Basin-Delta Mothersite

Fish

Salton Sea Home Page

THE ECONOMIC IMPORTANCE OF

THE SALTON SEA SPORTFISHERY 

A Report to the California Department
of Fish and Game 

by 

CIC Research, Inc.
1215 Cushman Avenue
San Diego, California 92110
Telephone (619) 296-8844
 October 1, 1989

 

TABLE OF CONTENTS

Section

Page

I. Abstract
II. Introduction
III. Methodology
IV. Study Results and Discussion

A. Salton Sea Users
B. Direct Expenditures by Salton Sea Users
C. Total Economic Impact of the Salton Sea
D. Opinions and Attitudes
E. An Analysis of the Impact of Instituting User Fees
F. Salton Sea Business Survey

V. Conclusions
VI. Recommendations
VII. Bibliography
Appendix A. Detailed Survey Results
Appendix B. Analysis of Indirect and Induced Impacts
Appendix C. Questionnaire (not available)

1
2
6
18

18
26
31
34
41
50

52
57
60
63
85
95

TABLES AND ILLUSTRATIONS

Title

Page

TABLE 1. Telephone Sampling Effort and Sample Sizes
TABLE 2. Salton Sea Users
TABLE 3. Purpose of Last Visit to Salton Sea by County of Residence
TABLE 4. Direct Expenditures by Salton Sea Users
TABLE 5. Total Economic Impacts of the Salton Sea Recreational Resource
TABLE 6. Would Pay a Small Fee to Preserve Wildlife
TABLE 7. Against Government Spending to Preserve Sea
TABLE 8. Would Pay a Small Fee to Preserve Wildlife by Total Household Income
TABLE 9. Would Pay a Small Fee to Preserve Wildlife by Purpose of Last Visit
TABLE 10. Estimates of Revenue Associated With User Charges
FIGURE 1 . Salton Sea User Households
FIGURE 2. Economic Importance of the Salton Sea Recreational Resource
FIGURE 3. Indicators of Surplus Value and Existence Values
FIGURE 4. Indicators of Importance of Preserving the Salton Sea Wildlife Habitat and Environment
FIGURE 5. Indicators of Potential Market
FIGURE 6. Revenue Potential of Salton Sea User Fee

APPENDIX A. (separate document)
TABLE 1. Average Trip Expenditures per Household
TABLE 2. Average Annual Expenditures per Household
TABLE 3. Total Annual Direct Expenditures in $ Thousands
TABLE 4. Month of Latest Trip
TABLE 5. Estimated Multipliers by Region
TABLE 6. Employment and Payroll by County
TABLE 7. Selected Measures of Imperial County Economic Activity
TABLE 8. Selected Measures of Riverside County Economic Activity
TABLE 9. Total Economic Impacts of Salton Sea Direct Expenditures Based on Intercept Survey
TABLE 10. Total Economic Impacts of Salton Sea Direct Expenditures Based on Telephone Survey
TABLE 11. I Would Use the Salton Sea More Often if the Fishing Were Better (Recent Users)
TABLE 12. I Would Use the Salton Sea More Often if the Fishing Were Better (Not Recent Users)
TABLE 13. Making the Salton Sea Water Less Salty So the Fish Can Survive Is Important to Me (Recent Users)
TABLE 14. Making the Salton Sea Water Less Salty So the Fish Can Survive Is Important to Me (Not Recent Users)
TABLE 15. Preserving and Improving the Areas Where Wildlife Live Is Important to My Enjoyment of the Salton Sea (Recent Users)
TABLE 16. Preserving and Improving the Areas Where Wildlife Live Is Important to My Enjoyment of the Salton Sea (Not Recent Users)
TABLE 17. If Sportfishing Were Nonexistent at the Salton Sea, I Would No Longer Visit There
TABLE 18. The Reason I Have Not Used the Salton SeaRecently Is Because of Declining Fishing& Wildlife Resources
TABLE 19. I Consider the Salton Sea a Major OutdoorRecreational Area for Southern California (Recent Users)
TABLE 20. I Consider the Salton Sea a Major Outdoor Recreational Area for Southern California (Not Recent Users)
TABLE 21. I Would Not Support the Government SpendingMoney to Preserve and Enhance the NaturalQualities of the Salton Sea (Recent Users)
TABLE 22. I Would Not Support the Government Spending Money to Preserve and Enhance the Natural Qualities of the Salton Sea (Not Recent Users)
TABLE 23. If All of the Salton Sea Fish Died I Would Have NoTrouble Finding an Alternative area of Equivalent Value
TABLE 24. If the Numbers of Wildlife Species Using the Salton Sea Diminished, I Would Go Elsewhere to Enjoy Them (Recent Users)
TABLE 25. If the Numbers of Wildlife Species Using the Salton Sea Diminished,I Would Go Elsewhere to Enjoy Them (Not Recent Users)
TABLE 26. If I Could Not Eat the Fish I Caught, It Would Effect My Use of the Salton Sea (Recent Users)
TABLE 27. If I Could Not Eat the Fish I Caught, It Would Effect My Use of the Salton Sea (Not Recent Users)
TABLE 28. I Would Support Establishing a Small Fee to Users of the Salton Sea If All of the Money Raised Were Used Solely For Enhancing The Fish and Wildlife There (Recent Users)
TABLE 29. I Would Support Establishing a Small Fee to Users of the Salton Sea If All of the Money Raised Were Used Solely For EnhancingThe Fish and Wildlife There (Not Recent Users)
TABLE 30. I Did Not Have the Time to Use the Salton Sea Recreational Resource
TABLE 31. I Have Changed the Kinds of Outdoor Activities I Am Pursuing
TABLE 32. I Do Not Use the Salton Sea Because It Is Polluted
TABLE 33. It Is Too Expensive to Travel to the Salton Sea
TABLE 34. My Past Recreational Experience at the Salton Sea Was Negative
TABLE 35. I Do Not Use the Salton Sea Because the Fish Are Not Edible
TABLE 36. I Have Found a Better Alternative Recreational Resource
TABLE 37. Types of Principal Businesses Surveyed

19
22
25
27
33
43
43
44
45
48
22
30
35
37

39
47



63
64
64
65
66
67
68
68
69

70
71
71
72

72

73

73

74
74

75

75

76

76

77

77

78

79

79

80

80
81
81
81
81
82
83
83
84

APPENDIX B. (separate document)

Analysis of Indirect and Induced Economic Impacts
Regional Input-Output Models
The SCAG Input-output Model of Southern California

85
86
87

THE ECONOMIC IMPORTANCE OF THE SALTON SEA SPORTFISHERY

ABSTRACT

The Salton Sea is a major southern California recreation area largely because of the sportfishery. The fish and other wildlife of the Sea are threatened by rising salinity. There are technically feasible ways for controlling the rising salinity, and ways of maintaining the wildlife until broader controls can be instituted. However, a proper evaluation of such measures requires an estimate the value of the Salton Sea as a recreation area, and its importance to the local economy.

A study in 1969 measured an annual use rate of 1.5 million recreation days with about two-thirds of that total accounted for by sportfishing. The same study projected a use level of 4.3 million recreation days by the year 2,010 assuming the Sea's viability as a sportfishery was maintained.

The present study is based on telephone interviews with 14,767 randomly selected southern California households and over 2,059 interviews at various Salton Sea locations. The study estimates that 154,600 households used the Salton Sea for recreation purposes at least once during the last year. Based on average household size in the southern California Counties this would represent 389,095 people. The average group size reported by this sample (5.8) was over twice as large as the average household indicating that the typical group contained more than one household. An additional sample representing another 642,490 southern California households reported using the Salton Sea, but not as recently as the preceding 12 months. Combining the two results in an estimated 797,090 user households in southern California or just over 2 million southern Californians who have used the Salton Sea.

The sample representing 154,600 recent user households reported using the Salton Sea for recreation an average of 6.7 days in 1987. This is an annual use rate of about 2.6 million recreation days.

The (154,600) households directly spent $76 million in 1987, which is just under $30 per recreation day and an average of over $490 per year per household. These direct expenditures give rise to secondary economic impacts including: (1) the indirect (input) requirements needed to supply the goods and services purchased by the Salton Sea recreation user and (2) the income payments resulting from the $76 million direct expenditure which leads to additional rounds of expenditures.

