ECONOMIC ANALYSIS OF THE MIGRATORY BIRD HUNTING REGULATIONS FOR THE 2021-2022 SEASON - Prepared by: Economics Branch Policy, Economics, Risk ...
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ECONOMIC ANALYSIS OF THE MIGRATORY BIRD HUNTING REGULATIONS FOR THE 2021-2022 SEASON Prepared by: Economics Branch Policy, Economics, Risk Management, and Analytics (PERMA) U.S. Fish & Wildlife Service August 2020
Contents Economic Analysis ......................................................................................................................... 3 Initial Regulatory Flexibility Analysis ......................................................................................... 10 References ..................................................................................................................................... 28 Appendix A ................................................................................................................................... 29
Economic Analysis Economic Background and Significance The purpose of this economic analysis is to determine the economic effects of Federal regulatory alternatives for the 2021-2022 hunting season for migratory birds. This analysis centers on changing daily bag limits and season lengths, the two most important policy variables in the Federal framework. The analysis will show that differences in those key variables between alternatives result in measurable changes in the number of hunters, how often they hunt, and the amount of consumer surplus they enjoy as well as the amount of money they spend in pursuit of their sport. There are two components to this analysis: first, each of the regulatory alternatives will be evaluated for their effects on consumer surplus and second, each alternative will be evaluated for their effects on hunter expenditures. The results of this analysis will document the expected economic effects of the final framework for the 2021-2022 Fall migratory bird hunting season. Over harvesting at the turn of the century resulted in depleted bird populations and inspired the Migratory Bird Treaties between the United States, Great Britain (Canada), Mexico, Japan, and the Soviet Union. The Migratory Bird Treaty Act (Act) implementing the treaties authorizes the Secretary of the Interior to establish national frameworks within which States may establish migratory bird hunting regulations. The status of migratory bird populations are discussed in a series of annual reports. Environmental considerations are covered under a separate Finding of No Significant Impact (FONSI). These reports and more information about Adaptive Harvest Management are available at http://www.fws.gov/migratorybirds/NewsPublicationsReports.html. The Act is permissive. Without the national frameworks, the States cannot establish hunting seasons and hunting is prohibited. The national framework indirectly regulates migratory bird hunting in the United States by setting maximums for season length and bag limits under which the States can set their own hunting regulations. The States can be more restrictive than the Federal framework but not more lenient, i.e., the States can set shorter seasons and/or lower bag limits. Government policies generate economic effects by changing the use of resources in the economy. Alternative resource allocations may increase the efficiency of the national economy and generate greater welfare for its citizens, or policies may redistribute resources from one region or industry to another. The former are national economic effects. The latter are regional economic effects. By permitting hunting, the migratory bird hunting framework regulations generate both types of effects. 3
Approximately 1.5 million people bought duck stamps in 2017 1 (U.S. Fish and Wildlife Service 2018). In addition to State hunting licenses, duck stamps are necessary to hunt ducks or geese in the United States. This analysis estimates the economic effects of regulatory alternatives on duck hunting – a major component of all migratory bird hunting. Sufficient data exists for duck hunting to generate an analysis of hunter behavior in response to regulatory alternatives. The analysis for all migratory bird hunting is not possible because of data limitations but can be inferred from the results of the duck hunting analysis presented here. Duck hunters represented approximately 51 percent of all migratory bird hunters in 2016, or 57% of the number of days hunting (2016 National Survey). Evidently, hunters derive more pleasure from duck hunting than from their next most preferred option for spending that time and money. The increment in their welfare versus the next most preferred activity and the increment in producer surplus versus the next most productive use of the resources are the national welfare benefits of duck hunting. The Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) has determined that the migratory bird hunting frameworks rulemaking constitutes an economically significant rule, under the definition of Executive Order 12866. Effects of Allowing Migratory Bird Hunting The Service calculates annually the biological impacts of each regulatory alternative as part of the regulation development process and in consultation with the four Flyway Councils. This annual assessment process occurs when the Service obtains current year duck population status information and the updated expected harvest information for each alternative in August. The results from this assessment are considered each year at the Flyway Council meetings and Service Regulations Committee meetings, and results are provided for public review in the subsequent hunting season frameworks proposed rule. These expected harvests and population level impacts under each alternative are evaluated annually and part of the formal decision making process. The optimal regulatory alternative is derived each year based on current population status, expected harvest under each alternative, and the population and harvest management objectives adopted by the four Flyway Councils and the Service. The annual Environmental Assessment of the migratory bird hunting regulations provides detailed descriptions of three alternative frameworks for the annual duck hunting season: Alternative 1. Issue restrictive regulations allowing fewer days than those issued during the 2020-2021 season. Alternative 2. Issue moderate regulations allowing more days than those in Alternative 1. 1 Stamp sale data is scheduled to be updated by the U.S. Fish & Wildlife Service after January 2021. 4
