The Economic Impact of the Huron River

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Place: Southeastern Michigan

Overview

In southeastern Michigan, the Huron River Trail benefits the community through spending at local businesses, higher property values along the river, and recreational enjoyment. The authors also measure benefits from biological diversity, wetland flood reduction, and aesthetic values but these are connected to the river, not just the trail.

Relevance

This study is relevant for those interested in understanding a wide range of values possible from water trails. Other than the economic impact estimates, the values reported are for the river as a whole, not just the designated trail.

The different categories of values should not be added because they are measuring different things. For example, the recreational enjoyment value measures how much trail users would be willing to pay to use the river. Adding this value to the actual amount users spend would essentially be counting this spending twice. An additional note of caution: the economic impact study incorporates spending by residents (who comprise about 57% of river users). This is not new money for the community.

Location

This study is based in southeastern Michigan.

Trail Type

The study considers the impact of the 104-mile Huron River Water Trail.

Purpose

The purpose of this study is to estimate a broad range of benefits related to the river to help justify spending on river and land restoration and infrastructure improvements.

This study was commissioned by the Huron River Watershed Council, an organization that advocates for river restoration and community awareness of the river.

Findings

  • The authors estimate that almost 123,000 visitors use the river 2.6 million days per year. Forty-three percent of river users came from outside the area.
  • Visitors spend $29.9 million annually, which translates to $53.5 million in direct and indirect spending.
  • Of the 61 businesses surveyed, 25% state that more than 50% of their customers are river users. Most of the businesses are shopping, dining, and recreation-related businesses.
  • Properties next to the river have a price premium between 39% and 65%, depending on the county. This reflects the value property owners place on the river, not just the trail.
  • The recreation value of the trail is $108.2 million per year. This represents the value river users would be willing to pay for a day on the river, not the amount they actually spend.

Methods

The authors used three different methods to estimate three types of values for the river. To estimate the economic impact of visitor spending, they surveyed trail users regarding the number of visits and spending patterns. To estimate the effect of the river on property values, they used a hedonic pricing model using details of individual property characteristics and price relative to distance to the river. To estimate the importance of the recreation opportunity, the authors use a benefit function transfer approach, which applies values from primary research in other locations to this situation.

Citation

Isley, P., C. Glupker, E. Nordman, J. Cowie, H. LaMay. 2017. The Economic Impact of the Huron River. Allendale, MI: Seidman Research Office, Grand Valley State University.