Evaluating economic impacts of protected areas in contexts with limited data; the case of three national parks in Iceland

Abstract

Economic impacts of protected areas (PAs) are receiving more attention in recent years and methodology in this area is advancing. Multiple studies have illustrated that PAs are a potent land use strategy to generate multiple and direct economic benefits. These benefits are driven by tourism as the central economic activity in PAs worldwide. This study takes the case of Snæfellsjökull, Vatnajökull and þingvellir National Parks (NPs) in Iceland, characterized by limited regional economic data and multi-destination and -purpose visitor travel patterns. Its main objective is to advance understanding of the economic impacts related to PAs in the context of limited data availability. Our analysis is based on the widely used Money Generation Model (MGM2) -methodology, localized to the Icelandic context by using Icelandic labour data and national input-output (I-O) tables regionalized using the Flegg Location Quotient (FLQ). We provide a consistent approach for handling multi-destination and -purpose trips, and separating spending data between local and overall impacts. Based on 2019 visitor and economic data, the visitors (N = 2087) spent, on average, $113 per day in the parks and generated estimated total economic impacts between $30-99 MM with 347-1140 jobs generated across the study sites. For example, in Vatnajökull NP's southern region, the jobs supported locally by the park constituted 36% of all the jobs in the municipalities. Combined tax revenue to the state from the three parks was $88 MM. The localized methodology generated similar economic impacts as earlier studies but showed that employment impacts were previously overestimated by the default models. Our approach and findings can be used as a reference for others applying the MGM2 or similar methods, and they support policy development, decision-making and informed discussion between researchers, practitioners in PA and tourism management, municipalities and communities around PAs. Being able to show economic impacts is increasingly important for PAs to ensure sustained funding amid budget cuts and the transition of government bodies to business units. Limitations of the study include a lack of winter data for Vatnajökull and þingvellir NPs and broad categorization of the Icelandic economic data used in the I-O table regionalization. In further research, a comprehensive sustainability analysis is needed to complement the economic impact analysis and site-specific factors could be analysed in more detail.

Keywords: Economic impact analysis; Flegg location quotient (FLQ); Iceland; Input–output; Money generation model 2 (MGM2); Protected areas.