Alternative 3. Issue liberal regulations identical to the regulations in the 2020- 2021 season. The Service proposes to issue liberal migratory bird hunting regulations in 2021-2022 (Preferred Alternative 3). This alternative is consistent with the objectives for long-term sustained duck population levels and harvest objectives. A final determination of which alternative to promulgate will be made when the analysis of the bird population status, due to be completed in the summer of 2021, is available. Economic Model An economic model of duck hunting was developed to estimate changes in annual duck hunting days, changes in expenditures, and changes in consumer surplus for each Alternative (Appendix A). The underlying model utilizes data on the number of duck hunters, number of duck hunter days, and duck harvest by flyway. The model uses data from the Migratory bird hunting activity and harvest during the 2017-18 and 2018-19 hunting seasons and the 2011 and 2016 National Surveys of Fishing, Hunting and Wildlife Associated Recreation. The model will be updated once new data are available from the next iteration of the National Survey of Fishing, Hunting, and Wildlife Associated Recreation, scheduled to take place in 2022. Current economic effects were determined by comparisons with the most restrictive Federal framework under Alternative 1, i.e. the minimum migratory bird hunting permitted. Alternatives 2 and 3 increase season length and permitted harvest which result in an increase in consumer surplus when compared to the baseline (Alternative 1). The estimated economic benefits resulting from the preferred alternative (Alternative 3) are the maximum achievable with the proposed framework. Estimating Consumer Surplus 2 Estimates of individual’s willingness to pay for duck hunting provides some insight into the consumer surplus derived from this activity. Willingness to pay for migratory waterfowl hunting (which includes both ducks and geese) averaged $81 per day (2018$) (Walsh, Johnson, and McKean 1990). This is the average of 17 estimates the authors found in the research literature. In order to account for regional differences in consumer surplus estimates, data for estimating consumer surplus of waterfowl hunting by flyway are needed. The most recent flyway estimates in the existing literature has only one study where sufficient data were collected to derive consumer surplus estimates by flyway. Hay (1988) is the only study found that estimated values for each of the four flyways. Average consumer surplus estimates are required to evaluate the alternative duck hunting frameworks, which are specified by flyway. In this report, the consumer surplus is presented as a range taken from the Hay (1988) study. To date, this is the most recent study that estimated consumer surplus by flyway. The daily consumer surplus estimates 2 “Consumers’ surplus is the difference between what a consumer pays for a unit of a good or service and the maximum amount the consumer would be willing to pay for that unit” (U.S. Office of Management and Budget 2003). 5
are used to determine the economic value of the baseline (restrictive migratory bird hunting regulations) and the estimated effects of changes brought about by different frameworks. The estimates from the Hay (1988) study provided the 95 percent confidence intervals for flyway consumer surplus per day used in this analysis. The estimates range from $43 to $69 (2018$) per hunting day. This range of estimates used is more conservative than the Walsh, Johnson, and McKean findings from the literature. Estimating Producer Surplus 3 The estimation of producer surplus is the missing value for a complete analysis of the economic benefits generated by the migratory bird framework. Producer surplus is more difficult to quantify in the case of a natural resource. There may be some producer surplus associated with land leases for access to waterfowl hunting as well as habitat leases to provide primary constituent elements needed to allow waterfowl to reproduce. Any producer surplus associated with the sale of equipment and services to hunters is not easily estimated since the data on profit margins for all these items are not known. Also, the large numbers of suppliers of services and equipment would tend to eliminate excess profits through competition. Since most of the services and equipment have non-duck hunting applications, producers cannot set a price that discriminates between duck hunters, who would presumably be willing to pay more, and other customers. Therefore, they could not extract excess profits from duck hunters. Data to estimate producer surplus are not available. Given competitive markets and the inability to price discriminate, producer surplus is probably minimal compared to consumer surplus. Consumer Surplus Effects of Alternative Frameworks Using the economic model described in Appendix A, duck hunting days are estimated for each Alternative. Table 1 shows the estimated consumer surplus from duck hunting by Alternative and by flyway. Total consumer surplus ranges from $265 million for the restrictive framework (Alternative 1) to $305 million for the preferred framework (Alternative 3). 3 “Producers’ surplus is the difference between the amount a producer is paid for a unit of a good or service and the minimum amount the producer would accept to supply that unit.” (U.S. Office of Management and Budget 2003). 6
Table 1. Estimated Total Consumer Surplus for Alternative Frameworks (thousand 2018$). Consumer Surplus Per Day Alternative 1 Alternative 2 Alternative 3 Flyway (2018$) Restrictive Moderate Preferred Atlantic $43 - $62 $37,000 $42,100 $47,800 Mississippi $50 - $64 $131,900 $138,300 $145,400 Central $48 - $60 $43,600 $46,800 $49,300 Pacific $50- $69 $52,100 $57,400 $62,500 Total $264,600 $284,600 $305,000 Alternative 1 This alternative includes restrictive regulations allowing fewer days than those issued in 2020-2021. Bag limits are 3 ducks below the 2020 levels and seasons are 30 to 47 days shorter. The reduced bag limit reduces the probability of hunting about 1.5 percent resulting in 138,000 fewer hunters. Total hunting days would be approximately 723,000 fewer days. Taken together the restrictive framework results in an estimated $265 million (2018$) in duck hunter consumer surplus. Alternative 2 Bag limits under this alternative are the same as under the preferred alternative (Alternative 3) but season lengths are 14 to 21 days shorter. Duck hunters would spend fewer days afield. The reduced season length decreases the probability of hunting resulting in 65,000 fewer hunters. Estimated consumer surplus would be $285 million (2018$). Alternative 3 The preferred regulations are similar to the 2020-2021 regulations and have the most positive economic effect when compared to Alternative 1. The estimated consumer surplus ranges from $263 to $347 million with a mid-point estimate of $305 million. The bag limits and season lengths results in an estimated 910,000 duck hunters. This alternative is the preferred alternative and maximizes the total hunters’ welfare benefits which are related to bag and days afield. The net effect of alternative frameworks results in relatively modest increases in consumer surplus primarily reflecting the fact that the frameworks are not severely binding on duck hunters decisions on how many days to hunt (Table 1). The differences between season length, days afield, and bag limits and actual harvest are large enough that only marginal changes in hunter behavior are expected from alternative frameworks. The season length and bag limits set in the National framework, for example 90 days of hunting and 5 as a bag limit per day, are significantly higher than the typical hunter uses. Typically, hunters hunt for 9 days and bag slightly more than 2 ducks per day. Thus, any 7
