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Published July 1978. Facts and recommendations in this publication may no longer be valid. Please look for up-to-date information in the Sea Grant Catalog: http://seagrant.oregonstate.edu/publication

Smith, Frederick J. (Frederick John), 1936-

Oregon State University. Extension Service/Marine Advisory Program

Oregon State University. Extension Service

Oregon State University. Sea Grant College Program

What are salmon worth? 
by Frederick J. Smith 
Extension Marine Economist 
Oregon State University 
Another title in the series 
Marine resource 
management 
Statements about and estimates of the 
economic value of salmon have been 
used extensively in salmon-management 
discussions. What are salmon worth, to 
tvhom, and for what purpose? At least 
seven studies have attempted to answer 
these questions. Several new salmon- 
value studies are underway. However, 
surprisingly few of these studies satisfy 
the diverse industry groups, 
policymakers, or even the researchers 
themselves. The reason is often confusion 
over the appropriate use of salmon-value 
estimates and the research methods used. 
This bulletin attempts to explain these 
studies in nontechnical language by 
reviewing the various reasons for 
researching the value of salmon, then 
explaining the various valuation methods, 
and finally reviewing existing studies. 
Why determine the 
economic value of salmon? 
Some salmon-value studies are 
undertaken to improve research methods. 
However, most studies originate from the 
need to make better salmon-management 
decisions. The economic value of salmon 
is one of several important factors taken 
into consideration in salmon-management 
decisions. The following are some of the 
commoner issues in which the economic 
value of salmon plays an important role. 
Allocating salmon between 
recreational harvest and commercial 
harvest. Anglers seek to demonstrate 
that salmon have a greater economic 
value when they harvest them. 
Commercial fishers seek to demonstrate 
a greater economic value for 
commercially harvested salmon. Each 
group seeks to convince management 
agencies that it should be allocated a 
larger share of the harvestable supply of 
salmon. 
Oregon State University 
Extension Marine Advisory Program 
A Land Grant / Sea Grant Cooperative 
SG 48       July 1978 
Allocating salmon between harvest 
(commercial or recreational) and 
escapement for spawning. Although it is 
generally agreed that escapement should 
always be sufficient at least to maintain 
the stock, there is some debate as to 
whether escapement should be increased 
to enhance future stocks. Some wish to 
demonstrate that those salmon that are 
allowed to escape for the purpose of 
increasing future stocks have a greater 
economic value if harvested today. 
Allocating salmon among comtnercial 
fisheries. Salmon are commercially 
harvested by hook and line, purse seine, 
and gill net. At one time, they were also 
harvested by traps and fish wheels. There 
is also a geographic character to salmon 
fisheries. The California salmon fishery is 
different from Oregon's, which is different 
from Washington's. Participants in each 
of these fisheries wish to demonstrate 
that salmon have a greater economic 
value when harvested by their methods 
and in their geographic area. 
For example, the participants in the 
Oregon salmon troll fishery contend that 
their product is of higher quality and 
that escapement is "automatic." However, 
participants in the Columbia River gill 
net fishery contend that their product is 
at the peak of maturity (size) and that 
their methods are much more efficient. 
Allocating salmon between Indian and 
non-Indian harvesters. Although this 
allocation is currently being determined 
by the courts, non-Indian harvesters 
would like to counter these court 
determinations by demonstrating a much 
greater economic value for non-Indian 
harvest. 
Protecting salmon from adverse 
environmental action. Dam construction, 
diversion of water for irrigation, heating 
of water by power plants, siltation of 
spawning areas, and water pollution are 
a few of the human-caused environmental 
impacts that reduce or destroy salmon 
stocks. Advocates for salmon wish to 
demonstrate that the economic value of 
salmon is greater than the economic 
value of dams, power plants, and 
irrigation. At a minimum, they wish to 
demonstrate that the value of salmon is 
sufficient to justify investing in fish 
ladders, cooling towers, diversion screens, 
and other measures to protect the salmon 
and offset the impact of human-caused 
environmental degradation. 
Justifying salmon enhancement 
(hatcheries, stream improvement, fish 
ladders, etc.). Salmon users wish to 
demonstrate that the economic benefit of 
salmon enhancement is greater than the 
cost. The term "benefit-cost ratio" is 
applicable in this case. The value of 
salmon is calculated in various ways 
(the benefit) and must be greater than 
the cost of enhancement. 
Allocating scarce management, 
research, and enhancement resources 
between salmon and other fish. 