The overall level of Salton Sea user spending ($76 million) generates an additional $128.6 million in output, and household income of $91.8 million for a total economic impact of $296.3 million. Although $53 million of the $76 million in direct expenditures (70%) takes place in the Salton Sea local area, only $27 million of the total additional output and $19.4 million of household income occurs in the local area. Thus the total impact in the local area is $99.2 million of the region-wide $296.3 million. Most of the remaining $197.1 million impact takes place in the larger urban centers of southern California. This volume of economic activity provides the equivalent of 2,633 jobs region-wide, and a substantial number of these jobs (1,486) are in the two counties where the Sea is located. This is particularly critical because this region of the State has a chronic unemployment rate that ranks among the highest in the country.

Both recent and not recent users feel strongly about preserving the fish and wildlife of the Sea. Nearly 75 percent of not recent users and over 80 percent of recent users would support the establishment of user fees to be used for this purpose. An annual user fee of $5.00 per adult would generate as much as $1.4 million per year if applied to all users, over $600 thousand of this would come from anglers.

INTRODUCTION

An economic study of the Salton Sea by Development Research Associates (Harris et al. 1969) found that the Sea provided 1.5 million recreation days annually, two thirds of which were sportfishing. This same study projected use rates of 4.3 million by the year 2010 and estimated a value to the user in 1969 of $3.50 per day. Events during the past few years raise questions about the current applicability of the later estimates. For example, a more recent survey by the U.S. Fish and Wildlife Service estimated average expenditures by California anglers of $32.00 per day. Projected use levels have also been questioned because negative publicity a few years ago regarding the environmental quality of the Sea and potential health hazards associated with eating the fish resulted in a sharp decline in use levels at that time. Although use levels have been increasing since that initial drop, the change was large enough to raise a question about the reliability of the 1969 projections.

The Salton Sea sportfishery and its related wildlife and its socio-economic dependents are threatened by the rising salinity in the Sea. A proposed diversion of fresh water inflow would accelerate this condition. The salinity level of the Sea is already about 38-41 thousand parts per million (PPM) and is expected to reach 50,000 PPM before the year 2000 (Hager and Garcia 1988). This is much higher salinity than the ocean and, although the aquatic life in the Sea at present is sufficiently prosperous to make the Sea one of the most productive sportfisheries in the State (Black 1985), there is general agreement by biologists who have examined the situation that it is just a matter of time before the sportfishery becomes non-regenerative unless some form of corrective action is taken without delay.

In anticipation of several possible responses by the many public agencies who have responsibilities for preventing a collapse of the Sea's ecosystem or for protective actions designed to prevent or postpone this scenario, an interagency task force has been created to study the problem and make recommendations that are technically and economically feasible. There are technically feasible controls for the rising salinity, and ways of maintaining the wildlife (Meyer 1988). However, each of these actions has a cost, and, where there is a cost, there are questions regarding the economic value of the Sea by which to judge the economic efficiency of such investments. For example, a business that earns $1,000 a year would find it difficult to borrow $1,000,000 to preserve that earning power. A prudent banker would require a minimum profitability sufficient to pay the interest and amortize the principal before the proposition would be regarded as economically viable. In the case of a public good such as the Salton Sea sportfishery the same principal would be applied even though a determination of the "profitability" of the Sea is considerably more difficult.

This study is an important first step in defining the economic importance of the Sea, thereby establishing some guidelines regarding questions of present and future economic viability. This is done by estimating the value current users of the Sea place on their recreation days at the Sea as measured by the amount of money they spend in the process. Moreover, such expenditures result in an economy both at the Sea and along supply routes into the very urban centers where most of the users reside. This study attempts to simulate these economies by using economic multipliers that are typical of the small towns around the Salton Sea and other multipliers that have been developed for the larger region of southern California. These results provide an aggregate measure of the economic value of the Sea to recreational users as well as an estimate of the impact on the local and regional economy of the Sea's continued existence or its demise. These are the primary objectives of the study, but not the entire focus. Another important objective of the study is to assess the attitudes of different user groups concerning the preservation, enhancement or demise of the sportfishery. Groups include both recent users, not so recent users and the business community in the immediate vicinity of the Sea.

The study is not intended to assess the economic feasibility of any specific action, nor is it intended to match benefits received with charges for maintaining access to those benefits. Additional objectives of the study include an assessment of the concerns and opinions of users and former users of the Sea regarding their prospect for continued use or renewed interest as the case may be. These user groups were also asked their opinion regarding user fees or the use of public funds applied to the preservation of the Sea's wildlife habitat.

The results of the study are presented in section IV. Detailed tables covering the more important findings of the study are presented in Appendix A. Appendix B is a more concise statement of parts of the methodology which is summarized in the following section. Section V presents the major conclusions that can be drawn from the study, and section VI provides some additional comments regarding the economic questions that have a bearing on the proposed solutions to the problems confronting the Sea.

METHODOLOGY

The objectives of the study required the use of multiple surveys and various secondary data including economic models of different geographic economic areas of southern California. In this section we review the underlying concepts as well as the specific methods that were applied in the study. The work stops short of attempting to estimate the value of the Salton Sea as a public resource because the measures that have been proposed in the literature are highly criticized in the same literature. The ideal assessment of the economic value of a public resource can be illustrated by referring to the method of assessing the value of privately held resources. The generally accepted measure of its value is the discounted present value of the stream of earnings that the resource can produce for the owner. A sportfishery/recreation area is, however, a public resource. There is no easily measured stream of earnings that accrue to the owners that could be used to repay loans used to maintain the resources' productive capacity. It is owned by everyone, and may be used by everyone. As a result, its value can only be assessed by finding out what value is placed on it by its owners (i.e. everyone). By the same token, moneys required to maintain and preserve the resource can be taken from a productive surplus only by means of establishing user fees or by using public finance measures.

The literature on valuing fisheries covers several concepts that attempt to get at the value of the public resource in terms similar to those used to value private resources. The exercise is one of attempting to place a market value on non-market goods (the fish) and services (fishing, hunting, boating, camping,etc.). The approach used in this study is to measure the amount users of the Sea spend in the process i.e. for licenses, fees, fishing tackle, bait, food, shelter, clothing, transportation, etc. The principal that is applied is that the gross value (benefit) received by a user is at least as much as the value he/she could obtain by spending the same amount of money for other commodities/services. This has a certain appeal because it is straightforward and unambiguous. However, it is not a measure of the value of the resource in the sense stated above with respect to the earnings of a privately held productive resource. In this regard, these are the costs associated with the realization of the benefits of the recreation. The latter benefits, if they could be quantified, could be conceptualized as the equivalent of the total revenue generated from users from which user expenditures would be deducted in order to arrive at an estimate of the net (imputed) earnings of the resource. The net imputed earnings could then be discounted to arrive at a present value. We agree with Glass and Muth (1987) and others that this is conceptually better and a much more useful measure of the value of the resource if it could be measured. The concept is referred to in the literature as "consumer surplus," and is defined as the value received by the consumer over and above the cost to the consumer. It is sometimes explained as the difference between what the consumer pays and the maximum he/she would be willing to pay all other things being equal. The concept has appeal because it leads to a concrete estimate of how much the price could rise before the consumer would refuse to buy. This is a particularly critical issue in situations such as the Salton Sea, where it would be important to know how much of a user charge could be levied without losing the users.

There is a trade-off between raising revenue from users to invest in the preservation of the Sea, and a possible reduction in the number of users who would use the Sea. Should the revenue measure substantially reduce the number of users, it would not only fail to raise revenue but it might also reduce business and create economic hardships for those who depend economically on Salton Sea visitors.

Consumer surplus is an interesting concept. Unfortunately, attempts to actually quantify an amount of surplus value have been at best highly subjective. and controversial. Every effort was made in this study to assure that the estimates of value were pragmatic, conservative and non-controversial. The issues were considered too critical to waste time debating the validity of the measurements.

This study also avoids the use of other concepts that have been shown in the literature to result in very large valuations of fishery resources, while also generating a good deal of controversy about their validity. For example, research dealing with the valuation of Great Lakes fishery resources identified "consumptive use values," "indirect use values" and "intrinsic values" (Bishop Boyle and Welsh 1987). One element of intrinsic value, "existence value," produced an estimated intrinsic value of a single species, the striped shiner, of $12 million per year based on survey respondents valuation of the species at $4.16 to $5.66 on average. In an earlier study Bishop had estimated direct use values of all of Wisconsin's Great Lakes commercial and sportfishing at $60 million (Bishop 1984). Thus, by comparison, existence valuation as applied in the literature has the potential for overwhelming measurements of use value.