changes in the National framework are expected to have only a small impact on hunter behavior (days afield and hunter bag) and migratory bird populations. Duck hunting accounted for approximately 51 percent of all migratory bird hunting days in 2016. This analysis of duck hunting benefits, if extrapolated to all migratory bird hunting, would be 2 times higher than the duck hunting estimate discussed above. There is no data to support the extrapolation so it is not performed. The frameworks safeguard the efficient use of the resource over time by imposing limits on its exploitation. Overexploitation when access to the resource was unconstrained threatened its sustainability. Limiting resource consumption ensures future hunting opportunities and the resulting ongoing benefits to hunters. The frameworks have little direct effect on other agencies’ actions nor any material budgetary impact. As the framework procedure has been in place for over 20 years, no novel legal or policy issues are raised by these regulations. Effects on Migratory Bird Populations As noted above, the frameworks do not severely dictate duck hunter’ choices on how many days to hunt since participation trends have been relatively flat since 1991. Furthermore, the season length and bag limits set in the National framework, for example 90 days of hunting and 5 as a bag limit per day, are significantly higher than the typical hunter trends of 9 days of hunting and about 2 birds per day. Thus, the differences between the three Alternatives are expected to have only small impacts on hunter behavior (days afield and hunter bag) and, consequently, migratory bird populations. As a result, when comparing the preferred alternative to the most restrictive alternative, the preferred alternative would have minimal impacts on migratory birds and the various ecosystem services (such as birdwatching, pest control, disease regulation, and nutrient cycling) that they provide. Costs Incurred by States The framework regulations for migratory bird hunting impose some costs of administration and enforcement on the States. If there were no migratory bird hunting, the States could apply their resources to different ends. As the States also derive revenue from licenses and sales taxes on hunting supplies, the net effect on State resources is uncertain. 8
If States were free to set hunting seasons and bag limits (abrogating the Migratory Bird Treaty Act), some might opt for longer seasons and higher bag limits without regard to the health of the waterfowl populations. To the extent the frameworks constrain the regulatory regime these States may impose, the framework imposes an opportunity cost on the States. The opportunity cost is the lost revenue and hunter expenditures the State cannot recover because it is constrained by the framework in its hunting regulations. There is no way to quantify this cost. In particular, the long run impact of over harvesting the population would be difficult to estimate and value. 9
Initial Regulatory Flexibility Analysis Background The Regulatory Flexibility Act of 1980 (Public Law 96-354) requires agencies to evaluate the potential effects of their proposed and final rules on small businesses, small organizations, and small governmental jurisdictions. Section 603 of the Act requires agencies to prepare and make available for public comment a regulatory flexibility analysis (RFA) describing the impact of proposed rules on small entities. Section 603(b) of the Act specifies the content of a RFA. Each RFA must contain: A description of the reasons why action by the agency is being considered; A succinct statement of the objectives of, and legal basis for, the proposed rule; A description – and, where feasible, an estimate of the number – of small entities to which the proposed rule will apply; A description of the projected reporting, record keeping, and other compliance requirements of the proposed rule including an estimate of the classes of small entities which will be the subject to the requirement and the type of professional skills necessary for preparation of the report or record; and An identification, to the extent practicable, of all relevant Federal rules that may duplicate, overlap, or conflict with the proposed rule. 1. Description of the reasons why action by the agency is being considered Over harvesting at the turn of the century resulted in depleted bird populations and inspired the Migratory Bird Treaties between the United States, Great Britain (Canada), Mexico, Japan, and the Soviet Union. The Migratory Bird Treaty Act (Act) implementing the treaties authorizes the Secretary of the Interior to establish national frameworks within which States may establish migratory bird hunting regulations. The Act is permissive. Without the national frameworks, the States cannot establish hunting seasons and hunting is prohibited. The proposed regulation indirectly regulates migratory bird hunting in the United States by setting maximums for season length and bag limits under which the States can set their own hunting regulations. The States can be more restrictive than the Federal framework but not more lenient, i.e., the States can set shorter seasons and/or lower bag limits. 2. Objectives of, and legal basis for, the proposed rule The U.S. Fish and Wildlife Service (FWS or Service) is the Federal agency delegated the primary responsibility for managing migratory birds. This delegation is authorized by the Migratory Bird Treaty Act (MBTA, 16 U.S.C. 703 et seq.). We implement the provisions of the MBTA through regulations in parts 10, 13, 20, 21, and 22 of title 50 of the Code of Federal Regulations (CFR). 10
Migratory game birds are those bird species so designated in conventions between the United States and several foreign nations for the protection and management of these birds. Under the Migratory Bird Treaty Act (16 U.S.C. 703–712), the Secretary of the Interior is authorized to determine when “hunting, taking, capture, killing, possession, sale, purchase, shipment, transportation, carriage, or export of any * * * bird, or any part, nest, or egg” of migratory game birds can take place, and to adopt regulations for this purpose. These regulations are written after giving due regard to “the zones of temperature and to the distribution, abundance, economic value, breeding habits, and times and lines of migratory flight of such birds” and are updated annually (16 U.S.C. 704(a)). This responsibility has been delegated to the Service as the lead Federal agency for managing and conserving migratory birds in the United States. However, migratory game bird management is a cooperative effort of State, Tribal, and Federal governments. 3. Description and estimate of the number of small entities to which the proposed rule would apply The underlying model utilizes data from the “Migratory bird hunting activity and harvest during the 2017-18 hunting season” for the number of duck hunters, number of duck hunter days, and duck harvest by flyway. Expenditure data are from the 2011 and 2016 National Survey of Fishing, Hunting and Wildlife Associated Recreation. Major Categories of Hunter Expenditures Waterfowl and other migratory bird hunting represent an important part of the total economic activity generated by fishing and hunting in the United States. The 2016 National Survey of Fishing, Hunting and Wildlife Associated Recreation indicates that all migratory bird hunter expenditures, exclusive of licenses, stamps, tags, permits, and special equipment totaled over $2.1 billion in 2016 (2018$). This analysis looks at duck hunting and the economic effects of regulatory alternatives on that major component of migratory bird hunting. Expenditure data specific to duck hunters are not directly available from the Survey. An estimate of duck hunter expenditures was obtained by using the numbers of active duck hunters and hunter days reported in the “Migratory bird hunting activity and harvest during the 2017-18 hunting season” and the per capita and per day expenditure data reported in the 2011 and 2016 Surveys updated to 2018 dollars. Resulting duck hunter expenditures for travel and equipment in the four flyways totaled $1.1 billion (2018$). Equipment and daily spending were estimated for each flyway. Expenditure data are from the 2016 National Survey and are weighted using flyway-level expenditure estimates calculated from the 2011 Survey. Assuming that duck hunters distributed their spending among the Survey’s travel expenditure categories in the same way as did other migratory bird hunters in 2016, duck hunters spending would have been as follows: 11