Proponents of salmon wish to 
demonstrate that the economic value of 
salmon is greater than those of crab, 
ground fish, shrimp, tuna, etc. This 
information can then be used to justify: 
management that favors salmon 
harvesters, increased salmon research 
relative to research on other fisheries, 
greater salmon enhancement, and more 
favorable treatment for salmon harvesters 
(such as lower fees, gear subsidies, and 
tax exemptions). 
Justifying private salmon aquaculture. 
Salmon-aquaculture interests seek to 
demonstrate the economic value of 
salmon: to gain acceptance in the 
industry, to obtain favorable legislation, 
to obtain preferred treatment with 
regulatory agencies, and to rationalize 
their own long term investments. 
How can economic values 
be determined? 
There are various salmon-valuation 
methods that are appropriate to each of 
the issues identified above. However, 
there are few that will be equally 
appropriate for more than two or three 
of these issues at the same time—and 
none that will satisfy all. The fact is, 
most salmon-value research addresses 
only one issue at a time and has little 
relevance to others. However, people 
often misuse such research by applying 
results to issues unrelated to those for 
which the research was intended. 
A discussion of various methods for 
placing an economic value on salmon 
follows. Included are some observations 
on the appropriate uses of these methods. 
Salmon fishers' profits. This is a 
popular—and frequently misused— 
method of valuation. Researchers' 
calculations of fishers' profits can be 
arrived at by subtracting the cost of 
harvesting from the dockside value. 
However, researchers sometimes exclude 
certain costs from this calculation 
(for example, such fixed costs as 
depreciation, insurance, and interest). 
Also they sometimes include 
nonmonetary costs (for example, the 
value of owner-operator's time and 
investment). 
The fisher's profit figure—no matter 
how it is calculated—may have some 
value in deciding how to allocate public 
resources between salmon and nonsalmon 
fisheries and in fisheries management. It 
is inappropriate as the sole criterion for 
allocating salmon among harvesters, 
since it assumes purely economic 
objectives (which is not very realistic 
for recreational salmon harvesters). 
Dockside price. This measures the 
economic value that salmon buyers place 
on salmon. It is most often cited to 
demonstrate the value of salmon to the 
state or region (where it is multiplied by 
the weight). This method may also have 
some validity in allocating public 
resources between salmon and nonsalmon 
fisheries. It has also been used to justify 
enhancement and protective measures, 
although it may yield too conservative an 
estimate for such uses. It is inappropriate 
for allocating salmon between commercial 
and recreational harvesters because the 
price-setting mechanisms are different 
for each group. It also ignores 
secondary and other impacts of salmon- 
harvester sales. 
Commercial fishers' expenditures. 
This measures the economic value 
commercial fishers place on salmon. 
As with the salmon fishers' profit 
method above, you should recognize that 
some costs may not be included in this 
calculation. It is sometimes used as a 
proxy for harvesting efficiency. This is a 
very conservative estimate; commercial 
fishers do not consume the salmon 
but harvest for the benefit of others. They 
are adding value equal to expenditures, 
but only in the very first stage of salmon 
utilization. It may be an appropriate 
method of valuation if results are used to 
allocate salmon among the different 
commercial salmon fisheries. 
Recreational fishers' expenditures. 
This is sometimes used to estimate the 
value that anglers place on 
salmon. The anglers' expenses 
incurred in getting to the fishing site, 
cost of gear and equipment, and the cost 
of room and board on location are 
usually (not always) included in this 
calculation. This method has been 
compared with the commercial fisher's 
expenditure or profit method as a basis 
for allocating salmon between these two 
groups. 
How much more anglers would be 
willing to spend. It is useful to find 
out how much more an angler would be 
willing to pay over and above actual 
fishing expenditures. For example, if an 
angler actually pays $100 for a fishing 
experience but would be willing to pay 
an additional $80 before seeking some 
other recreational experience, he places 
a total value of $180 on the fishing 
experience. 
The angler is the harvester, processor, 
and marketer as well as the consumer, 
so this method is useful in justifying 
salmon protection and enhancement. 
It is also useful in allocating salmon 
between recreational and commercial 
fisheries, but only if similar criteria are 
applied to the commercial fisheries. 
Selling price of recreational fishing 
experience. The previous approach may 
be biased by the financial situation of 
anglers who participate in surveys 
(some have less money to spend than 
others). Researchers assume that, by 
asking anglers for the price at which 
they would sell recreational fishing 
rights, they can come up with a less 
biased value. Otherwise, this valuation 
approach has the same advantages and 
disadvantages as the above method. 
