The Economic Value of Water and Ecosystem Preservation

Final Report to the
Texas Coastal Management Program
GLO Contract No. 05-018
The Economic Value of Water and Ecosystem Preservation in the Estuary and
Coastal Wetlands of San Antonio Bay
Mitchell L. Mathis, Ph.D.
Principal Investigator (posthumous)
Co-Authored By:
Liza Cushion
Paul Montagna, Ph.D.
Eric Biltonen, Ph.D.
David Yoskowitz, Ph.D.
with assistance from:
A.J. Espinosa
Ruthanne Haut
August 31, 2007

Table of Contents
Executive Summary.......................................................................................................... v
1. Overview of San Antonio Bay Region..................................................................... 1
1.1. Geographic Setting for the San Antonio Bay Region......................................... 1
1.2. Legal Setting in Texas Related to Freshwater Inflows ....................................... 2
1.3. Introduction to the Importance of Inflows.......................................................... 3
1.4. Conclusion .......................................................................................................... 5
2. The Role of Freshwater Inflows in Sustaining Estuarine Ecosystem Health in
the San Antonio Bay Region ............................................................................................ 6
2.1. Introduction......................................................................................................... 6
2.2. The Role of Freshwater Inflows to Sustain Estuarine Ecosystems..................... 6
2.2.1. Functional role of freshwater inflow........................................................... 6
2.2.2. Variable freshwater inflows........................................................................ 9
2.2.3. Effects of reduced freshwater inflows ...................................................... 10
2.3. Observed and Potential Effects of reduced freshwater inflows in the San
Antonio Bay Ecosystem................................................................................................ 12
2.4. Conclusion ........................................................................................................ 15
3. Characterization of Ecotourism in the San Antonio Bay Region of Texas ....... 17
3.1. Introduction....................................................................................................... 17
3.2. General Overview of Ecotourism ..................................................................... 18
3.3. Ecotourism in the San Antonio Bay Region..................................................... 20
3.3.1. Protected Areas of the San Antonio Bay: Valuable Natural Assets ......... 20
3.3.2. The Economics of Multiple Nature Tourism Services ............................. 25
3.3.3. Economic Impact of Ecotourism .............................................................. 28
3.4. Conclusions....................................................................................................... 30
4. Estimating the Value of Freshwater Inflows Supporting Ecotourism............... 32
4.1. Introduction....................................................................................................... 32
4.2. Key Site Details for the Analysis...................................................................... 33
4.3. Travel Cost Method - Analytical Approach and Description ........................... 33
4.3.1. Travel Cost Method - Survey and Data Description................................. 35
4.3.2. Travel Cost Method – Analysis and Results............................................. 36
4.4. Production Function Approach – Analytical Approach and Description ......... 38
4.4.1. Problems with representing freshwater inflows in a production function 38
4.4.2. Production Function Approach - Data ...................................................... 40
4.4.3. Production Function Approach – Analysis and Results ........................... 40
4.5. Conclusion ........................................................................................................ 43
5. The Socio-economic Environment of the San Antonio Bay Region ................... 44
5.1. County Socio-economic Information................................................................ 44
5.2. Analysis............................................................................................................. 54
5.2.1. Methodology............................................................................................. 54
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5.2.2. Sources / Data ........................................................................................... 57
5.3. Results of the study........................................................................................... 58
5.3.1. Shift – Share Analysis............................................................................... 58
5.3.2. Input-Output Analysis............................................................................... 65
5.4. Conclusions....................................................................................................... 67
6. Concluding Discussion............................................................................................ 70
7. References................................................................................................................ 78
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Table of Figures
Table 3-1. Acreage of Public Protected Areas.................................................................. 21
Table 3-2. Average Willingness to Pay by Activity (2002 Dollars)................................. 27
Table 3-3. Personal Income and Production Earnings By County, 2003 ($000).............. 29
Table 3-4. Direct Travel Impacts by County .................................................................... 30
Table 4-1. Descriptive Characteristics of key variables collected from surveys (for the
aggregated data set)........................................................................................................... 35
Table 4-2. Results of regression analysis for aggregate data set ...................................... 36
Table 4-3. Result of regression of impact of freshwater inflows on visitor numbers....... 41
Table 5-1. Population and Growth Rate by County, 1980-2006 ...................................... 45
Table 5-2. Age Distribution, 2005 .................................................................................... 46
Table 5-3. Ethnicity distribution, 2005............................................................................. 46
Table 5-4. Educational attainment, 2000 .......................................................................... 46
Table 5-5. Employment Shift-Share Analysis, 2001 – 2005 Aransas and Calhoun......... 59
Table 5-6. Employment Shift – Share Analysis, 2001 – 2005 Aransas............................ 61
Table 5-7. Employment Shift – Share Analysis, 2001 – 2005 Calhoun........................... 63
Table 5-8. Economic Impact-Aransas/Calhoun................................................................ 65
Table 5-9. Economic Impact-Aransas............................................................................... 66
Table 5-10. Economic Impact-Calhoun............................................................................ 67
Table 5-11. County Socio-economic Characteristics........................................................ 68
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Executive Summary
The San Antonio Bay Region, formed where the Guadalupe River meets the
Guadalupe Estuary, teems with life. The San Antonio Bay and its related
intracoastal system cover an area of approximately 100 square miles. The
majority of the freshwater inflows to San Antonio Bay come from the Guadalupe
and San Antonio Rivers which have historically supplied about 80% of the total
freshwater inflows into this estuary (Longley, 1994).
Estuarine ecosystems provide myriad ecosystem functions, including many
goods and services used by humans. These estuarine ecosystems are
dependent upon freshwater inflows in order to maintain their ability to function
properly. There are many complexities in the system due to relationships
between species, nutrients, and other input factors into the ecosystem.
In general, the roles of freshwater are relatively well understood, although the
precise impacts of marginal changes in flows are not known at this time. More
important than a large quantity of inflows is the large seasonal fluctuation of
inflows. Many organisms depend on the ecosystem for different periods of their
life cycles. Seasonal fluctuations, droughts, and floods are all necessary in order
to maximize the productivity of estuaries for fishery purposes. While increased
inflows generally have a positive and linear correlation with increased fish
populations, if inflows are consistently high, estuary productivity can decrease.
Impacts on the Freshwater Inflows to the San Antonio Bay
The San Antonio Bay region’s uniquely diverse habitats and ecosystems are
experiencing increasing pressure from human development. This ecosystem will
have to adapt to varying amounts of freshwater inflow due to human
development especially in and around the city of San Antonio. An adequate
amount of water is of critical importance to sustaining the remarkable biodiversity
of the Bay, yet the ecosystem’s water needs are only recently beginning to be
addressed. Given the mounting pressures on the environment, it is increasingly
important that adequate freshwater is allocated to sustain the ecosystem.
Ecotourism in the San Antonio Bay Region
As more and more people have become aware of the ecological treasures
that exist there, ecotourism has developed into a rapidly growing sector of the
regional economy. Ecotourism in the San Antonio Bay can have a significant
impact on the local economy. In 2003 more than 71,000 people visited the
Aransas National Wildlife Refuge to view flocks of migratory birds and other
wildlife. Ecotourists provide business to hotels, nature-tour operators and
restaurants. In addition, various hotels, RV parks, nature tours and outdoor
recreation stores advertise their role in the ecotourism industry and the
availability of good birding opportunities located nearby.
However, due to the lack of consistent and complete data, it is difficult to
quantify the economic impact of ecotourism on the San Antonio Bay region.
Currently, comprehensive data on the number of people that come to visit the
v

egion for ecotourism purposes does not exist hampering the estimate of their
economic impact. Regardless of these difficulties in measuring ecotourism
production and impact, existing evidence indicates that ecotourism is playing an
important role in the local economy.
However, despite the growth of the ecotourism industry, the Bay’s fragile
estuarine ecosystem is facing pressure from other economic activities. The
increased pressure on both surface water and groundwater resources upstream
by agricultural production, industry, and a rapidly growing urban population in
San Antonio has altered the timing and volume of river inflow to the Guadalupe
estuary. This delicate estuarine system is deteriorating because upstream water
users rarely consider the water needs of an ecosystem.
Need for Economic Analysis
An important obstacle to more widespread recognition of the ecosystem’s
water needs is that the economic value of using water to sustain the regional
ecosystem has never been quantified. Without ‘economic representation’ of this
value, it is difficult for water managers, planners, and users to consider the
ecosystem, along with agriculture, industry, and municipalities, when making
water use decisions. A fundamental element of the economic analysis is the
ecology of the bay and estuary, which is a complex system made up of
interdependent elements (e.g. water, flora, land, etc.). However, the complexity
of the science underlying the understanding of freshwater inflows on marine and
river ecosystems has led to infighting resulting in little progress on the issue
(Korosec, 2007).
Ultimately, if the unique ecosystems of the San Antonio Bay are to survive,
they must be recognized as a valuable natural asset as well as an economically
important water user (Mathis, 2004a). This study attempts to more fully develop
the economics behind freshwater inflows in order to better inform the ongoing
debate on environmental flows.
Travel Cost Method
The Travel Cost Method was used to estimate the value of freshwater inflows
on the eco-tourism sector operating in the San Antonio Bay area. The Travel
Cost Method uses actual expenditure data to estimate a ‘value’ for the natural
resource services which support the ecotourism service that is consumed.
The Travel Cost Method analysis showed that the average visitor (who
resided in Texas) experienced a consumer surplus of $273 dollars per visit, while
the average reported expenditure per Texas resident was $231. The consumer
value is the economic benefit received in excess of actual travel expenditures
indicating a high value of freshwater inflows.
Production Function Approach
An ecotourism production function was estimated as a function of inflows and
other key variables. This function was then used to calculate a marginal value for
freshwater inflows. For this study, the freshwater inflows are the only input to
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ecotourism included in the model. The output, ecotourism, is equated with the
number of visitors to the Aransas National Wildlife Refuge.
There are several problems with using a production function approach to
estimating the value of freshwater inflows to the production of ecotourism. The
primary problem is the complex relationship between inflows and the status of
the ecosystem. The inflow regime poses particular problems because:
• Inflows are continual rather than applied in discrete amounts;
• Inflows vary across the year with important high and low flow periods;
• Inflows experience periods of flood and drought which are also useful
to maintaining the ecosystem; and,
• The resulting ecosystem services are not simply an increasing
function of freshwater inflows
Therefore, the present model is viewed as an initial step in addressing this
issue and not as a definite conclusion.
The estimated tourism-water production function indicated that freshwater
inflows have a positive relationship with visitor numbers up to a flow rate of 2,400
cfs. The average flow rate from the data was calculated as 1,995 cfs. An
incremental increase of 100 cfs was modeled as an increase of 25 visitors for an
incremental increase of $12,700 in eco-tourism expenditures. This should be
interpreted as an early indicator that freshwater inflows have a positive impact on
the ecosystem services that tourists use.
Socio-economic Environment of the San Antonio Bay
The socio-economic environment of the San Antonio Bay was examined with
a particular concern on the status of the fishing industry. The socio-economic
analysis looked at Aransas, Calhoun, and Refugio counties. The analysis used
Shift-Share analysis and input-output analysis.
Shift-Share
Shift-Share analysis was conducted to study the competitiveness and growth
and decline of local industries. This study used employment changes from 2001
to 2005 to identify the sources of growth and decline in local areas.
Input-output Analysis
Input-output modeling was used to reveal the complete impact on the
economy of employment change in a particular sector. The input-output model
uses a matrix representation of a nation’s (or a region’s) economy to predict how
changes in one industry will affect other industries.
Aransas, Calhoun, and Refugio counties have many issues in common and
several that are unique to the county itself. Fishing employment in Aransas has
eroded at a much faster rate during the time period under study than Calhoun. A
negative competitive share in Aransas and zero value for Calhoun suggests that
the county does not have a comparative advantage in this sector. Given that the
vii

main fisheries are shrimp and oysters it could be argued that these counties
would continue to have an advantage, particularly in oysters, where global
competition is not as relevant as it is in shrimping. Of greater interest is that the
total economic impact of employment loss in the fisheries sector was not nearly
as great in the other employment sectors analyzed.
In the case of Aransas, the growth in mining and construction was able to
offset the decline in fisheries and manufacturing, and create a net 376 jobs and
income of $17.6 million. For Calhoun, the study period coincided with a scaling
back of expansion at the petro-chemical firms and this is reflected in the declining
employment numbers. Yet, it still illustrates the greater impact that each of the
three industries has on the economy than fishing.
It is felt that shrimping will continue to feel pressure from imports as well as
from input prices, such as fuel. Oystering may still have a competitive advantage
given the demand for fresh product. This fishery will face pressure in the form of
higher input prices as well as habitat loss. One could conclude that even if there
is a loss of jobs in the fishery sector that it could be made up in other sectors,
assuming they grow, and that the impact would actually be greater. However,
there might be value beyond the economic output of the fishing sector.
Texas and the Coastal Bend have a rich commercial fishing history. There
are many who value its presence beyond the product that it can provide. These
values that are not as tangible can add to the impact that the industry has. For
example, there are tourists who come on vacation and enjoy the experience of
going to the docks to buy shrimp, fish, or oysters directly off the boat. If this
experience is taken away, an important question is whether the tourist would
continue to holiday in this region.
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1. Overview of San Antonio Bay Region
1.1. Geographic Setting for the San Antonio Bay Region
The San Antonio Bay Region, formed where the Guadalupe River meets the
Guadalupe Estuary, teems with life. The San Antonio Bay and its related
intracoastal system cover an area of approximately 100 square miles and include
Mission Lake, Guadalupe Bay, Hynes Bay, Espiritu Santo Bay and Mesquite Bay
(Figure 1-1). Matagorda Island serves as a barrier separating the San Antonio
Bay from the Gulf of Mexico. The bay averages less than six feet in depth (East,
2001). Espiritu Santo Bay and Matagorda Bay are located just to the north of San
Antonio Bay while Mesquite Bay and Aransas Bay are located to the south.
Figure 1-1. San Antonio Bay and surrounding area.
The main connection to the Gulf of Mexico for San Antonio Bay is through
Pass Cavallo at the southern end of Matagorda Bay. San Antonio Bay is
hydraulically connected by the Gulf Intracoastal Waterway (GIWW), a dredged
channel that runs along the entire Gulf Coast. The GIWW is a maintained
navigation channel that is more than 300 feet wide and about 15 feet deep.
1

The majority of the freshwater inflows to San Antonio Bay come from the
Guadalupe and San Antonio Rivers. Historically, the Guadalupe and San
Antonio Rivers have supplied over 79.6% of the total freshwater inflows into this
estuary (Longley, 1994). The gauged areas of the Guadalupe River alone
accounted for 56.9% of the total freshwater inflows into the estuary (Longley,
1994). The Guadalupe River originates in the southern edge of the Edwards
Plateau. The Upper Guadalupe is shallow, with swift flows, receiving inputs from
many minor tributaries that flow intermittently following rainfall events. The San
Antonio River originates within the San Antonio city limits, on the northern edge
of the South Texas Brushlands, and flows in a southeasterly direction. The San
Antonio River joins the Guadalupe River approximately 16 km (9.94 miles) before
entering San Antonio Bay on the Texas coast.
The Guadalupe Estuary has a definite salinity gradient with relatively large
areas having different salinities at intermediate inflow volumes. It has fresher
areas near the Guadalupe River mouth (Mission Lake Guadalupe Bay, Hynes
Bay), and high salinity areas in Espiritu Santo Bay near Pass Cavallo, one of the
major bay-Gulf of Mexico passes.
The Guadalupe Estuary and related wetlands are facing unprecedented
pressure from upstream human water use, as agricultural production, industry,
and rapidly growing urban populations are claiming increasing portions of flows.
Some water authorities have begun to consider the option of reusing treated
effluent rather than allowing it to enter the rivers as return flows that would
provide freshwater to the Estuary. Complicating this problem, some downstream
water rights have been granted based on a certain level of return flows (Kaiser,
1998).
1.2. Legal Setting in Texas Related to Freshwater Inflows
Surface water in Texas is regulated by a permitting system where each water
right has a priority date. Section 11.027 of the Texas Water Code outlines the
principle that those who are “first in time” to apply for a permit are “first in right” to
take or divert surface water and apply it to a defined beneficial use. If there is a
water shortage, the senior rights holders are entitled to extract their share before
the junior holders, who may receive none of their permitted share (State of
Texas, 2005). During a period of extremely low inflows, such as during the
drought of 1956, there is a possibility that water holders may extract all available
water, leaving no inflow to reach the San Antonio Bay.
This possibility has prompted Texas lawmakers to consider mandating that
some freshwater be appropriated for the purpose of maintaining beneficial
environmental flows since currently no permits may be issued to set aside for
environmental needs or bay and estuary inflows. Texas Water Code §11.147
defines a beneficial inflow as “a salinity, nutrient, and sediment loading regime
adequate to maintain an ecologically sound environment in the receiving bay and
estuary system that is necessary for the maintenance of productivity of
economically important and ecologically characteristic sport or commercial fish
2

and shellfish species and estuarine life upon which such fish and shellfish are
dependent (State of Texas, 2005).”
In response to House Bill 2 (1985), Senate Bill 683 (1987), Senate Bill 1
(1997), and other legislative directives, the Texas Water Development Board
(TWDB) and the Texas Parks & Wildlife Department (TPWD) jointly maintain a
data collection and analytical study program focused on determining the effects
of and needs for freshwater inflows to the state's bays and estuaries. A schedule
announced in 1998 provided for the study through 2006 of all of the Texas
estuaries, minor bay systems, river estuaries, and coastal preserves.
1.3. Introduction to the Importance of Inflows
Within this context, Texas Parks and Wildlife determined that 1.15 million
acre-feet of fresh water is the lowest inflow target value that fulfills the biological
needs of the estuary on a seasonal basis (Texas Water Development Board,
2006). Nonetheless, as water demands continue to increase over the next two
decades, low flows during extended droughts may be prolonged to the point of
causing serious permanent ecological damage to the estuary. For example,
during the drought of 1956, the inflow was as low as 275,082 acre-feet (Texas
Water Development Board, 2006). Potential damages to the San Antonio Bay
could in turn have significant adverse effects on local communities and economic
activities, such as tourism and fishing that are supported by these ecosystems.
San Antonio Bay is especially vulnerable to changes in timing of flows since
it lacks a direct connection to the Gulf. It may become mostly fresh following a
flooding event or hyper-saline during drought conditions. From 1941 to 1987, the
Bay received an average of 2.3 million acre-feet of inflow annually. The overall
rates of freshwater inflows increased during this period, “which can be attributed
to increased urbanization in the watershed, increased groundwater pumping and
return flows and increased precipitation in the latter period (Longley, 1994).”
In addition to the existing information regarding freshwater inflows data
ecological freshwater requirements, some information also exists concerning the
economic value of bays and estuarine ecosystems along the Texas coast. A July
2003 publication of the State of the Bays estimated that the Texas coastal
estuaries as whole generated roughly $2 billion annually from recreational fishing
alone. Commercial fisheries averaged another $266 million annually (Mckinney,
2003). Travel to coastal-based destinations accounts for about 30% of travel in
Texas, translating into $10 billion in economic benefits each year. Much of these
benefits are dependent on healthy estuaries (Mckinney, 2003).
The Texas Water Resources Institute (TWRI), in the May 2001 study,
“Impacts of Recreational and Commercial Fishing and Coastal Resource-Based
Tourism on Regional and State Economies”, also yielded important data
regarding the economic value of Texas’ estuaries (Jones and Tanyeri-Abur,
2001). Their study area covered the six Texas bays and estuaries, including the
Sabine-Neches estuary, the Trinity-San Jacinto estuary, the Lavaca-Tres
Palacios estuary, the Guadalupe Estuary, the Nueces-Mission-Aransas estuary,
3

and the Laguna Madre estuary. 1 Separate analyses were conducted for each
estuary to estimate direct and total economic impacts of the recreation-related
and commercial fishing sectors.
In the TWDB definition of estuaries, some counties are included in more than
one estuary. Thus, a summary analysis was conducted separately to avoid
double counting and to estimate aggregate impacts. The summary analysis, for
the entire Texas Gulf Coast, calculated that the direct impact of total recreation
on the Gulf Coast was $867 million in 1995 (Jones and Tanyeri-Abur, 2001).
Additionally, commercial fishing in the bays contributed another $37 million, and
total commercial fishing added $175 million. It is estimated that bay and estuary
recreation-related sectors sales to final demand stimulated total regional
business sales of about $1.6 billion, personal income of $651 million, value
added of $999 million, and around 32,168 jobs in the Texas Gulf Coast region.
Impacts of commercial fishing in the bay contributed $57 million in total output,
$17 million in personal income, $40 million in value-added, and 1,190 jobs. The
impact for all of Texas was generally slightly higher, and commercial fishing in
the Gulf had an additional impact as well.
Specifically, the San Antonio Bay and Guadalupe Estuary support several
commercial and recreational fisheries. Commercial fishing in the area provides
over $20 million in revenue, supporting hundreds of jobs, while recreational
fishing also contributed thousands of dollars in revenue to the regional economy.
The TWRI study approximated recreational and travel spending related to the
Guadalupe Estuary, including recreational fishing and nature-based tourism, at
around $155 million in 1995 (Jones and Tanyeri-Abur, 2001).
4
In 2000, more than
4.9 million people participated in fishing, hunting, and wildlife watching in Texas
(US Department of the Interior, Fish and Wildlife Service et al., 2003). Naturebased
tourism in the Guadalupe estuary alone generated $11 million in revenue
and created 275 full-time jobs (Jones and Tanyeri-Abur, 2001).
In addition to recreational and commercial fisheries, the Bay and Estuary
support a burgeoning nature-based tourism sector. The Aransas National Wildlife
Refuge hosts an array of wildlife, including alligators, javelina, snakes, bobcats
and the endangered whooping crane. Aransas National Wildlife Refuge (ANWR)
is often listed one of the top birding sites in North America (Konrad, 1996).
ANWR and Matagorda Island are also included as a part of the American Bird
Conservancy’s “Important Bird Areas Program (American Birding Conservancy,
2006).” Due to the high bird diversity and the presence of rare and endangered
species, Aransas is considered one of America’s top 50 birding locations. 2 The
Bay area is also part of the Great Texas Birding Trail and draws thousands of
bird enthusiasts each year. These activities are vital to the regional economy,
and they depend upon the health of the estuary and surrounding wetlands, which
requires freshwater inflows for its sustenance and conservation.
1 As individual units defined by Texas Water Development Board.
2 As selected by American Birding Association members at the 1994 Minot, ND convention.