Table 2. 2016 Expenditures by Migratory Bird Hunters and Duck Hunters Expenditures (million 2018$) Category Percent All MB Hunters1 Duck Hunters Equipment 37% $788.6 $398.5 Food 15% $327.6 $165.5 Transportation 24% $505.9 $255.7 Lodging 11% $225.2 $113.8 Other 13% $285.0 $144.0 Total 100.0% $2,132.4 $1,077.5 Source: 2016 National Survey of National Survey of Fishing, Hunting, and Wildlife-Associated 1 Recreation Migratory bird hunters spent $2.1 billion for guns, ammunition, travel, and recreational services in 2016 (2018 $). These resources would have been spent on other activities if migratory bird hunting had not been possible so they do not represent a change in national economic efficiency or welfare. Nevertheless, this spending is important for the industries and regions where the money is spent. If items like hunting camps, off-road vehicles, and land are included, 2016 spending for migratory bird hunting increases substantially. Beneficiaries of the Rule There were an estimated 1.2 million duck hunters in the U.S. in 2016 (U.S. Department of the Interior 2016). In addition to hunters, a wide range of businesses and individuals benefit economically from the establishment of the annual migratory bird hunting regulations. A partial list of migratory bird hunter expenditure categories and the types of businesses that benefit from those expenditures are shown in Table 3. Migratory bird hunting regulations generate significant economic activity for small businesses. Nationwide, migratory bird hunters spent $1.6 billion at small businesses in 2016 (Table 5). Over 800,000 small businesses will share in these sales. All but two of the States with reported sales derive, as a minimum, an excess of $2 million in small business sales from migratory bird hunting. 12
Table 3. Types of Expenditures by Migratory Bird Hunters Expenditure Item Examples Beneficiaries Equipment and Supplies Guns, ammunition, boats Sporting goods stores, department stores, boat dealers Transportation Gasoline, oil, repairs, air Service stations, vehicle travel, vehicles dealers and rental agencies Lodging Motels, campgrounds Food and Beverages Restaurants, grocery stores Lands and Leases Club memberships, daily Hunting clubs, private land and seasonal hunting fees owners Clothing Specialized clothing, Retail clothing stores, mail waders, boots order firms Limited information is available on the number of businesses and individuals in the various categories who benefit from duck hunter expenditures. This is not surprising considering that those who provide equipment, supplies and services to duck hunters often provide identical or similar items to non-hunters. For example: 1. A motel in a duck hunting area may obtain a portion of its income from duck hunters. Registrants are not requested to indicate the nature of their travel. The same situation prevails for food service establishments, gasoline stations, etc. 2. The number of sporting goods stores in the United States is obtainable. However, such stores may cater to fishermen, bowlers, skiers, joggers, etc., in addition to hunters. Without knowledge of their specialty, knowing the number of sporting goods stores is not sufficient. 3. Considerable leasing of lands for hunting and other purposes is accomplished informally without record keeping, and the payment is often in cash or otherwise undocumented. Methods This analysis combines information from the 2011 and 2016 National Surveys of Fishing, Hunting, and Wildlife-Associated Recreation (Survey) and the U.S. Department of Commerce County Business Patterns 2017 database to develop estimates of migratory bird hunters’ expenditures at small businesses. The Survey provides excellent 13
information about hunters and anglers expenditures for sporting trips and equipment. Trip expenditures are categorized as food, lodging, transportation, and other travel items (e.g., guide fees, access fees, and rentals). Equipment expenditures include guns, ammunition, and decoys. Expenditures for vehicles, cabins, and land are excluded from this analysis. As very few respondents purchased these items, the data are considered unreliable. The Surveys do not collect information about vendors. Therefore, another method is necessary to find the proportion of total expenditures that can be attributed to small businesses. The U.S. Department of Commerce publishes the County Business Patterns database that includes the number of enterprises by county and North American Industrial Classification System (NAICS). To assess the effects of the rule on small entities, this analysis focuses on retail establishments. The U.S. Small Business Administration (SBA) defines a small business as one with annual revenue or employment that meets or is below an established size standard (Table 4). Table 4. Small Business Size Standards Industry Code Description Small Business Size Percentage of Standard (millions) Businesses that are Small1 Full-Service 99% 722511 $8.0 Restaurants Limited-Service 98% 722513 $12.0 Restaurants Supermarkets and 98% Other Grocery 445110 $35.0 (except Convenience) Stores Hotels (except Casino 99% 721110 $35.0 Hotels) and Motels Gasoline Stations 98% 447110 with Convenience $32.0 Stores Other Gasoline 92% 447190 $16.5 Stations Sporting Goods 99% 451110 $16.5 Stores 1 US Census Bureau, 2017 Economic Census The U.S. Census Bureau’s Economic Census provides national level data for the number of firms by sales and industry type. Since the Economic Census does not provide state level data for the number of firms by sales and industry type, the national estimate is applied. As shown in Table 4, the majority of businesses qualify as small businesses. The County Business Patterns information permits calculation of small business’ share of businesses but not their share of sales. An alternative method was used to allocate sales to small businesses from establishment information for each State. If all businesses sell about the same amount, the share of expenditures spent at small businesses will be the 14