Another tact was taken in estimating existence values for anadromous species of the Sacramento and San Joaquin systems (Meyer 1985). Most respondents stated that no amount of money would compensate them for the loss of these fish. "Those respondents who did provide numerical answers, reported values in the range of $200 to $600 per household per year" (Meyer 1985). Obviously the concept is meaningful, but the fact remains with regard to the validity of the measurement... "Ask a hypothetical question and you get a hypothetical answer" (Scott 1965).

This study also develops primary data on the intensity of the concerns of the recreational users, local businesses, and those users who may have quit or reduced their utilization of the Salton Sea. In certain respects these statements of concern provide a form of quantification of surplus value in the case of users and indicate values are received by even those users who have not used the Sea for some time and perhaps expect not to unless some of the problems they perceive are removed. These questions also provide a type of ordinal measure of preservation value. No attempt is made to place a monetary value to the responses, but the distribution of the intensity of the response gives some clues regarding the user valuation. Responses to these questions have been tabulated by type of recreational use comparing recent users and users who did not use the sea during the year preceding the interview. The complete set of tables is included in Appendix A.

Survey Design

A pretest of the survey determined that the relevant market could be as large as the nine southern California counties including San Diego, Imperial, Riverside, Orange, Los Angeles, Ventura, Santa Barbara, San Luis Obispo and San Bernardino. A random digit dialing telephone sample was made for this region as an augment of CIC Research's National Marine Fisheries survey. A tally of yes responses to two screening questions would establish the proportion of households in the telephone survey region that had (1) used the Salton Sea in the last 12 months, which we call "recent users", or (2) used the Salton Sea but not in the last 12 months, which we call "not recent users". They also would be followed by different questions for (1) recent users and (2) not recent users. The two telephone questionnaires are included as Appendix C.

The study also conducted periodic sampling at various sites around the Sea. The purpose of this sample was (1) to estimate the number of users from outside the nine county area covered by the telephone survey, (2) to provide a check on expenditures estimates and other responses which would be fresher in the minds of respondents in the field versus recalled in some cases from several months back during a telephone interview, and also (3) to make certain that there was a large enough sample of recent users to meet the objectives of the study. The intercept survey could not be regarded as random in the sense that all visitors to the Sea during the survey year had an equal chance of being selected in the sample. Intercepts are known to be biased towards more frequent (more avid) users. However, since these are known bias the results are still a useful tool for crosschecking the results of a random sample which may not be large enough to stand on its own.

Timing of the Survey

Another important characteristic of the survey methodology was the spacing of interviews throughout the period of a year so as to provide a maximum likelihood of obtaining the seasonal distribution of Salton Sea Users. The telephone survey was divided into 6 more or less equal two week waves of interviewing, beginning with the two week period from the last week of February 1988 through the first week of March 1988, and ending with the period comprising the last week of December, 1988 through the first week of January 1989. Each of the six waves consisted of between 1200 and 1250 calls in each of the weeks representing each month from February 1988 through January 1989.

The intercept interviews were conducted on 3 to 5 days per month from January 1988 through December 1988 at a rate of about 175 interviews per month. The intercept sample was taken from various visitor frequented sites throughout the Sea shore, including: (1) North Shore Marina (2) State Park Headquarters (3) Mecca Beach (4) Corvina Beach (5) Salt Creek Beach (6) Playa Riviera (7) Bombay Beach (8) Niland Marina (9) Wildlife Refuge Wister (10) Red Hill Marina (11) National Wildlife Refuge (12) Salton City Marina (13) Salton Sea Beach, and (14) Desert Shores.

Relevant Models of the Salton Sea Economy

The final element of the methodology is based on models that are characteristic of the economies of the Salton Sea area and the southern California region. The objective in this regard was to assess the overall economic results that are attributable to the direct trip related expenditures by Salton Sea users as determined by the surveys, and to position that effect geographically.

CIC examined a number of alternative models including models produced by the U.S. Bureau of Economic Analysis (BEA) that can be purchased and which can be configured to represent any county or combination of counties. Using this approach, we might have defined one model for Imperial and Riverside Counties and another for all nine of the counties that made up the telephone sampling universe. There are some problems with these models, however, which are briefly described here, which lead the study to take another direction. First, the BEA models are derived from the national input-output model updated from 1972 and shrunk to local areas using earnings data that are developed by the BEA for purposes of estimating local area personal income. The modeling system is called "RIMS II" (Cartwright 1981) and is offered as a far more reasonable approach to developing county level and multi-county level input-output models than alternative direct survey techniques. Moreover, it is a particularly attractive approach if results are being compared across a number of different areas, because the models would be based on the same design and data. Otherwise they are generally considered technically inferior to survey based regional models.

CIC did not use the RIMS II approach for several reasons. First, CIC already had access to and familiarity with several models of different areas in southern California, which for the purposes of this study provide parameters that are at least as accurate as what BEA could provide even though the models do not explicitly conform to the county boundaries that were encompassed by the telephone survey. However, the boundaries of the survey are not necessarily the boundaries of the economies that are linked to a Salton Sea economic region. There is no particular economic rationale for defining the geographic study area as the nine counties that were in fact selected. By the same token, there is no particularly compelling reason to define the Salton Sea "local area" as consisting of the geographic area encompassed by Riverside and Imperial County boundaries. Quite to the contrary, one of the models that was used is particularly attractive for purposes of describing the Salton Sea economy. This is a model of the Imperial County economy that was developed using direct survey techniques using 1978 as the base year (Clement and Shellhammer 1981). Although this model represents only one of two counties where the Salton Sea is located, it is the county that is most representative of the Salton Sea economy. A model that included all of Riverside County would in contrast have many elements that would dwarf the Salton Sea elements. Such a model would appear to have far greater economic interdependence than is in fact a characteristic of the business community around the Salton Sea.

The Salton Sea area is an economy that has very sparse internal linkages because nearly all goods sold are brought in from the outside. A characteristic of such an economy is very low "multipliers." Multipliers are a measure of how much additional economic activity comes out of an initial injection of money. In economies where most of the goods sold come from other places the multipliers tend to be low. In areas where a broadly diversified base of primary, secondary and tertiary economic activities seem to build one market on another, such as the Los Angeles-Orange-Riverside SMA the multipliers tend to be much larger. The Salton Sea economy might then be regarded as an outpost of that megopolis down the road. Whatever money is spent in businesses in the area around the Salton Sea is syphoned off quickly into the big urban economies to the west.

The economic models that were used in this study illustrate these points very well. The second model used in this study was developed by CIC Research for the Southern California Association of Governments (SCAG) (Weddell, Shellhammer, Hull, Niwata 1979). The SCAG model is very characteristically the Southern California model. The multipliers are large, the productivity high and high wage rates. This is because of the six counties encompassed by the SCAG model, Riverside and Imperial counties are dwarfed by Los Angeles and Orange. The SCAG region does not include San Diego, but the multipliers are in each sector larger than those in the San Diego model (Clement, Shellhammer 1981). This is to be expected based on the relative size and diversity of the two economic regions. An aggregation of San Diego and the SCAG region might produce slightly higher multipliers, but this would be a major undertaking that would add very little to the study. Given the objectives of the study, little could be gained by adding other southern California counties to these models. It is sufficient to note that the local area results refer to the market area near the Salton Sea on the one hand, and southern California results refer to all southern California.

Updating the Models

In order to use models that were developed representing the regional economies in 1976 and 1978 respectively, one adjustment is very important. This is an adjustment that puts the information into a more current wage/price framework. For example, since the SCAG regional economy was modeled using 1976 economic data, the average wage per employee in that region has increased by over 84 percent. Since the direct expenditures are in more current dollars, the resulting derived income estimates are also represented in more current dollars. Consequently the derived estimate of the associated employment using unadjusted employment relationships would be greatly overstated. CIC adjusted the labor requirement coefficients using County Business Patterns data on employment and payroll for the periods 1976, 1978, 1985, and 1986 by county in the study area. These data were used to compute a weighted average wage per employee for the appropriate region and time period; i.e. the change in average wage between 1976 and 1986 in the SCAG region and 1978 and 1986 in Imperial County. A projection of payroll per employee to 1988 was made based on the recent trend from 1985 to 1986. The change in payroll per employee functions as a "deflator" to adjust the employment coefficients sufficiently to account for changes in the value of the dollar during the periods in question. A somewhat more systematic discussion of these points is included in Appendix B. The actual multipliers used in the study and the data that were used for update adjustments are included in Appendix A (Table 5 and Table 6). The estimates of economic activity that are derived from these data are discussed in the next section which presents the results of the study.