How much more salmon consumers 
would be rvilling to spend. Regardless of 
the retail price of salmon, there will 
always be some consumers willing to pay 
more. By calculating the additional 
amount consumers would be willing to 
pay for commercially harvested salmon, 
researchers derive the value of salmon in 
its ultimate use. This is a valuation 
method comparable to the "how much 
more anglers would be willing to spend" 
method discussed above and is referred 
to as "consumer surplus." These two 
methods provide one fair but not 
comprehensive basis for allocating 
salmon between the recreational and 
commercial fishery. A common use of 
this valuation method is in justifying 
salmon protection and enhancement. 
Increase in local and regional 
economic activity. The harvest, 
processing, marketing, and consumption 
of salmon generate employment 
and new wealth in the region. 
Expenditures for recreational fishing 
services also generate employment and 
new wealth. The increase in local and 
regional economic activity attributable to 
salmon represents a comprehensive 
regional measure of the value of salmon. 
It is useful in helping to justify certain 
management practices, salmon protection 
and enhancement, allocation between 
Indian and non-Indian, and allocation of 
public resources between salmon and 
nonsalmon fisheries. 
How much the public is willing to pay. 
This method of salmon valuation involves 
a theoretical increase in cost to the 
general public (for protection, 
enhancement, management, research, 
etc.) up to the point where the public 
rebels. If the public refuses to expend 
more than $100 million, that is the 
value the public places on salmon. This 
method of valuation provides a basis for 
allocating public funds among fishery and 
nonfishery uses. 
What economic valuation 
information is available? 
The pioneering work of Brown, Singh, 
and Castle at Oregon State University 
indicated a gross expenditure of $18 
million in 1962 by salmon and steelhead 
anglers. The authors estimated the 
demand for salmon and steelhead fishing 
days by Oregon anglers. Net economic 
benefits to the Oregon salmon and 
steelhead anglers were estimated to be as 
high as $5.7 million in 1962 dollars. 
At the time when Brown, Singh, and 
Castle were starting their work, Donald 
Fry of the California Department of Fish 
and Game was analyzing the value of 
commercially harvested salmon in the 
Sacramento and San Joaquin Rivers 
system. By assuming the "most efficient" 
harvest system (gill nets) and size of 
fleet, Fry demonstrated that salmon 
could be landed for $.38 per pound less 
than the dockside price—a profit of 
approximately $8.45 per fish. He argued 
that this would be the loss if dams or 
other water projects were to reduce the 
salmon runs. 
Jack Richards completed a study of 
the economic evaluation of Columbia 
River anadromous fisheries in 1968. 
Richards' objective was to determine the 
benefit-cost ratio of salmon-enhancement 
programs on the Columbia River, given 
the existence of dams and other salmon- 
degradation activities. Calculated 
benefits to commercial fishers were 
based on their profits, given the fishing 
inefficiency caused by overregulation. 
Richards' conclusions differed from Fry's, 
who assumed a "most efficient" fishery in 
his estimates. Richards calculated 
benefits to anglers based upon the 
amount anglers would be willing to pay 
a hypothetical owner of fishing rights for 
the opportunity to fish. He estimated the 
combined benefits of commercial harvest 
and angling (assuming some changes in 
the share of salmon going to each group) 
to be $13,805,098 in 1965. This 
compared favorably with enhancement 
cost of $9,508,320. 
Mathews and Brown estimated the net 
benefits generated from salmon sport 
fishing in Washington. They estimated 
the total expenditures directly related to 
fishing to be $19,921,039 in 1967. Their 
work included only direct cash costs to 
anglers, whereas earlier studies included 
indirect costs such as depreciation, 
meals, and motels. In estimating 
the net value of the salmon sport 
fishery, Mathews and Brown used 
the "For what price would you sell your 
fishing right?" approach. Answers ranged 
from $193 to $235 per year, depending 
on location in the state. 
Francis M. Schuler provided further 
analysis of the benefits and costs of 
salmon enhancement on the Columbia 
River. Schuler goes beyond previous 
work by attempting to use the consumer- 
surplus concept in estimating benefits. 
Further, Schuler suggests a reallocation 
of Columbia River salmon between sport 
and commercial fishers based upon 
their relative contribution in offsetting 
enhancement-program costs (through 
taxes) as well as the relative benefits to 
consumers. 
A 1976 report by Brown, Larson, 
Johnston, and Wahle provides improved 
harvest-benefit estimates for commercial 
and sport harvests of Columbia River 
salmon. They used the consumer-surplus 
approach for commercially harvested 
fish. They used 1962 data to estimate 
benefit to anglers, but they improved 
their estimates by using a more accurate 
measure of the effect of angler travel 
distance. Consumer benefits from 
increased commercial harvest were 
estimated to be $.80 per pound. Angler 
benefits were estimated to be $22 per 
day. 