proportion small businesses are to the total number of firms. This proportion probably overstates small business’ share. A large discount department store probably sells more guns and ammunition than a small neighborhood gun shop. Using this method generates estimates of expenditures by migratory bird hunters at small businesses. To illustrate the State level of benefits, the following tables have been developed based on the 2011 and 2016 National Surveys. The estimates are reported in Table 5 and are shown by State and expenditure category. Table 6, Estimated Migratory Bird Hunters’ Expenditures on Food, illustrates the calculations for each of the expenditure categories shown on Tables 6 through 9. All expenditures in this section are reported in thousands of 2018 dollars. The first column contains State totals of the amounts respondents to the Survey reported they spent for food while on trips whose primary purpose was to hunt migratory birds. Food may be bought at a full service restaurant (NAICS 722511), limited service restaurant (NAICS 722513), or grocery store (NAICS 445110) so all types of firms were combined. The second column shows the number of establishments in NAICS 72200 or 44510 in each State. The third column shows the number of establishments categorized as small businesses in each State. The proportion small business establishments are of the total is the method used to allocate expenditures to small businesses. This allocation is shown in the fifth column. Although more than 25,000 hunters and anglers were interviewed for the Survey, these expenditure estimates are based on only those who actually hunted during 2011 and stated that the primary purpose of their trip or equipment purchase was hunting migratory birds – a sample of about 485 individuals. Only a small subset of hunters in each State meets both criteria so the expenditures are quite sensitive to individual responses. Zero totals may be based on small sample sizes. Small samples may also inflate expenditure estimates. Lodging observations were sparse so state lodging estimates are spotty and unreliable. A zero estimate for a state indicates a small sample size and no estimate was attempted. County business pattern information may also introduce errors. To avoid disclosure of private information, the Census Bureau withholds employment information when there are few establishments in a geographic area. Exclusion of a single large employer can greatly affect the proportion attributed to small business. In addition, entry of enough firms into an area results in all of the establishments appearing in the statistics. This exacerbates the instability of the published series. No effort was made to compensate for unreported firms in this analysis. Surveys of a wide range of businesses would be required to obtain the necessary detailed data. The Small Entity Analysis included in this section spreads expenditures across all beneficiary businesses in proportion to the number of establishments. The direct expenditures described above cycle through the economy generating additional income and sales. Analysis of this multiplier effect is beyond the scope of this report but clearly $2.1 billion is the minimum stimulus from the migratory bird regulations. 15
Results Migratory bird hunting generates considerable revenue for small businesses. In Arkansas, California, and Minnesota, migratory bird hunting would be considered a significant industry generating over $100 million in expenditures in each state. The multiplier effect in each of these regions generates significantly more economic activity. Nationwide, migratory bird hunters spent approximately $1.6 billion at thousands of small businesses in 2016. Some of this economic activity would occur without the annual promulgation of hunting regulations. Since much of the equipment and services used in migratory bird hunting can be used for other purposes, some of the annual sales would continue even if migratory bird hunting were prohibited. Much, if not all of this business activity would be redirected to alternative pursuits. 4. Description of the projected reporting, record keeping, and other compliance requirements for small entities The proposed rule would establish national frameworks within which States may establish migratory bird hunting regulations. No reporting, record keeping, or other compliance requirements are necessary. 5. Duplication with other Federal rules There are no relevant Federal rules that may duplicate, overlap, or conflict with the proposed rule. 6. Description of any significant alternatives to the proposed rule Each alternative outlined in the economic analysis results in a different level of economic stimulus generated from duck hunter spending. State expenditures for enforcement of duck hunting regulations are not affected by any of the proposed alternatives. In each case, the States would be required to field about the same enforcement effort. Only if the frameworks greatly relaxed bag limits and seasons would the States be able to reduce enforcement effort significantly. Alternatives 1 and 2 will reduce State license sales and sales taxes on hunting goods compared to the preferred Alternative 3. These revenue losses would be in addition to the lost stimulus of expenditures in local economies. Although reduced hunting now may result in more ducks to hunt next year, higher populations also increase the risk of disease outbreaks and unhealthy competition, in the absence of adequate natural predation. The opportunity cost of duck hunting, ignoring long run effects, is minimized by the preferred framework, Alternative 3. QUESTIONS FOR COMMENT TO ASSIST REGULATORY FLEXIBILITY ANALYSIS: 16
1. Please provide comment on any or all of the frameworks in the proposed rule with regard to (a) the impact of the provision(s) (including any benefits and costs), if any, and (b) what alternatives, if any, the Service should consider, as well as the costs and benefits of those alternatives, paying specific attention to the effect of the rule on small entities in light of the above analysis. 2. Please describe ways in which the proposed rule could be modified to reduce any costs or burdens for small entities consistent with the Service’s requirements. 3. Please identify all relevant federal, state or local rules that may duplicate, overlap or conflict with the proposed rule. 4. Please provide consumer surplus data for migratory bird hunting by flyway. 5. Please provide information regarding change in sales and associated revenue due to the proposed rule. 17
Table 5. Estimated Expenditures by Migratory Bird Hunters at Small Businesses – Summary (Millions of 2018 dollars) State Food Lodging Transportation Equipment Total Alabama 6.3 - 0.1 5.8 12.2 Alaska 0.5 0.2 4.3 0.8 5.8 Arizona 2.6 1.1 19.8 14.2 37.7 Arkansas 17.3 - 4.4 234.5 256.1 California 30.9 7.8 44.7 58.2 141.6 Colorado 1.4 - 1.2 5.4 8.0 Connecticut 2.3 - 1.5 31.3 35.1 Delaware 0.3 - 0.2 4.2 4.7 Florida 1.4 - 12.3 6.2 19.9 Georgia 2.9 0.7 3.0 39.6 46.3 Hawaii - - - - - Idaho 0.9 - 0.9 1.3 3.1 Illinois 3.4 - 1.8 33.3 38.6 Indiana 4.1 - 10.1 5.0 19.2 Iowa 0.3 - 3.1 14.5 17.9 Kansas 1.6 - 1.7 2.6 5.9 Kentucky 2.2 - 4.4 11.5 18.0 Louisiana 14.3 0.1 20.4 42.9 77.7 Maine 2.5 - 3.7 0.7 6.9 Maryland 0.9 - 0.6 0.5 2.0 Massachusetts 2.7 1.5 5.3 11.9 21.4 Michigan 5.5 - 12.3 66.6 84.4 Minnesota 27.1 - 44.0 77.5 148.5 Mississippi 4.5 3.5 26.2 14.3 48.5 Missouri 11.4 - 4.5 27.6 43.5 Montana 5.1 0.3 2.1 19.7 27.2 Nebraska 1.8 0.5 22.0 1.5 25.8 Nevada 1.3 0.9 2.5 2.6 7.3 New Hampshire 0.1 0.8 3.4 - 4.2 New Jersey 0.8 - 1.5 4.2 6.4 New Mexico 3.6 - 1.0 5.9 10.5 New York 0.2 0.4 10.1 0.1 10.9 North Carolina 29.2 0.1 11.9 7.9 49.1 North Dakota 1.0 - 0.6 2.4 4.0 Ohio 2.4 13.6 4.6 16.5 37.1 Oklahoma 1.3 - 7.5 3.5 12.3 Oregon 1.6 0.7 2.3 0.1 4.6 Pennsylvania 0.2 - 3.0 - 3.2 18