STUDY RESULTS AND DISCUSSION

Salton Sea Users

A study in 1969 measured an annual use rate of 1.5 million recreation days with about two-thirds of that total accounted for by sportfishing (Harris et al. 1969). This same study estimated that by the year 2010, the use level would grow to about 4.3 million recreation days. The present study estimates a current use level at about 2.6 million recreation days annually based on 154,600 households using the Sea for recreational purposes an average of 6.7 days of during the year 1987, and an average size of household of 2.5. This places the growth in total recreation days not far from the level that would be expected at this time based on the forecast that Harris et al. made in 1969. However, the proportion of recreation days devoted to fishing has slipped from two thirds in 1969 to just under 50 percent. Although this represents a number of fishing days that is over 25 percent greater than in 1969, it still lags the behind the pace of growth implied in the forecast made in 1969. These findings are explained in greater detail below.

User Rates by County

Table 1 shows user rates by county based on the telephone survey. Pretest results notwithstanding, the percentage of user households from the counties of Ventura, Santa Barbara and San Luis Obispo were not sufficient to warrant their being singled out. Actually, user proportions proved to be quite small in all counties except Imperial. Out of 14,767 random telephone calls only 463 (3.1%) gave an affirmative response to the question "In the last 12 months have you or other members of your household visited the Salton Sea?" The study was very fortunate to have so large a sample.

TABLE 1. Telephone Sampling Effort and Sample Sizes

Telephone
contacts
Used Salton
Sea in last
12 months
Used Salton
Sea but not in
last 12 months

County

yes
complete
yes
complete

Imperial
Los Angeles
Orange
Riverside
San Bernardino
San Diego
San Luis Obispo
Santa Barbara
Ventura

1,158
4,074
2,096
1,289
1,472
2,093
641
836
1,108
142
80
43
41
60
63
10
12
13
133
75
38
39
60
59
8
10
13
187
362
213
248
249
293
50
49
71
177
338
192
227
240
277
49
45
70

Total

---------------
---------------
---------------
---------------
---------------

14,767
463
435
1,722
1,615
Source: CIC Research, Inc., 1989.

The ratio of the yes responses to the number of telephone contacts was used to estimate the proportion of households in each of the respective counties that had used the Sea in the preceding 12 months. Affirmative responses to the question "Have you or other members of your household ever visited the Salton Sea?" was used to estimate the number of households who had used the Sea before but not in the last 12 months. These rates multiplied times the total number of households in each county are the basis used to estimate the number of user households in the respective county. These use levels by county are detailed in Table 2.

Volume of Users by Place of Residence

Table 2 shows the expanded estimates of the number of user households by place of residence based on the prevalence rates computed from the survey responses shown in Table 1 and the total number of households in the sampling universe. The control total number of households was derived by averaging 1/1/89 and 1/1/88 data on the number households by County from the Population Research Unit of the California Department of Commerce.

The number of Salton Sea users who are not residents of the counties listed in Table 1 were estimated using the intercept survey. Just under 10 percent of the people encountered at the Salton Sea were from areas outside of the telephone survey region. This provides a reasonable approximation of the number of users from outside southern California. Intercept responses from Californians who are residents of counties not covered in the telephone survey represented 3.4 percent of total intercept responses. The proportion of intercepted respondents who were visitors from other states and countries was 6.4 percent. These proportions in relation to the control totals provided by the telephone survey indicate an additional 5,256 user households from other California Counties plus another 9,836 from other states and countries. Added to the 139,508 household users estimated using the telephone survey of the nine county region results in an estimated annual use level of 154,600 households. The average group size for these Salton Sea outings was 5.8 and included 2.5 adults. Since the average household size in the survey area is 2.517 either the typical group had members of more than one household, or Salton Sea user households are much larger than the average southern California household. Applying the average household size (2.517) to the estimated number of user households results in an estimate of the number of users of 389,095. The average number of days of recreational use per year was estimated at 6.7 days. Multiplying these two figures results in the estimate of 2.6 million recreation days.

 

TABLE 2. Salton Sea Users

County

Total \a
households
Recent \b
users
Infrequent \b
users
Total
users

Imperial
Los Angeles
Orange
Riverside
San Bernardino
San Diego
San Luis Obispo
Santa Barbara
Ventura
Other California Counties \c
Other States And Countries \c

32,641
2,988,635
813,435
349,026
439,153
861,446
76,827
126,472
211,617
N.A.
N.A.

4,003
58,687
16,688
11,102
17,602
25,930
1,199
1,815
2,483
5,256
9,836

5,271
265,559
82,663
67,152
74,286
120,594
5,993
7,413
13,560
N.A.
N.A.

9,274
324,246
99,351
78,254
91,888
146,524
7,192
9,228
16,043
(min)5,256
(min)9,836

---------------

---------------

---------------

---------------

Total\d

5,899,252

154,600

642,490

797,092

---------------

---------------

---------------

---------------

Percentage of
Total Households

100.0%

2.4%

10.9%

13.3%

---------------------------------------------------------------------------------------

Sources:
\a Population Research Unit, Department of Finance, State of California.
\b CIC Research, Inc. June 1989
\c Estimated using proportions of respondents by place of residence from a sample of 2059 respondents from various locations around the Salton Sea during the period February 1, 1988 through January 1989.
\d Detail may not add to total because of rounding.

The number of users who had not used the Sea during the last 12 months outnumbered those who had by over four to one. The two are shown together in Table 2 and the sum gives an estimate of the total number of southern California households that have at some time used the Salton Sea for recreation purposes. Figure 1 gives the final estimates of the distribution of Salton Sea user households by county of residence for the major user counties. The "other" category shown in the figure includes users from all other California counties not specifically referenced and from other states and countries to the extent possible (i.e. the one year period number) based on the intercept survey. The pie chart on the left shows the distribution of users who had used the Salton Sea within 12 months based on the telephone survey distribution. The pie chart on the right is the distribution of users based on the telephone survey response by those who had used the Sea but not in the last 12 months. In both cases almost 40 percent of users are from Los Angeles County.

 

 

FIGURE 1. Salton Sea User Households

 

Type of Recreational Use

Table 3 shows a breakdown of the purpose of latest trip expanded to the estimated total number of southern California user households by county of residence. Respondents were permitted more than one response to the question so the total number of trip purposes will exceed the number of trips by the amount of multiple purpose trips. e.g. Table 3 shows the estimated number of users of 139,421. This is slightly less than the total southern California user households (139,507) because of missing values. The sum the column totals is 234,673 which indicates that there were a large number of multiple purpose trips.

TABLE 3. Purpose of Last Visit to Salton Sea by County of Residence

Purpose of Trip 

County

Fishing

Hunting

Boating

Camping

Bird
watching

Other

Total
households

Total\*
purposes

Imperial
Los Angeles
Orange
Riverside
San Bernardino
San Diego
San Luis Obispo
Santa Barbara
Ventura

2,280
28,152
4,829
6,555
8,497
9,219
600
728
573

210
4,692
1,317
570
1,172
1,756
0
0
0

570
12,512
3,951
1,425
3,223
3,073
300
364
382

480
21,114
6,585
3,420
5,860
7,902
600
364
955

540
4,692
3,073
1,995
1,758
1,756
0
0
191

1,980
29,716
12,292
4,845
8,204
14,926
900
1,092
2,483

3,990
58,650
16,682
11,115
17,580
25,901
1,200
1,820
2,483

6,060
100,878
32,047
18,810
28,714
38,632
2,400
2,548
4,584

---------

---------

---------

--------

---------

---------

---------

---------

Total..........

61,433

9,717

25,800

47,280

14,005

76,438

139,421

234,673

* Total purposes exceeds total households because of multiple response question format.

CIC Research, Inc. June, 1989.

Seasonal Use Patterns

Recreational use of the Salton Sea is greatest during the months of April through August with June and July being the peak months. Appendix A Table 4 shows the complete monthly distribution of the latest trip based on the telephone survey of recent users. This shows an added important influence of the sportfishery. Fishing for the orangemouth corvina peaks during the summer months. The sportfishery therefore counters some of the seasonal economic swings in an area that is predominantly a fall-winter-spring agricultural economy. Moreover, because of the excessive temperatures, most of the "snowbird" visitor economy drops off considerably during the summer months.

