Societal Impact

Environmental & Resource Economics

CHNEP Economic Valuation

Client: The Coastal & Heartland National Estuary Partnership (CHNEP) Location: Southwest Florida

The Balmoral Group was retained to estimate the economic valuation of the natural resources in the CHNEP region by County and by Basin, using economic impact-based models and fiscal impact models.

Economic impact models attempt to quantify the effects of spending that is driven by a specific asset – in this case, natural resources in the CHNEP region – on the regional economy through ripple effects on employment, wages, and business revenues.

Fiscal impact models estimated the expenditures by local government to protect and preserve the natural resources in the CHNEP region, and the tax revenues that are generated in return. Additionally, hedonic models were used to estimate the property value impacts of CHNEP’s major waterways and conservation lands.

Finally, selected capital projects were further investigated for cost-benefit analysis, as an indicator of the strength of investments that continue to be made across the watershed.

The analysis found that all counties showed a positive return for their investment, ranging from below $5,000 to more than $20,000 per capita. Natural resources in the CHNEP region generate about $12.3 billion in direct spending, $3.8 billion in regional income, and $146 million in local & state tax revenues, and support over 148,000 jobs annually.

Economic Impact

Economic Analysis of District Waterways

Client: Florida Inland Navigation District (FIND) Location: 12 counties within the FIND

The Florida Inland Navigation District (District) is comprised of Nassau, Duval, St. Johns, Flagler, Volusia, Brevard, Indian River, St. Lucie, Martin, Palm Beach, Broward, and Miami-Dade Counties – spanning approximately 370 miles along Florida’s East Coast. The District is responsible for the maintenance of the waterway and benefits of the District’s ongoing maintenance programs.

The Balmoral Group prepared the economic impact of the Intracoastal Waterway as well as two alternative scenarios. Surveys and interviews, economic impact analyses, econometrics and hedonic modeling were used to evaluate multiple aspects of the Intracoastal Waterway (ICW) maintenance program, including spending by recreational boaters and tourists, proximity premium effects of the Waterways on real estate, spending in “hidden sectors”, and commercial fish landings.

Cost Benefit & Regulation

Price Elasticity of Demand for Water Supply

Client: Utah Department of Natural Resources - Water Resource Division Location: Washington and Kane County, Utah

Faced with a burgeoning population in a water resource-constrained geography, the State of Utah commissioned The Balmoral Group to estimate price elasticity of demand for water against a backdrop of $1.7 billion in proposed capital expenditures.

This project included econometric modelling across residential, commercial and agricultural sectors, in Southwest Utah, Salt Lake City area, and the rest of Utah, and eleven different rate tier structures to estimate the price elasticity of water demand.

The elasticity of impact fees as well as price and income elasticity of water demand was also explored. Extensive literature review was conducted to support use of both OLS (Ordinary Least Squares) and IV (Instrumental variable) models. To estimate the price and income elasticities for geographic and socioeconomic trounces, utility billing was collected for over 100,000 households over a three year time horizon, which resulted in a dataset that included over 2 million observations. Extensive analysis was conducted to test for structural differences between markets, assess outliers, evaluate various functional forms and modeling approaches, and to assemble the data (Kruskal-Wallis, Mann-Whitney-Wilcox, ANOVA testing and others).