Table 5. Estimated Expenditures by Migratory Bird Hunters at Small Businesses – Summary (Millions of 2018 dollars) State Food Lodging Transportation Equipment Total Rhode Island 0.3 - 0.6 1.1 2.0 South Carolina 1.5 - 1.5 7.1 10.0 South Dakota 8.3 9.0 29.9 9.7 57.0 Tennessee 4.3 - 5.2 11.2 20.7 Texas 19.1 - 30.3 17.4 66.8 Utah 2.4 - 12.3 9.0 23.7 Vermont 0.2 1.4 18.6 17.7 37.9 Virginia 20.2 - 0.3 14.3 34.7 Washington 5.2 3.6 4.2 6.4 19.5 West Virginia - 0.3 12.0 - 12.3 Wisconsin 5.4 - 0.1 23.3 28.8 Wyoming 0.8 - 1.9 0.6 3.3 Total $ 263.6 46.5 $ 419.9 $ 892.6 $1,622.3 19
Table 6. Estimated Migratory Bird Hunters' Expenditures on Food (Expenditures in thousands of 2018 dollars) State Total MB Hunter Total Number of Number of Small Estimated MB Expenditures on Firms Businesses Hunters' Food Expenditures at Small Businesses Alabama $8,048 9,105 8,140 $7,195 Alaska $1,719 1,925 1,806 $1,613 Arizona $10,712 12,786 11,254 $9,429 Arkansas $4,913 5,673 5,162 $4,470 California $80,681 93,154 84,762 $73,413 Colorado $11,497 13,409 12,078 $10,356 Connecticut $8,380 9,488 8,804 $7,776 Delaware $1,875 2,226 1,970 $1,659 Florida $37,110 44,550 38,987 $32,476 Georgia $18,749 22,138 19,697 $16,682 Hawaii $3,353 3,961 3,523 $2,982 Idaho $3,215 3,662 3,378 $2,966 Illinois $26,552 30,593 27,895 $24,210 Indiana $11,478 13,537 12,059 $10,225 Iowa $6,168 7,068 6,480 $5,655 Kansas $5,213 6,100 5,477 $4,681 Kentucky $7,048 8,368 7,404 $6,236 Louisiana $8,700 10,221 9,140 $7,780 Maine $3,397 3,831 3,569 $3,165 Maryland $11,263 13,296 11,833 $10,024 Massachusetts $17,164 19,700 18,032 $15,711 Michigan $18,508 21,416 19,444 $16,804 Minnesota $10,037 11,730 10,545 $9,023 Mississippi $4,703 5,517 4,941 $4,212 Missouri $10,902 12,814 11,453 $9,744 Montana $2,744 3,090 2,883 $2,560 Nebraska $4,005 4,555 4,208 $3,700 Nevada $5,771 6,785 6,063 $5,157 New Hampshire $3,194 3,642 3,356 $2,943 New Jersey $21,498 24,177 22,585 $20,082 New Mexico $3,270 3,908 3,435 $2,874 New York $57,851 64,352 60,777 $54,637 North Carolina $18,370 21,945 19,299 $16,155 North Dakota $1,633 1,879 1,716 $1,491 20
Table 6. Estimated Migratory Bird Hunters' Expenditures on Food (Expenditures in thousands of 2018 dollars) State Total MB Hunter Total Number of Number of Small Estimated MB Expenditures on Firms Businesses Hunters' Food Expenditures at Small Businesses Ohio $22,169 25,907 23,290 $19,930 Oklahoma $6,989 8,085 7,343 $6,348 Oregon $10,775 11,972 11,320 $10,188 Pennsylvania $26,595 30,679 27,940 $24,221 Rhode Island $2,929 3,275 3,077 $2,752 South Carolina $9,151 10,923 9,614 $8,054 South Dakota $1,853 2,098 1,947 $1,720 Tennessee $11,260 13,319 11,829 $10,000 Texas $48,135 57,299 50,569 $42,481 Utah $4,810 5,637 5,053 $4,312 Vermont $1,659 1,848 1,743 $1,565 Virginia $16,262 19,085 17,084 $14,557 Washington $16,139 18,167 16,955 $15,062 West Virginia $3,156 3,640 3,316 $2,875 Wisconsin $12,618 14,440 13,256 $11,583 Wyoming $1,281 1,438 1,346 $1,199 21
Table 7. Estimated Migratory Bird Hunters' Expenditures on Lodging (Expenditures in thousands of 2018 dollars) State Total MB Hunter Total Number of Number of Small Estimated MB Expenditures on Firms Businesses Hunters' Lodging Expenditures at Small Businesses Alabama - 853 814 - Alaska 712 284 261 $654 Arizona 4,464 721 694 $4,297 Arkansas - 1,080 932 - California 31,226 5,735 4,899 $26,674 Colorado - 1,353 1,199 - Connecticut - 382 326 - Delaware - 180 164 - Florida - 3,388 2,791 - Georgia 2,970 1,996 1,855 $2,760 Hawaii 3 293 178 $2 Idaho - 759 713 - Illinois - 373 351 - Indiana - 1,489 1,270 - Iowa - 991 931 - Kansas - 607 582 - Kentucky - 745 707 - Louisiana 272 909 839 $251 Maine - 778 633 - Maryland - 700 603 - Massachusetts 5,914 516 484 $5,547 Michigan - 1,343 1,225 - Minnesota - 931 815 - Mississippi 13,895 1,074 976 $12,627 Missouri - 679 657 - Montana 1,126 530 497 $1,056 Nebraska 2,115 1,801 1,661 $1,951 Nevada 3,789 318 301 $3,586 New Hampshire 2,988 456 427 $2,798 New Jersey - 332 297 - New Mexico - 1,041 934 - New York 1,618 631 582 $1,492 North Carolina 709 457 404 $627 22
Table 7. Estimated Migratory Bird Hunters' Expenditures on Lodging (Expenditures in thousands of 2018 dollars) State Total MB Hunter Total Number of Number of Small Estimated MB Expenditures on Firms Businesses Hunters' Lodging Expenditures at Small Businesses North Dakota 194 2,340 1,965 $163 Ohio 55,006 1,419 1,302 $50,471 Oklahoma - 862 820 - Oregon 2,679 967 878 $2,432 Pennsylvania - 1,479 1,309 - Rhode Island 116 140 112 $93 South Carolina - 1,118 1,001 - South Dakota 37,385 439 419 $35,682 Tennessee - 1,391 1,286 - Texas 67 5,259 4,882 $62 Utah - 612 536 - Vermont 5,746 1,523 1,349 $5,090 Virginia - 236 203 - Washington 14,207 1,221 1,081 $12,578 West Virginia 1,201 1,097 995 $1,089 Wisconsin - 320 300 - Wyoming - 397 365 - Note: A hyphen (-) denotes that sample sizes are too small to report data. 23
Table 8. Estimated Migratory Bird Hunters' Expenditures on Transportation (Expenditures in thousands of 2018 dollars) State Total MB Total Number of Number of Small Estimated MB Hunter Firms Businesses Hunters' Expenditures Expenditures at on Small Businesses Transportation Alabama $169 3,217 3,202 $168 Alaska $4,922 182 182 $4,922 Arizona $22,929 1,529 1,520 $22,794 Arkansas $5,084 1,604 1,584 $5,021 California $51,776 7,488 7,424 $51,333 Colorado $1,364 1,555 1,540 $1,351 Connecticut $1,691 1,066 1,062 $1,685 Delaware $275 247 246 $274 Florida $14,118 6,336 6,312 $14,065 Georgia $3,460 5,063 5,038 $3,443 Hawaii $1 244 243 $1 Idaho $1,079 1,745 1,733 $1,072 Illinois $2,071 657 652 $2,055 Indiana $11,701 3,816 3,787 $11,612 Iowa $3,621 2,737 2,712 $3,588 Kansas $1,960 1,072 1,056 $1,931 Kentucky $5,065 2,024 2,014 $5,040 Louisiana $23,619 2,419 2,399 $23,424 Maine $4,309 1,970 1,968 $4,305 Maryland $725 1,480 1,474 $722 Massachusetts $6,089 773 772 $6,081 Michigan $14,230 3,562 3,547 $14,170 Minnesota $50,850 2,134 2,118 $50,469 Mississippi $30,394 2,669 2,636 $30,018 Missouri $5,132 2,022 2,016 $5,117 Montana $2,430 505 499 $2,401 Nebraska $25,378 4,491 4,475 $25,288 Nevada $2,904 459 449 $2,841 New Hampshire $3,891 968 961 $3,863 New Jersey $1,715 563 562 $1,712 New Mexico $1,146 2,346 2,263 $1,105 New York $11,778 837 820 $11,539 24
Table 8. Estimated Migratory Bird Hunters' Expenditures on Transportation (Expenditures in thousands of 2018 dollars) State Total MB Total Number of Number of Small Estimated MB Hunter Firms Businesses Hunters' Expenditures Expenditures at on Small Businesses Transportation North Carolina $13,894 800 784 $13,616 North Dakota $649 4,974 4,941 $645 Ohio $5,285 3,904 3,871 $5,240 Oklahoma $8,628 1,858 1,849 $8,586 Oregon $2,683 928 914 $2,643 Pennsylvania $3,465 3,943 3,908 $3,434 Rhode Island $654 306 306 $654 South Carolina $1,739 2,609 2,590 $1,726 South Dakota $34,507 617 615 $34,395 Tennessee $5,958 3,466 3,444 $5,920 Texas $35,041 11,397 11,300 $34,743 Utah $14,325 746 733 $14,075 Vermont $21,496 3,107 3,084 $21,337 Virginia $352 416 415 $351 Washington $4,888 1,896 1,885 $4,860 West Virginia $13,865 2,575 2,563 $13,800 Wisconsin $141 937 927 $139 Wyoming $2,277 323 315 $2,221 25