Direct Expenditures by Salton Sea Users

The direct expenditures summarized in Table 4 and shown in much more detail in Appendix A are shown separately for the telephone survey and the intercept survey. In both surveys, respondents were prompted using expenditure categories. See Appendix A Tables 1-3 for more detail and Appendix C for the actual questionnaires. After each expenditure category obtained a response, the respondent was asked "how much of the [response amount] was spent in the local area?" Local area was defined as Imperial County and Riverside County. The mean values for the expenditure categories by area for each survey is shown in Appendix A Table 1. The average total expenditure per trip and per year is shown below in Table 4, detailed by survey and by the geographic area where the expenditure was made. In the telephone survey "the year" is based on the average number of days at the Sea during 1987. In the intercept survey, "the year" is defined as "during the last 12 months." The results of both surveys are shown together for comparison purposes.

TABLE 4. Direct Expenditures by Salton Sea Users

Intercept survey
Telephone survey

region
local
region
local

Average Household

Expenditures per Trip

$179.36
$116.73
$174.23
$121.33

Average Annual

Household Expenditures

$825.09
$527.01
$490.89
$341.51

Total Annual

Expenditures (in $millions)

$127.60
$81.40
$75.90
$52.80
Source: CIC Research, Inc. 1989

The average expenditures per trip shown in Table 4 are almost identical, both for overall expenditures and the amount of expenditure in the local area.

There are however, some critical differences in the results produced by the two surveys. The breakdown of trip expenditures (shown in Appendix A Table 1) is quite different. The intercept survey estimates are much higher in expenditure categories associated with camping. For example grocery store purchases are larger and restaurant purchases smaller; camping, park and R.V. fees are larger and motel lodging expenditures are smaller. This shows the different character of the two surveys. The average annual expenditure shown in Table 4 is also quite different between the two surveys. This is primarily due to a substantial difference in the number of trips per year. Number of trips is derived from the response to a question about the number of days in the (current/last) trip relative to the stated number of days of use during the period of a year.

The average expenditure per trip was not significantly different between the two samples in spite of an average length of stay that was almost twice as great in the intercept survey as in the telephone survey. This is also because of smaller group sizes in the intercept survey than in the telephone survey (3.1 compared to 5.8).

Several explanations for these differences can be made. The intercept survey had the advantage of requiring only a few days recall at most, while respondents in the telephone survey had to recall events as long ago as 12 months. The number in the group was also obviously easier for the intercept respondent since the group was present at the time of the interview. Also, the intercept respondent was asked "how many days this trip, and during the last 12 months." This is obviously an easier recall than that required of the telephone respondent who had to recall "how many days during the last trip, and in the calendar year 1987." For these reasons, it is difficult to discard the intercept survey results entirely. However, the differences that are observed in the two surveys are the expected result of a sampling universe on the one hand of households randomly selected, and what amounts to a sampling universe of visit days, not necessarily random sampled. The intercepted respondents were encountered at random but were more likely to be selected the more days they were at the Sea. Moreover, campers were particularly strong targets to be interviewed because they were easier to find. All of the differences in the results of the two surveys can be explained as the result of a respondent selection procedure in the intercept survey that favored visitors in proportion to the length of time in their visit.

Weighing all the evidence, CIC believes the estimates made in the telephone survey are more reliable in a statistical estimation sense of the term, because of the importance of randomness in the selection of respondents. Still, certain features of the intercept survey are also persuasive, particularly the advantages associated with recall and that is why they are included in this report.

The net effect of the differences in the annual direct expenditure estimates between the two surveys is over $51.7 million (locally, $28.6 million). Since most of this difference is attributable to the longer stay associated with the intercept survey sample we can be reasonably sure that the expenditure estimates provided by this sample are on the high side. In the interest of being conservative therefor, no greater direct expenditure should be claimed based on this study than what can be estimated from the telephone survey.

Total Economic Impacts of the Salton Sea Recreational Area

Total direct spending associated with all recreational uses of the Sea is estimated at $75.9 million annually including almost $52.8 million spent locally in Imperial and Riverside Counties. Using Imperial Valley multipliers (see Appendix A, Table 5) the $52.8 million of local spending would result in total direct, indirect and induced output (sales) in the local area amounting to $79.8 million a year. Using multipliers developed for the SGAG region (which includes Imperial and Riverside counties, along with Los Angeles, Orange, San Bernardino and Ventura) the impact of the $75.9 million direct spending on total sales amounts to $204.5 million a year. This means that although less than $25 million of the direct spending takes place outside the local vicinity of the Sea, $124.7 million of the total impact on sales happens in other counties in southern California. These results, illustrated graphically in Figure 2 on the facing page and in Table 5, demonstrate clearly the nature of the dependence of the economies in the vicinity of the Salton Sea on the larger urban centers of southern California for sources of supply for goods sold, and for financial and business services.

This illustrates an economic phenomena that has become a troublesome characteristic of modern capitalist economies. The lack of vertical integration and diversification in the smaller peripheral economies make them much more vulnerable to small changes, often leading to chronic stagnation and unemployment. Large urban centers by contrast have an internal growth dynamic that seems to withstand any adverse economic events that might befall the periphery. Such areas tend to continue to grow well beyond a size that could be regarded as optimal because of "external economies of agglomeration" (Hansen 1970).

A principal indicator of the difference in the economy of the periphery and that of urban centers is that both wages and cost of living tend to be much higher. The provision of indirect and induced goods and services from businesses in the urban center to businesses and households located in the periphery is associated with much higher sales and earnings relative to the amount of employment. The wage differential is a primary reason why cities tend to grow far beyond a size that could be justified on the basis of economic efficiency (Hansen, 1970) and why pockets of rural poverty and chronic unemployment are present even under the best of national economic conditions. This development condition is clearly the case in this instance as Table 5 shows; the local area impacts include 56.4 percent of the employment but only 21.1 percent of the income. (Once again with respect to Table 5, CIC recommends the more conservative results based on the telephone survey.)

FIGURE 2. Economic Importance of the Salton Sea Recreational Resource  

TABLE 5. Total Economic Impacts of the Salton Sea Recreational Resource ($ Amounts in Millions: Employment in Person Years)

Region encompassed
Telephone survey

Total
output
Total
household
income
Total
economic
impact
Total
employment

Southern California
Imperial/Riverside Counties

$204.5
$79.8

$91.8
$19.4

$296.3
$99.2

2,633
1,486

Intercept survey

Southern California
Imperial/Riverside Counties

$338.8
$119.7

$145.1
$28.8

$483.9
$148.5

3,861
2,104

Source: CIC Research, Inc. 1989

An additional dimension of the economic impact of the direct spending attributable to Salton Sea visits (also shown in Table 5) is the equivalent of 2,633 full time jobs and earnings of $91.8 million. Although this is a small proportion of the southern California recreation economy, the 1,486 estimated jobs and the estimated $19.4 million in household income would represent a significant part of the economy of Imperial County and the southern corner of Riverside County. Combining the various transactions shown in Tables 4 and 5 results in an estimate of total economic impact of $296.3 million for the southern California region. Over $99.2 million of this impact occurs in the Salton Sea local area (Imperial and Riverside Counties).

It is difficult to assign the impact to different recreational activities because of the multiple response format of the purpose of trip question. However when direct expenditures are tabulated by the first stated purpose of the latest trip, 42.1 percent of direct expenditures were made by respondents who listed fishing as the primary purpose; another 14.5 percent of direct expenditures were made by respondents who listed hunting first; 8.1 percent of expenditures were made by respondents who listed Boating first; 16.6 percent of expenditures came from respondents who listed camping first; and the final 18.8 percent of direct expenditures were accounted for by respondents who listed something else first, ranging from bird watching to picnicking.

 

FIGURE 3. Indicators of Surplus Value and Existence Values

Opinions and Attitudes

An important dimension of the study is the perceptions of various groups concerning the problems of the Salton Sea and of measures that could be undertaken to deal with the problems. Respondents were asked to rate their agreement with certain statements on a scale of 1 to 5 where 1 is strongly disagree with the statement and 5 is strongly agree with the statement, with less strong disagreement or agreement at 2 and 4 respectively and 3 being a neutral position. There were ten statements put to those people who had used the Salton Sea within the last 12 months. Nine of the same statements were rated by those who had used the Salton Sea since 1980 but not within the last year. All respondents who had not used the Sea in the last 12 months were also asked to rate a series of statements aimed at eliciting responses that could be interpreted as explaining why they have not been to the Salton Sea for so long.

