Review of Mowen, Graefe, Trauntvein, and Stynes’ “The Economic Significance and Impact of Pennsylvania State Parks: And Updated Assessment of 2010 Park Visitor Spending on the State and Local Economy.”

The objective of this study is to assess economic impact that the State Park system had on the state of Pennsylvania in 2010.  This model uses the number of parties of visitors that visited the park system, multiplied by the average spending per visitor, and finally multiplied by the appropriate local or regional multipliers.  The study identifies it’s multipliers as being determined from IMPLAN data, established by the Minnesota IMPLAN Group.

            The authors make several claims using numbers about the economic impact/economic activity/etc. of state parks.  Much of it may distract from the number that truly matters for the economic impact: the estimate of $274 million dollars.  We think this number they estimate represents a reasonable economic impact for the state of Pennsylvania.

 

Specific Comments:

·       The authors include estimates that contain all spending by people in-state residents (which won’t give an accurate assessment of the economic impact, since the money would likely be spent in-state anyway) and an economic impact that excludes these people (which could be accurate).  The economic impact that excludes in-state visitors is $274 million.  This seems reasonable.  First, there could be in-state folks that would have left the state to go to a different park.  This would indicate the $274 million figure is too low.  On the other hand, some visitors from out-of-state may have been here anyway, and just added in a park on their visit to see friends, family, etc.  That would indicate the $274 million is too high.  Overall, this seems like a reasonable estimate of the economic impact of state parks.

o   This number, however, is not the estimate that’s being pushed.  Estimates that are incorrect, showing the total economic activity, could be misleading and shouldn’t have been so prominently displayed.

·       The authors also are very misleading in their executive summary, when they state: “For every dollar invested in (Pennsylvania State Parks) in 2010, $12.41 of income (value added) is returned to Pennsylvania.”  This is misleading for a number of reasons. 

o   First, it uses the higher impact, that isn’t correct (of over $1 billion).  If one used the more-correct $274 million estimate the dollar figure would be much lower. 

o   Second, the authors are phrasing this in such a way that it sounds like they're claiming: “if the government contributed an extra dollar to PA parks would lead to an additional $X of economic impact on the state economy.”  That would not happen. 

·       We can’t verify any of the individual use estimates or the dollar spent estimates for each site.  Naturally, each site has an incentive to inflate these, so they may be a bit high.  For example, without knowing the estimated number of visitors for the Presque Isle State Park, four million visitors sounds high (that’s over 10,000 visitors every day of the year).  That being said, We don’t really know, so perhaps that’s correct. 

 

When graded on our “best practices,” how does this study do?

Things they do well:

2.) This study establishes the borders of Pennsylvania as the geographic region being studied.

3.) This study is performed on the basis of whether or not the parks exist.  So, a counterfactual is effectively established. 

4.) Expenditures were only counted once.

6.) The methods are explicitly described.  The study utilizes the MGM2 Model designed by one of the authors of this study (Stynes).

7.) The study compares the data that it found to data found in previous studies of Pennsylvania State Parks.

8.) The source of funding is clearly disclosed as the Pennsylvania Department of Conservation and Natural Resources.

Things they do not do well:

1.)   This study states both the monetary impact and the jobs impact of the Pennsylvania State Parks.

5.) We cannot find any evidence that this was reviewed by outsiders prior to publication. 

Overall thoughts

This study seemingly does a lot of things well.  We don’t like that there are so many estimates that could mislead readers into believing there is a false (higher) impact than what is actually occurring, but the methods to reach the economic impact of $274 million seem reasonable.