Economic Impact and Recreational Value of Artificial Reefs in Northwest Florida

Fred Bell . Florida State University, Department of Economics, Tallahassee, FL 32306. Phone: 850/644-7092. Email: fwbell@garnet.acns.fsu.edu

Artificial reefs provide a valuable aid in recreational fishing and diving. However, there have been few studies of the economic impact of artificial reefs on coastal communities and the added recreational value provided to anglers and divers who use artificial reefs. This study was funded by the Florida Department of Environmental Protection to ascertain what the economic benefits are compared to the cost of deploying artificial reefs in northwest Florida.

The area of study included bay; Walton; Okaloosa; Santa Rosa and Escambia counties in Florida. Users of artificial reefs were divided into visitors and local residents for these counties. For the five county area. It was found that in 1998 visitors spent over $357 million on such items as bait; charter boat fees and lodgings that were directly related to the use of artificial reefs. Residents of these counties spent over $57 million during this same time period for a combined economic impact of over $415 million. This combined impact supported nearly $84 million in wages and salaries and 8,163 jobs associated with the use of artificial reefs. The deployment of Artificial reefs was associated with a considerable injection of money into the local economies by visitors plus residents. Indirect impacts by visitors were not considered in this study, but would added to the overall economic importance of artificial reefs.

The use of artificial reefs for fishing and diving enhances the value of the recreational experience. This is called "use value" by economists and measures the added output of the services provided by the recreational aid called an artificial reef. Although this "use value" is not directly measured by the market, three well know techniques were employed to estimate "use value". These techniques are the (1) turnbull; (2) dichotomous choice and (3) travel cost method. Using survey data of anglers and divers, it was found that the artificial reef system off the five counties under study added over $31 million annually to the recreational experience. Since this "use value" is an economic benefit that flows to anglers and divers over time, its asset(capitalized value) at 3% is nearly $1.2 billion. From 1978 to 1998, the state and local governments have invested about $5 million in artificial reefs off the study area. Thus, the economic implication are immense. In this study, the investment in artificial reefs created a recreational asset 240 times the initial investment.

The study methodologies and statistical analyses form the framework for evaluating in one unified model the economic impact and use value of recreational resources in not only marine coastal areas, but for inland waterbodies as well. The entire study may be obtained from Jon Dodrill of The Florida Department of Environmental Protection(850-922-4340). In addition to Dr. Bell, Dr. Mark Bonn of Florida State University and Dr. Robert V. Leeworthy of the National Oceanic and Atmospheric Administration were also authors of this study. The study is under consideration for use in southeast Florida. Biologists; planners and administrators may want to apply it to their areas to document the economic payoffs from the deployment of artificial reefs.