The results of these ratings of agreement/disagreement are presented in detail in Appendix A for each category of user (recent/not recent) broken down by the purpose of their last trip to the Salton Sea. For purposes of the text, we have selected a few of the more important statement ratings, but there is much to be found in each of the 26 Tables that present these findings. Figure 3 on the facing page was selected because the statement more than any other gets at the issue of evidence of consumer surplus. The statement was "I would support establishing a small fee to users of the Salton Sea area if all the money raised were used solely for enhancing the fish and wildlife there." The responses are overwhelmingly in support of the concept. A similar response was obtained from a statement that was phrased in the negative, i.e. "I would not support the government spending money to preserve and enhance the natural qualities of the Salton Sea." In this case over 70 percent of the recent user respondents disagreed as did over 65 percent of the not recent respondents. This illustrates (in addition to the important technical point that respondents were paying close enough attention to the details of the statement to catch the shift to negative) that most respondents were able to overcome what has become a knee jerk reaction in opposition to government spending in deference to their concerns about the preservation of the Salton Sea.

That so many "not recent users" were favorably disposed to these two concepts of raising money for preservation of the recreation value of the Salton Sea is somewhat surprising. It indicates that they have an "existence value" for the sea either because they expect to use it again in the future, or they might be conscious of the increased congestion at other recreations sites that would accompany a decline in the use of the Salton Sea, or as the literature suggests, they may value the existence of the resource regardless whether or not they expect to personally profit from its use.

Figure 4 on the facing page shows the responses to the statement "preserving and improving the areas where wildlife live is important to my enjoyment of the Salton Sea". This recapitulates the points mentioned above and also provides some evidence of a large potential market, provided there are improvements in the Sea. Over 83 percent of those households who had not used the Salton Sea in more than a year were in agreement with this statement.

A review of those statements that deal directly with non-use also reveals that there might be a substantial market among the not so recent users regardless of improvements. For example Figure 5 on the facing page shows that over 60 percent of these respondents indicated that their reason for not using the Sea was that they lacked the time. At the same time, over 50 percent indicated that they have not changed the type of outdoor activity they pursue which we take to mean that the things that drew them to the Salton Sea in the first place are still operative. If the responses demonstrated in Figure 5 are a reflection of the potential market then the results of the study are indeed conservative.

 

FIGURE 4. Indicators of Importance of Preserving the Salton Sea Wildlife Habitat and Environment

An Analysis of the Impact of Instituting User Fees

Any measures undertaken to mitigate the threats to Salton Sea wildlife will require funding. Located in an area of the state that is severely lacking in resources, funds required for measures to preserve the wildlife will have to come from new outside sources. After reviewing the sentiments expressed by the Salton Sea users (specifically with regard to the general response to the direct question regarding the willingness to pay a small fee for purposes of preserving the wildlife) raising needed revenue through user fees seems appropriate and feasible. For example, over 60 percent of the respondents in each of the three survey groups strongly agreed with the user fee statement. Adding those who agreed but not as strongly, raises the total percentage in agreement to between 75 and 80 percent. Although almost half of the balance rated the statement at a level indicating indifference, the 10 percent or so who voted against the idea should receive some further study if only to be sure that the user charge would not have the effect of reducing business in the region.

There was a curious split in the opinion expressed by the Salton Sea business community who, while almost unanimously favoring some revenue measure, were split on whether it should be user fees or sales tax. Probably this is the result of the thoughtful business respondent thinking there would be a much larger tax base (county-wide) from which to obtain the necessary funds while the user fee might result in some reduction in the number of Salton Sea users and an associated loss of business.

It is informative to compare responses to questions dealing with the respondent's attitude about approaches to financing measures that might be taken to mitigate threats to the Sea and its wildlife. This is done in Table 6 and Table 7, which is based on the telephone sample weighted to reflect the number of adults in the travel party, and expanded to the number of households in southern California. Considering both statements regarding opposition to government spending (Table 7) and support for user fees (Table 6) the user fee statement is the stronger of the two. 70.3 percent strongly agree with the statement in support of user fees, and adding those who agree (but not as strongly) brings the total to 83.7 percent. By contrast, strong disagreement with the statement opposing government spending is indicated by 65.3 percent, and adding in those who disagree with the statement opposing government spending (but not strongly disagree) brings the total to 72.1 percent. Much of the difference can be explained by the response by about 10 percent of the sample who strongly agree to user fees but who also strongly agree with the statement opposing government spending. This curious response is a reflection of the times e.g. a general reaction that opposes government spending but at the same time feels strongly enough about preserving the Sea to volunteer user charges.

 

FIGURE 5. Indicators of Potential Market

TABLE 6. Would Pay a Small Fee to Preserve Wildlife

(Weighted by adults in party and southern California households)

Adults
Percent
Cumulative
Percent

Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree

21,233
4,574
29,638
45,346
238,171

6.3%
1.3%
8.7%
13.4%
70.3%

6.3%
7.6%
16.3%
29.7%
100.0%

Total

---------------

---------------

338,96

100.0%

Source: CIC Research, Inc. 1989.

TABLE 7. Against Government Spending to Preserve Sea

(Weighted by adults in party and southern California households)

Adults
Percent
Cumulative
Percent

Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree

221,270
23,002
45,892
11,651
37,147

65.3%
6.8%
13.5%
3.4%
11.0%

65.3%
72.1%
85.6%
89.0%
100.0%

Total

---------------

---------------

338,962

100.0%

Source: CIC Research, Inc. 1989.

 

Those who gave a negative response to user fees did so not as a consequence of their income level. Table 8 shows that over 85 percent of low income (under $15,000) respondents favored user fees, and most of them were in strong agreement. Respondents in the income groups over $30,000 also favored user fees in numbers well above the 85 percent level. Most of those who disagree with the statement favoring user fees are concentrated in the $15,000 to $30,000 income groups. Based on these results, CIC would argue that the establishment of a reasonably small annual user fee is not likely to have an adverse impact on the number of users of the Sea. However, there are some technical issues.

 

TABLE 8. Would Pay a Small Fee to Preserve Wildlife By Total Household Income

(Weighted by adults in party and southern California households)

Percent
disagree
Percent
neutral
Percent
Agree
Total

Number
Percent

Under $10,000
$10,000 to $14,999
$15,000 to $19,999
$20,000 to $29,999
$30,000 to $39,999
$40,000 to $59,999
$60,000 and over

13.2
0.8
18.2
6.7
5.3
4.6
10.1

0.0
14.1
9.9
16.3
4.7
6.0
6.1

86.8
85.1
71.8
77.1
89.9
89.3
83.9

9,140
13,379
32,521
47,072
64,459
65,409
67,327

3.0
5.1
10.5
15.2
20.8
23.7
21.7

Column total

-----------

-----------

-----------

-----------

-----------

7.8

8.0

84.2

309,647

100.0

Source: CIC Research, Inc. 1989. 

The most difficult technical issues regarding the establishment of a user fee structure is how much to charge and the appropriate instrument for the charges. For example, a logical place for a user fee is a stamp attached to fishing and hunting licenses. While this has a good deal of technical merit, if only for administrative simplicity, it reaches only about half of the adult users. Hunters and fishermen would, in effect, pay for the benefit of other users; users who, as Table 9 shows, are substantially in agreement with paying user charges. Other options could include fees for launching boats and fees for camping. However, the other uses may be difficult to license, e.g. birdwatching, picnicking, sightseeing, etc.

 

TABLE 9. Would Pay a Small Fee to Preserve Wildlife By Purpose of Last Visit

(Weighted by adults in party and southern California households)

Percent
disagree
Percent
neutral
Percent
Agree
Total

Number
Percent

Fishing
Hunting
Boating
Camping
Bird Watching |
Other

7.7
10.1
9.1
3.5
10.4
7.6

6.3
4.2
4.2
10.2
4.7
14.4

85.7
85.7
86.7
86.3
84.9
78.0

142,109
20,568
20,723
45,046
18,296
93,998

41.7
6.0
6.1
13.2
5.4
27.6

Total

-----------

-----------

-----------

-----------

-----------

7.6

8.7

83.7

340,740

100.0

Source: CIC Research, Inc. 1989.

