Estimated Economic Impact of Recreational Fishing On

Michigan State University Extension
Tourism Educational Materials - 33510310
06/06/02

Estimated Economic Impact of Recreational Fishing On Minnesota Waters of Lake Superior

Source: Minnesota
Authors: Gunderson, Jeff; Kreag, Glenn
ID: Publication F6
Year: Spring 1991

SUMMARY

The recreational fishing industry (including charter
fishing) on the Minnesota waters of Lake Superior
contributed approximately $9.74 million dollars in direct
expenditures to the state in 1990. Based on the
assumptions described below and using an economic
multiplier range of 1.3 to 1.8, the state economic impact
was estimated at $12.67 million to $17.54 million.
Estimates of the state economic impact can go as high as
$34.43 to $49.06 million, depending on the source of the
information.

Lake Superior's charters fishing businesses contributed
$6.47 million and non-charter recreational fishing
contributed $3.27 million of the total $9.74 million in
direct 1990 state expenditures. Using the economic
multipliers listed above, charter fishing businesses
generated $8.41 to $11.65 million in state economic impact
while non-charter recreational fishing generated $4.25 to
$5.89 million.

METHODS AND ASSUMPTIONS

Charter Fishing

The 1990 estimated economic impact of the charter fishing
industry was based on a 1987 survey conducted by Gunderson
and Mahoney (Gunderson, 1988). The economic information
generated in that survey has been revised in this report
to reflect the current number of charter captains and has
been adjusted for inflation as reflected in the Consumer
Price Index. The 1987 study found that each charter boat
generated $56,350 in direct customer spending in the
Duluth-Superior metropolitan area and throughout Minnesota
(we did not include the spending at home and in transit
for the 15 percent of the clients that came from out of
state). This total includes spending for charter fees,
licenses, food, lodging, travel, and entertainment.

If we adjust for inflation to estimate 1990 spending, then
each charter boat generated approximately $64,730 in
direct state spending. Therefore the 100 charter boats
operating in 1990 generated a total of $6.47 million in
direct state spending ($64,730 X 100 = $6.47 million). See
Figure 1.

(Vis. 1)

People who go charter fishing on Lake Superior also spend
money on dining, lodging, and other vacation expenses.
This totals $6.47 million in direct state spending and
includes spending in the Duluth-Superior metropolitan
area. Sixty-five percent of this money is spent within 10
miles of the charter boat.

Expenditures coming into a community from outside are
subject to a multiplier effect which creates additional
economic activity. For our region and this industry, it is
reasonable to assume that a multiplier between 1.3 and 1.8
applies, depending on the local economy (personal
communication, Dr. Wayne Jesswein, University of
Minnesota-Duluth). Applying this multiplier range results
in a 1990 estimate of a state economic impact of $8.41 to
$11-65 million due to the charter fishing industry. 1

-- 1 The Minnesota charter fishing economic impact
includes some spending that occurred in Superior,
Wisconsin. This is because local spending was defined in
the 1987 survey as that spending which occurred within ten
miles of the charter boat. We, therefore, cannot separate
money spent in Duluth or Superior by Twin Ports charter
clients.

It was estimated in the 1987 study that each charter boat
generated $37,000 in direct local spending. Adjusted for
inflation and the increased number of charter boats, this
translates to direct local expenditures of $4.25 million
and a local economic impact of between $5.52 and $7.65
million. Local spending is spending that occurred within
10 miles of the charter boat. See Figure 2. (Vis. 2)

Non-charter Recreational Fishing

The estimated economic impact of the non-charter
recreational fishery is based on information from the
1985 National Survey of Fishing, Hunting, and Wildlife
Associated Recreation, which was conducted by the U.S.
Fish and Wildlife Service (USFWS). The survey reports that
on average, $34 was spent per day of Great Lakes fishing.
Adjusting for inflation, the 1990 expenditures per day
were estimated at $41.25. Angler days were estimated from
Minnesota Department of Natural Resources (MN DNR) summer
creel surveys that report the number of Lake Superior boat
and shore angler trips. Minnesota DNR angler trips are
essentially equivalent to the angler days of the USFWS
survey. The term angler days will be used in the rest of
this report.

