Value of Natural Resources: Deschutes River Corridor and its Water

Abstract

The Deschutes River in Central Oregon provides numerous ecosystem services benefits to the region. This study analyzed the market and expressed values to six industries in the region: agriculture, tourism, recreation, hotels, real estate, and commercial salmon fishing. Using revealed preference methodologies to assess ecosystem services benefits to these industries, the study found the river provides a total economic value to the industries of $185.2 million annually, of which $134.7 is direct revenue to the region, $28.0 is revenue outside the region, and $22.5 million is the expressed value of products and services that residents receive for free in their market value equivalent. The benefits of the river to these industries create 3,433 in full time equivalent jobs for Central Oregon with an estimated value in wages of $73.0 million. The study built a model to analyze the economic impact to the four industries of different water management regimes including one to maximize agricultural revenues, another to maximize recreational revenues, a third that increases productivity in all industries without adverse impact to any one industry, and a fourth which examines the current distribution under drought conditions. The four scenarios result in gains in total economic value from 19.1 to 66.2%, changes in market value from -10.5 to 47.6% and changes in expressed value that varies from -34.2 to 204.5%. The results demonstrate the potential economic tradeoffs and gains within and among industries that will be made under different water management decisions.