According to the Rockport-Fulton Chamber of Commerce, between 5,000
and 10,000 ecotourists visit the four-day Hummer/Bird Festival annually (Ridgely,
2005). A survey sent to festival attendees in 1995 determined that approximately
4,500 nonresident visitors to the festival contributed $1.1 million to the local
community (Kim, Scott et al., 1998). The Chamber of Commerce speculates that
the total direct expenditure during the festival is much higher today because four
‘major properties’ have since been constructed, allowing more visitors to attend.
During the festival, there are no hotel vacancies in town.
The Guadalupe Estuary is the winter home to the only self-sustaining
population of endangered whooping cranes. Reduced inflows may jeopardize the
survival chances of this rare bird which draws thousands of bird-watchers to the
area every year. Whooping cranes depend on blue crabs as their primary food
source during the winter months. When freshwater inflows are high, there are
more blue crabs available for the cranes to eat. TPWD data suggests that water
inflows greater than 1.3 million acre-feet annually results in low enough salinities
in the estuary to produce high numbers of blue crabs (Longley, 1994). In San
Antonio Bay, the years with the highest harvests all had inflows greater than 3
million acre-feet (Stehn, 2001). In times of lower inflows, blue crab populations
fall sharply resulting in an increase in crane mortality (Stehn, 2003).
This is only one example of the many complex ecosystem interactions that
are disrupted by fluctuations in freshwater inflows. Without an intact ecosystem,
the entire region could lose millions of dollars that are generated by tourism
revenue from fishing, hunting, wildlife viewing and other commercial and
recreational industries that depend on an ecologically sound system. Maintaining
adequate freshwater inflows also benefits area homeowners since studies have
shown that water-based features (including intact wetland ecosystems)
significantly enhance property values (Crompton, 2004).
1.4. Conclusion
This section has provided a brief introduction to the San Antonio Bay region.
There was also a discussion on the importance of freshwater inflows to the
ecology and economy of the Bay. The management of these inflows is the main
motivation behind this study. In particular, there is a need to develop new tools
and methodologies to develop knowledge to guide decision makers.
An estimated value for the water in the production of ecotourism can help to
establish the economic rationale for using scarce water to preserve and maintain
the Bay’s ecosystems. While existing agricultural economics literature provides
some insight in the valuation of water as an input in production, and tourism
economics provides additional insight into the nature of the tourism production
function and product, new methodology must be developed in order to rigorously
examine the value of water in ecotourism production. Ultimately, if the unique
ecosystems of the San Antonio Bay are to survive, they must be recognized as a
valuable natural asset as well as an economically important water user (Mathis,
2004a).”
5

2. The Role of Freshwater Inflows in Sustaining Estuarine Ecosystem
Health in the San Antonio Bay Region
2.1. Introduction
Estuaries are vital aquatic habitats for supporting marine life, and they confer
a multitude of benefits to humans in numerous ways. These benefits include the
provision of natural resources used for a variety of market activities, recreational
opportunities, transportation and aesthetics, as well as ecological functions such
as storing and cycling nutrients, absorbing and detoxifying pollutants, maintaining
the hydrological cycle, and moderating the local climate. The wide array of
beneficial processes, functions and resources provided by the ecosystem are
referred to collectively as “ecosystem services.” From this perspective, an
estuary can be viewed as a valuable natural asset, or natural capital, from which
these multiple goods and services flow (Constanza, d'Arge et al., 1997).
The quantity, quality and temporal variance of freshwater inflows are
essential to the living and non-living components of bays and estuaries.
Freshwater inflows to sustain ecosystem functions affect estuaries at all basic
physical, chemical, and biological levels of interaction. The functional role of
freshwater in the ecology of estuarine environments has been scientifically
reviewed and is relatively well understood. This role is summarized in section
2.2, after a brief overview of the geographical context of the San Antonio Bay
Region in the next section. Section 2.3 follows with discussion of the impacts of
reduced freshwater inflow to the San Antonio Bay. Section 2.4 concludes with
some general observations.
2.2. The Role of Freshwater Inflows to Sustain Estuarine Ecosystems
The following list of the roles of freshwater inflows in sustaining estuarine
ecosystems is taken from Longley (1994) and is accompanied by a brief
explanation of each of these effects. These functions of freshwater inflow apply
to estuaries in general and may not apply specifically to the San Antonio Bay.
2.2.1. Functional role of freshwater inflow
Dilution of Seawater
A primary role of freshwater inflows is the mixing with seawater to create
brackish conditions typical of most bays and estuaries. Many commercially and
recreationally important species rely on the lower salinity conditions of estuaries
for at least some portion of their life cycle.
Dilution of contaminants
Freshwater inflow into bays and estuaries carries with it contaminants from
land surfaces within the watershed. The contaminants are transported into bays
and estuaries where they are diluted in the greater volume of water. The dilution
6

effect is limited by assimilative capacity of bays and estuaries and their various
habitats.
Creation and maintenance of nursery habitats
Freshwater inflows are vital to the creation and maintenance of estuarine
habitats which provide food and protection to many organisms including finfish,
crustaceans, birds, reptiles, and mammals.
Reduction of metabolic stresses in estuarine dependent organisms
Salinity concentrations in bays and estuaries are naturally variable. To deal
with the variability, all estuarine organisms have a range of salinity
concentrations that they can tolerate based on their ability to regulate
concentrations of internal body salts relative to environmental salinity. Drastic
changes in salinity regimes can impair an organism’s ability to maintain osmotic
balance triggering metabolic stresses. Metabolic stresses can lead to increased
incidence of disease, parasitism and can have a negative effect on the ability of
organisms to forage and reproduce.
Transportation medium for beneficial sediments and nutrients; cycling, and the
removal of metabolic waste
Freshwater flows provide a medium for the transport of suspended
particulate matter including sediment, detritus (decaying organic material) and
organisms such as phytoplankton. Additionally, freshwater inflows transport
nutrients (e.g. nitrogen and phosphorus) from watershed point sources (e.g.
wastewater treatment) and non-point sources (i.e. runoff) to bays and estuaries.
Modification of concentration dependent chemical reactions of particles in the
saltwater environment
Various compounds adhere to the surface of suspended particles and
interact with other chemical constituents in the water column. Freshwater inflows
are not only a source of suspended particles, but also influence salinity levels
which have a direct effect on the rate of chemical reactions, ion-exchange,
coagulation and precipitation of particles.
Creation of a resource partitioning mechanism among estuarine plants and
animals
The combined effects of inflow on salinity, temperature, and turbidity
influence the distribution of ecological producers and consumers in the estuary.
When foraging, species must very often share one resource such as a specific
wetland area or mudflat. Resource partitioning ensures that multiple species
(crustaceans, finfish, birds) are able to utilize the same resource, but each in a
different way. Freshwater inflows ensure diversity among habitat types as well as
the consuming organisms dependent upon them.
7

Distribution and vertical movement of organisms in the water column related to
stimulation of positive phototaxic or negative geotaxic behavioral response
Positive phototaxis describes an organism’s upward movement in the water
column toward a light source; negative geotaxis describes an organism’s upward
movement in the water column against gravity. Changes in salinity, triggered by
changes in freshwater inflows, have been shown to have an effect on the
phototaxic and geotaxic behavior of estuarine organisms, especially larval finfish
and crustaceans.
Creation of a cutting and filling mechanism that affects erosion and deposition in
the bays and estuaries
Freshwater inflows play an important role in the physical characteristics of
bays and estuaries. They influence circulation patterns and can increase the
erosion of bay shorelines and habitat. Freshwater inflows also provide a
transport mechanism for sediments that can accrete on bay shorelines or deposit
in the open bay.
Creation of a salt wedge and mixing zone in concert with tidal action
Estuaries are areas where freshwater from land and saltwater from the
ocean mix. Less dense freshwater pushes against and rises above the more
dense saltwater forming a salt wedge. The movement of the salt wedge between
the freshwater and saltwater sources depends upon the volume of freshwater
flowing into the estuary and the tidal forces moving saltwater into and out of the
estuary.
Transportation of allochthonous nutritive materials into bays and estuaries as a
function of topography, rainfall and drainage area
Freshwater inflows bring external organic and inorganic materials into the
bays and estuaries, providing desirable nutrients to the ecosystem.
Migration and orientation of migratory organisms like the penaeid shrimps and
many marine fishes
The movement of organisms into and out of an estuary is dependent on
seasonal physical cues including tides, temperature, photoperiod, and salinity.
Additionally, some organisms, such as shrimp are dependent on currents and
tides for their large scale movement within the estuary.
Stimulation of some plants and animals that may be considered less desirable to
humans such as “red tide” and others
In addition to the estuarine organisms deemed as beneficial or benign by
humans, noxious organisms such as the naturally occurring red tide algae and
pathogenic bacteria such as Vibrio and fecal coliforms are present. Populations
of these undesirable organisms are limited by certain physical conditions
including temperature and salinity. In the case of fecal coliform bacteria,
8

freshwater inflow acts as a mechanism by which the bacteria is transported from
the watershed to the bay. In the case of red tide and Vibrio vulnificus, adequate
freshwater inflows can inhibit their growth, preventing adverse impacts to finfish,
shellfish, and humans.
2.2.2. Variable freshwater inflows
Dynamic nature of estuaries
Dynamic and seasonal fluctuations are realistic and necessary for Texas
bays and estuaries. Additionally, many multi-year patterns exist as well. The
seasonal timing of freshwater inflow is particularly important because adequate
inflows during critical periods of reproduction and growth are better for
ecosystem health and organism populations than constant inflow throughout the
year. However, extended low inflow conditions can lead to degraded estuarine
environments, loss of important nursery areas for economically valuable fish and
shellfish resources, and a reduction in the ability of the ecosystem to produce its
wide array of goods and services (Longley, 1994).
Large scale weather patterns on inflow
Dramatic fluctuations exist due to long-term weather patterns that produce
droughts and floods. The 22-year Hale double-sunspot cycle and the 18.6-year
lunar nodal cycle seem related to periods of drought. However, research has
demonstrated that over the past 300 years the recurrence interval of
approximately 20 years for major droughts is not accurate enough for forecasting
purposes (Longley, 1994). Observed climatic cycles have demonstrated
tendencies for clusters of wet or dry years to occur, and that several individual
years in a cluster will contain a particular extreme condition. For example, the
hot dry years during the 1980’s after a number of several wet years in the 1970’s
was a normal cycle for a semi-arid region such as Texas (Longley, 1994).
Human interference
Due to a rapidly growing population in the Gulf States, particularly along the
coast and in cities along major rivers that flow into the Gulf has created problems
that threaten the quantity and quality of the Gulf’s freshwater supply.
Innumerable rivers and streams carry industrial and community waste and street
runoff to the Gulf from many cities and communities, causing pollution of the
bays and estuaries. This pollution, combined with accidental coastal chemical
discharges and oil spills, sometimes dumps more wastes into bays and estuaries
than the systems can treat effectively, affecting the health and productivity of the
coastal ecosystem.
Demands of a growing population have placed unprecedented pressure on
bays and estuaries, competing with the ecosystem for many uses. Diversion of
water for community use, construction of dams, channelization, and wastewater
discharges all affect freshwater inflows. While benefiting communities, many of
these activities have also generated problems. Damming rivers and streams to
9

form reservoirs for flood control, community use and for recreation have
permanently changed water flow patterns and reduced freshwater inflows and
necessary nutrients. Channelization to provide flood protection built in natural
flood plains and former wetlands has caused problems as well.
2.2.3. Effects of reduced freshwater inflows
Increased salinity of bay, estuary, and nearshore maritime waters
Increased salinity of bay, estuarine, and near shore maritime waters can
disrupt the ecosystem, altering the composition and distribution of plant and
animal populations. Increased salinities can also facilitate the growth of
pathogenic bacteria such as red tide and Vibrio vulnificus.
Reduced mixing due to salinity differences and stratification of the water column
Reduced inflows may increase salinity stratification and lead to a decrease in
mixing, causing a change in plant and animal species composition and
decreased diversity.
Penetration of salt-wedge farther upstream allowing greater intrusion of marine
predators, parasites, and diseases
With decreased freshwater inflow, the salt-water wedge will push farther into
the estuary. The resultant influx of marine predators, parasites, and diseases will
negatively impact estuarine organisms and habitats that depend on a lower
salinity regime.
Saltwater intrusion into coastal groundwater and surface water resources used
by man
With decreased freshwater inflow, the salt-water wedge will push farther into
the estuary, infiltrating groundwater and surface water supplies used by humans
for irrigation, drinking water, and industry.
Diminished supply of essential nutrients to the estuary from inland or local
terrestrial origins
A diminished supply of nutrients from the watershed to the estuary can
become a limiting factor in the ecosystem’s overall productivity.
Increased frequency of bottom sediments becoming anaerobic, liberation of toxic
heavy metals into the water column that had been sequestered in the benthic
substrates, and sulfur cycle domination
Decreased freshwater inflows can increase the occurrence of sediments with
little or no oxygen. When oxygen is lacking in the sediments, microorganisms
switch metabolic processes to utilize sulfur. Thus, the concentration of sulfur
compounds increases in the anoxic sediments typically in the form of hydrogen
10

sulfide. Heavy metals bounds to sediments under normal conditions are released
into the water column under anoxic conditions becoming biologically available to
the food web.
Reduced inputs of particulates and soluble organic matter with flocculation and
deposition of the particles locally, rather than being more widely dispersed
throughout the estuarine ecosystem
Freshwater inflows transport suspended particulate and organic matter from
the watershed to the estuary. When freshwater inflows decrease, particles
flocculate (or bind together) and settle out of the water column closer to the
source rather than throughout the estuary making the particulates less available
to estuarine organisms.
Loss of economically important seafood harvests from coastal fisheries’ species
for a variety of reasons related to high salinity conditions, reduced food supply,
and loss of nursery habitats for the young
Commercial fisheries and recreational fisheries are extremely valuable
industries in the State of Texas. Most commercially and recreationally important
species rely upon bays and estuaries for at least some portion of their life cycle.
With decreased freshwater inflows, salinity in the estuary increases having a
negative impact on the habitats that provide food and shelter to the estuarine
food chain. The loss of habitat, food supply, and nursery areas would have a
detrimental effect on commercial and recreational fisheries stocks.
Loss of characteristic dominance of euryhaline species in the bays and estuaries
to stenohaline species as natural selection occurs for species more fully adapted
to marine conditions in general
As freshwater inflow decreases so does the variability of salinity
concentrations. As salinity rises over the long term, euryhaline species (able to
tolerate a wide range of salinities) inhabiting bay waters are replaced by higher
salinity, stenohaline species able to withstand only a narrow range of salinities. A
decline in species diversity could result.
Increased incident of human diseases caused by bacteria in seafood
Estuarine species, particularly filter-feeding oysters, consumed by humans
are subject to bacteria present in the water column. Of special concern are the
bacteria of the genus, Vibrio. Native and exotic species of Vibrio are present in
many bays and estuaries in Texas, but populations of Vibrio increase under
conditions of warm water temperature and high salinities. Freshwater inflows are
vital to control population explosions of these harmful bacteria that can cause
illness in humans when ingested.
11

Deterioration of salt marshes, mangrove stands, and sea grass beds if under
elevated salinities
Salt marshes, mangrove stands, and sea grass beds provide numerous
ecosystem functions, such as providing nursery areas and preventing erosion.
Elevated salinities can cause deterioration and degradation of these habitats and
the ecosystem services that they provide.
Loss of sand/silt renourishment of banks and shoals resulting in erosion
Freshwater inflows transport sediment loads to bays and estuaries where the
particles drop out of suspension to replenish bank and shoal sediments lost to
erosion. Reduced freshwater inflows would lessen the supply of renourishment
material resulting in a loss of some banks and shoals over time as erosion
processes continue.
Alteration of littoral drift and nearshore circulation patterns
Freshwater inflows and transported sediment not only impact the circulation
patterns and sediment budget within bays and estuaries but also exit the bay
system and impact the beach shoreline. A reduction of freshwater inflows could
reduce the sediment load deposited along the beach shoreline, decreasing the
accretion of sediments along nearby, down-current bars and barrier islands.
Aggravation of all negative effects during drought periods
Variations in salinity are necessary to maintain the health and productivity of
bays and estuaries. Strong periods of freshwater inflow are just as important as
periods of natural drought. While ecosystems are stressed naturally due to
droughts, reduced inflows due to human diversions of freshwater can artificially
increase the duration and frequency of drought conditions with deleterious effects
on the estuarine ecosystem.
2.3. Observed and Potential Effects of reduced freshwater inflows in the
San Antonio Bay Ecosystem
San Antonio Bay is especially vulnerable to changes in timing of flows since
it lacks a direct connection to the Gulf. It may become mostly fresh following a
flooding event or hyper-saline during drought conditions (Texas Water
Development Board, 2006). From 1941 to 1987, the Bay received an average of
2.3 million acre-feet of inflow annually. The overall rates of freshwater inflows
increased during this period, “which can be attributed to increased urbanization in
the watershed, increased groundwater pumping and return flows and increased
precipitation in the latter period (Longley, 1994).”
General relationships between Gulf estuary productivity and freshwater
inflows have been identified. Deegan et al. (1986) found that freshwater input
was highly correlated (r=.98) with fishery harvest (Deegan, J. W. Day et al.,
1986). In (Longley, 1994), the Guadalupe Estuary is examined with respect to
12

inflow levels and populations of seven commercially important fisheries species
(red drum, black drum, spotted sea trout, blue crab, bay oyster, and white and
brown shrimp). Additionally, inter-estuary comparisons of spotted sea trout, blue
crab and white shrimp harvests are examined. In general, all species harvests
examined tended to have a strong linear correlation with increased freshwater
inflows (Longley, 1994). A graphical depiction of the relationship between
freshwater inflows and fishery productivity is shown in Figure 2-1. Based on data
from Guadalupe estuary, the figure indicates that a continuous increase in
freshwater inflows will eventually lead to a decline in fishery productivity.
Figure 2-1. Fisheries Harvest vs. Freshwater Inflow in the Guadalupe
Estuary
Source: Texas Water Development Board (2004)
Evidence from other literature and results from the economically important
species studied suggests that populations of white shrimp, oysters, and blue
crabs would most likely decline with decreased freshwater inflows. For brown
shrimp, high salinity or low salinity concentrations would adversely affect catch
rates. It has proven much more difficult to measure catches of finfish due to a
variety of complex indirect effects and their long lifespan. However, there is
some evidence that juvenile Gulf menhaden and southern flounder are negatively
affected by increased salinity (Longley, 1994).
Effects of Availability of Blue Crabs on the Whooping Crane Population
The whooping crane is one of the most famous birds occupying a place on
the endangered species list. They breed in wetlands of Wood Buffalo National
13

