Published: 2015 Citation: Boyer, T.A., L.D. Sanders, A. Stoecker, S. Ferrell and R.T. Melstrom. 2015. Municipal Water Conservation in Oklahoma: Background, Issues and Options. Oklahoma Cooperative Extension Service Fact Sheet: AGEC-1055.
• Type: Other Status: Published Year Published: 2015 Citation: Melstrom, R.T., D.H. Jayasekera, C. Jager and T.A. Boyer. 2015. The Economic Value of Sportfishing Trips to Oklahoma Lakes. Oklahoma Cooperative Extension Service Fact Sheet: AGEC-1054.