Angler days over the last 10 years as estimated by the
Minnesota Department of Natural Resources (Spurrier 1985
and Morse 1989), have ranged from a high of 130,000 days
in 1983 to a low of 58,000 days in 1984. There were 88,300
non-charter angler days estimated in 1988 and 77,100
estimated in 1989 (no estimate was available for 1990).
The 1988-89 average of 82,700 angler days was used since
it is representative of recent levels of non-charter
fishing activity.

Anglers were divided into state resident (91 percent) and
nonresident (9 percent) categories (personal communication
with Stephen Morse, MN DNR). Multiplying the 75,257
resident angler days times $41.25 per trip resulted in
direct state expenditures of $3.10 million dollars. We
estimated nonresident angler expenditures in Minnesota by
interpreting USFWS survey data. We combined trip
expenditures and license fees and omitted equipment
expenditures to provide an estimate of non-resident
expenditure within Minnesota of $22.03 per fishing day.
Total non-resident expenditures were, therefore, estimated
to be $3.27 million. Using the multiplier range of 1.3 to
1.8, the 1990 estimated state economic impact of the non-
charter recreational fishery was $4.25 to $5.89 million.

(Vis. 2) Figure 2

* Includes spending Duluth/Superior and Minnesota's North
Shore.

Minnesota DNR 1990 Information (personal communication
with Stephen Morse) shows that approximately 45 percent of
anglers came from hometowns within 75 miles of where they
fished Lake Superior, 47 percent came from 76 to 300 miles
away. These data are inadequate to separate the state and
local economic impacts on non-charter recreational
fishing. We do, however, assume that the majority of the
impact occurs locally.

Total

The combined 1990 charter and non-charter recreational
fishing expenditures in Minnesota were estimated at $9.74
million, as described above. The state economic impact of
those direct expenditures was then estimated at $12.67 to
$17.54 million, based on the economic multiplier range of
1.3 to 1.8. See Figure 3.

(Vis. 3)
* Includes spending in Duluth-Superior metropolitan area.

Another estimate of the total economic impact of Lake
Superior recreational fishing can be derived solely from
the 1985 USFWS national survey. The survey reports that
610,000 resident days of fishing took place on Lake
Superior and its tributaries in 1985 (Table 83 of that
report). Multiplying the $41.25 expenditures per day
(corrected for inflation) by 610,000 resident fishing days
results in direct state expenditures of $25.16 million.
Out-of-state anglers (95,000 angler days) contribute an
additional $2.09 million in expenditures in Minnesota
(based on $22.03 per angler day for non-residents---our
interpretation of USFWS survey data). The total 1990 state
economic impact of recreational fishing on Minnesota
waters of Lake Superior was then $35.43 to $49.06 million,
using the multiplier range of 1.3 to 1.8. 2

-- 2 Multiplier Effect. Sport anglers spend money on
fishing equipment, travel, lodging, and related supplies.
These expenditures, in turn, can be viewed as sales, jobs,
wages, and taxes generated. Regional economic impact
analysis is an attempt to measure more than just the
initial direct expenditures. Secondary impacts are also
considered. The degree to which total economic impact
exceeds direct expenditures is a measure called the
regional economic impact multiplier.

The size of the multiplier depends on the size of the
region under study. Since economic development is
regionally oriented, impacts outside the region are not
counted, and are referred to as leakages. If all the money
spent in the region leaked out of the region, the
multiplier would equal one (no change). If half the money
spent within the region leaked out and half stayed, there
would be an initial economic multiplier effect of wages,
and taxes. If half of this second cycle leaked out and
half remained, an additional .25 in economic impact factor
would be added to the multiplier making the total economic
impact 1.5 + .25 = 1.75. There would be another .25 of
money to enter a third cycle of sales, jobs, wages, and
taxes. If all of this leaked out of the region, there
would be no additional impact and the total economic
impact multiplier would be 1.75.