Park in the Northwest Territories of Canada and winter on the coastal wetlands of
the San Antonio Bay Region. Hunting pressures and habitat loss reduced the
population to fewer than 15 individuals in 1941. Since then, protection under the
federal Endangered Species Act (including habitat protection provided by the
Act) has resulted in a gradual increase in numbers. During the winter of 2004-05,
217 birds wintered in Aransas National Wildlife Refuge and other protected areas
that surround the San Antonio Bay (Stehn, 2005b).
While wintering in the San Antonio Bay region, the whooping crane’s main
source of energy comes in the form of blue crabs (Guillory and Elliot, 2001). In a
year of high crab abundance, whooping cranes can consume 7-8 crabs per hour
(80 crabs per day), totaling 80-90% of their diet. In contrast, during years of low
blue crab abundance, cranes consume an average of only three crabs per hour
(about 35 crabs per day) (Chavez-Ramirez, 1996). A 1996 study of the principal
food items of whooping cranes showed that blue crabs were the highest in
protein and overall nutritional value for the cranes (Nelson, Slack et al., 1996).
Whooping cranes will switch to other foods when crabs are hard to come by, but
because of the poor nutritive value of these alternate foods, the cranes barely,
and in some cases do not, meet their daily energy requirements (Chavez-
Ramirez, 1996).
When an organism consumes more energy than it can utilize in a day, it
stores the energy in the form of fat. The stored energy is important for the cranes’
survival since it provides the energy necessary to complete the long migration to
the breeding grounds. In the eight-year period from 1993-2001, the Fish and
Wildlife Service conducted surveys that roughly estimated the number of blue
crabs available to whooping cranes. Two winters (1993-94 and 2000-01) had
lower than normal numbers of crabs. During those winters, seven and six
whooping cranes died respectively. In the six other winters with normal numbers
of crabs, 0-1 crane died (Stehn, 2001). These observations are strongly
indicative of the inverse correlation between blue crab abundance and whooping
crane mortality.
In addition to increased mortality of adult cranes, there seems to be a
correlation between good crab years and good nesting and productivity the
following spring (Chavez-Ramirez, 2003). Following the poor blue crab winter of
1993-94, 37% of the known adult pairs (17 out of 46) failed to nest following their
return to Canada. This was unusual since normally just about all pairs attempt to
nest annually (Stehn, 2005b). These observations suggest that sufficient inflows
are required to produce the necessary food that will help ensure the survival of
the species.
Freshwater inflows have an even more direct connection to whooping crane
survival than through blue crabs. Whooping cranes can drink water directly from
the bay when the salinity is less than 23 parts per thousand (the salinity of
seawater is 35 parts per thousand). When marsh and bay salinities exceed 23
parts per thousand (ppt), the cranes must fly to freshwater water sources in order
to drink. These flights use energy, reduce time available for foraging or resting,
14

and could potentially make the cranes more vulnerable to predation in the
uplands (Chavez-Ramirez, 1996).
As stated previously, there tends to be a strong linear correlation between
the blue crab population and increased freshwater inflows (Longley, 1994). In the
Guadalupe Estuary, blue crabs are most abundant in salinities that average
between 10-25 ppt (San Antonio/Guadalupe Estuarine System, 2005). TPWD
data suggests that water inflows greater than 1.3 million acre-feet annually
results in low enough salinities in the estuary to produce high numbers of blue
crabs (Longley, 1994). In San Antonio Bay, the years with the highest harvests
all had inflows greater than 3 million acre-feet (Stehn, 2001). Therefore,
according to Longley, the salinity level should remain between 10 and 20% for
approximately 60 to 80% of the time for maximum production of the blue crab
species as well as the white shrimp, gulf menhaden and brown shrimp.
It is especially important to continue to study this issue as the human
population in south Texas is expected to double over the next 50 years causing
great shifts in the water use in this region. The Texas Water Development Board
projects an 8% reduction in blue crab population in the next 40 years due to
reduced inflows, as humans take more water from the Guadalupe River and
hence the San Antonio Bay (Chavez-Ramirez, 2003). A study funded by the
Guadalupe Blanco Water Development Board, the San Antonio River Authority
and other water groups will build on and expand this work of the TWDB and
TPWD, with specific application to the fresh water inflow needs of the San
Antonio Bay ecosystem. It is stated that the “goal is to provide a new, additional
source of water to meet future needs in the South Texas region, while helping to
protect spring flows at the Comal and San Marcos Springs and preserve inflows
to the San Antonio-Guadalupe bays and estuary system (Lower Guadalupe
Water Supply Project, 2004).”
Specifically, Texas A&M University is conducting a multi-faceted research
project involving extensive collection of field data with the ultimate objective of
linking freshwater inflows and marsh community dynamics in San Antonio Bay to
whooping cranes (Lower Guadalupe Water Supply Project, 2005). In addition, the
Center for Research in Water Resources at the University of Texas at Austin is
engaged in a research effort focusing upon the influence of freshwater inflows on
the ecological health of San Antonio Bay (Lower Guadalupe Water Supply
Project, 2005).
2.4. Conclusion
Estuarine ecosystems provide myriad ecosystem functions, including many
goods and services used by humans. These estuarine ecosystems are
dependent upon freshwater inflows in order to maintain their ability to function
properly. Among many purposes, freshwater inflows affect the salinity
concentration, move nutrients and pollutants through the ecosystem, and
seasonally fluctuate accommodating the needs of the many species that use
estuaries for at least one part of their life cycle.
15

In general, the roles of freshwater are relatively well understood, as well
as the effects of reduced freshwater inflow. However, studies that link fish
populations to freshwater inflow are quick to point out that there are many
complexities in the system due to relationships between species, nutrients, and
other input factors into the ecosystem. More important than a large quantity of
inflows, however, is the large seasonal fluctuation of inflows. A myriad of
organisms depend on the ecosystem for different periods of their life cycles.
Seasonal fluctuations, droughts, and floods are necessary in order to maximize
the productivity of estuaries for fishery purposes. While increased inflows
generally have a positive and linear correlation with increased fish populations, if
inflows are consistently high, estuary productivity can decrease.
Human interference with freshwater inflow has begun to change the
dynamic of San Antonio Bay Region. The ecosystem will continually have to
adapt to varying amounts of freshwater inflow due to human development
especially in and around the city of San Antonio. Given the mounting pressures
on the environment, it is increasingly important that adequate freshwater is
allocated to sustain the ecosystem.
16

3. Characterization of Ecotourism in the San Antonio Bay Region of Texas
3.1. Introduction
The San Antonio Bay lies in one of the most ecologically complex and
biodiverse regions in all of North America. As more people become aware of the
ecological treasures that exist there, ecotourism has developed into a rapidly
growing sector of the regional economy. Tourism is among the top three
industries in Texas, and ecotourism makes up a significant share of total tourism
in the state (Dean Runyan Associates, 2004). One of the most popular
ecotourism activities is birding. Texas is the number one birdwatching
state/province in North America, and various protected areas within the San
Antonio Bay offer excellent locations to view birds and other wildlife. Birding
organizations often list Aransas National Wildlife Refuge among the top ten
birding locations within the United States. There have been over 495 bird
species recorded in the Coastal Bend region – more than all but four states
(Coastal Bend Bays and Estuaries Program, n.d.).
Ironically, while the ecotourism industry is growing, the Bay’s fragile
estuarine ecosystem is facing pressure from other economic activities.
Potentially, the largest problem that threatens the overall health of the Bay is a
marked change of natural freshwater inflow that it receives. The increased
pressure on both surface water and groundwater resources upstream by
agricultural production, industry, and a rapidly growing urban population in San
Antonio has altered the timing and volume of river inflow to the Guadalupe
estuary. A large increase or decrease of incoming freshwater can affect “fish
spawning, shellfish survival, bird nesting, seed propagation, and other seasonal
activities of fish and wildlife (Environmental Protection Agency, 2005).” This
delicate estuarine system is deteriorating because upstream water users rarely
consider the water needs of an ecosystem.
“An important obstacle to more widespread recognition of the ecosystem’s
water needs is that the economic value of using water to sustain the regional
ecosystem has never been quantified. Without ‘economic representation’ of this
value, it is difficult for water managers, planners, and users to consider the
ecosystem, along with agriculture, industry, and municipalities, when making
water use decisions. A detailed understanding of the San Antonio Bay’s
ecotourism sector and the role water plays in supporting it can help establish the
ecosystem as an economically important user of the river inflows into the Bay.
Without sufficient water, the region’s ecosystem will continue to decline, with
potentially detrimental effects on the ecotourism industry. Within this overall
context, this paper serves to characterize the ecotourism sector and its role in the
regional economy of the San Antonio Bay (Mathis, 2004a).”
17

3.2. General Overview of Ecotourism
Tourism is one of the largest industries on the planet. According to the World
Travel and Tourism Council, “tourism and its related economic activities generate
11 percent of the Global Domestic Product, employ 200 million people, and
transport nearly 700 million international travelers per year.” Currently,
ecotourism makes up only a small percentage (5% to 10%) of the global travel
market, yet, it is one of the fastest growing sectors. While tourism in general is
growing at a rate of 4 percent annually, the ecotourism market is growing at a
much faster rate, ranging between 10 and 30 percent (Vincent and Thompson,
2002). In recognition of the growing importance of ecotourism to economies
worldwide, the United Nations General Assembly declared 2002 as the
“International Year of Ecotourism” in order to encourage cooperation between
governments, regional (and international) organizations and non-governmental
organizations in promoting and developing measures of environmental protection
(United Nations Environment Programme (UNEP), 2003).
“Nature-based tourism” and “nature-tourism” are often used interchangeably
to refer to the same activity that is referred to in this report as “ecotourism,”
although a variety of definitions exist for ecotourism. The International
Ecotourism Society defines ecotourism as “responsible travel to natural areas
that conserves the environment and sustains the well-being of local people.”
Implied in the definition is that anyone participating in ecotourism activities should
follow the following principles:
• Minimize impact;
• Build environmental and cultural awareness and respect;
• Provide positive experiences for both visitors and hosts;
• Provide direct financial benefits for conservation;
• Raise sensitivity to host countries' political, environmental, and social
climate;
• Support international human rights and labor agreements; and,
• Provide financial benefits and empowerment for local people
(International Ecotourism Society, 2004).
Although tourism can be based on natural attractions such as wildlife viewing
or water-based recreation that does not mean it is ecologically or socially
sustainable. “In fact, activities ranging from powerboat trips through narrow
gorges to chasing elephants with paint-guns have been called ‘ecotourism
(Sekercioglu, 2002).’” It is possible to conduct ecotourism activities in a
sustainable manner “by monitoring damage to the natural environment, paying
attention to the location’s carrying capacity, and overall minimizing negative
impacts and maximizing positive ecological, sociocultural and economic impacts
(Mathis, 2004a).” The Quebec Declaration on Ecotourism lists the following
principles of sustainable tourism:
18

Contributes actively to the conservation of natural and cultural
heritage, includes local and indigenous communities in its planning,
development and operation, contributing to their well-being,
Interprets the natural and cultural heritage of the destination to
visitors, lends itself better to independent travelers, as well as to
organized tours for small size groups (United Nations Environment
Programme (UNEP), 2003).
Ecotourism is not necessarily sustainable; however, it can be if conducted in
a thoughtful manner. This form of ecotourism can be preferable to alternative
forms of economic development such as logging, mining, or agriculture, because
it has the potential to protect natural areas and benefit local people at the same
time (Sekercioglu, 2002). “Well-planned and managed ecotourism may prove to
be the most effective tool for long-term conservation of biodiversity when the right
circumstances (such as market feasibility, management capacity at local level,
and clear and monitored links between ecotourism development and
conservation) are present (United Nations Environment Programme (UNEP),
2003).”
In the context of this report, we use the term “ecotourism” to imply nonconsumptive,
nature based tourism that is not necessarily sustainable. The
reason for this is mainly because the economic impact of consumptive uses of
nature based resources (hunting and fishing) have already been evaluated in the
San Antonio Bay Region (along with many other Texas coastal regions). 3
Birding, hiking, camping, boating and other forms of ecotourism are growing
in popularity among Americans. These activities bring an economic dimension to
communities as people come to experience the natural resources and spend
their money on goods and services provided by local communities. Trip-related
expenditures for wildlife viewing across the United States accounted for about
$8.2 billion in 2000. Texas ranked fourth in total economic output related to
wildlife watching expenditures at $2.46 billion, resulting in 28,377 jobs across the
state (US Fish and Wildlife Service, 2001). Birdwatchers are one of the best
sources of ecotourism income since they form the largest single group of
ecotourists, are educated, and have above average incomes. The National
Survey on Recreation and the Environment reported that the percentage of
Americans that participated in birding one or more times in the past twelve
months has increased from 12% in 1982-83 to 33% in 2000-2001 (US Fish and
Wildlife Service, 2003b). Approximately 2,268,000 birders visit Texas annually, of
which 94% are from in state and 6% are from out-of-state (US Department of the
Interior, Fish and Wildlife Service et al., 2003).
3 For a discussion of the economic value of consumptive uses of nature-based resources, see Jones, Lonnie L. and A.
Tanyeri-Abur. 2001. Impacts of Recreational and Commercial Fishing and Coastal Resource-Based Tourism on Regional
and State Economies. TR-184, Texas Water Resources Institute, Texas A&M Univ., College Station.
19

3.3. Ecotourism in the San Antonio Bay Region
Texas ranks consistently as one of the top locations in the United States for
ecotourism due to its high amount of biodiversity. There are 12 eco-regions
within the state, which range from deserts and hills to plains and piney woods
(Griffith, Bryce et al., 2004). There have been 6,273 different species recorded in
Texas, of which 340 are endemic. Texas is the number one birdwatching
destination in the United States, with over 600 species of birds that account for
more than 75% of the bird diversity in the country (Stein, 2002). Most of these
birds reside or migrate along the 367 miles of the Texas Gulf coast, “offering
birders unparalleled opportunities to see an impressive variety of birds within a
relatively consolidated area (Eubanks, 2003).” One of the best places for birding
along the Gulf Coast is in the San Antonio Bay region. It is a paradise for
ecotourists, including birders, who come to the region for its natural abundance
(Texas Parks and Wildlife Department (TPWD), 2001).
Ecotourism in the region focuses primarily on birding, but also
accommodates other wildlife and outdoor enthusiasts. Aransas National Wildlife
Refuge is often listed as one of the top birding sites in North America (Konrad,
1996). ANWR and Matagorda Island are also included as a part of the American
Bird Conservancy’s “Important Bird Areas Program (American Birding
Conservancy, 2006).”
3.3.1. Protected Areas of the San Antonio Bay: Valuable Natural Assets
By establishing various wildlife refuges and management areas, the
remaining fragments of the San Antonio Bay’s regional ecosystem are effectively
protected. These protected areas are valuable natural assets that serve as a
base for a variety of ecotourism activities within the region.
The most well known protected area in the region is the Aransas National
Wildlife Refuge Complex, which is comprised of five units. The two largest units
that make up the Refuge are the Blackjack Peninsula in Aransas County and
Matagorda Island. Other units include the Tatton Unit, the Lamar Unit and the
Myrtle Foester-Whitmire Division (Texas Parks and Wildlife Department, 2005c).
Together, they create a 115,651-acre complex, which is managed by the U.S.
Fish and Wildlife Service.
20

Figure 3-1. Public Protected Areas of the San Antonio Bay Region
Table 3-1. Acreage of Public Protected Areas
Site Size (Acres)
Aransas National Wildlife Refuge Complex 115,471
Matagorda Island Unit 56,668
Blackjack Peninsula Unit 47,261
Tatton Unit 7,568
Myrtle Foester Whitmire Division 3,240
Lamar Unit 734
Guadalupe Delta Wildlife Management Area 6,594
Welder Flats Wildlife Management Area 1,480
Total 123,545
21

Of the five units of the Aransas National Wildlife Refuge, the Blackjack
Peninsula Unit was the first established in 1937 with the goal of protecting the
wildlife of the Texas coastal region. In 1941, the last remaining wild population of
fifteen whooping cranes wintered in the saltwater marshes surrounding the newly
established Refuge. In 1967 the Tatton Unit, which also provides critical crane
habitat, was donated and annexed onto the main refuge (US Fish and Wildlife
Service, 2003a). Due to conservation efforts and protection under the Federal
Endangered Species Act, the Aransas whooping crane population has since
been increasing at an average annual rate of 4.6 percent and the Fish and
Wildlife Service expects it to reach between 225 - 240 individuals by the winter of
2005 – 2006 (Stehn, 2005a). The landscape of the Blackjack Peninsula is made
up of tidal marshes, grasslands and mottes (groves of trees), which provide
important coastal habitat for a number of species. Other threatened and
endangered birds found at ANWR include the Bald Eagle, the Brown Pelican,
and the Piping Plover. Records show 392 bird species documented at Aransas,
of which, more than 210 are migratory species that use the refuge as a staging
and wintering location (Texas Parks and Wildlife Department, 2005c). Due to the
high bird diversity and the presence of rare and endangered species, Aransas is
considered one of America’s top 50 birding locations. 4 It is also home to a wide
variety of mammals including deer, javelina, coyote, bobcat, jaguarundi, raccoon
and others.
The Matagorda Island Unit of the Aransas National Wildlife Refuge is one of
the barrier islands that borders the Gulf of Mexico and is separated from the
mainland by San Antonio and Espiritu Santo Bays. The island is 38 miles long
and varies in width from less than a mile to about four and a half miles. The
island supports 30 species of reptiles and 9 mammal species. The most common
mammals include white-tailed deer, coyote, raccoon, badger, and jackrabbit.
There are 325 bird species on Matagorda Island, including a wide variety of
migratory birds. Approximately 29 state or federally listed threatened and
endangered species are found on Matagorda Island, including the Whooping
Crane, Brown Pelican, Least Tern, and Piping Plover. In 1996, the park began a
reintroduction effort with the Aplomado Falcon. The island marshes are important
nursery areas for shrimp, oyster, blue crab, and many species of sport fish, such
as red drum, spotted sea trout, tarpon, shark, mackerel, and southern flounder.
Activities include salt-water fishing, hunting, birding, picnicking, historical
interpretation, camping, hiking, bicycling, surfing, swimming, beach combing, and
nature study. Also within the Park is the Enron Matagorda Island Environmental
Research and Education Center, which offers “hands on” environmental
education for high school and college students and teacher workshops on barrier
island ecology, endangered species, and wildlife biodiversity (Texas Parks and
Wildlife Department, 2005e).
The Lamar Unit and the Myrtle Foester Whitmire Division are smaller parcels
of land that were purchased from private owners and later annexed onto the
Refuge. The Lamar Unit was leased form the Nature Conservancy of Texas in
4 As selected by American Birding Association members at the 1994 Minot, ND convention.
22

