Review of Fly, English, Menard, and Jensen’s “Estimated Economic Impacts of Tennessee State Parks.”  Review by Matthew Rousu and Kyle DeShong.

            The objective of this study is to find the economic impact of the Tennessee State Park System on the State of Tennessee. 

Overall thoughts:

·       The study multiplied the number of visitors to the parks by the average visitor spending and then multiplied that number by the appropriate multipliers.  The visitor information was found through visitor surveys.  This information could easily be subject to survey bias.

·       The authors appear to make no effort to determine which individuals that visited the parks would have been in TN even without the parks.  This certainly means the economic impact figures estimated are overstated, likely by a lot.  For example, in the study on Pennsylvania’s parks (link here), only about ¼ of the total amount spent could be thought of as having an economic impact on the economy, as the rest was estimated to have been spent in the state regardless of whether the park was there or not. 

·       There is no mention of whether the multipliers the authors used differed across parks.  For state parks near the border of other states, it is likely that the multipliers should be lower, as more spending would “leak” into bordering states.  Given so many of Tennessee’s state parks seem to be near the border, this is a major issue and likely means the multiplier estimates were too high.

·       The authors provide the terribly misleading statistic: “For every dollar spent … from the general fund …., it generates $17 in direct expenditures and over $37 in economic impacts”.  First, this assumes the figures they computed earlier, which they aren’t.  Further, this assumes that all the economic impact comes from the general assembly money – which it doesn’t.  It isn’t the general assembly money that is creating any economic impact that does exist – largely it’s because the parks are indeed there.  Finally, this type of statement implies that if the government spent an additional dollar on parks, there would be additional economic impact.  That isn’t necessarily true – extra money spent may or may not create additional economic activity. 

 

If graded on our “best practices” – how well does this study do?

Things that are done well:

2.)  This study makes it clear that the geographic region for which they are estimating an impact for is the entire State of Tennessee.

6.) The methods used to arrive at the number stated within the study were explained okay, but not superbly.  We wish there were more details on the multiplier..

8.) The source of funding is contained in the study.  This economic impact analysis is a part of a plan entitled , “Tennessee 2020 – A vision plan for Land, Water, and Quality of Life.” 

Things that are not done well:

1.) This study states both the monetary impact and the jobs impact of the parks in Tennessee. 

3.) The counterfactual here is poorly defined.  The study seems to be examining all the economic activity in Tennessee that is generated based on the state parks being there and open to the public.  This is far different from the economic impact, which is the additional economic impact – i.e., extra money spent/jobs created in the state because of the parks.   

5.) The study does not report an outside reviewer of the study, so we assume there are none.

7.) This study does not compare its findings to similar studies.

 

Overall thoughts:

This study is poorly explained and appears to make numerous errors, all of which would lead to an inflated estimate for the economic impact.  We place little trust in the values provided in this study.