Statewide Economic Contributions from

Diving and Recreational Fishing Activities on Mississippi’s Artificial Reefs

April 9th, 1998

Prepared under contract for the:

Mississippi Department of Marine Resources

and the

Mississippi Gulf Fishing Banks, Inc.

by:

Southwick Associates

Fernandina Beach, FL Alexandria, VA

(904) 277-9765 (703) 684-5856

Table of Contents

Forward/Acknowledgments...... iii

List of Tables...... iv

Executive Summary...... vi

Introduction and Purpose...... 1

The Importance of Economic Information...... 2

Section I: Diving and Fishing Trips to Coastal Mississippi...... 3

Characteristics of Diving Trips and Trip Related Expenditures...... 3

Characteristics of Saltwater Fishing Trips and Trip Related Expenditures..... 12

characteristics of Charter Boat Firms...... 21

Section II: Economic Impacts of Expenditures Associated with Diving and Fishing

Trips to Artificial Reefs

Descriptions of Economic Impacts...... 24

Data Sources and Methodologies...... 25

Results...... 29

Appendix A: Survey Forms...... 32

Appendix B: Dive Survey Standard Deviations…………………………………….. 42


FORWARD/ACKNOWLEDGMENTS

This project was conducted under contract to the Mississippi Gulf Fishing Banks and the Mississippi Department of Marine Resources by Southwick Associates, a fish and wildlife economics research firm based in Fernandina Beach, Florida and Alexandria, Virginia (904-277-9765). The authors and primary researchers were Rob Southwick, John Bergstrom, Ph.D., and Jeff Teasley.

Until this project, very little scientific data were available on the characteristics of fishing and diving trips to artificial reefs in Mississippi marine waters and the statewide economic impacts of these trips. To generate quantified information, surveys were conducted of Mississippi coast divers, anglers, and charter boat operations. In any survey, there is a trade-off between survey length and response rates. In addition, any survey which asks respondents to provide financial information such as personal expenditures is likely to generate some resistance on the part of survey participants. Therefore, this project began with a certain level of caution. Despite the beginning uncertainties, this project was successfully completed after many hours of research, surveying, discussions and economic examinations. This success came only as a result of the cooperation and support of key industry members and marine management officials. With their tremendous assistance, the first scientific economic examination of fishing and diving trips to artificial reefs in coastal Mississippi has been completed.

Southwick Associates extends its sincere gratitude to Mike Buchanan of the Mississippi Department of Marine Resources for his assistance, the Mississippi Gulf Fishing Banks, and to every dive shop along the Mississippi coast. Every coastal dive shop participated in this project by distributing surveys and helping us to obtain the information required to quantify the total number of divers. Without their help, results on coastal scuba diving would not have been possible. We also thank every charter boat operation, angler and diver who took the time to complete and return a survey, and Ben Posadas of the Mississippi State University Cooperative Extension Service for his constructive reviews and inputs. Despite the countless people who participated in this project, the authors remain solely responsible for all contents herein.

List of Tables

Page #

Table 1: Characteristics of Trips to Coastal Mississippi for Scuba Diving 5

Table 2: Expenses Incurred on Most Recent Trip to Coastal Mississippi

During Which Scuba Diving Took Place 6

Table 3: Proportion of Scuba Dives Taken to Artificial Reefs in

Coastal Mississippi 7

Table 4: Proportion of Coastal Mississippi Diving Trip in Past 12 Months

Taken Aboard a Charter Boat 7

Table 5: Expenditures on Scuba Diving Equipment During the Past 12

Months by Coastal Mississippi Divers 8

Table 6: Expenditures on Auxiliary Scuba Diving Equipment During the

Past 12 Months by Coastal Mississippi Divers 9

Table 7: Demographic Characteristics of Coastal Mississippi Divers 10

Table 8: Rankings of Preferred Gamefish for Spearfishing by Coastal

Mississippi Divers 11

Table 9: Characteristics of Trips to Coastal Mississippi for Saltwater Fishing 13