1987 and then purchased in 1991. Private land separates it from the Blackjack
Peninsula Unit. The landscapes are similar and range from a dense cover of live
oak trees to salt and cordgrass marshland. The marshland of the Lamar Unit
provides important habitat for whooping cranes (US Fish and Wildlife Service,
2003a). Between 1991 and 1994, the Refuge purchased the Myrtle Foester
Whitmire Division using Land and Water Conservation Funds. “It has been
identified in the North American Waterfowl Plan as one of the most important
wetland habitats on the Texas coast (US Fish and Wildlife Service, 2003a).”
There are other protected areas within the San Antonio Bay region apart
from the Aransas National Wildlife Refuge Complex. The Guadalupe Delta
Wildlife Management Area (GDWMA) is a deltaic estuary of the Guadalupe River
and consists of three distinct units: Mission Lake Unit, Hynes Bay Unit and the
Guadalupe River Unit. The GDWMA is a complex of natural and manmade
wetlands and freshwater marshes, which are subject to flooding by the
Guadalupe River and its bayous. The Management Area also encompasses
associated upland habitat. Lands in the GDWMA have traditionally provided
important habitat for wetland dependent wildlife, especially migratory waterfowl.
“Riparian areas along the numerous small bayous form ‘corridor forests’ of
pecan, black willow, cedar, American elm, hackberry and green ash provide
excellent forage area for neotropical songbirds (Texas Parks and Wildlife
Department (TPWD), 2005).” White-tailed Hawks, Peregrine Falcons and
hundreds of White-faced Ibis forage seasonally in the marshes of the GDWMA.
Some of the federal threatened and endangered bird species that occur in the
Management Area include Brown Pelican, Wood Stork, Bald Eagle, and
Whooping Crane. Along with prime habitat for birds, “the estuary at the upper end
of San Antonio Bay provides valuable spawning and nursery habitat for red drum,
Atlantic croaker, spotted seatrout, brown shrimp, white shrimp, blue crab, and
other marine species (Texas Parks and Wildlife Department, 2005d).”
Welder Flats Wildlife Management Area and Coastal Preserve consists of
1,480 acres of estuarine ecosystem in the San Antonio Bay region. The
submerged coastal wetlands range in elevation from sea level to 1.2 meters. The
area has large stands of aquatic grasses and several species of algae. These
grasses provide protection to young fish, making Welder Flats an excellent
nursery ground for red drum and spotted sea trout (Texas Parks and Wildlife
Department, 2005f). “This source of marine life and native grasses in shallow
waters provide the environment desired for feeding numerous species of
waterfowl, wading and shore birds that use the preserve, of which the most
unique is the endangered whooping cranes (Texas Parks and Wildlife
Department, 2005g).”
The Aransas National Wildlife Refuge, Guadalupe Delta Wildlife
Management Area and Matagorda Island State Park are three of 308 distinct
wildlife-viewing sites incorporated into the Great Texas Coastal Birding Trail
(GTCBT). The Trail runs through 43 counties along the Texas coast (Texas
Parks and Wildlife Department, 2005b). The GTCBT was developed with the
hope of:
23

• Promoting the entire Texas coast as a superb destination for traveling
birders.
• Offering a means through which rural coastal communities could band
together with adjacent destinations and enhance the appeal of the
entire region as a tourism destination.
• Heightening awareness among Texas coastal communities,
particularly those in isolated rural settings, of the value of these nature
resources and the need to conserve these irreplaceable assets for the
future (Eubanks, 2003).
In addition to land-based opportunities to view birds and wildlife, the Texas
Parks and Wildlife Department is in the process of establishing the Texas
Coastal Paddling Trail; an integrated network of water trails for sea kayakers in
various locations along the Texas coast. Eventually, the network will include
prepared campsites with water and other amenities. Within the Guadalupe
estuary, the Port O’Connor Paddle Trail will connect the city of Port O’Connor
and Matagorda Island State Park. “The trail allows paddlers access to Texas’
best saltwater habitat and offshore birding (and fishing) opportunities (Harvey,
2002).” Currently, the project is still in the development stages.
Well-preserved habitat also exists on private lands in the region. Robert L.
Cook, the Executive Director of the Texas Parks and Wildlife Department
(TPWD) noted that since 94 percent of Texas is under private ownership, “if large
scale natural resource conservation is going to happen in Texas, it's going to
happen on private land (Texas Parks and Wildlife Department, 2002b).” In the
San Antonio Bay region, the Womack Family Ranch encompasses approximately
8,500 acres, including 4,200 acres of wetlands, which attract more than 300
species of birds, including bald eagles and peregrine falcons. There are two large
heron and egret rookeries located within the marsh. The wetlands are also home
to an abundance of fish and other wildlife, including a large population of
alligators. A permanent easement prohibiting agricultural practices and
development ensures that the wetlands will be available for use by these species
in the future. The Womack Ranch is also working to convert upland mesquite
woodlands back to native coastal prairie (Womack Family Ranch, 2003).
Restoration efforts on the ranch earned them the TPWD’s 2002 “Lone Star Land
Steward” program award.
The Johnson Ranch is a 245-acre area adjacent to the Lamar Unit of ANWR
that is protected as a wildlife refuge in partnership with The Nature Conservancy.
Eventually, they expect to donate the land to ANWR (The Nature Conservancy,
2002). Also located just south of the study region is the Fenessey Ranch, which
boasts 750,000 acres of lands, of which 4,000 are wetlands. These ranches offer
ecotourism opportunities for visitors, thus capitalizing on increased interest in
wildlife-associated activities.
24

3.3.2. The Economics of Multiple Nature Tourism Services
Ecotourism in the San Antonio Bay can have a significant impact on the local
economy. For example, in 2003 more than 71,000 people visited the Aransas
National Wildlife Refuge to view flocks of migratory birds and other wildlife,
thereby providing the region with an important source of income. According to
Diane Probst, executive director of the Rockport-Fulton Area Chamber of
Commerce, tourists that came to visit Aransas brought in more than $5 million to
the local economy (Hudgins, 2005). Ecotourists provide business to hotels,
nature-tour operators and restaurants located in the nearby towns of Seadrift,
Port Lavaca, Rockport-Fulton, Port Aransas, and others. Many of the bed and
breakfasts attract ecotourists by publicizing their proximity to birding sites, and in
particular, advertise opportunities to view whooping cranes. They also promote
butterfly and wildlife watching. For example, the owners of the previously
mentioned Johnson Ranch also run a bed and breakfast, the Crane House,
which is located adjacent to the protected portion of the property. The bed and
breakfast caters to photographers and ecotourists by advertising its proximity to
ANWR and by offering a variety of outdoor experiences, which include wildlife
viewing opportunities and kayak rentals. They charge guests from $125 to $245
per night and offer a birding list for the property (Crane House, 2005). In
addition, various hotels, RV parks, nature tours and outdoor recreation stores
advertise their role in the ecotourism industry and the availability of good birding
opportunities located nearby (Mathis, 2004a).
“Birding tours operating out of Rockport/ Fulton harbor reported the number
of its annual customers has grown to between 8,000 and 10,000 from less than
1,000 a decade ago (Texas Parks and Wildlife Department, 2002a).” These tours
can range from $10/person for a one-hour “nature-watching” and dolphin tour to
several hundred dollars for a full day of birdwatching, thereby generating
significant income for the area. Although most ecotourists to the area are there
for the usual sights, business can pick up considerably if someone he takes out
on a tour spots a rare species and posts a picture to their website (Sims, 2005).
The U.S. Fish and Wildlife Service estimate that each sighting of a rare bird
species may bring an added $100,000 into a community as people rush in to see
the bird, and once there, get a hotel and eat a few meals (Hudgins, 2005).
Birders can sign up for various web sites, cell phone text services and email
notifications that will send them alerts notifying them of a rare bird in the area.
In response to the growth of the ecotourism industry, private ranches around
the San Antonio Bay have also begun to establish ecotourism operations. The
Womack Ranch sells ecotourism passes for birding, hiking, and wildlife viewing.
They offer kayaking and canoeing, as well as birding and walking loops. During
migration seasons, they employ guides to conduct butterflies and bird tours
(Womack Family Ranch, 2003).
Along with the year-round ecotourism opportunities, the San Antonio Bay
region hosts several annual organized events that take advantage of yearly bird
migrations, thus attracting large numbers of ecotourists. Anne Vaughan,
Executive Director of the Port Aransas Chamber of Commerce noted that “people
25

used to walk in here and ask, ‘which way is the beach?’ Now people ask me,
‘where can I find the birds?’” Port Aransas holds the “Annual Celebration of
Whooping Cranes and Other Birds” during winter months when whooping cranes
are present. The visitors to the festival can choose to take tours (on land or by
boat) to view whooping cranes as well as other birds and wildlife or attend
workshops and educational seminars (Port Aransas Chamber of Commerce,
2005).
These birding festivals may last only for a few days but can have large local
economic impacts. Every September, the city of Rockport hosts the
“Hummer/Bird Celebration” in honor of the thousands of hummingbirds that stage
along the coast before migrating across the Gulf of Mexico. Along with
hummingbird-related activities such as banding and habitat restoration, the
festival offers opportunities to visit other birding locations via boat and bus tours,
as well as dragonfly and butterfly identification workshops and other activities
relating to ecotourism (Hummer/Bird Celebration Committee, 2004). According to
the Rockport-Fulton Chamber of Commerce, between 5,000 and 10,000
ecotourists visit the four-day Hummer/Bird Festival annually (Ridgely, 2005). A
survey sent to festival attendees in 1995 determined that approximately 4,500
nonresident visitors to the festival contributed $1.1 million to the local community
(Kim, Scott et al., 1998). The Chamber of Commerce speculates that the total
direct expenditure during the festival is much higher today because four “major
properties” have been constructed, allowing more visitors to attend. During the
festival, there are no hotel vacancies in town.
A 1999 study by Eubanks and Stoll of travelers along the central portion of
the Great Texas Coastal Birding Trail found that on average, travelers spent 31
days per year viewing wildlife on the trail. Their most recent trip lasted 8.71 days
and 7.55 nights. Only 4.6% of the travelers along the trail were residents within
the region. The typical traveler was 60 years old, college-educated, traveling with
a spouse or friend, and had a household income of more than $60,000 a year.
These visitors have a large economic impact, and spend an average of $981.99
per person ($683.91 within the region, $197.90 within Texas but out of the
region, and an additional $100.19 out of state) on travel-related expenditures in
their most recent trip. This translates into expenditures of $78.52 per person/day
along the Texas coast and results in a direct expenditure of $2,452 over the
course of a year (Eubanks and Stoll, 1999). This amount is greater than the
value of $35.24 per person/day that was determined by evaluating the results of
seven studies of participation in non-consumptive wildlife-viewing activities,
including birding (See Figure 3-2) (Walsh, Johnson et al., 1988).
26

Table 3-2. Average Willingness to Pay by Activity (2002 Dollars)
Activity
Average Value
per Activity
Day
($)
27
Number of
Studies
Evaluated
Camping 30.95 18
Picnicking 27.51 7
Swimming 36.46 11
Hiking 46.16 6
Non-motorized
Boating
77.27 11
Non-consumptive
Wildlife
35.24 7
Source: Walsh, Johnson and McKean (1988)
Unfortunately, it is impossible determine the total economic impact that
visitors to the Birding Trail have on the region because there is no way to count
them. Sandi Ridgely, Director of Tourism and Events at the Rockport-Fulton
Chamber of Commerce noted, “It’s difficult to determine the number of birders
who come here to use the Trail. They just come here and do their thing. They
don’t stop by the visitor’s center to be counted (Ridgely, 2005).”
The Gulf Coast Bird Observatory and TPWD sponsor the “Great Texas
Birding Classic,” along the Coastal Birding Trail. The Classic is a five-day
competitive birdwatching tournament held each year in April to coincide with
spring bird migration along the Gulf Coast. It utilizes the full length of the Great
Texas Coastal Birding Trail and is considered the “biggest, longest, and wildest”
birding tournament in the US. The purpose of the Birding Classic is to help
“increase appreciation, understanding and conservation of birds along the Great
Texas Coastal Birding Trail through education, recreation, nature tourism and
conservation fundraising (Texas Parks and Wildlife Department, 2005a).” In
2004, there were 288 participants, which represented an 87 percent increase
over 2001. Although 91 percent of the 322 participants in 2003 were Texans, 9
percent came from 16 other states. In previous years, it has drawn international
participation as well (Hudgins, 2005).
A 1984 contingent valuation survey attempted to estimate the non-market
value of whooping cranes and concluded that their value (including current use,
anticipated future use and non-use value) ranged from $1 billion to $1.5 billion
dollars annually for U.S. residents. This value does not “consider expenditures
for tour boat rides and travel or indirect impacts of such expenditures (Stoll and
Johnson, 1984).”
Along with wildlife watching and birding, there are other forms of ecotourism
activities that rely on healthy rivers and Bays. One organized boating event that
makes use of ideal boating conditions along the Guadalupe River is the Texas

Water Safari. The Water Safari is a 262-mile, nonstop canoe race that begins in
San Marcos and finishes in Seadrift, on the San Antonio Bay. Other variations of
the race also finish in the Bay. In 2003, there were 682 contestants participating
in various forms of marathon canoe racing along the Guadalupe River and into
the San Antonio Bay (Texas Water Safari, 2004).
3.3.3. Economic Impact of Ecotourism
Expenditures and economic impacts from ecotourism are notoriously difficult
to characterize. Definitions differ about what constitutes the “ecotourism
industry,” and because ecotourism is comprised of elements of other sectors
such as the travel, hotel, and restaurant industries, obtaining accurate economic
data regarding ecotourism (and tourism in general) presents a challenge.
However, by any account, the ecotourism industry in Texas is enormous. In
2003, Total Direct Travel spending in Texas was $41.2 billion, ranking Texas
third among all states with a 6 percent share of domestic travel spending (Only
California and Florida have a greater market share). This spending directly
supported 477,000 jobs with earnings of $13.3 billion (Dean Runyan Associates,
2004). Nature-based tourism increased by 63% from 1980 to 1990, making it the
fastest growing sector of the state travel industry. It generates $1 billion in state
taxes, $739 million in local taxes, and $1.4 billion of economic activity.
Average per capita personal income for 2002 in 2002 dollars ranged from
$22,351 in Calhoun County, $26,411 in Refugio County, and $25,394 in Aransas
County, compared to per capita personal income of $28,472 for Texas and
$30,511 for the nation. The larger, 19 county Coastal Bend region yielded a total
gross regional product of $17.5 billion in 2000. Tables 3-3 and 3-4 summarize
basic figures regarding personal income, production earning and travel impacts
in the region.
In the Coastal Bend region, as noted by the Texas state comptroller’s office,
tourism was the fourth largest industry (by employment) behind health care,
services to businesses, and government. Tourism between 1980 and 2001 grew
at an average annual rate of 3.2%, in terms of total spending, making it one of
the fastest growing industries in the region (Strayhorn, 2002).
While irrigated agriculture and in particular, ranching played historically
significant roles in shaping the San Antonio Bay’s regional economy and culture,
agriculture today contributes less than 1% of total personal income (Table 3-3).
Manufacturing constitutes a large sector in the economy of Calhoun County. In
contrast, in Aransas and Refugio counties, services represent one of the major
and expanding job sources. Most of that growth has come in health services and
in services related to tourism, i.e., recreation and entertainment.
28

Table 3-3. Personal Income and Production Earnings By County, 2003 ($000)
Aransas Refugio Calhoun Total
Per Capita Personal Income a 25,394 26,411 22,351
Total Personal Income 601,043 200,167 456,752 1,257,962
Non-farm Personal Income 601,595 196,535 448,512 1,246,642
100.1% 98.2% 98.2% 99.1%
Farm Earnings -552 3,632 8,240 11,320
-0.1% 1.8% 1.8% 0.9%
Dividends, Interest and Rent 148,733 60,998 69,956 279,687
24.7% 30.5% 15.3% 22.2%
Transfer Payments 126,911 42,987 93,523 263,421
21.1% 21.5% 20.5% 20.9%
Total Travel Spending b 65,596 23,614 12,741 101,951
10.9% 11.8% 2.8% 8.1%
Production Earnings c 216,985 77,952 550,675 845,612
Farm Earnings -552 3,632 8,240 11,320
-0.1% 4.7% 1.5% 1.3%
Non-farm Earnings 217,537 74,320 542,435 834,292
100.1% 95.3% 98.5% 98.7%
Manufacturing 8,493 - 292,446 300,939
3.9% 53.1% 35.5%
Retail Trade 34,027 8,770 19,591 62,388
15.7% 11.3% 3.6% 7.4%
Health Care d 13,351 - - 13,351
6.2% 6.2%
Government 37,478 22,510 56,156 116,144
17.3% 28.9% 10.1% 13.7%
Total Travel Spending b 65,596 23,614 12,741 101,951
30.2% 30.3% 2.3% 12.1%
Sources: U.S. Bureau of Economic Analysis (2003) and Office of the Governor, Economic Development and Tourism
(2003).
Notes:
a Percentages are based on contribution to total personal income.
b Total Travel Spending is derived from the Texas Department of Economic Development, 2003, and does not refer to
any single industry or sector. It is possible that there is some overlap with the other listed categories, although we
believe such an overlap is small, if one exists at all.
c “Production Earnings” excludes income derived from transfer payments and interest, dividends, and rent.
Percentages reflect the particular sector’s contribution to production earnings, rather than total personal income.
d The manufacturing data from Refugio county and the health care data from Refugio and Calhoun Counties was
undisclosed by the U.S. Bureau of Economic Analysis due to privacy issues. Thus, total manufacturing data excludes
Refugio County and total health care data excludes Refugio and Calhoun Counties.
29

Table 3-4. Direct Travel Impacts by County
County
Total Direct
Spending
($000)
Visitor
Spending
($000)
Earnings
($000)
30
Employment
(Jobs)
Tax Receipts
Local
($000)
State
($000)
Aransas 65,600 65,600 18,940 1,090 1,290 3,710
Calhoun 23,610 23,610 7,250 400 360 1,380
Refugio 12,740 12,740 1,700 110 110 1,130
Source: Dean Runyen Associates (2004).
Winter Texans who come to the region can create a significant additional
demand for goods and services. In Port Aransas, approximately 4,000 Winter
Texans come to the city to stay for an average of 74 days, usually from the
northern U.S – outnumbering the 3,500 permanent residents of the town. Winter
Texans have usually reached the age of retirement, and due to this, the length of
their stay by far exceeds the average leisure stay of 2.3 days in the Coastal
Bend. They spend over $13 million in Port Aransas and often have friends and
family to visit, contributing an additional $2.5 million to the local economy.
Outdoor activities are a main attraction for 57 percent of Winter Texans and
many of them participate in ecotourism activities such as birdwatching. In total,
they spend $520,000 per year on entertainment in and around Port Aransas,
including ecotourism activities (Lee and Yoskowitz, 2004).
A study done by researchers at Texas A&M University quantified the
economic impacts of recreational activities and commercial fishing for the
Guadalupe Estuary. It found that water-based recreation such as boating,
recreational fishing, birding, swimming and other activities contributed $6.94
million in direct expenditures to the local economy, indicating an average
expenditure of $66.10 per person per day for recreation. Due to the methodology
used in that study (developed to provide consistency across all six Texas
estuaries), the study does not provide specific figures for different activities. It
was not possible to separate out the direct expenditures for consumptive and
non-consumptive uses so, it was not possible to estimate the value of nonconsumptive
uses of San Antonio Bay from this study (Tanyeri-Abur, Jones et al.,
1998).
3.4. Conclusions
Due to the lack of consistent and complete data, it is difficult to quantify the
economic impact of ecotourism on the San Antonio Bay region. Currently,
comprehensive data on the number of people that come to visit the region for
ecotourism purposes does not exist hampering the estimate of their economic

impact. It is necessary to conduct empirical studies of birdwatchers and other
ecotourists in order to obtain a reliable figure of ecotourism expenditures in the
area and their impact on the local economy(Mathis, 2004a). Despite these
difficulties in measuring ecotourism production and impact, existing evidence
indicates that ecotourism is playing an important role in the local economy.
Activities such as birdwatching, photography, backpacking, horseback riding,
cycling, wildlife viewing, and canoeing are increasingly popular as urban
residents and visitors strive to connect with nature (Mathis, 2004a).” The Bay has
many valuable unique ecological assets that serve as the basis of ecotourism
and its various components, such as lodging, dining, and tour operators. Projects
like the Great Texas Coastal Birding Trail and the Texas Coastal Paddling Trail
take advantage of the regional assets, with the intention of continuing to develop
the ecotourism industry.
“Even as the San Antonio Bay’s ecotourism sector continues to gain
momentum, the fragile natural assets upon which it depends – that is, the
region’s uniquely diverse habitats and ecosystems – are experiencing increasing
pressure from human development. Obtaining resources to sufficiently preserve
these natural assets presents a formidable challenge. Beyond dollars, an
adequate amount of water is of critical importance to sustaining the remarkable
biodiversity of the Bay. Yet as domestic, industrial and agricultural users compete
for water in the face of persistent scarcity, the ecosystem’s water needs have
only recently been addressed.
31

4. Estimating the Value of Freshwater Inflows Supporting Ecotourism
4.1. Introduction
Economics is typically described as the science of allocating scarce
resources among competing end uses. There is a long and well-developed list of
literature describing the foundations of social welfare analysis and public choice.
The most commonly accepted approach is that inputs and outputs are monetized
in order to provide a common metric by which various allocations and outputs
can be compared. The problem with environmental goods is that they are
typically public goods and no market exists by which to observe market prices
used to monetize these goods. Economists have expended much effort to
develop theories and methods by which to value these non-market goods. This
study makes use of two approaches: i) the Travel Cost Method and ii) a
production function approach.
This economic analysis examines the value of freshwater inflows on
ecotourism on the San Antonio Bay Region. While there are many definitions of
ecotourism, some related to the idea of sustainability, ecotourism in this study
refers primarily to tourism which is based on natural or ecological attractions
(Mathis, 2004b).
There are two main questions of importance. The first question concerns the
value of current sectors (e.g. tourism) that are supported by the freshwater
inflows. This first question yields information on the value of current activities,
which can be useful in comparing different activities supported by the same
resource, but it doesn’t yield insights into possible tradeoffs. A second question
concerns possible tradeoffs resulting from alternative management scenarios.
This question yields information on what the economic impact on a given sector
will be if the current management situation is changed (e.g. inflows are reduced).
A fundamental component for the economic analysis is the ecology of the
bay and estuary, which is a complex system made up of interdependent
elements (e.g. water, flora, land, etc.). The element of interest to this analysis is
the freshwater inflows to the estuary. Beneficial inflows are defined in the Texas
Water code (sec. 11.147) as a “salinity, nutrient, and sediment loading regime
adequate to maintain an ecologically sound environment in the receiving bay and
estuary system that is necessary for the maintenance of productivity of
economically important and ecologically characteristic sport or commercial fish
and shellfish species and estuarine life upon which such fish and shellfish are
dependent.” However, a complexity of the science underlying the understanding
of freshwater inflows on marine and river ecosystems has led to much infighting
resulting in little progress on the issue (Korosec, 2007). This study attempts to
more fully develop the economics behind freshwater inflows and ecotourism in
order to better inform the ongoing debate on environmental flows.