Youmans and others have completed 
economic impact studies of several 
coastal counties in Oregon (Youmans, 
Collin, and Stoevener for Clatsop; 
Youmans, Rompa, and Ives for 
Tillamook). These studies included all 
commercial fisheries (not salmon alone) 
as a sector in the county economies. 
The authors calculated multipliers 
(indexes of the rate at which the sector 
contributes to new economic activity) 
and net economic impacts of the 
commercial fishery. 
In 1968 the Clatsop County income 
multiplier for commercial fishing was 
1.23, and the level of economic activity 
was $3,600,000. The seafood processing 
multiplier was 1.81, and the level of 
economic activity generated was 
$39,800,000. The Tillamook County 
fishing industry multiplier was 2.72 in 
1973. 
Assumptions, biases, 
and other pitfalls 
Since nobody has enough time or 
money to conduct a truly comprehensive 
study of salmon values, it is always 
necessary to make assumptions. 
Assumptions reduce the scope and 
complexity of the real world to a 
manageable size for research. If the 
assumptions are in error, the studv results 
may also be in error, but not always. 
Never accept or reject results because the 
assumptions appear to be wrong. 
All studies of salmon value require 
data from the industry. Before such data 
are gathered, researchers must develop 
methods for analyzing the data; such 
tools are often referred to as the "model" 
or "methodology." The model guides the 
researcher in collecting and analyzing the 
data so that specific questions can be 
answered. The model keeps the 
researcher on the right research track. 
However, if the researcher chooses a 
model inappropriate to the questions to 
be answered, any results are suspect. 
In the final analysis, although the 
economic valuation of salmon is 
important, it is only one factor in the 
economic, social, and political 
decisionmaking process that affects this 
resource. 
References cited 
Brown, William C, Douglas Larson, 
Richard Johnston, and Roy Wahle, 
Improved Evaluation of Commercially 
and Sport-Caught Salmon and 
Steelhead of the Columbia River, 
Oregon State University Agricultural 
Experiment Station Special Report 463 
(Corvallis, 1976). 
Brown, William C, Ahjmer Singh, and 
Emery Castle, An Economic 
Evaluation of the Oregon Salmon and 
Steelhead Sport Fishery, Oregon State 
University Agricultural Experiment 
Station Technical Bulletin 78 
(Corvallis, 1964). 
Fry, Donald H., "Potential Profits in the 
California Salmon Fishery," California 
Fish and Game, 48:256-267 (October 
1962). 
Mathews, Steven B., and Gardner Brown, 
Economic Evaluation of the 1967 
Sport Salmon Fisheries of Washington, 
Department of Fisheries Technical 
Report 2 (Olympia, 1970). 
Richards, Jack O., "An Economic 
Evaluation of Columbia River 
Anadromous Fish Programs." Ph.D. 
dissertation, Oregon State University, 
1968. 
Schuler, Francis M., "Distributional 
Considerations in the Allocation of the 
Production Costs of Marketable Public 
Outputs, With an Application to the 
Columbia River Salmon Hatcheries." 
Ph.D. dissertation. University of Rhode 
Island (Kingston, 1974). 
Youmans, Russell, Theodore Collin, and 
Herbert Stoevener, Impact of a Major 
Economic Change on a Coastal Rural 
Economy: A Large Aluminum Plant in 
Clatsop County, Oregon, Oregon State 
University Agricultural Experiment 
Station Bulletin 614 (Corvallis, 1977). 
Youmans, Russell, William Rompa, and 
Edward Ives, The Tillamook County 
Economy: A Working Model for 
Evaluating Economic Change, Oregon 
State University Extension Service 
Special Report 478 (Corvallis, 1977). 
7-78/5M 
OREGON STATE UNIVERSITY 
EXTENSION 
n SERVICE 
Extension Service,  Oregon State  University,  Corvallis, Henry 
A. Wadsworth, director. This publication was produced and dis- 
tributed in furtherance of the Acts of Congress of May 8 and June 
30, 1914. Extension work is a cooperative program of Oregon 
State University, the U.S. Department of Agriculture, and Oregon 
counties. Extension's Marine Advisory Program is supported in 
part by the Sea Grant Program, National Oceanic and 
Atmospheric Administration, U.S. Department of Commerce. 
Extension invites participation in its activities and offers them 
equally to all people, without discrimination. 


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