Table 9. Estimated Migratory Bird Hunters' Expenditures on Equipment (Expenditures in thousands of 2018 dollars) State Total MB Hunter Total Number of Number of Small Estimated MB Expenditures on Firms Businesses Hunters' Equipment Expenditures at Small Businesses Alabama $5,261 248 225 $4,773 Alaska $761 77 73 $721 Arizona $12,865 440 423 $12,368 Arkansas $212,165 190 177 $197,648 California $52,635 2,250 2,183 $51,068 Colorado $4,876 780 745 $4,657 Connecticut $28,359 276 267 $27,434 Delaware $3,804 78 74 $3,609 Florida $5,625 1,563 1,522 $5,477 Georgia $35,877 494 456 $33,117 Hawaii - 121 121 - Idaho $1,138 215 205 $1,085 Illinois $30,170 640 605 $28,520 Indiana $4,548 420 402 $4,353 Iowa $13,107 221 210 $12,455 Kansas $2,345 166 152 $2,147 Kentucky $10,362 266 254 $9,895 Louisiana $38,856 225 202 $34,884 Maine $668 151 146 $646 Maryland $459 291 279 $440 Massachusetts $10,806 502 481 $10,354 Michigan $60,306 735 713 $58,501 Minnesota $70,106 512 482 $65,998 Mississippi $12,901 129 120 $12,001 Missouri $24,989 346 326 $23,545 Montana $17,870 195 183 $16,770 Nebraska $1,378 120 111 $1,275 Nevada $2,378 159 153 $2,288 New Hampshire - 195 193 - New Jersey $3,804 510 489 $3,647 New Mexico $5,352 159 156 $5,251 New York $129 1,189 1,143 $124 North Carolina $7,135 676 644 $6,797 26
Table 9. Estimated Migratory Bird Hunters' Expenditures on Equipment (Expenditures in thousands of 2018 dollars) State Total MB Hunter Total Number of Number of Small Estimated MB Expenditures on Firms Businesses Hunters' Equipment Expenditures at Small Businesses North Dakota $2,137 53 48 $1,935 Ohio $14,950 674 641 $14,218 Oklahoma $3,210 215 199 $2,971 Oregon $69 435 417 $66 Pennsylvania - 814 766 - Rhode Island $1,005 76 76 $1,005 South Carolina $6,386 277 257 $5,925 South Dakota $8,815 86 82 $8,405 Tennessee $10,159 371 351 $9,611 Texas $15,744 1,167 1,017 $13,720 Utah $8,102 334 321 $7,787 Vermont $16,007 121 118 $15,610 Virginia $12,895 492 465 $12,187 Washington $5,796 559 534 $5,537 West Virginia - 116 112 - Wisconsin $21,041 476 459 $20,290 Wyoming $526 92 90 $515 Note: A hyphen (-) denotes that sample sizes are too small to report data reliably. 27
References Hay, Michael J. Net Economic Recreation Values for Deer, Elk and Waterfowl Hunting and Bass Fishing. Addendum to the 1985 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation. U.S. Department of the Interior, Fish and Wildlife Service, Washington, D.C. July 1988. Raftovich, R.V., K.K. Fleming, S. C. Chandler, and C.M. Cain, 2019. Migratory bird hunting activity and harvest during the 2017-18 and 2018-19 hunting seasons. U.S. Fish and Wildlife Service, Laurel, Maryland, USA. U.S. Department of Commerce, Bureau of the Census. Economic Census. Washington, DC. 2017. Available from: https://factfinder.census.gov. Accessed July 2020. U.S. Department of the Interior, Fish and Wildlife Service and U.S. Department of Commerce, Bureau of the Census. 2011 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation. U.S. Government Printing Office, Washington, DC. U.S. Department of the Interior, Fish and Wildlife Service and U.S. Department of Commerce, Bureau of the Census. 2016 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation. U.S. Government Printing Office, Washington, DC. U.S. Department of the Interior, Fish and Wildlife Service, Office of Migratory Bird Management. Administrative Report – July 2012, Preliminary estimates of waterfowl harvest and hunter activity in the United States during the 2010 and 2011 hunting season. USFWS/OMBM: Laurel, MD. 2012. U.S. Fish and Wildlife Service. 2007. Environmental Assessment. Duck Hunting Regulations for 2007. U.S. Department of the Interior, Washington, D.C., U.S.A. U.S. Fish and Wildlife Service 2018. Federal Duck Stamp Sales by Year. https://www.fws.gov/migratorybirds/pdf/get-involved/DuckStampSales.pdf. Accessed May 2018 U.S. Office of Management and Budget. Circular A-4. September 30, 1993. https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf Walsh, Richard G., Johnson, Donn M., and John R. McKean. What Can We Learn From 20 Years Of Work With TCM And CVM. W-133 and Western Regional Science Assn., Annual Meeting, Molokai Hawaii, February 22, 1990. 28
Appendix A Introduction The economic model was originally developed in the early 2000s to analyze duck hunter behavior under different regulatory migratory bird hunting frameworks.. The underlying model utilizes ratios on the number of duck hunters, number of duck hunter days, and duck harvest by flyway. This model has been updated with the most current data available: the 2011 and 2016 National Surveys of Fishing, Hunting and Wildlife- Associated Recreation and the Migratory bird hunting activity and harvest during the 2017-18 and 2018-19 hunting seasons. The primary research interest of this analysis is the tradeoff between season length and bag limit assuming a desired total harvest of ducks. This is not the question these alternative frameworks pose. Each framework varies both bag limit and season length in order to not over harvest the species. The present analysis seeks to quantify these relationships and apply them to changes in both season length and bag limit. Because of the less stringent data requirements, the empirical approach employed for this analysis is a reduced form of the random utility model bypassing the site decision equation. The hunter’s decision is limited to two questions. First, does the hunter choose to hunt ducks? Second, how many total days does the hunter choose to hunt ducks during one hunting season? The methodology used to analyze the impacts of varying the season length and/or bag limit is explained in the following text. In any season, the total harvest of ducks (K) is the product of average bag per day per hunter (B), average days afield per hunter per season (DAF), the probability that a hunter will hunt ducks (PROB), and total hunters of all game (H): (1) K = (B) (DAF) (PROB) H The variables in the model and in the subsequent empirical analysis are defined in Table 8. The analysis was conducted under the assumption that total harvest, K, is set according to annual biological considerations. To develop the parameters of the model it was assumed that once K is determined, it remains constant under all alternative combinations of daily bag and season length. Therefore in the model, any change in K, denoted as (dK), is equated to zero. This can be seen in the total differential of equation (1): δK δK δK (2) dK = dB + dDAF + d(PROB) =0 δB δDAF δPROB The differential shows that the various components of dK can be allowed to vary as long as the effects of their changes on K net out to zero. The components are the changes in duck harvest that can be attributed to changes in bag per day (dB), days afield (dDAF), and probability (dPROB). It is assumed that total number of hunters (H) remains 29