4.2. Key Site Details for the Analysis
The study region is formed where the Guadalupe River meets the Guadalupe
Estuary. This intra-coastal ecosystem has an area of about 100 square miles and
serves as a critical habitat for many species. Freshwater flows into the bay
system from runoff from land after rain events and from surface water courses
including the San Antonio and Guadalupe Rivers. These two rivers have
historically provided 79.6% of the total freshwater inflows into the estuary
(Longley, 1994). A modeling study by Texas Parks and Wildlife Department
(TPWD) indicates that the Guadalupe Estuary has a direct response to
freshwater inflows on a seasonal basis and indirectly on a total annual basis
(TPWD, 1998).
The Guadalupe Estuary’s fisheries biota has a critical need for suitable
salinity condition during May and June. Inflows during July and August are
typically the year’s low flow period, but can have minimal negative impact if
earlier flows are adequate. During drought years, a study by Texas Parks and
Wildlife Department (TPWD) predicts a significant decrease in wetland
productivity and fisheries harvest (TPWD, 1998). The study further expressed
that “any exacerbated increase in the severity, frequency or duration of droughts
will alter the ecosystem structure” resulting in reduced biodiversity (TPWD,
1998). The TPWD study further recommended managing the river’s flow pattern
to maintain historical low flows at the same frequency as experienced historically
by avoiding increases in the size or duration of low flows/drought conditions.
The freshwater inflows are essential to maintaining the ecosystem of the bay
and are important in terms of quantity, quality, and timing. The marginal impact
that water has on the quality and quantity of ecosystem services which support
ecotourism cannot be modeled with precision due to the complexity of the
ecosystem. However, a study on the San Antonio Bay and Guadalupe Estuary
estimated a minimum annual inflow of 1.03 million acre-ft/year and a maximum
inflow of 1.29 million acre-ft/year (TPWD, 1998). This same study recommended
a maximum inflow of 1.15 million acre-ft/year as the lowest target value to meet
the biological needs of the bay and estuary.
4.3. Travel Cost Method - Analytical Approach and Description
The study makes use of the Travel Cost Method for estimating the value of
freshwater inflows on the eco-tourism sector operating in the San Antonio Bay
area. The Travel Cost Method uses actual expenditure data to estimate a ‘value’
for the natural resource services which support the ecotourism service that is
consumed. The Travel Cost Method (TCM) is an indirect revealed preference
approach in that values are derived from actual purchasing behavior, but indirect
as the purchase is for related goods (National Research Council, 2004).The
Travel cost method yields a maximum estimate of willingness-to-pay for the
ecosystem services provided by freshwater inflows. This measure is termed by
economists as ‘consumer surplus.’
33

Consumer surplus is a monetary measure calculated as the difference in
what a consumer is willing to pay for a given good and the price they actually
have to pay (Pearce, 1994). Economic theory typically assumes a negative
demand relationship between price and quantity, which simply means that at
lower prices people are willing to buy more units of a given product. This is
represented graphically by a downward sloping demand curve in Figure 4-1.
However, individuals normally face a single unit (market) price which is
unaffected for different levels of consumption. This creates a condition where the
price actually paid is less than the price the consumer is willing to pay for
quantities less than Q* as illustrated in Figure 4-1. The total of these differences
are the consumer’s surplus as it is the additional benefit received from a given
level of consumption but not actually paid for (the shaded area in Figure 4-1).
Figure 4-1. Typical Demand Curve with Negative Relationship between
Price and Quantity
Price
Q*
Consumer Surplus
For the Travel Cost Method, the market price for ecotourism is equated to the
actual travel costs borne by the consumer. A demand curve is calculated from
survey data which estimates a relationship between price and quantity, where
quantity is the number of trips taken. Finally, the consumer surplus is calculated
as the area below the demand curve and above the market price. This consumer
surplus is then attributed to the (non-market) ecosystem services supporting the
tourism experience. That is, on average the consumer surplus is the value of the
economic benefit that ecotourists receive from the ecosystem services
supporting ecotourism. The measure answers the question over what the current
value of inflows are in support of ecotourism.
The study also uses a production function approach to estimate the value of
freshwater inflows on the ecotourism sector. A production function approach
considers freshwater inflows as an input to the production of ecotourism. This
34
Price
Demand
Quantity demanded

approach allows examination of question 2, which is concerned with the
economic impacts on the ecotourism sector resulting from changes in the flow
regime.
4.3.1. Travel Cost Method - Survey and Data Description
Data was gathered from a survey that was administered to visitors to gather
information about their trip including number of visits per year and average cost
of a visit. The survey also gathered information on recreational activities
undertaken, previous visits, typical length of stay, and location of home and
primary recreational area.
There were a total of 417 useable surveys that contained the necessary data.
A total of 65 percent of respondents reported themselves as permanently
residing in Texas. The most common activity reported among respondents was
going to the beach at 79%. This was followed closely by fishing (68%), nature
observation (65%), and bird watching (62%). The average number of day trips
during the previous 12 months was 23, while the median was three. The average
duration of a day trip was 4.5 hours. Almost 100% of respondents reported
making a previous trip to Coastal Bend bay and estuaries for outdoor recreation
and leisure.
Many respondents were “Winter Texans” and incurred high travel costs in
traveling to Texas for the winter. The survey sought to gather travel costs
incurred only for the nature trip and not for the entire cost of relocating for the
winter. The average reported travel cost was $508 and the median cost was only
$100.
Table 4-1. Descriptive Characteristics of key variables collected from
surveys (for the aggregated data set)
Variable Value
Texas resident 65%
Previous trip 99.76%
Average number of annual trips 27.3
Average number of trips were day
trips 23.4
Average trip duration in hours 4.5
Average trip time in hours 0.88
Average Travel Cost ($) 508
Median 100
Minimum 1
Maximum 5,000
Activities participated in:
Fishing 68%
Hunting 13%
Beach 79%
35

Boating 46%
Nature 65%
Camping 43%
Photo 41%
Hiking 48%
Birding 62%
4.3.2. Travel Cost Method – Analysis and Results
Initial analysis was conducted for the aggregate data set. The approach used
here follows a two step procedure to estimate individual demand and consumer
surplus (Upneja, Shafer et al., 2001). Ordinary least squares regression was
applied to survey data to estimate a function relating travel cost to number of
visits. This individual demand equation was then used to estimate individual
consumer surplus.
The regression model was set up to estimate a demand function for ecotourism.
The dependent variable was the reported number of day trips. The
independent variable included (log of) travel cost (LnCost), state residency status
(TX_home), duration of trip in hours (Duration), estimated travel time from local
base (Trip_time), and whether the respondent participated in bird watching,
fishing or beach going. The model yielded an adjusted r-squared value of 0.20.
Results showed that the natural log of travel cost was the most significant
variable. This was followed by fishing, beach-going, and birding activities.
Duration of trip in hours was also shown to be a significant variable. Other
variable were not reported as significant. Results of the regression analysis are
presented in Table 1.
Table 4-2. Results of regression analysis for aggregate data set
Coefficients Standard Error t Stat
Intercept 87.65 11.91 7.36
LnCost -9.56 1.56 -6.11
TX_home 5.92 5.48 1.08
Duration -5.54 1.96 -2.82
Trip_time -0.72 2.11 -0.34
Birding 13.20 5.35 2.47
Fishing 23.89 5.33 4.48
Beach -21.98 5.876 -3.74
Holding all variables constant except LnCost the demand function was
estimated as:
Equation 1. q
= −9
. 55(ln
p)
+ 73.
164
36

This average number of trips from this equation was estimated as 13.6 which
is about half the actual average of 27.3. The average travel cost reported from
the survey data is $508 for the aggregated data set. Equation 1 was then used to
estimate the number of trips for the average visitor for incremental price
increases ranging from $1 up to $1,900. The average consumer surplus was
calculated as $1,136 for the aggregated data set.
The data was disaggregated by Texas residents and non-residents. This was
done as it appeared as if some respondents reported travel costs that included
general costs for travel to Texas instead of solely costs for the daily nature trip.
The average travel costs were given as $231 for Texas residents and $1,024 for
non-Texas residents.
Regressions were run on each data set with the TX_home variable omitted.
The resulting equations had an adjusted r-square of .22 for the Texas residents
and a .20 for the non-Texas residents. Using the same method as described
above the average consumer surplus for Texas residents was estimated as $273
and for non-Texas residents it was estimated as $13,060. A graph of the three
estimated demand curves is presented in Figure 4-2.
Figure 4-2. Estimated individual demand curves for eco-tourism
Travel Cost ($)
1600
1400
1200
1000
800
600
400
200
0
0 10 20 30 40 50 60 70 80 90 100
Trips
37
All
Texans
Non Texans

4.4. Production Function Approach – Analytical Approach and Description
A key goal of the research is to provide useful economic information to inform
the debate on freshwater inflows in Texas rivers. Of course, the debate is
especially concerned with competing uses for freshwater inflows. Therefore, it is
important to try to relate the value of ecotourism to quantities of freshwater
inflows.
A core tool in economics is the production function which mathematically
relates known inputs to the production of outputs. Production functions are
typically used to analyze the decisions made by a firm in producing their output.
However, economists have also adapted production function analysis to estimate
the value of irrigation water in the production of crops.
As in many uses, water is typically under-priced relative to the costs of
provision. One method to estimate amore accurate value of water in crop
production is to use a crop-water production function. As in a standard production
function, crop output is related to the input of water and other inputs (e.g. seed
and fertilizer) to establish a mathematical relationship. From the estimated cropwater
production function, the marginal physical product per unit of water can be
calculated. The marginal physical product is then multiplied by the crop price to
calculate a marginal value per unit of water. It is important to note that this
estimated value is related only to crop price and water’s marginal physical
productivity rather than to the economics of crop production (Gibbons, 1986).
This study adopts a similar approach with the assumption that freshwater
inflows are an input into the production of ecotourism. An ecotourism production
function is estimated as a function of inflows and other key variables. This
function is then used in conjunction with the ecotourism values estimated by
TCM to calculate a marginal value for freshwater inflows.
For this study, the freshwater inflows are the only input to ecotourism
included in the model. The output, ecotourism, is equated with the number of
visitors to the Aransas National Wildlife Refuge. This implies that ‘units’ of
ecotourism are not produced until consumed. Finally, various factors are included
to account for likely sources of correlation between input and output. These
included precipitation, summer holiday period, nesting period for whooping
cranes, and period for ‘winter Texans’.
4.4.1. Problems with representing freshwater inflows in a production function
There are several problems with using a production function approach to
estimating the value of freshwater inflows to the production of ecotourism. The
primary problem is the complex relationship between inflows and the status of
the ecosystem. In a typical production function approach, an input is applied in a
fixed quantity resulting in a quantity of output (e.g. X lbs. of seed result in Y
bushels of corn). For the current problem, maintenance of the status quo
condition/productivity of the ecosystem is a result of maintaining the historical
average flow regime, including intra-year high and low flow periods as well as the
38

occasional flood and drought events (Figure 4-3). It is thus quite difficult to
determine what unit of water inflows to consider as the ‘input.’
Figure 4-3. Example of Flow Regime Variations
Flow
January December
It is known that freshwater inflows have a highly significant impact on the
ecosystem, but this is through a complex interaction with the other elements of
the ecosystem. For example, one study states that high inflows help to boost
blue crab populations which in turn serve as the primary source of nutrition for
the whooping cranes (Stehn, 2001). Stehn (2001) further remarks that during
years with poor crab production (e.g. such as 1993-4 and 2000-1), there is a
marked increase in whooping crane deaths. As whooping cranes are a major
attraction for birders/nature tourists, it is fair to hypothesize that there may also
be an impact on tourist numbers.
There is also the difficulty that ecosystem services are not simply an
increasing function of freshwater inflows – too little (drought) can be as
detrimental as too much (flooding). Furthermore, these natural variances are an
important part of maintaining the health of the ecosystem. Also of concern is the
duration which variations in flow must be maintained to have a beneficial or
detrimental impact on the health of the ecosystem.
Even ignoring the problem of the complex interactions of inflows with the
ecosystem does not alleviate the problem. In agricultural science, production
functions have been developed to account for the timing of irrigation application.
However, water applications in agriculture are distinct; whereas, freshwater
inflows are continuously applied in the production of ecosystems. Thus, there is a
fundamental question in how to best incorporate the inflows into a production
function. The present model is viewed as an initial step in this direction. Average
inflow rates were taken on a monthly basis. These flows were then compared to
visitor data lagging the flows by one month up to 18 months. The implicitly
assumes that flows in a single month would have a significant impact on
attracting tourists. The results of this analysis are discussed in Section 4.7.
39
High year
Average
Low year

4.4.2. Production Function Approach - Data
Data was also gathered from the USGS for inflows at Tivoli on the
Guadalupe River which is below the confluence of the San Antonio and
Guadalupe River, for the year 2000 - 2006. Rainfall data was also gathered as
days of precipitation per month for the Aransas Wildlife Refuge. Finally, the main
winter tourist season is from around December through February, while the
greatest number of tourists is during the summer months (Morehead, Beyer et
al., 2007). Tourist inflows are also influenced by bird migrations, in particular, the
winter nesting of the whooping cranes which occurs from October to April.
Dummy variables were constructed to account for tourist seasons and the
Whooping Crane nesting period.
4.4.3. Production Function Approach – Analysis and Results
The production function model was constructed based on various factors
discussed previously. The output was designated as the monthly number of
visitors to the Aransas Wildlife Refuge. The main input was average monthly
inflows to San Antonio Bay as measured the Tivoli Station on the Guadalupe
River. Other included factors attempted to account for correlation including
nesting times for the whooping crane, rainfall, peak period for winter Texans, and
summer holidays.
As discussed earlier, an analysis was conducted to look at correlation
between inflow data and visitor numbers. The strongest correlations were found
for same month inflows (positive), flows lagged by 6 months (negative) and flows
lagged 18 months (negative). Figure 4-4 below illustrates the monthly average
flows (2000-2006) as reported at the Tivoli gauging station compared to the
average number of visitors to the AWR (2001-2007). The low flow period
matches with the lower visitor numbers, which may be simply be a coincidence in
the data caused by the 6 month intervals between low and high flows. There are
spikes in the visitor data for March from an up-tick in boat tours and also in
October from bow hunters.
An eco-tourism production function was specified as the monthly number of
visitors to the Aransas National Wildlife Refuge as a function of several variables.
The independent variables included:
• “Flow_Tiv” - The monthly average flow as measured at the Tivoli
gauging station;
• “AWR_Precip - The total monthly precipitation at the Aransas National
Wildlife Refuge;
• “Holiday”- Dummy variable for summer holiday period (June-August);
• “Nesting” - Dummy variable for whooping Crane winter nesting
(October-April); and,
• “ Winter_TX” - Dummy variable for peak Winter Texans (December-
February)
40

The results of the regression yield an adjusted r-squared value of 0.62. The
dummy variable for whooping crane nesting season was the only significant
variable. Water inflows were positive in sign with a t-stat of 1.05. Results of the
regression are presented in Table 4-3.
Figure 4-4. Average number of visitors to AWR and average flow from the
Tivoli gauging station on the Guadalupe River
Flow (cfs) / Visitors (ppl)
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Table 4-3. Result of regression of impact of freshwater inflows on visitor
numbers
Standard
Coefficients Error t Stat
Intercept 556.31 1904.49 0.29
Flow_Tiv 2.16 2.06 1.05
Flow_Tiv_Squared -0.00047 0.00 -0.89
AWR_Precip -0.66 0.65 -1.01
Holiday -356.91 611.59 -0.58
Nesting 3615.56 579.37 6.24
Winter_TX -280.98 547.63 -0.51
41
Avg Flow
Avg Visitor

Based on the regression results, a simplified equation was formulated to
estimate visitors over a range of flow levels. The equation is given as follows:
2
Equation 2: V i = 2.
157Qi
− 0.
00047Q
i + 2264
The variable V represents the monthly visitor number and Q is the average
monthly inflow. Figure 4-5 illustrates the modeled impact of freshwater inflows on
visitor numbers.
Figure 4-5. Modeled relationship of freshwater inflows to visitor numbers
Visitors (Persons)
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
0 1000 2000 3000 4000 5000 6000
Figure 4-5 shows increasing visitors for freshwater inflows increasing to an
inflow rate of 2,400 cfs; whereas, the average monthly flow rate was calculated
from USGS statistics as 1,995 cfs. Equation 2 yields an estimate of 4,714 visitors
for the average monthly flow rate. Multiplying the estimated number of visitors
with the average expenditures as reported in the travel cost data ($508) yields a
total travel expenditure of $2.39 million. An incremental increase of 100 cfs is
modeled as an increase of 25 visitors for an incremental increase of $12,700 in
eco-tourism expenditures. Assuming a 30 day month, 100 cfs converts to 22,442
42
Flow (cfs)

gallons, which results in a value of $565 per 1,000 gallons. This is very high rate
relative to water rates of alternative uses with market prices.
4.5. Conclusion
This chapter has examined the calculation of the value of freshwater inflows
in support of the ecotourism sector. This type of analysis is important for
answering two questions. First, what is the value of inflows for the current
economic state of ecotourism? Second, what is the economic impact if these
flows are altered? The analysis relies heavily on the knowledge of the interaction
between inflows and the ‘production’ of ecosystem services. The analysis should
be interpreted an initial, although significant, step in the development of this
methodology.
The economic analysis has shown that eco-tourism has significant economic
value in the San Antonio Bay. The Travel Cost Method analysis showed that the
average visitor (who resided in Texas) experienced a consumer surplus of $273
dollars per visit. The average reported expenditure per Texas resident was $231.
The consumer value is the economic benefit received in excess of actual travel
expenditures indicating a high value of freshwater inflows. Further analysis could
be undertaken to calculate an aggregate value for the region, but was unable to
be conducted here.
A production function type approach was used to examine the contribution of
freshwater inflows to the production of eco-tourism. This approach has been
used in agricultural economics to estimate the value of water as an input in crop
production. There were many conceptual difficulties in applying such an
approach and the analysis presented here should be considered as a first step in
this direction rather than a final conclusion. The primary complication was in
modeling the relationship between water inflows and the ‘production’ of ecotourism.’
There appeared to be a coincidental correlation between high flows and
higher visitor numbers at the Aransas Wildlife Refuge.
An attempt was made to control for correlated factors so that an indicative
calculation could be made. A tourism-water production function was estimated.
Freshwater inflows were show to have a positive relationship with visitor numbers
up to a flow rate of 2,400 cfs. The average flow rate from the data was calculated
as 1,995 cfs. This should be interpreted as an early indicator that freshwater
inflows have a positive impact on the ecosystem services that tourists use.
However, more work needs to be done to address the timing and magnitude of
flow variations and their respective impacts on freshwater inflows. This type of
approach will be highly useful in analyzing tradeoffs from allocating water
between competing uses.
43

5. The Socio-economic Environment of the San Antonio Bay Region
5.1. County Socio-economic Information
This section includes a description of the demographic and economic
characteristics of the three counties that surround the San Antonio Bay: Aransas,
Calhoun, and Refugio (Figure 5-1). The demographic variables analyzed include:
1. Population Growth; 2. Age Distribution; 3. Ethnicity Distribution; and 4.
Educational Attainment. The economic variables analyzed include: 1. Percentage
of people of all ages living in poverty; 2. Per capita personal income; 3. Average
wage per job; 4. Total number of jobs; and 5. Unemployment Rate.
Figure 5-1. San Antonio Bay
Source: Cartography by Anne Evans, Harte Research Institute for Gulf of Mexico Studies, July 2007. Base map data
from the Texas General Land Office.

