AS MAINE GROWS

We are all aware that economists are likely to disagree about the details of their forecasts. We also know that accurate economic information is vital to consumers, producers, and the government (just ask the folks at the State House). Usually, economic forecasts are based on supply and demand, functions which set the market price for goods and services.

A recent trend in economics is to study nonmarket goods. According to Dr. Stephen D. Reiling, University of Maine professor of Agricultural and Resource Economics, nonmarket goods are those for which markets do not exist, and therefore which lack an established market price. He gives as examples such things as how much is it worth for a person to see an animal in the wild, or to enjoy a sunset over an unspoiled ocean beach.

Reiling comments that “There are no market prices to determine just how much value people place on pristine environments. What people pay for a nonmarket goods (like going to Baxter to see a moose feeding in a pond) may not reflect the real value they put on it.” A research project which Reiling and his associates conducted on late-season black flies in the Penobscot River Valley is an example of nonmarket economics. Yes, Virginia, there are black flies in Maine after July 4th, no matter what the myth says.

With a grant from the Maine Department of Environmental Protection, a test area was selected in the Penobscot River Valley. Included were 13 towns and three unorganized townships from Millinocket on the north to Edinburg and Lowell on the south. Residents in those towns are well acquainted with the pestiness of late-season blackflies.

A total of 694 randomly selected households in the study area received questionnaires in 1987 — half during the late season black fly period, and half after the season. The response rate for the first group was 74 percent, and 69 percent for the second group, well above acceptable averages.

The major nonmarket economic approach used in the study was to ask the respondents how much they would be willing to pay to a special district to conduct a late-season black fly control program.

They were requested to state how much they would pay annually to the special district to achieve three levels of black fly reduction — 60 percent, 75 percent, 90 percent. A majority of the respondents indicated that they would not pay anything to the district for any of the suggested levels of black fly reductions. In contrast, 17 percent of the respondents were willing to pay $25 or more (over $100 in some cases) to achieve a 90 percent reduction in late-season black flies.

Although the results of the study might be a disappointment to the advocates of black fly control, the high rate of participation and interest in the study, and the overall quality of data bodes well for further research of economic relationships for which there is not an established market.

Dr. Kevin Boyle, UM assistant professor of Agricultural and Resource Economics and Dr. Reiling are currently analyzing data from a multiphased study of the economics of fishing, hunting, and other aspects of wildlife in Maine. The study was requested and funded by a special Maine Legislative Commission. It may be the most comprehensive research of its type to date in the United States.

Unlike most studies of activities related to wildlife and the natural environment, it focuses on both its consumptive (fishing, hunting, etc.) and the noncomsumptive (viewing, feeding wildlife) aspects. In a later As Maine Grows column we will detail some of the results of the study that relate to hunting including information about moose, turkey, and water fowl. Data on several types of fishing will also be included.

When the study is fully analyzed, it is anticipated that for the first time there will be highly useful data related to the value that Maine people place on being passive participants in enjoying the state’s outdoors and its animal inhabitants. The data from the Boyle and Reiling study should have great value to those who have an interest in maintaining Maine’s natural environment. For the first time Maine legislators and other agencies and interested parties will have hard date to use as a base for decisions related to use and protection of our wildlife and other natural resource. In addition, the data may, at least indirectly, provide insights about the protection and use of natural resources other than fish and game.

While there is a generalized concern for many aspects of our natural environment including wetlands and areas threatened by development or other potential misuses, no empirical information is available to determine just how valuable the general public perceives them to be. Use of the nonmarketing research techniques employed by the UM economists might provide the necessary data.

For those interested in the results of the late-season black fly study and who wish to be put on a list to receive other publications in the series as they become available, write for MAES Bulletin 822, care of Ms. Joan Bouchard, Room 207, Winslow Hall, University of Maine, Orono 04469.

This week’s column was written by Louis A. Ploch, professor emeritus of rural sociology at the University of Maine.