constant. Measuring the compensating changes in these components is what ultimately permits the determination of the tradeoffs between bag limit and season length. The magnitude of the change in harvest caused by each of the components is the product of the initial change in the component and the partial derivative of K with respect to the component. For example, the effect on K of a change in daily bag (dB) is the product of dB and the partial derivative of harvest with respect to daily bag (δK/δB). Thus, equation (2) summarizes the nature of the tradeoffs between daily bag limits and season length in setting the regulatory framework. It shows that any increase in daily bag (dB > 0) must be offset by decreases in DAF and PROB such that total harvest remains the same (dK = 0). Table 10. Definition of Variables Variable Definition Unit of Measurement PROB Probability of duck hunting, 1 = if hunts ducks given that a person hunts 0 = otherwise DAF Days afield per hunter per season Days SL Season length Days BL Bag limit per hunter per day Ducks B Actual daily harvest per hunter Ducks K Duck harvest per season Ducks H Number of hunters of all species Participants DH Number of duck hunters Participants HD Duck hunting days (DAF x DH) Days AGE Age of individual Years INC Individual’s household income Thousands of dollars Gender Sex of individual 1 = if male 0 = female METRO Urban residence 1 = if residence is in urban area 0 = otherwise BD05 2017 average daily harvest of Ducks ducks per hunter in individual’s state of residence WH05 Square miles of waterfowl habitat Square miles of wetlands per in individual’s state of residence square mile of total state area in 2005 AES Average 2016 equipment 2018 Dollars expenditures of duck hunters AVS Average 2016 variable 2018 Dollars expenditures per day for duck hunting E Elasticity of season length with Unitless Number respect to days afield 30
To measure those tradeoffs it is first necessary to express the components of (2) in other terms. From equation (1), the partial derivatives of total harvest with respect to daily bag (B), days afield (DAF), and probability (PROB) are: δK (2.1) = DAF(PROB)H δB δK (2.2) = B(PROB)H δDAF δK (2.3) = B(DAF)H δPROB Two equations were specified to incorporate hunter behavior into the model. It is assumed that a hunter makes two decisions. First, a hunter decides whether to hunt ducks. The decision to participate is binary; the individual either hunts ducks (PROB=1) or he does not (PROB=0). The mean of PROB is the proportion of hunters that hunts ducks, the participation rate. As discussed in detail below, the decision to participate is influenced by a number of factors. The probability that a given hunter will hunt ducks is a function of age, sex, residence in a rural versus urban area, income, season length, and the amount of waterfowl habitat and the bag per day per hunter in the individual’s home state. To simplify the discussion, all factors influencing the decision to hunt ducks except bag per day can be combined in the intercept (a), making the probability that an individual hunts ducks a function of bag per day. (3) PROB = a + bB Second, after deciding to hunt ducks the hunter must decide how many days to hunt during the season (DAF). The days afield decision is influenced by a number of the same variables: income, availability of duck habitat, and bag per day. Once again, all factors influencing DAF except bag per day can be summarized in the intercept ©. (4) DAF = c + eB Solving equation (4) for B and substituting into equation (3) yields: b(DAF - c) (5) PROB = a + e The derivative of (5) with respect to DAF is: dPROB b (6) = dDAF e 31
Substituting (6) and the partial derivatives (2.1, 2.2, and 2.3) into equation (2) and solving for the change in DAF results in: − dB(DAF)(PROB)H (7) dDAF = b B(PROB)H + B(DAF)H e Equation (7) may be simplified by combining all factors on the right hand side except dB into a constant, J. This makes the tradeoffs between changes in DAF and B apparent, in equation (8). (DAF)(PROB)H (7.1) J= b B(PROB)H + B(DAF)H e (8) dDAF = -dB(J) Note that B in the model is actual bag whereas the policy variable set in the regulations is bag limit (BL), a maximum number of ducks per day attained by relatively few hunters. The estimated relationship between changes in B and BL for each flyway is shown in Table 10. When dBL is known, the corresponding dB is determined from those estimates. The change in days afield (dDAF) for a given dB is derived from (8). With H and K constant, the new probability (PROB) is then calculated by substituting the new levels of DAF and B into equation (1). This keeps the duck hunters in the flyway on the isoquant representing a constant total harvest (K) while allowing BL and SL to vary. The change in SL consistent with the change in BL is determined programmatically. The elasticity of SL with respect to DAF (the ratio of the percent change in SL to the percent change in DAF): dSL dDAF dSL DAF (9) E= = SL DAF dDAF SL Equation (9) shows how much DAF must change in response to the change in SL to produce the required new level of BL. If BL is increased, SL must decrease if total harvest is to be held constant. After the new probability of duck hunting is determined, the difference (dPROB) between it and the base probability is multiplied by the total number of hunters (H) to obtain the change in the number of duck hunters (dDH). This model assumes that the new hunters will spend the same amount on equipment as the average of previous duck hunters (AES), the product of dDH and AES is the first part of the economic impact (IMP1) caused by changing BL. The second part of the impact (IMP2) is the change in 32
variable expenditures. It is the product of dHD, the change in hunter days due to the change in BL, and average variable spending (AVS) per day. (10) Impact = IMP1 + IMP2 (10.1) IMP1 = dDH(AES), where: dDH = (dPROB)(H) (10.2) IMP2 = (dHD)(AVS), where: dHD = dDH(DAF + dDAF) + dDAF(DH) Thus, the economic impacts are measured as changes from the base case in terms of hunter equipment spending and spending for food, travel and lodging as the number of duck hunters and days afield change in response to the regulatory alternatives. Estimation of the Model Parameters As discussed above, the individual hunter is assumed to first decide whether to hunt ducks and then decide the amount of time to spend in the field. The individual’s decision whether or not to hunt ducks is specified as a function of age, sex, residence in rural versus urban areas, income, season length, and average bag per day and amount of waterfowl habitat in the hunter’s home state. The last two variables are included as measures of the relative quality and availability of waterfowl among states. The days afield (DAF) equation is a function of household income, average daily harvest, season length, and residence in rural versus urban areas. The variables in the equations are defined in Table 8. Data used for this analysis are from the 2011 and 2016 National Survey of Fishing, Hunting and Wildlife Associated Recreation, and the Waterfowl Harvest and Hunter Activity Administrative Reports for the 1979 through 2011 seasons. These data sources provide the required variability in harvest, season length and bag limits to allow the estimation of the economic model. The two equations were estimated on a national basis because there was insufficient variation for some variables to estimate individually for each flyway. The probability equation was estimated with logit equation, and the days afield equation was estimated with ordinary least squares. Below each parameter estimate is the t-value in parentheses. The probability equation is estimated for all hunters. The days afield equation is estimated for those hunters who hunted ducks. The results are shown in Table 11 below. 33
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