Aransas distinguishes itself from Calhoun and Refugio both demographically
and economically. As the fastest growing County analyzed; its population is
relatively older and significantly more homogenous than Calhoun’s and
Refugio’s. In addition, Aransas has the highest educational attainment of the
adult population. Historically, this County had the highest percentage of people
living in poverty, until 2004. After 2004, Aransas County showed the greatest
decrease in the unemployment rate and it was the only County that experienced
an increase in the number of jobs from 2001 to 2005.
Aransas
Aransas County is located on the Gulf Coast northeast of Corpus Christi. It is
the most populated and the fastest growing county in the San Antonio Bay area.
The population grew more than 25 percent per decade from 1980 to 2000, with
the last six years experiencing accelerated growth. From 2000 to 2006, the
population increased from 22,497 to 24,831 inhabitants, a growth rate of just over
10 percent (Table 5-1).
The age distribution indicates that Aransas County’s population is relatively
older than the State’s and the other counties analyzed for this report. This is
simply explained by the fact that Aransas County is a top retirement spot in
Texas and has recently seen tremendous growth in the number of retirees
relocating to the area (Aransas County, n.d.). In 2005, 27 percent of the
population were 18 and under, 52 percent were between the ages of 19 and 65
and 21 percent of the population were 65 and older. Texas’ age distribution
indicates that 36 percent of the population is 18 and under, 54 percent were in
between the ages of 19 and 65 and only 9.9 percent are over 65 years old (Table
5-2).
Table 5-1. Population and Growth Rate by County, 1980-2006
Population/Growth
Rate by County
1980 1990 2000 2006
Aransas 14,260 17,892 22,497 24,831
--- 25.47% 25.74% 10.37%
Calhoun 19,574 19,053 20,647 20,705
--- -2.67% 8.37% 0.28%
Refugio 9,289 7,976 7,828 7,596
--- -14.13% -1.86% -2.96%
Source: (US Census Bureau, 2007b; US Census Bureau, 2007d; US Census Bureau, 2007g)
45

Table 5-2. Age Distribution, 2005
Percentage of Population
by Age
Aransas Calhoun Refugio Texas
Ages 1 – 18 27.40% 35.10% 29.80% 35.90%
Ages 19 – 64 52% 50.40% 53% 45.80%
Ages 65 and over 20.60% 14.50% 17.20% 9.90%
Source: (US Census Bureau, 2007b; US Census Bureau, 2007g; US Census Bureau, 2007d)
The ethnicity distribution for the County’s population is more homogeneous
than the State’s and the other counties analyzed (Table 5-3). The 2005 estimates
shows that 72 percent were Caucasian (non-Hispanic), 2 percent were Black
(non- Hispanic), 22 percent of people were of Hispanic or Latin origin, and 3.9
percent were of other races (Table 5-3).
Table 5-3. Ethnicity distribution, 2005
Percentage of Total
Population by race
Aransas Calhoun Refugio Texas
White, non - Hispanic 72.40% 49.40% 47.90% 49.20%
Black, non - Hispanic 2% 2.60% 6.70% 11.70%
Hispanic or Latin origin 21.70% 43.90% 44.70% 35.10%
Other 3.90% 4.10% 1.30% 4.0%
Source: (US Census Bureau, 2007a; US Census Bureau, 2007c; US Census Bureau, 2007f)
The County has the highest educational attainment of the adult population of
the three counties analyzed; however, it is still lower than the State overall. In
2000, 75 percent of persons aged 25 and older completed High School and 17
percent of people aged 25 and older had a Bachelor’s degree (Table 4).
Table 5-4. Educational attainment, 2000
Educational Attainment
High School Graduates,
Aransas Calhoun Refugio Texas
Percentage of persons age 25 74.60% 69% 68.10% 75.70%
and over
Bachelor’s degree and higher,
Percentage of persons age 25
and over
16.70% 12.10% 11.60%
Source: (US Census Bureau, 2007f; US Census Bureau, 2007a; US Census Bureau, 2007c)
46
23.20%
Aransas has a significant portion of the population living in poverty, which is
defined by the U.S Census Bureau as the status in which an individual’s family
income is less than the threshold appropriate for that family. The family is
considered in poverty and all members have the same poverty status. The

thresholds vary according the size of the family and ages of members (US
Census Bureau, 2007e). For example, in a family of four members (parents and
two children), the threshold in 2006 was $20,444. If the total family income in
2006 was smaller than $20,444, this family and all its members were considered
“in poverty”. In 2001, 21 percent of people of all ages were living in poverty in
Aransas County. The situation is tending to improve. In 2004, 19 of all people
were still living under such conditions, which translates to a decrease from 4,645
to 4,536 (Figure 5-2).
Figure 5-2. Percentage of people of all ages living in poverty, 1997-2004
24%
22%
20%
18%
16%
14%
12%
10%
1997 1998 1999 2000 2001 2002 2003 2004
Source: (US Census Bureau, 2007e)
Aransas Calhoun Refugio
Real per capita personal income in Aransas is relatively low compared to
Texas and the nation (Figure 5-3) 5 . However, it did increase from $23,978
($24,660) in 2001 to $26,603 ($27,504) in 2005, an increase of 11 percent. In
2005, it was ranked 81 st within the 254 counties in Texas. The real average wage
per job increased significantly from $20,812 ($21,104) in 2001 to $23,967
($24,779) in 2005. However, average real wage rates are still relatively lower
than Calhoun and Refugio and to the rest of the State (Figure 5-4).
5 Real per capita income is inflation adjusted per capita income, with 1998 as the base year. The
value in parentheses represents nominal per capita income.
47

Figure 5-3. Real per capita Personal Income, 1998-2005
$37,500
$35,000
$32,500
$30,000
$27,500
$25,000
$22,500
$20,000
$17,500
$15,000
1998 1999 2000 2001 2002 2003 2004 2005
Aransas Calhoun Refugio Texas United States
Source: U.S Department of Commerce, Bureau of Economic Analysis, 2007
Figure 5-4. Real average wage per job, 1998-2005
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
1998 1999 2000 2001 2002 2003 2004 2005
Aransas Calhoun Ref ugio Texas
Source: U.S. Department of Commerce, Bureau of Economic Analysis, 2007
48

The total number of full-time and part-time jobs increased from 10,290 in
2001 to 10,646 in 2005, which represents an employment growth of 3.45 percent
(Bureau of Economic Analysis, 2007). The unemployment rate grew from 5.90
percent in 2000 to 8.20 percent in 2004; however, in 2006 the unemployment
rate decreased considerably to 4.8 percent (Figure 5-5). From January 2007 to
June 2007, the average unemployment rate was 4.3 percent.
Figure 5-5. Unemployment rate by County, 2000-2005
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2000 2001 2002 2003 2004 2005 2006
Source: Texas Workforce Commission, 2007
Aransas Calhoun Refugio Texas
Aransas County’s major employers are ACISD (Aransas County Independent
School District), Wal-Mart, H.E.B, Wood Group Production Services, Aransas
County, City of Rockport, State of Texas, Gulf Pointe Plaza, Rockport Coastal
Care Center, and Oak Crest Nursing Center (Rockport – Fulton, n.d).
Figure 5-6 shows the percentage of employment by sector in 2005. The
major industry employers are Trade (16%), Accommodation and Food Services
(13%), the Government (10%) and Fishing (10%).
49

Figure 5-6. Employment Sectors Pie Chart, Aransas, 2005
Arts, Entertainment,
Recreation, Education
3%
Mining (oil and gas)
3%
Finance and Insurance
3%
Admnistrative and
w aste services
4%
Health care and social
assistance
5%
Transportation and
w arehousing
2%
Professional and
technical services
5%
Other services, except
public admnistration
9%
Manufacturing
1%
Real estate
7%
Source: U.S. Department of Commerce, Bureau of Economic Analysis, 2007
50
Trade
16%
Construction
9%
Accomodation, Food
services
13%
Fishing
10%
Governm ent
10%
Calhoun
Calhoun County is northeast of Aransas County, and borders San Antonio
Bay on its eastern edge. The county seat is Port Lavaca. Once the most
populated County surrounding the San Antonio Bay area, Calhoun has
experienced relatively slow population growth. From 1980 to 1990, the County
experienced a negative growth rate of -2.37 percent. In the 1990s, the County
grew at a positive rate of 8.37 percent; however, the County has had almost zero
growth since 2000. From 2000 to 2006, the County’s estimated number of
inhabitants increased from 20,647 to 20,705 (Table 5-1).
The age distribution indicates that the County’s population is relatively older
than the State average and younger than Aransas and Refugio. In 2005, 35
percent of the population was 18 and under, 50 percent was in between the ages
of 19 and 65 and 15 percent of the population was 65 and older (Table 5-2).
The ethnicity distribution indicates a similarity with Texas and Refugio, which
are more heterogeneous than Aransas. In 2005, Caucasians’ (not Hispanic)
accounted for 49.40 percent of the population, 44 percent of people were of
Hispanic or Latino origin, 2.6 percent were Black (not – Hispanic) and other races
accounted for 4 percent of the population (Table 5-3).

The County also shows a lower educational attainment compared to Texas
and the nation. In 2000, 69 percent of persons aged 25 and older completed
High School and only 12 percent of this group had a Bachelor’s degree (Table 5-
4).
Calhoun is the only county analyzed that shows an increase in the level of
poverty from 2001 to 2004. In 2001, there were 16.3 percent of people of all
ages living in poverty and in 2004 this percentage increased to 16.6. This
translates to an increase from 3,349 to 3,409 persons living under such
conditions (Figure 5-2).
Real per capita personal income is the lowest of the three Counties analyzed
(Figure 3). It increased from $20,881 ($21,475) in 2001 to $23,756 ($24,561) in
2005. In 2005, the County was ranked 154 th of the 254 counties in Texas. On
the other hand, Calhoun’s real average wage per job is significantly greater than
Aransas’ and Refugio’s and also greater than Texas’. It increased from $38,386
($39,479) to $42,705 ($44,152) during the same period of time (Figure 5-4).
The number of full-time and part-time jobs decreased from 13,459 in 2001 to
12,787 in 2005, a decrease of 4.9 percent (Bureau of Economic Analysis, 2007).
Similarly, the unemployment rate increased from 4.7% in 2000 to 6% in 2005;
however, it had decreased again in 2006 to 4.9 percent (Figure 5-5). From
January 2007 to June 2007, the average unemployment rate was 4.4 percent.
Calhoun’s major employers are Alcoa, INEOS Nitriles (formerly BP), Calhoun
County Independent School District, Calhoun County, Formosa Plastics,
Harmony Industrial, H.E.B., International Bank of Commerce, King Fisher Marine
service, SSI Management Group, Dow Chemical, Seadrift Coke LP, and Inteplast
Group (Economic Development Corporation, 2007).
Figure 5-7 shows the percentage of employment by sector in 2005, which
indicates that the major industry employers are Manufacturing (26%),
Construction (15%), Government (12%) and Trade (10%). Fishing accounts for
only 3% of the total employment.
51

Figure 5-7. Employment Sectors Pie Chart, Calhoun, 2005
Mining (oil and gas) 1%
Transportation and
w arehousing
2%
Fishing
3%
Finance, insurance, real
estate 6%
Professional, technical
services 4%
Accomodation and food
services
6%
Arts, Entertainment,
Recreation, Information
1%
Management, Education,
Health Care and social
assistance
8%
Source: U.S. Department of Commerce, Bureau of Economic Analysis, 2007
52
Other services, except
public administration
5%
Manufacturing 26%
Construction
15%
Governm ent
12%
Trade
10%
Refugio
Refugio County is located on the lower Gulf Coast and is the least populated
and the slowest growing County in the San Antonio Bay area. The population has
decreased since 1980. In the decade from 1980 to 1990 the population
decreased approximately 14 percent. From 1990 to 2000 the growth rate was
negative 1.86 percent. From 2000 to 2006, Refugio experienced a negative
population growth rate of 3 percent (Table 5-1).
The age distribution indicates that the County’s population is also older than
the State’s. In 2005, 29.80 percent of the population were 18 and under, 53
percent were between the ages of 19 and 65 and 17.20 percent of the population
were 65 and older (Table 5-2).
The ethnicity distribution estimated for 2005 indicates that 47.90 percent of
people were Caucasian (not–Hispanic), 6.70 percent were Black (not–Hispanic),
44.70 percent were of Hispanic or Latin origin and 1.30 percent were of other
races (Table 5-3).
The County has the lowest educational attainment of the adult population of
the counties analyzed. In 2000, 68.10 percent of persons with age 25 and older
completed High School and 11 percent of people in this age group had a
Bachelor’s degree (Table 5-4).

Refugio shows a rapid decrease in the level of poverty compared to the other
counties analyzed. In 2001, there were 16.7 percent of people living below the
poverty line and in 2004 this percentage decreased to 14.7, a decrease from
1,385 to 1,125 people living under such conditions during this time period (Figure
5-2).
Real per capita personal income in Refugio is the highest compared to the
other counties, but still lower than Texas and the nation. It increased from
$24,901 ($25,610) in 2001 to $28,238 ($29,195) in 2005 and in 2005 it was
ranked 61 st within the 254 counties in Texas (Figure 5-3). The real average wage
per job also increased from $21,927 ($22,551) in 2001 to $24,333 ($25,158) in
2005 (Figure 5-4), still relatively low compared to the rest of the state.
The total number of full-time and part-time jobs and the unemployment rate
since 2000 has been cyclical. In 2001, the total number of jobs was 3,249 and in
2005 it was 3,391, an increase of 4.4 percent (Bureau of Economic Analysis,
2007). The unemployment rate increased from 4.10% in 2000 to 5.00% in 2005
(Figure 5-5). Similar to the other counties, the unemployment rate decreased to
4.9 percent in 2006 and from January 2007 to June 2007, the average
unemployment rate fell further to 4.3 percent.
Figure 5-8 shows the percentage of employment by sector in 2005 in
Refugio. Due to privacy concerns, many sectors do not show the actual number
of jobs; however, it is possible to estimate that the government is the County’s
major employer, accounting for 24% of total employment, followed by trade
(13%), mining (oil and gas) extraction (9%) and construction (9%). It is not
possible to determine the number of jobs in the Fishing sector since no data were
available.
Figure 5-8. Employment Sectors Pie Chart, Refugio, 2005
Manufacturing 1%
Real estate 2%
Admnistrative and
w aste services 2%
Sectors avoiding public
disclosure
(including fishing) 22%
Transportation,
Inf ormation
2%
Professional, technical
services 3%
Other services, except
public admnistration
10%
Finance, Insurance 4%
Source: U.S. Department of Commerce, Bureau of Economic Analysis, 2007
53
Governm ennt 24%
Trade
13%
Mining (oil and gas)
9%
Construction,
9%

5.2. Analysis
5.2.1. Methodology
This report uses two different economic analyses of the San Antonio Bay
area: 1. Shift – share analysis, and 2. Input/output modeling.
Shift-Share
Shift – Share analysis enables us to study the competitiveness and
growth/decline of local industries. This study uses employment changes from
2001 to 2005 to identify the sources of growth/decline in local areas. It
decomposes local employment growth into three components: 1. National share
(NS); 2. Industry Mix (IM); and 3. Competitive share (CS).
1. The National share component explains the share of the change in total
local employment that can be attributed to the rate of the total national
employment growth. In other words, this component calculates the change in
local employment if the County industry growth were the same as the total
national growth rate.
To calculate the NS component, we multiply the County employment of
t
industry i in base year t, E ic by the national growth rate over the time period
t+
n
EUS
analyzed, −1
.
t
E
NS
t+
n
ic
US
= E
t
ic
i = industry
t ⎛ E
×
⎜
t
⎝ E
+ n
US
US
⎞
−1
⎟
⎠
t + n = current time period
t = base year
c = County
2. The Industry Mix component focuses on the national growth of each
specific industry. The total IM would then tell us how much local growth is
attributed to the mix of industries in our region. While calculating the IM
component we are also able to identify how many jobs were created (or not) in
each particular industry due to the national growth of these respective industries.
To calculate the IM component, we multiply the county employment of
t
industry i in base year t, Eic by the difference between the national growth of each
t+
n t+
n
EiUS
EUS
specific industry and the overall national growth, − .
t t
E E
54
iUS
US