 User Fee Revenue Potential

Assuming that only fishermen and hunters are charged we estimate the number of adult users purchasing the stamp would be about 150,000 annually. Camping and boating fees would pick up another 55,000 to 60,000 adult users. As long as the fee is small we would expect few defections. Of course, the higher the fee the fewer the users, though it is difficult to believe that a fee as small as $2 or $3 per year could make a difference in a person's decision to use the Salton Sea. It is more likely that the inconvenience of getting the license would be more decisive. The data on expenditures indicate that the experience is sufficiently valuable to most regular users that defections at low fees are most unlikely. With these cautions in mind, we would argue that those people who responded negatively to the user fee statement would probably be the first lost depending on the amount of the user fee. Second out would be those whose response indicated indifference to the question of user fees.

To illustrate the point, Table 10 shows what might happen comparing fees of $2.50 per year per adult versus $5.00 per year per adult, assuming this would be the difference for those whose response was negative, indifferent, or favorable. The first column shows the estimated number of users by purpose of trip. Column (2) is the number of adult users less those opposed to user fees. Column (3) is the annual revenue resulting from a user fee of $2.50 per year applied to the number of users in column (2). Column (4) is the estimated number of adult users based on favorable responses to the user fee question. The revenue from these users paying a fee of $5.00 per year is in column (5).

 

 

FIGURE 6. Revenue Potential of Salton Sea User Fee

TABLE 10. Estimates of Revenue Associated With User Charges

Number of
adult users
User fee @
$2.50/year
User fee @
$5.00/year

users
$revenue
users
$revenue

(1)
(2)
(3)
(4)
(5)

Fishing
Hunting
Boating
Camping
Other

142,109
20,568
20,723
45,046
112,294

130,770
18,498
18,844
43,480
103,251

$326,925
$46,245
$47,110
$108,700
$258,128

121,805
17,634
17,980
38,891
88,895

$609,025
$88,170
$89,900
$194,455
$444,475

Total

------------

------------

------------

------------

------------

340,740

314,843

$787,108

285,205

$1,426,025

Source: CIC Research, Inc., 1989.

Figure 6 on the facing page summarizes the annual revenue potential of an annual user charge $5.00 per adult and $2.50 per adult. At these rates the maximum revenue to be expected would be $1.4 million assuming the fee could be applied to all users regardless of the nature of the use. With a $2.50 user fee the maximum revenue would be $787,108 if applied to all users. If only anglers are charged, as for example with a Salton Sea fishing license stamp, the revenue would be $609,025 at $5.00, or $326,925 at $2.50 per adult respectively. A hunting stamp would add another $88,170 or $46,245 depending on the charge, but about 50 percent of Salton Sea users would escape the user charge.

Table 10 can also be used to illustrate the possible trade-off between raising revenue with user fees and an associated adverse economic impact. For example, Table 10 shows the number of adult anglers decline from 142,109 to 130,770 with the introduction of a $2.50 user fee, an 8 percent decline. Recalling that the economic impact of fishing is estimated at 42 percent of the total, the economic impact of an 8 percent decline in fishing would be about -3.4 percent (-8% of 42%) or about $2.5 million less direct spending and $9.9 million lower total impact. Continuing the same analysis to the $5.00 user fee results in an additional 6 percent decline in the number of user households, and another 2.5 percent decline in direct spending ($1.9 million) and total impact ($7.5 million). In other words, if these responses to the introduction of a $5.00 user fee are accurate, the impact of the fee might be as significant as -5.9 percent in economic activity attributable to Salton Sea recreational users. This is $4.4 million less total direct spending, $3.1 million of which would be reduced spending in the local area. This would result in $14.6 million lower total impact, $5.8 million of which would be local. This analysis does not mean that there would be reduced nominal spending; only that spending would be less by these amounts than it would be in the absence of the user fee. If this were the outcome, the short run negative impact would have to be evaluated against the long term benefit of the user fees in terms of preserving the Salton Sea economy.

This example illustrates a primary reason why a general tax (e.g. a sales tax) is preferred to user charges as a method for financing public goods. If the payment for the public good cannot be avoided by reducing ones use of the public good then the secondary impacts associated with reduced usage can be avoided. However, as we pointed out above, the limitations associated with the assumptions on which these estimates are based make us believe that the amount of reduced use associated with a $2.50 or $5.00 fee might be substantially less than these estimates. 

Salton Sea Business Survey

CIC also conducted a survey of a sample of 89 business firms operating in the immediate vicinity of the Salton Sea. The purposes of this survey were (1) to crosscheck some of the economic relationships being developed from models and surveys at the point where the respondents would know for sure their customers were Salton Sea users; (2) to obtain the business community's assessment of how much their business depends on a viable Salton Sea sportfishery; and (3) to check the business community's preferences regarding measures to raise the revenue required to undertake remedial actions to protect the sportfishery.

The 89 firms that participated in this survey accounted for $16 million in total sales and 315 full time equivalent employees. This is a sales per employee ratio of about $50,800 compared to the model estimate of about $53,700. The difference of less than 6 percent is quite small and provides a validation of the Imperial County model and the update procedure.

Asked if a decline in fishing would have an adverse impact on their business, 82 percent said yes. The average percentage of sales depending on Salton Sea visitors is 55 percent; 10 percent of businesses are 100 percent dependent, and another 14 percent get over 90 percent of their revenue from Salton Sea visitors. Very few of the businesses surveyed could be expected to remain in business without Salton Sea visitors.

The business respondents were also asked to express their views on actions that would prevent the decline of the sportfishery. Over 80 percent of the respondents said they would be in favor of establishing user fees to pay for the costs of such measures. Next the business respondents were asked if they would favor a 1/2 cent sales tax. Over 72 percent also responded that they would favor such a tax. Asked to choose between the user charge or the tax, 47 percent chose user fees and 30 percent chose the sales tax, 2 percent chose neither and 20 percent did not know which they would choose.

CONCLUSIONS

The most important conclusions that can be derived from the study are that there is a substantial value in the Salton Sea sportfishery, and perhaps there is even greater potential value that could be realized if enhancements are made. The Salton Sea sportfishery has had a good deal of negative publicity concerning the levels of selenium in the fish, and of pollution from the New River. This study indicates that there remains a good deal of lingering doubts about the quality of the fish by many former Salton Sea users. For example, over 55 percent of people whose last trip to the Sea was to fish but who had not been to the Sea for over a year felt strongly about the question of being able to eat the fish a prerequisite to using the Sea. Over half of this group believed the Sea to be polluted, and nearly half believed the fish are not edible. The negative publicity was met with a significant decline in the numbers of fishermen at that time. However, the numbers appear to be growing once again and might still achieve the forecasted use levels for the year 2010 assuming the sportfishery remains viable.

This study estimated that present users number over 150,000 households that spend over $75 million per year on trips to the Salton Sea. About 40 percent of these users were anglers, and many of the other users (e.g. birdwatchers) depend indirectly on a viable sportfishery. It would be safe to predict therefore that the demise of the sportfishery would eliminate about half of the Salton Sea economy. This sharp a reduction in business would eliminate a many of the local business firms.

A measurement of net or surplus value in monetary terms was not attempted in the study, however, the value based on direct expenditures is sufficient to justify major investments to protect the Sea. Existence values or other intrinsic or psychological values were likewise not estimated in the study in a manner that would permit monetary quantification, however respondents (both recent users and not recent users) felt strongly about preserving and enhancing the Sea. Even users who had not been to the Sea for a number of years were familiar with the issues and in general favorably disposed with regard to supporting measures that would keep the sportfishery viable. Specifically, the better than three out of four recent users who stated they would support user fees is a positive indication that there is sufficient user surplus value to initiate fund raising efforts with users.

We would hasten to add, however, that since we do not have a concrete estimate of the amount of surplus value realized by Salton Sea users (nor is it feasible with known research methods to obtain one) the magnitude of user charges should be modest and only increased after sufficient experience proves that it can be raised without jeopardizing the number of users. We have some recommendations on how such information might be assembled if user fees are collected and would urge the task force to take a very deliberate approach to the evolution of user sponsored preservation measures. The risk is that use would decline resulting in a decrease in the current $300 million a year economic impact. The third of that impact that takes place in the local area of the Sea would be especially hard to replace if use of the Sea were to decline. Since almost 45 percent of users indicated they would have no problem finding suitable alternative forms of recreation if the sportfishery declined the risk should be taken seriously, particularly since the area of the state that would hardest hit by a decline in the Sea has experienced chronic long term economic development problems.

