Natural-Resource Amenities and Nebrask’s Economy: Current Connections, Challenges, and Possibilities

Natural resources do not have to be converted into crops, electricity, or other commodities to support economic growth. Instead, growth can occur when natural resources provide recreational opportunities (bird-watching, fishing, boating, etc.) and other amenities consumers find desirable. This process is called amenity-driven growth.

This report examines the current status of, and potential for naturalresource-related, amenity-driven growth in Nebraska. Resource-related amenities may be able to stimulate economic growth in the state through four mechanisms:

  1. Improve the Quality of Life. Nebraskans may be able to improve the economy by making the state more attractive, especially to highly productive people. Areas with abundant amenities tend to attract people—especially entrepreneurs and those with high levels of education—and to experience faster growth in jobs and income.
  2. Encourage Feedback to the Farm Sector. Nebraskans may be able to improve the economy by capitalizing on natural-resource amenities in ways to bolster the farm sector. Amenity-driven growth may increase off-farm job opportunities for members of farm and ranch families. Some farms and ranches may increase earnings by using natural resources for agritourism activities. Practicing environmentally sound farm practices, such as irrigating with no more water than crops need, may increase many farms’ net earnings.
  3. Expand Recreation and Other Commercial Uses of Natural Resources. Nebraskans may be able to improve the economy by stimulating growth in the recreation industry. Americans spend a lot on resource-related recreation. National expenditures in 2001 on three activities, fishing, hunting, and wildlife-watching, averaged $81, $103,  and $103, respectively per trip, and totaled $35.6, $20.6, and $38.4 billion for the year. Some recreational activities important in Nebraska, such as bird-watching, are growing rapidly. 
  4. Protect Environmental Values. Nebraskans may be able to improve the economy by reducing damage to the environment. Ecosystems provide many valuable goods and services. Some sustain species and special landscapes, others knit together the web of life, mitigate floods, control pests, … the list is perhaps endless. Impairing these goods and services can retard growth by causing communities to rely on more costly substitute services, and by triggering changes in economic behavior, either voluntarily or through regulation.

The economic forces underlying amenity-driven growth are powerful. Spatial differences in amenities, of all types, account for about half the interstate differences in job growth. Natural-resource amenities are especially important. Most studies, though, have focused on mountains, ocean beaches, and other amenities absent in Nebraska, raising the possibility that it lacks what is needed to have any hope of using natural-resource  amenities to generate jobs, incomes, and community stability.

Evidence indicates, however, that Nebraska has its own, distinctive style of amenities potentially capable of generating amenity-driven growth: rivers and reservoirs; agricultural as well as undeveloped landscapes;
opportunities for fishing, hunting, and wildlife-watching; trails; state parks; and areas with aesthetically pleasing topography and scenery. Nearly all Nebraskans indicate that the state’s natural resources are important to the quality of life they enjoy living in Nebraska.

These feelings notwithstanding, the four mechanisms of amenity-driven growth currently sometimes work to Nebraska’s disadvantage.