IM
t+
n
ic
= E
t
ic
⎡⎛
E
× ⎢⎜
⎜
⎢⎣
⎝ E
t+
n
iUS
t
iUS
t ⎞ ⎛ E
⎟
− ⎜
t
⎠ ⎝ E
+ n
US
US
⎞⎤
⎟
⎥
⎠⎥⎦
t + n = current time period
i = industry
55
t = base year
c = County
3. The Competitive Share component is extremely relevant since it identifies
the leading and lagging industries in our study region. It enables us to know how
many jobs were created (or not) due to our region’s competitiveness. Some
industries can grow faster or slower regardless of the total national growth rate.
This is due to unique competitive advantages that some industries and/or regions
have compared to others.
To calculate the CS component, we multiply the county employment of
t
industry i in base year t, E ic by the difference between the industry’s County
t+
n t+
n
Eic
EiUS
growth rate and the industry’s national growth rate, − .
t t
E E
CS
t+
n
ic
= E
t
ic
i = industry
t ⎡⎛
E
× ⎢ ⎜
⎢⎣
⎝ E
+ n
ic
t
ic
⎞ ⎛ E
⎟ −
⎜
⎠ ⎝ E
t + n = current time period
t+
n
iUS
t
iUS
⎞⎤
⎟
⎟⎥
⎠⎥⎦
t = base year
c = County
The sum of all three components equals the change in local employment in
the time-period being studied.
Δ E
ic
= NS
t+
n
ic
+ IM
t+
n
ic
+ CS
t+
n
ic
Input-Output Economic Impact
After deconstructing the various reasons for employment change using shiftshare
analysis, the question becomes: What impact does this change in
employment have. Using input-output modeling allows us to reveal the complete
impact on the economy of employment change in a particular sector.
An input-output model uses a matrix representation of a nation’s (or a
region’s) economy to predict how changes in one industry will affect other
ic
iUS

industries. It can also predict how these affects will impact on consumers,
government, foreign suppliers, and on the economy. Input-output analysis
considers inter-industry relations in an economy, depicting how the output of one
industry goes to another industry where it serves as an input, thereby making
industries interdependent on another, both as customers of output and suppliers
of inputs. An input-output model depicts this dynamic relationship. In addition to
studying the structure of national economies, input-output analysis has been
used to study regional economies within a nation and a state.
Impacts can be divided into three categories: Direct, indirect, and induced.
The sum of impacts in these three categories generates a total impact. The direct
impact is the number of jobs gained or lost in a specific industry. Indirect impact
is the impact that is generated from the ancillary industries that support the
specific industry in question. For example, in Table 5-8 the fishing category under
Indirect shows that 3.5 jobs were created in industries that support fishing such
as boat repair and maintenance, fuel, etc. Induced impact is generated when
individuals in direct and indirect categories spend their income in sectors not
related to the primary. For example, the fisherman uses his income to take his
family to dinner and the movies, buy groceries and clothing, etc, thus multiplying
his income in the regional economy.
For each industry there are three economic impacts presented: Output,
employment, and income. Employment and income are self-explanatory. Output
refers to the value of the goods and services produced in the industry. These are
typically the largest of the three values and for the sectors under analysis here,
most output is exported from the counties.
For the purposes of this report we will use the IMPLAN modeling software for
the development of input-output matrices for three regions: Aransas/Calhoun
(combined), Aransas, and Calhoun. The input-output modeling allows us to
develop economic multipliers for each of the four sectors of concern to determine
the impact of the employment change identified in the shift-share analysis. Data
for the model is based on the year 2003, which falls in the middle of study time
period. While the decline or growth in employment will have occured over several
years, the impacts calculated are based on the total change in the time period
and the values generated are annualized.
These two techniques have been widely used by several studies, such as 1.
“NAFTA and the Lower Rio Grande Valley of Texas: Measuring impacts”, 2. “The
economic base of Chaffee County, Colorado”, and 3. “Competitive Advantage
Analysis: Results for the Northwest Region”.
The first study aimed to measure the impact NAFTA had on the displacement
of jobs (or not) from United States to Mexico, analyzing the economic trends of
the four counties that compose the Lower Rio Grande Valley – Willacy, Cameron,
Starr, and Hidalgo. Opponents of NAFTA argued that this agreement would tend
to displace jobs to Mexico and its proponents believed that the free trade
agreement would lead to more jobs at higher wages rates. Texas was a target
state for this analysis since it shares an extensive border with Mexico. This paper
56

included an economic analysis of the Lower Rio Grande Valley. It begins with a
demographic description of the four counties. Later, earnings and employment
data were used to show trends and growth rates, to calculate location quotients
and derive a shift – share analysis (Morales and Stallmann, 2000). The shift –
share analysis was used to identify the sources of growth and decline of
particular sectors and the location quotients were used to identify the sectors with
low or high wage rates (Morales and Stallmann, 2000).
The second study analyzed only the county of Chafee, Colorado, and it used
a shift-share analysis specifically to identify the importance of different economic
sectors to the regional economy and its level of specialization in an industry. The
second report was primarily used to consider economic development plans in
Chaffee, and it was divided into two sections: 1. Background and demographic
information, and 2. Economic analysis. The first section focused on land use,
population, employment and income. The second section used four economic
analyses: location quotients analysis, shift-share analysis, economic base
analysis, and input-output model. The location quotient analysis highlighted
agriculture, construction, and services as major export sectors. Similarly, the
shift-share analyzed these sectors as the fastest growing in the regional
economy. In turn, the report concludes that these industries should be explicitly
taken into account in any long-term economic development plan (Cline and Seidl,
2007).
The third study evaluated an entire Canadian region and used a shift-share
analysis to identify the regional industries that possessed competitive
advantages compared to others, after a brief description of the regional
economy. The results of the shift-share analysis focused on only one component
– the competitive share component, since the goal of the paper was to identify
sectors with competitive advantages. Mining and manufacturing were considered
sectors with the most competitive advantages, since the results reported these
sectors as having the highest competitive share component (Elliot, 2007).
5.2.2. Sources / Data
The employment and earnings data was retrieved from the Bureau of
Economic Analysis and the industries analyzed were codified by the NAICS
classification. The shift-share analysis is employed on the national level and it
investigates changes in four private sectors from 2001 to 2005. This time-frame
starts with the recession and it ends with an economic boost for the nation. The
sectors analyzed include 1) Forestry, Fishing and related activities, 2) Mining, 3)
Construction and 4) Manufacturing. The regions covered in this analysis are: 1)
Aransas/Calhoun, 2) Aransas, and 3) Calhoun. Refugio could not be included in
our shift-share analysis since there is not enough data available, and the sectors,
except for Mining did not show estimates, to avoid disclosure of confidential
information.
57

5.3. Results of the study
5.3.1. Shift – Share Analysis
Employment changes in U.S
The U.S experienced an overall employment growth of 4.3 percent from 2001
to 2005 and an average employment decline of roughly 4 percent over the four
sectors analyzed during this time period (Bureau of Economic Analysis, 2007).
Forestry, Fishing and related activities was the second weakest sector analyzed.
The industry lost more than 10,300 jobs, which can be attributed to a 1 percent
decline. Manufacturing was the weakest sector analyzed. The country lost
2,133,700 jobs in this sector during these five years, which represents a 12.6
percent employment decline. Mining grew 1.06 percent with the creation of 8,600
jobs. Construction was the strongest sector. This industry created 999,000 new
jobs during the five years analyzed, growing approximately 10 percent.
Aransas/Calhoun Region
For Aransas/Calhoun Region, the national share component contributed to
an expected loss of 355 jobs. The mix of industries within this area increased by
95 jobs and the competitive share/regional shift was responsible for an expected
loss of 613 jobs (Figure 9). The sum of these three components equals to an
overall decrease of 873 jobs in the four sectors studied, which translates to an
employment decline of 9.74 percent (Table 5-5).
Figure 5-9. Employment change by segment. Aransas and Calhoun, 2001 -
2005
500
300
100
-100
-300
-500
-700
National Grow th
Industry Mix
58
Regional Shift

Table 5-5. Employment Shift-Share Analysis, 2001 – 2005 Aransas and
Calhoun
National Industry Competitive Employment Employment
Share Mix Share Change % Change
Fishing related
activities
-62 46 -67 -83 -5%
Mining (oil and gas) -16 20 49 53 13.32%
Construction -110 393 -250 32 1.15%
Manufacturing -168 -363 -344 -875 -21%
Total -355 95 -613 -873 -9.74%
Fishing and related activities. This sector experienced a loss of 83 jobs,
which can be translated to a negative growth rate of 5 percent (Figure 5-11).
Table 5-5 shows that this decline is attributed to both the national and the
competitive share components.
Figure 5-10. Employment Percentage Change by Sector. Aransas and
Calhoun, 2001-2005
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
Fishing, and
related activities
Mining
Construction
59
Manufacturing
Manufacturing. This was the weakest industry analyzed. This sector lost 875
jobs, which can be translated into a 21 percent decrease (Figure 5-11). All three
components negatively impacted this sector (Table 5-5).
Construction. This sector was responsible for the creation of 32 new jobs in
the two-county region. This is attributed to a 1 percent employment increase
(Figure 5-11). Both the national and the competitive share decreased in the
expected employment in construction; however, the industry mix component
counteracted this, thus contributing to a positive employment growth rate (Table
5-5).

Mining (oil and gas). This was the strongest sector in this area. The industry
grew at a 13 percent rate, creating 53 new jobs in the area (Figure 5-10).
Although the nation’s overall growth negatively affected this sector, the unique
mix of industries and the competitive share increased the expected value of jobs
(Table 5-5).
Figure 5-11. Employment change by sector. Aransas and Calhoun, 2001 -
2005
400
200
0
-200
-400
-600
-800
-1000
Fishing, and
related activities
Mining (oil and
gas) Construction
60
Manufacturing
Aransas County
For Aransas County, the national growth component decreased the expected
number of jobs by 90. The industry mix and the competitive share components
had equally increased this number by 137 new jobs each (Figure 5-12). The
three components together summed up to an overall increase of 184 new jobs
from 2001 to 2005, an employment growth of 8.10 percent (Table 5-6).
Figure 5-12. Employment change by segment. Aransas, 2001-2005
200
150
100
50
0
-50
-100
-150
National Grow th
Industry Mix Regional Shift

Fishing and related activities. The national growth and the competitive share
components were both negative, contributing to the declining trend of the fishing
industry during the time period analyzed. This sector lost 79 jobs from 2001 to
2005, which indicates an employment decline of 7 percent. However, a positive
industry mix component indicates that fishing is still growing faster in the County
than the national average growth rate of the four sectors analyzed (Table 5-6).
Table 5-6. Employment Shift – Share Analysis, 2001 – 2005 Aransas
National
Share
Industry
Mix
61
Competitive
Share
Employment
Change
Employment
% Change
Fishing related
activities -45 33 -68 -79 -7%
Mining (oil and gas) -9 11 91 93 43%
Construction -30 107 126 203 27%
Manufacturing -7 -15 -12 -33 -19%
Total -90 137 137 184 8.10%
Manufacturing. All three components decreased the expected number of jobs
in this industry from 2001 to 2005 (Table 5-6). Manufacturing was the weakest
sector among the four sectors analyzed, declining 19 percent, or a loss of 33 jobs
within the County (Figure 5-13).
Figure 5-13. Employment change by sector. Aransas, 2001-2005
250
150
50
-50
-150
-250
Fishing, and
related activities
Mining
Construction
Manufacturing
Construction. The sector grew at a rate of 27 percent, which contributed to
the creation of 203 new jobs during the time period analyzed (Figure 5-13). This
can be attributed to the population growth experienced by Aransas County.
Although the nation’s overall growth rate negatively influenced this industry; the
unique mix of industries and the competitive share elements have both
contributed to the creation of new jobs (Table 5-6). This indicates not only that

the local industry is growing faster than the national average growth rate, but also
that it is growing faster than the industry at the national level.
Mining (oil and gas). This sector grew at the fastest pace. A 43 percent
growth rate can be attributed to the creation of 93 new jobs from 2001 to 2005
(Figure 5-14). The national growth component decreased the expected number
of jobs but the industry mix and the competitive components have both positively
impacted this sector (Table 5-6).
Figure 5-14. Employment Percentage Change by Sector. Aransas, 2001 -
2005
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
Fishing, and
related activities
Mining
Construction
62
Manufacturing
Calhoun County
For Calhoun County all three components decreased the expected value of
the number of jobs. The national growth component has decreased it by 267
jobs. The industry mix decreased the expected value by 45 jobs and the
competitive share component had a negative impact of 794 jobs (Figure 5-15).
These three components decreased the overall number of jobs by 1107, which
represents an employment decline of 16.43 percent (Table 5-7).

Figure 5-15. Employment change by segment. Calhoun, 2001-2005
0
-100
-200
-300
-400
-500
-600
-700
-800
-900
-1000
National Grow th
Industry Mix
63
Regional Shift
Fishing and related activities. This sector was relatively strong given national
trends, losing only 4 jobs or declining 1 percent (Figure 5-16). Similar to
Aransas, the industry mix was the only positive component of the shift-share,
meaning that the local industry is growing faster than the national average growth
rate of the four sectors analyzed. The national growth component had also
negatively impacted this industry and a zero value for the competitive share
component indicates that the local and the national industry are growing at
similar rates (Table 5-7).
Table 5-7. Employment Shift – Share Analysis, 2001 – 2005 Calhoun
National
Share
Industry
Mix
Competitive
Share
Employment
Change
Employment
% Change
Fishing related
activities -17 13 0 -4 -0.94%
Mining (oil and gas) -7 9 -42 -40 -22.10%
Construction -80 286 -376 -171 -8.44%
Manufacturing -163 -353 -376 -892 -21.72%
Total -267 -45 -794 -1107 -16.43%
Mining (oil and gas). This sector declined at the fastest pace, reaching a 22
percent employment decline (Figure 5-16). This was responsible for the loss of
40 jobs. Although the unique mix of industries was a favorable component for this
sector, the national share and the competitive share components have
decreased the number of jobs within this sector (Table 5-7).

Figure 5-16. Employment percentage change by sector. Calhoun, 2001-2005
0%
-5%
-10%
-15%
-20%
-25%
Fishing, and related
activit ies
M ining
Const ruct ion
64
M anuf acturing
Manufacturing. This was one of the weakest sectors, declining at a rate of 22
percent rate (Figure 5-16). This can be translated to a loss of 892 jobs from 2001
to 2005. All three components negatively influenced this sector in Calhoun
(Table 5-7).
Construction. This sector declined 8 percent, which is attributed to a loss of
171 jobs (Figure 5-16). Although the unique mix of industries was positive for the
County, this was not enough to overweight the negative impact of both the
national share and the competitive share component (Table 5-7).
Figure 5-17. Employment change by sector. Calhoun, 2001-2005
0
-100
-200
-300
-400
-500
-600
-700
-800
-900
-1000
Mining
Fishing, and
related activities Construction
Manufacturing

5.3.2. Input-Output Analysis
The input-output modeling via IMPLAN is based on the county level. We had
the opportunity to develop an input-output model that consisted of as many
counties as we chose. To provide a more regional approach we analyze the
economic impact of employment change in the four sectors starting with the
combined Aransas/Calhoun region, and then Aransas and Calhoun separately.
Once again, Refugio has no measurable fishing industry to speak of so it is not
included in the analysis.
Aransas/Calhoun
The two county region of Aransas and Calhoun tells a much different story
then the counties analyzed separately. Fishing employment has decreased over
the time period analyzed, as identified in the previous section, for both counties.
The combined impact has been a loss of $3.3 million in output, 93 jobs, and $1.7
million in income (see Table 5-8).
Mining (oil and gas) has bolstered the regions economic activity. This is no
doubt heavily influenced by high oil and natural gas prices which have created
the needed incentive to increase output of currently producing wells, and bring
into production new and old wells that would otherwise have been considered
economically infeasible. As a result, output, employment, and income have all
increased for this sector on a two county regional level.
Construction output, employment, and income grew during this time period
as this region was buoyed by a number of events. Nationally housing starts were
on the rise as financing for purchases were relatively easy to acquire. However,
we are currently seeing the results of that superheated housing market.
Secondly, the region experienced an increase in Winter Texans and permanent
retirees, which pushed up demand for housing. As will be shown below, this
impact was more pronounced in Aransas County.
Table 5-8. Economic Impact-Aransas/Calhoun
Direct Indirect Induced Total
Fishing
(-) Output $2,481,680 $345,099 $512,675 $3,339,454
Employment 83 3.5 6.4 92.9
Income $1,358,962 $139,571 $150,679 $1,649,212
Mining
(+) Output $22,181,952 $3,654.621 $1,558,958 $27,395,531
Employment 53 20.5 19.6 93.1
Income $3,851,896 $958,312 $458,294 $5,268,501
Manufacturing
(-) Output $588,387,648 $100,257,774 $60,438,499 $749,083,942
Employment 875 522.2 758 2,155.8
Income $147,530,896 $26,629,179 $17,762,324 $191,922,404
Construction
(+) Output $5,015,053 $730,655 $531,382 $6,277,090
Employment 32 10.2 6.7 48.9
Income $1,300,606 $315,171 $156,203 $1,771,980
65

The decrease in manufacturing sector employment was the greatest drag on
the regional economy. This resulted in a total negative employment impact of
2,156 jobs and a drop in income of $191.9 million. As with the construction
sector, this impact was centralized in a single county: Calhoun.
Aransas
Unlike its neighboring county to the northeast, Aransas was able to make up
the loss in some of the four sectors analyzed, with substantial gains in others. As
a result, jobs increased by 376 and income by $17.6 million overall. Fishing, the
primary sector of focus, experienced significant decline of 7% in employment (79
direct jobs and 91 total jobs) and correspondingly, decreases in income and
output (see Table 5-9). Manufacturing also suffered employment loss through
this time period, although to a much lesser degree, yet the total impact on
income approached that of fishing.
Table 5-9. Economic Impact-Aransas
Direct Indirect Induced Total
Fishing
(-) Output $2,520,891 $388,159 $598,422 $3,507,472
Employment 79 4.4 7.6 91
Income $1,371,514 $164,174 $175,651 $1,711,339
Mining
(+) Output $39,608,736 $6,143,916 $3,344,867 $49,097,518
Employment 93 41.5 42.5 177
Income $6,888,255 $1,877,423 $981,847 $9,747,525
Manufacturing
(-) Output $2,832.931 $512,095 $427,536 $3,772,564
Employment 33 5.9 5.4 44.3
Income $937,951 $187,549 $125,500 $1,251,000
Construction
(+) Output $30,034,496 $5,851,544 $3,795,959 $39,682,000
Employment 203 82.9 48.2 334.1
Income $7,260,796 $2,505,567 $1,114,208 $10,880,570
Mining (oil and gas) and Construction produced positive economic impacts
for Aransas County. Combined, they added 296 jobs (direct) but accounted for
the creation of 511 total jobs through the multiplier effect. Income increased as
well, with a total impact of $20.6 million. As mentioned above and in the previous
section, construction growth is dominated by the retiree and second home
market in Aransas County. We could expect this trend to continue into the near
future even as housing starts slow down nationally.
66

