“The economic value of this is …” This is the worst statistic ever, produced at the instigation of interested parties who want to show how valuable their work is, as part of the case that there should be more government funding.
I hear it most days. Here is a typical example from today’s BBC news.
The world’s national parks and nature reserves receive eight billion tourist visits a year, generating around $600bn of spending, according to research.
After emitting a little steam from my ears, I thought ‘let’s blog on it’ and then ‘I’d better check what I’m talking about first’.
The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.
The paper gives a detailed account of how they used a range of resources to build a detailed (and, to my inexpert perusal, convincing) model of each of a stratified sample of 500 parks, to identify how many visitors each receives per year, and extrapolate from those models to the full population.
On the $600bn figure, they say
Economists working on tourism distinguish two main, non-overlapping components of value : direct expenditure by visitors (an element of economic impact, calculated from spending on fees, travel, accommodation, etc.); and consumer surplus (a measure of economic value which arises because many visitors would be prepared to pay more for their visit than they actually have to, …
I’ll stick to the simpler part – ‘direct expenditure by visitors … on fees, travel, accommodation’. So that will include the train ticket to go to the park and the drinks, meals and hotel nights bought in the national park (but presumably not drinks, meals and hotel night from estabishments outside the park). Won’t those people have eaten meals and drunk coffees and beers, quite likely for similar value, had they not gone to the park at all? Also it is looking at the income side of the consumer outlets in the parks – but not at their expenditure. If expenditure is greater than costs, and the outlet is on the way to bankruptcy, should it still be counted as providing economic value? According to this approach, yes. The authors are not economists, and when it comes to translating visits to dollars, the quality of the research drops.
Of course the researchers, and the BBC, both know that $600bn is meaningless unless compared with some other figure. So what are possible points of comparison? In the BBC article we have:
The tourism income vastly outweighs the $10bn a year spent safeguarding them, says a Cambridge University team.
(which is a shorter version of the final paragraph of the journal paper.)
Comparing this figure with the $600bn is like comparing the number of strawberries I grow in my garden, with the number that Morocco exports. Both about strawberries, but that’s about as far as it goes.
The other comparison we are offered is from Prof. Andrew Balmford, lead author of the report, who is quoted by the BBC as saying
the $10bn a year currently spent on these areas is small when compared with the quarterly profits of the likes of the computing giant Apple. Stopping the unfolding extinction crisis is not unaffordable. Three months of Apple profits could go a long way to securing the future of nature.
which strikes me as a very, very, very bad argument. I trust my daughter will make no arguments like that in her philosophy A-level exam.
I hear ‘the economic value is …’ statistics on the news most days, be it for the value of the arts, or the savings to the health service if speed limits are reduced, or the benefits to the economy that immigration brings. The tiny bit of research I’ve done this morning only goes to confirm my suspicion that we might as well disembowel cockerels and read their entrails.
Of course, it hurts. The researchers and news teams are doing their best to give us some basis for understanding the situation, all as part of the public discussion that, we hope, will help policy makers make better policies. And this post is purely critical: I have no clever method of converting, eg, visits to parks into ‘economic value’. And I’m sorry to have picked on what is probably useful and (except for the money bit) valid research. But all the same: those ‘economic value of ’ statistics: don’t swallow them!