A more formal inquiry should be made into the feasibility of public finance in lieu of user charges. The broader base that a general revenue measure would reach would minimize the burden on any specific group. Moreover, given the generally crowded condition of southern California's recreational resources the benefits of maintaining all of the resources accrue broadly. That is, if the 2.6 million Salton Sea user days were shifted to other recreational areas, users of the other areas would bear part of the burden of the increased congestion. Given the choice then between increased taxes or increased recreational congestion, likely even those who have never heard of the Salton Sea would opt for preservation of the Sea. Indeed, comparing this study with the findings of a more general survey of California households outdoor recreation experience, 74.6 percent of the respondents agreed with the statement "Parks and recreation areas in California are often too crowded when I want to use them" (CIC Research 1987). Only 21.9 percent of the respondents in this survey were opposed to the idea of paying higher taxes for the purpose of protecting natural areas in their community. However, respondents in this study were generally opposed to increasing general taxes (sales tax, auto registration fees, local property taxes) while favoring "sin" taxes and special fund raising events. User fees were supported when the fee would be used at the park where it was collected (68.3%); when used at other parks, more were in favor than opposed; when used as a general revenue measure almost 90% were opposed.

There does seem to be a favorable disposition among Californians to preserve troubled wildlife habitats. Much of the 70 percent response favoring government financed preservation measures is a vote that favors wildlife habitat preservation in general. The importance of the Salton Sea, however, is underscored by the direct annual economic value of over $75 million to users, and an economic impact of nearly $300 million annually on the southern California economy.

RECOMMENDATIONS

 The results of this study are sufficiently conclusive that we could not recommend a more intensive inquiry into questions that were not completely answered, such as a more formal analysis of consumer surplus. Nor is it likely that additional studies involving alternative ways of approximating market values for the non-market goods & services provided by the Sea would provide any more in the way of non-controversial measurements of the value of the Salton Sea. For purposes of establishing a valuation of the Sea and the economy related to the Sea we believe this study goes about as far as practical applications can take you. This is not to suggest that further economic study is unnecessary in terms of assessing the economic characteristics (benefits and costs) of specific remedial actions. For example, "what additional economic benefits and costs might be associated with linking the Sea to the Gulf of California through locks and canals?" or "what additional benefits or costs might be obtained by measures that would generate electricity as a by-product of desalination technologies?" or, indeed, "what economic impact would be associated with each type of desalinization project?" These are special questions related to specific technical approaches to the problem, while the focus of this study has been the underlying basic user benefits, and their associated economic importance.

However, we would recommend additional study of two specific issues that the current study was unable to address thoroughly because of the limitations of survey research techniques in dealing with hypothetical events. The question concerning the burden imposed by user fees would best be answered by those who pay them and those who would avoid them by going elsewhere. If a user fee is introduced, collecting the fee would provide an opportune time to collect information from users. The information should be sufficiently brief so as to minimize the burden on both the payor and the collector of the user fee. It should provide either direct information on how great the burden is perceived or provide (name, address, phone number) access to the user so that a formal inquiry could be undertaken.

A second issue that requires additional study relates to the feasibility and acceptability of using general (public) revenue for solutions to the problems of wildlife and recreational resources if only because the instruments for charging users of public goods & services are difficult to apply to all who benefit. The recreational resource users in this study favored greater government expenditures for preservation and enhancement of the Sea. However, the California parks and recreation study found similar results applied to wildlife and public parks in general (CIC Research 1987). In the latter case the revenue sources respondents preferred were those that did not have a widely shared burden. Indeed they tend to oppose revenue measures that apply to everyone. In light of the enormous fiscal surpluses and deficits that we see today it may seem somewhat superfluous to study measures to raise a few million dollars to protect a valuable public resource. However, there are difficulties in applying user fees in situations where there is greater willingness to pay than there are feasible instruments for making collections. Moreover, there appears to be a significant consciousness of being a beneficiary even among those who are non-users. The success of other new revenue programs (i.e. lotto) indicates there may be approaches for funding wildlife preservation programs which may offer users and nonusers alike the opportunity to contribute while minimizing the burden on any specific group.

REFERENCES

 

Ball, R. and K. Shellhammer. 1969. Evaluating the state business tax structure: an application of input-output analysis," National Tax Journal.

Bishop, R. 1984. Wisconsin's Great Lakes fisheries: an economic perspective. The future of great lakes resources. University of Wisconsin Sea Grant Institute, Report SG-84-145.

Bishop, R., K. Boyle, and M. Welsh. 1987. Toward total economic valuation of Great Lakes fishery resources. Am. Fish. Soc., Trans. 116:339-345.

Black, G. 1985. The Salton Sea Sportfisheries. California Department of Fish and Game Region V. Information Bulletin 0010-1985. 

Burnett, P. Toward Dynamic Models of Traveller Behavior and Point Patterns of Traveller Origins. Univ. of Texas. pp. 30-45.

California Department of Finance, Population Research Unit "Estimates of Population and Housing Units, by County 1985".

California Department of Finance, Population Research Unit "Estimates of Population and Housing Units, by County 1988".

Carter A. Changes in the Structure of the American Economy, 1947 - 1958 and 1962." Review of Economics and Statistics, May 1967, pp. 209-224.

Cartwright, J., R. Beemiller, and R. Gustely. RIMS II Regional Input-Output System, U. S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Analysis Division. U. S. Government Printing Office. April, 1981. p.25.

CIC Research, Inc. 1987. Public Opinions and Attitudes on Outdoor Recreation in California. Publications office. California Department of Parks and Recreation.

Clement N. and K. Shellhammer. 1981. The CBARC Input-Output Model of Imperial Valley, San Diego State Univ., San Diego, CA.

Clement N. and K. Shellhammer. 1981. The CBARC Input-Output Model of San Diego, San Diego State Univ., San Diego, CA.

Glass, R., and R. Muth. 1987. Pitfalls and limitations in the use of fishery valuation techniques. Am. Fish. Soc., Trans. 116:381-389.

Gordon, D., D. Chapman, and T. Bjornn. 1973. Economic evaluations of sport fisheries--what do they mean? Am. Fish Soc., Trans. pp. 293-311.

Gregory, R., 1987. Nonmonetary measures of nonmarket fishery resource benefits. Am. Fish Soc., Trans. 116:374-380.

Hansen, N. 1970. Rural Poverty and the Urban Crises. Bloomington: Indiana University Press.

Harris, J., J. Taylor, R. Harmon, and J. McElyea. 1969. Economic benefits derived from the waters of and land surrounding the Salton Sea. Development Research Associates. Los Angeles.

Isard. W. 1951. "Interregional and Regional Input-Output Analysis: A Model of a Space-Economy." Review of Economic and Statistics.

Kraft, J., and A. Kraft. 1974. Empirical estimation of the value of travel time using multi mode choice models. Journal of Econometrics 2. pp. 317-326.

Leontief, W. 1951. The Structure of the American Economy 1919-1939. New York: Oxford University Press.

Leontief, W. 1953. Interregional theory. Studies in the Structure of the American Economy. ed. Wassily W. Leontief. New York: Oxford University Press.

Merewitz, L. 1966. Recreational benefits of water resource development. Water Resources Research, Vol. 2, No. 4, pp.625-640.

Meyer P., J. Hagar and J. Garcia. 1988. Problems and Potential Solutions at Salton Sea. The California Resources Agency.

Meyer Resources, Inc. 1985. The Economic Value of Striped Bass, Morone saxatilis, Chinook Salmon, Oncorhynchus tshawytscha, and Steelhead Trout, Salmon gairdneri, of the Sacramento and San Joaquin River Systems. Anadromous Fisheries Branch, Administrative Report No. 85-03.

Miernyk W., K. Shellhammer, et al. 1970. Simulating regional economic development: an interindustry analysis of the West Virginia economy. Lexington, Mass. D. C. Heath and Company. 

Morey, E. R., 1981. The demand for site-specific recreational activities:a characteristics approach. Journal of Environmental Economics and Management 8. pp. 345-371.

Scott, A. 1965. The valuation of game resources: some theoretical aspects. Canadian Fisheries Report 4. 

U. S. Department of Commerce. 1980. County business patterns. Calif. U. S. Government printing office, Washington D. C.

U. S. Department of Commerce. 1982. County business patterns. Calif. U. S. Government printing office, Washington D. C.

U. S. Department of Commerce. 1987. County business patterns. Calif. U. S. Government printing office, Washington D. C., 1987.

Weddell, R. P., K. L. Shellhammer, Y. Niwata, W. Hull. 1979. SCAG region input-output model overview, Copley International Corporation, 7817 Herschel Ave., La Jolla, CA.

Top of Document