A Park By Any Other Name: National Park Designation as a Natural Experiment in Signaling


By Stephan Weiler*
Center for the Study of Rural America
December  2005
 RWP 05-09
Research Division 
Federal Reserve Bank of Kansas City 

Abstract

           Site designation by the National Park Service conveys a unique set of signals to information-constrained potential visitors. Changes in designation thus offer natural experiments to evaluate the signaling importance of names. This paper estimates the visitation effect of the conversion of National Monuments to National Parks through panel data analyses of the 8 designation changes that occurred between 1979 and 2000. These conversions have substantial and persistent effects on annual visitation, indicating that designation signals are indeed significant and credible. These signals appear to be particularly important to information-constrained visitors from a broad national audience compared to more proximate state and metro populations who have better information about nearby sites. Furthermore, increased annual visitor flows to newly designated parks do not appear to occur at the expense of visitation at alternative sites. Finally, visits to these parks appear to be quasi-inferior goods, as visitation is inversely related to various measures of national income.
 

Keywords: Information, Signaling, Natural Resources, Recreation

JEL classification: D83, Q26

*Stephan Weiler is a vice president and economist in the Center for the Study of Rural America at the Federal Reserve Bank of Kansas. Appreciated comments were provided by seminar participants at the Kansas City Fed, the University of Nebraska, West Virginia University, and the North American and Western Regional Science Association conferences. The views herein are those of the author and do not necessarily reflect the positions of the Federal Reserve Bank of Kansas City or the Federal Reserve System.

 

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