DISCUSSION

The estimated economic impact of the Minnesota Lake
Superior recreational fishery was based on dated
information and a number of assumptions. One assumption
was that the 1987 charter fishing survey was still
reflective of the industry as it has grown from 67
licenses in 1988 to over 100 licensees in 1990. The
charter fishing estimates are conservative since only the
76 percent of charter clients who said they came only or
primarily for charter fishing were included in the
estimates. Nonresident charter client travel to the
charter location was not included because we did not know
there they spent their money even though a portion of it
was surely spent in Minnesota.

We also assumed the Great Lakes-wide USFWS survey averaged
expenditures by all types of Great Lakes anglers (perch,
walleye, salmon, trout, smelt, etc.) from both boats and
shore. The USFWS also included estimates for fishing in
Great Lakes tributaries for smelt, steelhead, and salmon.
We did not incorporate Lake Superior tributary fishing in
our estimates of economic impact. Therefore, our estimates
not only exclude some Lake Superior fishing expenditures,
but underestimate the impact of boat anglers which, on
average, spend more than stream anglers. As a result, our
economic impacts estimates for non-charter recreational
anglers are conservative.

In 1985, the MN DNR estimated 49,477 angler days on
Minnesota waters of Lake Superior while the USFWS national
survey estimated 705,000) angler days (610,000 resident
days and 95,000 non-resident days) of fishing on those
waters. A large discrepancy exists between MN DNR
estimates of angler days on Lake Superior and those of the
USFWS survey. One factor that lowers the MN DNR estimates
is that winter and tributary fishing are not included in
the summer creel survey that we used. This still does not
explain the discrepancy. We do not support or defend
either estimates.

Economic impacts vary considerable depending on which
estimate of angler effort is used. While the estimates
presented here may not be as consistent or as precise as
we'd like, they do provide a range of estimates based on
the best information available. The direct expenditures of
all recreational fishing on Lake Superior is likely larger
than our estimate of $9.74 million derived from
Gunderson's 1987 Charter Fishing Survey and MN DNR creel
survey information, but smaller than the $27.25 million
estimated solely from the 1985 USFWS National Survey.

Spring 1991

For copies of this publication and the 1987-88 Charter
Fishing Study, contact Minnesota Sea Grant, 1518 Cleveland
Ave N #302, University of Minnesota, St. Paul MN 55108.
Phone: 612/625-9288 or FAX: 612/625-1263. Or Sea Grant
Extension, University of Minnesota, 208 Washburn Hall,
Duluth MN 55812. Phone: 218/726-8106 or FAX: 218/726-6556.
Request publication # F6.

The University of Minnesota is an equal opportunity
employer and educator.

Acknowledgments:

We would like to thank Dr. Jerrold Peterson, professor
of economics at University of Minnesota-Duluth, for his
review of this publication.

References:

1985 National Survey of Fishing, Hunting and Wildlife
Associated Recreation. 1988. U.S. Department of the
Interior. Fish and Wildlife Service. 167 p.

Consumer Price Index. Bureau of Labor Statistics, U.S.
Department of Labor, Government Printing Office,
Washington D.C. 20402.

Gunderson, J.L. 1988. 1987-88 Charter Fishing Study:
Minnesota Waters of Lake Superior, Minnesota Sea
Grant Research Report Number 27. 24 p.

Morse, Stephen, 1989. Completion Report: Spring
Anadromous, Lower North Sore Streams; Spring Anadromous,
Nemadji/Blackhoof; Spring Anadromous, Knife River; and
Lake Superior Creel Surveys. MN DNR Study 4, Job 166. 40
p.

Personal communication with Stephen Morse, MN DNR, 5351
North Shore Drive, Duluth, MN 55904.

Spurrier, J.R. 1985. Lake Superior Commercial Fish
Assessment Studies. MN DNR Completion Report 3-393-R-1. 25
p.

Jeff Gunderson is extension educator-fisheries and
associate extension professor, Minnesota Sea Grant
Extension Program. Glenn Kreag is extension educator-
tourism/recreation and associate extension professor,
Minnesota Sea Grant Extension Program.

Minnesota Sea Grant is a statewide program that funds
research, extension, and education projects related to
Lake Superior and Minnesota's water resources. It is
funded by NOAA, the University of Minnesota, the
Minnesota Extension Service, and the state legislature.
Sea Grant offices are located at the Duluth and St. Paul
campuses of the University of Minnesota.

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