Calhoun
Calhoun County’s experience is much different than that of Aransas. It has
experienced declines in all four sectors under examination. The total number of
jobs lost as a result of direct job loss was 1,325 and a corresponding total income
loss of $45.2 million (Table 5-10). The fishing sector experienced the smallest
percentage loss of the four sectors (0.94%).
The sectors hardest hit were manufacturing and construction. A significant
number of direct jobs were lost just in these two sectors (1,063). Conversations
with the Calhoun County Economic Development Corporation (August, 2007)
revealed that the job loss had been due to the temporary buildup of personnel for
expansion of a number of the counties petro-chemical plants, and then the
subsequent scaling back of those crews as the work was completed.
Table 5-10. Economic Impact-Calhoun
Direct Indirect Induced Total
Fishing
(-) Output $100,199 $12,004 $14,838 $127,041
Employment 4 .1 .2 4.3
Income $55,958 $4,863 $4,296 $65,117
Mining
(-) Output $16,594,208 $2,131,589 $590,927 $19,316,724
Employment 40 11 7.2 58.2
Income $2,879,399 $522,325 $171,540 $3,572,864
Manufacturing
(-) Output $127,911,760 $13,683,414 $7,749,969 $149,345,143
Employment 892 75.4 94.9 1,062.3
Income $27,452,578 $3,732,724 $2,243,834 $33,429,135
Construction
(-) Output $16,658,910 $1,170,775 $1,414,484 $19,244,170
Employment 171 12.1 17.3 200.4
Income $7,211,285 $516,100 $409,632 $8,137,016
5.4. Conclusions
Job growth and quality continues to be a challenge for rural counties, not
only in the Coastal Bend, but nationwide. The three counties examined here -
Aransas, Calhoun, and Refugio - have many issues in common and several that
are unique to the county itself. Table 5-11 identifies a few of the positive and
negative socio-economic characteristics. A common thread running through all
the counties is the level of educational attainment. In most cases the levels are
significantly less than the State average. This will continue to be a drag on
economic development. Both Refugio and Calhoun are experiencing negative or
flat population growth.
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Table 5-11. County Socio-economic Characteristics
Positives Negatives
Aransas 1. Declining poverty rate 1. Real average wage per job
2. Increasing real per capita
income
68
2. Educational attainment
3. Population growth
Calhoun 1. Real average wage per job 1. Educational attainment
2. Declining unemployment rate 2. Low real per capita income
3. Cost of living 3. Flat population growth
Refugio 1. Declining poverty rate 1. Real average wage per job
2. Steady unemployment rate 2. Educational attainment
3. Cost of living 3. Population loss
On the positive side, all three counties have seen decreases in poverty rates
over the last ten years and increasing real per capita income that is keeping pace
with the national and State rates of growth, although still below the averages.
Calhoun stands out with a real average wage per job that is higher than the
Texas average. This can be attributed to the high quality (paying) jobs found in
the extensive petro-chemical industry in the county.
The focus of this analysis was to determine the state of the fisheries industry
for the San Antonio Bay area. Any results are only relevant in the context of
employment alternatives for those that work in fisheries. Therefore, it was
decided that the most likely employment alternatives are mining (oil and gas),
construction, and manufacturing. Shift-share analysis allows us to deconstruct
the growth or decline in employment and identify the cause for that change,
whether it is national, industrial, or competitive trends.
The analysis of the two-county region is useful in comparison to Aransas and
Calhoun individually. One thing is for certain, these counties are not
homogenous, and so there should not be much weight placed on these
outcomes. What is more revealing is what is happening at the specific county
level.
Fishing employment in Aransas has eroded at a much faster rate during the
time period under study than Calhoun. A negative competitive share in Aransas
and zero value for Calhoun suggests that the county does not have a
comparative advantage in this sector. However, the data is aggregated to a level
where individual fisheries are not recognized. Given that the main fisheries are
shrimp and oysters it could be argued that these counties would continue to have

an advantage, particularly in oysters, where global competition is not as relevant
as it is in shrimping.
Of greater interest is the impact that declining or increasing employment has
had in the four industries. As Tables 5-9 and 5-10 illustrate, the total economic
impact of employment loss in the fisheries sector is not nearly as great in any of
the remaining three sectors. The multiplier effect is very limited.
In the case of Aransas, the growth in mining and construction was able to
offset the decline in fisheries and manufacturing, and create a net 376 jobs and
income of $17.6 million. For Calhoun, the study period coincided with a scaling
back of expansion at the petro-chemical firms and this is reflected in the declining
employment numbers. Yet, it still illustrates the greater impact that each of the
three industries has on the economy than fishing.
What is the future of the fishing sector within the context of the larger county
and/or regional economic picture? Shrimping will continue to feel pressure from
imports as well as input prices, such as fuel. Oystering may still have a
competitive advantage given the demand for fresh product. This fishery will face
pressure in the form of higher input prices as well as habitat loss. One could
conclude that even if there is a loss of jobs in the fishery sector that it could be
made up in other sectors, assuming they grow, and that the impact would
actually be greater. However, there might be value beyond the economic output
of the fishing sector.
Texas and the Coastal Bend have a rich commercial fishing history. There
are many who value its presence beyond the product that it can provide. These
values that are not as tangible can add to the impact that the industry has. For
example, there are tourists who come on vacation and enjoy the experience of
going to the docks to buy shrimp, fish, or oysters directly off the boat. If this
experience is taken away, an important question is whether the tourist would
continue to holiday in this region.
69

6. Concluding Discussion
The San Antonio Bay Region, formed where the Guadalupe River meets the
Guadalupe Estuary, teems with life. The San Antonio Bay and its related
intracoastal system cover an area of approximately 100 square miles and include
Mission Lake, Guadalupe Bay, Hynes Bay, Espiritu Santo Bay and Mesquite
Bay. Matagorda Island serves as a barrier separating the San Antonio Bay from
the Gulf of Mexico. The bay itself averages less than six feet in depth. The
Guadalupe Estuary has a definite salinity gradient with relatively large areas
having different salinities at intermediate inflow volumes. It has fresher areas
near the Guadalupe River mouth (Mission Lake Guadalupe Bay, Hynes Bay),
and high salinity areas in Espiritu Santo Bay near Pass Cavallo, one of the major
bay-Gulf of Mexico passes.
The majority of the freshwater inflows to San Antonio Bay come from the
Guadalupe and San Antonio Rivers. Historically, the Guadalupe and San
Antonio Rivers have supplied over 79.6% of the total freshwater inflows into this
estuary (Longley, 1994). The Guadalupe River originates in the southern edge of
the Edwards Plateau. The Upper Guadalupe is shallow, with swift flows,
receiving inputs from many minor tributaries that flow intermittently following
rainfall events. The San Antonio River originates within the San Antonio city
limits, on the northern edge of the South Texas Brushlands, and flows in a
southeasterly direction. The San Antonio River joins the Guadalupe River
approximately 9.94 miles (16 km) before entering San Antonio Bay on the Texas
coast.
Estuarine ecosystems provide myriad ecosystem functions, including many
goods and services used by humans. These estuarine ecosystems are
dependent upon freshwater inflows in order to maintain their ability to function
properly. Among many purposes, freshwater inflows affect the salinity
concentration, move nutrients and pollutants through the ecosystem, and
seasonally fluctuate accommodating the needs of the many species that use
estuaries for at least one part of their life cycle. There are many complexities in
the system due to relationships between species, nutrients, and other input
factors into the ecosystem.
In general, the roles of freshwater are relatively well understood, although the
impacts of marginal changes in flows are not known at this time. More important
than a large quantity of inflows, however, is the large seasonal fluctuation of
inflows. A myriad of organisms depend on the ecosystem for different periods of
their life cycles. Seasonal fluctuations, droughts, and floods are all necessary in
order to maximize the productivity of estuaries for fishery purposes. While
increased inflows generally have a positive and linear correlation with increased
fish populations, if inflows are consistently high, estuary productivity can
decrease.

Impacts on the Freshwater Inflows to the San Anontio Bay
Due to a rapidly growing population in the Gulf States, particularly along the
coast and in cities along major rivers that flow into the Gulf has created problems
that threaten the quantity and quality of the Gulf’s freshwater supply.
Innumerable rivers and streams carry industrial and community waste and street
runoff to the Gulf from many cities and communities, causing pollution of the
bays and estuaries. This pollution, combined with accidental coastal chemical
discharges and oil spills, sometimes dumps more wastes into bays and estuaries
than the systems can treat effectively, affecting the health and productivity of the
coastal ecosystem.
The San Antonio Bay region’s uniquely diverse habitats and ecosystems are
experiencing increasing pressure from human development. Obtaining resources
to sufficiently preserve these natural assets presents a formidable challenge.
Beyond dollars, an adequate amount of water is of critical importance to
sustaining the remarkable biodiversity of the Bay. Yet as domestic, industrial and
agricultural users compete for water in the face of persistent scarcity, the
ecosystem’s water needs are only recently beginning to be addressed.
Human interference with freshwater inflow has begun to change the dynamic
of San Antonio Bay Region. The ecosystem will have to adapt to varying
amounts of freshwater inflow due to human development especially in and
around the city of San Antonio. Given the mounting pressures on the
environment, it is increasingly important that adequate freshwater is allocated to
sustain the ecosystem.
Need for Economic Analysis
An important obstacle to more widespread recognition of the ecosystem’s
water needs is that the economic value of using water to sustain the regional
ecosystem has never been quantified. Without ‘economic representation’ of this
value, it is difficult for water managers, planners, and users to consider the
ecosystem, along with agriculture, industry, and municipalities, when making
water use decisions. A detailed understanding of the San Antonio Bay’s
ecotourism sector and the role water plays in supporting it can help establish the
ecosystem as an economically important user of the river inflows into the Bay.
Without sufficient water, the region’s ecosystem will continue to decline, with
potentially detrimental effects on the ecotourism industry. Within this overall
context, this paper serves to characterize the ecotourism sector and its role in the
regional economy of the San Antonio Bay.
The fundamental element of the economic analysis is the ecology of the bay
and estuary, which is a complex system made up of interdependent elements
(e.g. water, flora, land, etc.). The element of interest to this analysis is the
freshwater inflows to the estuary. Beneficial inflows have been defined in the
Texas Water code (sec. 11.147) as a “salinity, nutrient, and sediment loading
regime adequate to maintain an ecologically sound environment in the receiving
bay and estuary system that is necessary for the maintenance of productivity of
economically important and ecologically characteristic sport or commercial fish
71

and shellfish species and estuarine life upon which such fish and shellfish are
dependent.” However, the complexity of the science underlying the
understanding of freshwater inflows on marine and river ecosystems has led to
much infighting resulting in little progress on the issue (Korosec, 2007).
An estimated value for the water in the production of ecotourism can help to
establish the economic rationale for using scarce water to preserve and maintain
the Bay’s ecosystems. While existing agricultural economics literature provides
some insight in the valuation of water as an input in production, and tourism
economics provides additional insight into the nature of the tourism production
function and product, new methodology must be developed in order to rigorously
examine the value of water in ecotourism production. Ultimately, if the unique
ecosystems of the San Antonio Bay are to survive, they must be recognized as a
valuable natural asset as well as an economically important water user (Mathis,
2004a). This study attempts to more fully develop the economics behind
freshwater inflows and ecotourism in order to better inform the ongoing debate
on environmental flows.
Ecotourism in the San Antonio Bay Region
As more and more people have become aware of the ecological treasures
that exist there, ecotourism has developed into a rapidly growing sector of the
regional economy. In fact, tourism is among the top three industries in Texas,
and ecotourism makes up a significant share of total tourism in the state (Dean
Runyan Associates, 2004). One of the most popular ecotourism activities is
birding. Texas is the number one birdwatching state/province in North America,
and various protected areas within the San Antonio Bay offer excellent locations
to view birds and other wildlife.
Ecotourism in the San Antonio Bay can have a significant impact on the local
economy. For example, in 2003 more than 71,000 people visited the Aransas
National Wildlife Refuge to view flocks of migratory birds and other wildlife,
thereby providing the region with an important source of income. Ecotourists
provide business to hotels, nature-tour operators and restaurants located in the
nearby towns of Seadrift, Port Lavaca, Rockport-Fulton, Port Aransas, and
others. Many of the bed and breakfasts attract ecotourists by publicizing their
proximity to birding sites, and in particular, advertise opportunities to view
whooping cranes. They also promote butterfly and wildlife watching. In addition,
various hotels, RV parks, nature tours and outdoor recreation stores advertise
their role in the ecotourism industry and the availability of good birding
opportunities located nearby (Mathis, 2004a).
In 2003, Total Direct Travel spending in Texas was $41.2 billion, ranking
Texas third among all states with a 6 percent share of domestic travel spending
(Only California and Florida have a greater market share). This spending directly
supported 477,000 jobs with earnings of $13.3 billion (Dean Runyan Associates,
2004). Nature-based tourism increased by 63% from 1980 to 1990, making it the
fastest growing sector of the state travel industry. It generates $1 billion in state
taxes, $739 million in local taxes, and $1.4 billion of economic activity.
72

However, due to the lack of consistent and complete data, it is difficult to
quantify the economic impact of ecotourism on the San Antonio Bay region.
Currently, comprehensive data on the number of people that come to visit the
region for ecotourism purposes does not exist hampering the estimate of their
economic impact. Despite these difficulties in measuring ecotourism production
and impact, existing evidence indicates that ecotourism is playing an important
role in the local economy.
While the ecotourism industry is growing, the Bay’s fragile estuarine
ecosystem is facing pressure from other economic activities. Potentially, the
largest problem that threatens the overall health of the Bay is a marked change
of natural freshwater inflow that it receives. The increased pressure on both
surface water and groundwater resources upstream by agricultural production,
industry, and a rapidly growing urban population in San Antonio has altered the
timing and volume of river inflow to the Guadalupe estuary. A large increase or
decrease of incoming freshwater can affect “fish spawning, shellfish survival, bird
nesting, seed propagation, and other seasonal activities of fish and wildlife
(Environmental Protection Agency, 2005).” This delicate estuarine system is
deteriorating because upstream water users rarely consider the water needs of
an ecosystem.
Travel Cost Method
The Travel Cost Method was used to estimate the value of freshwater inflows
on the eco-tourism sector operating in the San Antonio Bay area. The Travel
Cost Method uses actual expenditure data to estimate a ‘value’ for the natural
resource services which support the ecotourism service that is consumed. The
Travel cost method yields a maximum estimate of willingness-to-pay for the
ecosystem services provided by freshwater inflows. This measure is termed by
economists as ‘consumer surplus.’ Consumer surplus is a monetary measure
calculated as the difference in what a consumer is willing to pay for a given good
and the price they actually have to pay.
For the Travel Cost Method, the market price for ecotourism is equated to the
actual travel costs borne by the consumer. The consumer surplus is then
attributed to the (non-market) ecosystem services supporting the tourism
experience. That is, on average the consumer surplus is the value of the
economic benefit that ecotourists receive from the ecosystem services
supporting ecotourism. The measure answers the question over what the current
value of inflows are in support of ecotourism.
The data was disaggregated by Texas residents and non-residents. This was
done as it appeared as if some respondents reported travel costs that included
general costs for travel to Texas instead of solely costs for the daily nature trip.
The economic analysis has shown that eco-tourism has significant economic
value in the San Antonio Bay. The Travel Cost Method analysis showed that the
average visitor (who resided in Texas) experienced a consumer surplus of $273
dollars per visit. The average reported expenditure per Texas resident was $231.
The consumer value is the economic benefit received in excess of actual travel
73

expenditures indicating a high value of freshwater inflows. Further analysis could
be undertaken to calculate an aggregate value for the region, but was unable to
be conducted here.
Production Function Approach
A key goal of the research was to provide useful economic information to
inform the debate on freshwater inflows in Texas rivers. The debate is especially
concerned with competing uses for freshwater inflows. Therefore, it is important
to try to relate the value of ecotourism to quantities of freshwater inflows.
A core tool in economics is the production function which mathematically
relates known inputs to the production of outputs. Economists have also adapted
production function analysis to estimate the value of irrigation water in the
production of crops. This study adopts a similar approach with the assumption
that freshwater inflows are an input into the production of ecotourism. An
ecotourism production function is estimated as a function of inflows and other key
variables. This function was then used in conjunction with the ecotourism values
estimated using the Travel Cost Method to calculate a marginal value for
freshwater inflows.
For this study, the freshwater inflows are the only input to ecotourism
included in the model. The output, ecotourism, is equated with the number of
visitors to the Aransas National Wildlife Refuge. This implies that ‘units’ of
ecotourism are not produced until consumed. Finally, various factors are included
to account for likely sources of correlation between input and output. These
included precipitation, summer holiday period, nesting period for whooping
cranes, and period for ‘winter Texans’.
There are several problems with using a production function approach to
estimating the value of freshwater inflows to the production of ecotourism. The
primary problem is the complex relationship between inflows and the status of
the ecosystem. It is known that freshwater inflows have a highly significant
impact on the ecosystem, but this is through a complex interaction with the other
elements of the ecosystem. The inflow regime poses particular problems
because:
• Inflows are continual rather than applied in discrete amounts;
• Inflows vary across the year with important high and low flow periods;
• Inflows experience periods of flood and drought which are also useful
to maintaining the ecosystem; and,
• The resulting ecosystem services are not simply an increasing
function of freshwater inflows
Thus, there is a fundamental question in how to best incorporate the inflows
into a production function. The present model is viewed as an initial step in this
direction. Average inflow rates were taken on a monthly basis. These flows were
then compared to visitor data lagging the flows by one month up to 18 months.
74

This implicitly assumes that flows in a single month would have a significant
impact on attracting tourists.
The estimated tourism-water production function indicated that freshwater
inflows have a positive relationship with visitor numbers up to a flow rate of 2,400
cfs. The average flow rate from the data was calculated as 1,995 cfs. This should
be interpreted as an early indicator that freshwater inflows have a positive impact
on the ecosystem services that tourists use. However, more work needs to be
done to address the timing and magnitude of flow variations and their respective
impacts on freshwater inflows. This type of approach will be highly useful in
analyzing tradeoffs from allocating water between competing uses. Multiplying
the estimated number of visitors with the average expenditures as reported in the
travel cost data ($508) yields a total travel expenditure of $2.39 million. An
incremental increase of 100 cfs is modeled as an increase of 25 visitors for an
incremental increase of $12,700 in eco-tourism expenditures. Assuming a 30 day
month, 100 cfs converts to 22,442 gallons, which results in a value of $565 per
1,000 gallons. This is very high rate relative to water rates of alternative uses
with market prices.
Socio-economic Environment of the San Antonio Bay
This study examined the socio-economic environment of the San Antonio
Bay, with a particular concern on the status of the fishing industry. The socioeconomic
analysis examined Aransas, Calhoun, and Refugio counties. The
analysis used Shift-Share analysis and an input-output model.
Shift-Share
Shift-Share analysis was conducted to study the competitiveness and growth
and decline of local industries. This study used employment changes from 2001
to 2005 to identify the sources of growth and decline in local areas. It
decomposes local employment growth into three components: 1. National share
(NS); 2. Industry Mix (IM); and 3. Competitive share (CS).
1. The National share component explains the share of the change in
total local employment that can be attributed to the rate of the total
national employment growth.
2. The Industry Mix component focuses on the national growth of each
specific industry. T
3. The Competitive Share component is extremely relevant since it
identifies the leading and lagging industries in our study region.
After deconstructing the various reasons for employment change using shiftshare
analysis, the question becomes: What impact does this change in
employment have.
Input-output Analysis
Input-output modeling was used to reveal the complete impact on the
economy of employment change in a particular sector. The input-output model
uses a matrix representation of a nation’s (or a region’s) economy to predict how
75

changes in one industry will affect other industries. It can also predict how these
affects will impact on consumers, government, foreign suppliers, and on the
economy. Input-output analysis considers inter-industry relations in an economy,
depicting how the output of one industry goes to another industry where it serves
as an input, thereby making industries interdependent on another, both as
customers of output and suppliers of inputs. An input-output model depicts this
dynamic relationship.
Job growth and quality continues to be a challenge for rural counties, not
only in the Coastal Bend, but nationwide. Aransas, Calhoun, and Refugio
counties have many issues in common and several that are unique to the county
itself. A common thread running through all the counties is the level of
educational attainment. In most cases the levels are significantly less than the
State average. This will continue to hamper economic development. Both
Refugio and Calhoun are experiencing negative or flat population growth.
On the positive side, all three counties have seen decreases in poverty rates
over the last ten years and increasing real per capita income that is keeping pace
with the national and State rates of growth, although still below the averages.
Calhoun stands out with a real average wage per job that is higher than the
Texas average. This can be attributed to the high quality (paying) jobs found in
the extensive petro-chemical industry in the county.
The focus of this analysis was to determine the state of the fisheries industry
for the San Antonio Bay area. Any results are only relevant in the context of
employment alternatives for those that work in fisheries. Therefore, it was
decided that the most likely employment alternatives are mining (oil and gas),
construction, and manufacturing. Shift-share analysis allows us to deconstruct
the growth or decline in employment and identify the cause for that change,
whether it is national, industrial, or competitive trends.
Fishing employment in Aransas has eroded at a much faster rate during the
time period under study than Calhoun. A negative competitive share in Aransas
and zero value for Calhoun suggests that the county does not have a
comparative advantage in this sector. Given that the main fisheries are shrimp
and oysters it could be argued that these counties would continue to have an
advantage, particularly in oysters, where global competition is not as relevant as
it is in shrimping. Of greater interest is that the total economic impact of
employment loss in the fisheries sector is not nearly as great in any of the
remaining three sectors. The multiplier effect is very limited.
In the case of Aransas, the growth in mining and construction was able to
offset the decline in fisheries and manufacturing, and create a net 376 jobs and
income of $17.6 million. For Calhoun, the study period coincided with a scaling
back of expansion at the petro-chemical firms and this is reflected in the declining
employment numbers. Yet, it still illustrates the greater impact that each of the
three industries has on the economy than fishing.
Shrimping will continue to feel pressure from imports as well as input prices,
such as fuel. Oystering may still have a competitive advantage given the demand
76

for fresh product. This fishery will face pressure in the form of higher input prices
as well as habitat loss. One could conclude that even if there is a loss of jobs in
the fishery sector that it could be made up in other sectors, assuming they grow,
and that the impact would actually be greater. However, there might be value
beyond the economic output of the fishing sector.
Texas and the Coastal Bend have a rich commercial fishing history. There
are many who value its presence beyond the product that it can provide. These
values that are not as tangible can add to the impact that the industry has. For
example, there are tourists who come on vacation and enjoy the experience of
going to the docks to buy shrimp, fish, or oysters directly off the boat. If this
experience is taken away, an important question is whether the tourist would
continue to holiday in this region.
77

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