Why is it important to measure the economic impact of local and regional public park agencies?

Public parks are important contributors to the standard of living in our neighborhoods, with benefits spanning from environmental gains and improved health to being a central meeting place that brings residents across ages and social strata together. But in a time of scarce resources and tight fiscal budgets, park and recreation agencies have to fight for funding needed to continue serving their mission.

A number of local and regional park agencies have conducted studies on the value of the economic activity their system has had on their local community, focusing on spending, tourism and property values. Until now, however, there has been no national study that estimates the economic contribution of the thousands of local and regional park agencies in the United States. NRPA commissioned this study to fill this gap and to inform discussions and debates with policymakers and key stakeholders on the importance of investing in public parks.

Beyond the economic impact, what are the other benefits of local and regional public parks?

Thousands of local park and recreation facilities throughout the United States promote healthy, prosperous and connected communities on a daily basis. Millions of people personally benefit from their local and regional park agencies in many ways, with examples including being a gathering place to meet with friends and family, offering open space to exercise and reap the benefits of clean air and water and a community resource where one can get a nutritious meal.

The benefits that local and regional parks bring to their communities are well demonstrated with NRPA’s Three Pillars:

  • Conservation — Parks are dedicated to preserving natural resources in the community. Local and regional parks play a leadership role in protecting open space, connecting children to nature and providing education and programming that help communities engage in conservation practices.
  • Health & Wellness — Local and regional parks are on the forefront of improving the health and wellness of their community’s citizens. Beyond promoting physical activity with their vast networks of open space, athletic facilities and trail systems, local and regional parks combat poor nutrition, hunger, obesity and physical inactivity.
  • Social Equity — Local and regional parks are treasured resources that are available to everyone, regardless of age, race and income. Local and regional park agencies ensure that all members of the community have access to open space and recreational opportunities.

What is included in the estimate of economic activity?

The Economic Impact of Local Parks study provides estimates of the direct, indirect and induced effects of local and regional park agency spending on the economy. The spending included in the study includes both annual operations and capital expenditures. The report includes estimates of economic output, value added (i.e., GDP), employment and labor income.

What is meant by direct, indirect and induced impacts?

The study estimates the direct, indirect and induced economic impacts resulting from local and regional parks’ operations and capital spending.

  • Direct effects are the spending by local and regional park systems, whether for operations or capital spending programs and include spending for equipment, utilities, goods, services and personnel costs.
  • Indirect effects capture the spending associated with the park systems’ vendors. For example, a park system contracts with a local company to spray for mosquitoes. The pest control company, in turn, hires employees, purchases pesticides and contracts with a bookkeeping service. The bookkeeping service rents office space, hires workers and purchases office supplies, and so on.
  • Induced effects track the employees of both the park and recreation agencies and their vendors spending their wages in the economy.

You say these are conservative estimates of the economic impact of local and regional park agencies. What is not included in the analysis?

As powerful as the figures presented in this report are, they are conservative measures of the economic impact of local and regional parks. The reason is this study exclusively focused on the economic impact of local and regional park agency spending. Other economic benefits not included in this study were:

  • Visitor spending: Since this is a national study, the vast majority of local and regional park visitors are from domestic origins and therefore have a net sum zero economic impact on a national basis (although the local impacts can be significant). Example: Most of the non-local visitors to a park in one town likely came from other nearby localities or at least somewhere else in the United States.
  • Other economic benefits: The research does not measure benefits that park systems generate for the environment, health/wellness and property values.
  • Spending on depreciable capital spending: Estimates of capital spending in this study do not include usual spending appearing in annual budgets for depreciable assets. As a result, these estimates likely understate the total value of park system spending and their economic consequences.

Who conducted the research?

NRPA commissioned the Center for Regional Analysis at George Mason University to conduct the research that is the basis of The Economic Impact of Local Parks report. The work was led by Dr. Terry Clower and was supported by his team of researchers during the summer and fall of 2015.

What is the study’s methodology?

Researchers at the Center for Regional Analysis at George Mason University derived the operations spending estimates using the IMPLAN economic input-output model with data from the U.S. Census Bureau’s 2013 Annual Survey of Public Employment & Payroll. The survey provides an estimate of the number of individuals (head count) employed by local governments’ parks and recreation departments. Using the number of employees, the IMPLAN model provides an estimate of total direct output, which is treated as operations spending for the park systems. The relationship between total spending and employment is based on national averages for entities operating in the park and recreation industry and closely related activities.

The researchers derived the estimates of local and regional park agencies’ capital spending from data available in NRPA’s PRORAGIS database and from other publicly available resources. This provided an estimate of the ratio of capital spending to operating spending for 1,169 local and regional park agencies. Applying this ratio to the nationwide estimates of operating spending, the researchers were able to determine an estimated total for capital spending for all local and regional public park systems in the United States.

 

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