Table 10: Expenses Incurred on Most Recent Trip to Coastal Mississippi

During Which Saltwater Fishing Took Place 14

Table 11: Proportion of Saltwater Fishing Trips to Coastal Mississippi in

Past 12 Months Taken Aboard a Charter or Private Boat 14

Table 12: Proportion of Saltwater Fishing Trips to Coastal Mississippi

During Past 12 Months Taken to Artificial Reefs 15

Table 13: Expenditures on Fishing Equipment During the Past 12 Months

by Coastal Mississippi Saltwater Anglers 16

Table 14: Demographic Characteristics of Coastal Mississippi Saltwater Anglers 18

Table 15: Rankings of Preferred Gamefish by Coastal Mississippi

Saltwater Anglers 19

Table 16: Frequency of Charter Boat Firms in Different Categories by Percentage

Split of Charters Between Fishing and Diving 21

Table 17: Charter Boat Fees for Whole and Half Day Trips Charged by Coastal

Mississippi Charter Boat Firms 22

Table 18: Rankings of Preferred Gamefish by Coastal Mississippi

Charter Boat Firms 23

Table 19: Retail Sales Generated by Scuba diving on MS Artificial Reefs 29

Table 20: Retail Sales Generated by Recreational Fishing on MS Artificial Reefs 30

Table 21: The Economic Impacts of Mississippi Artificial Reefs 31

Executive Summary

Recreational fishing and diving trips to artificial reefs in coastal Mississippi produce valuable benefits to the state economy. In 1997, it is estimated that the expenditures made by recreational anglers and divers during the course of their reef-related activities generated the following economic benefits for the Mississippi economy:

Scuba: Fishing: Total:

Retail sales = $886,500 $37.4 million $38.3 million

Jobs = 28 1,122 1,150

Salaries and Wages = $515,200 $20.1 million $20.6 million

State Sales Tax Revenues = $54,000 $2.7 million $2.7 million

State Income Tax Revenues = $9,200 $364,000 $374,000

Federal Income Tax Revenues = $47,500 $1.9 million $1.9 million

Total Multiplier Effect = $1.7 million $76.6 million $78.4 million

(the multiple rounds of spending created by sportsmen’s expenditures)

According to a recent study by the American Sportfishing Association, all saltwater fishing in Mississippi generates $155 million in annual retail sales and supports 3,988 jobs. This study indicates that about 25 percent of all expenditures and jobs supported by marine fishing in Mississippi could be associated with artificial reefs. Previous studies on scuba diving could not be identified. Therefore comparisons cannot be provided. Detailed information on trip expenditures and total trips to artificial reefs, as well as demographic data on Mississippi’s divers and anglers who use artificial reefs, are provided in this report. Please review the text for greater details.

v

INTRODUCTION AND PURPOSE

The study was initiated and funded by the Mississippi Gulf Fishing Banks and the Mississippi Department of Marine Resources. The primary purpose was to estimate total expenditures associated with recreational fishing and diving trips to artificial reefs in coastal Mississippi and the economic contributions of these expenditures to the Mississippi economy. The results will help resource officials understand and communicate the importance of artificial reef fishing and diving to the state economy, and help the public appreciate one of the many important benefits of artificial reefs. Economic benefits measured include: jobs supported, salaries and wages produced, tax revenues generated and total economic activity resulting from trip related expenditures.

This study had two basic components. One component was estimation of total expenditures associated with fishing and diving trips to artificial reefs in coastal Mississippi. This component required the design and conduct of three surveys: saltwater angler survey, scuba diver survey, and charter boat survey. These surveys were designed to collect information necessary for estimating total trip related expenditures and the proportion of total expenditures that can be attributed to artificial reef fishing and diving. The second major component of the study was estimating the economic impacts of expenditures attributable to artificial reef fishing or diving on the Mississippi economy. This component required combining the trip expenditure information with an economic model of the Mississippi economy to estimate the impacts of trip related expenditures on specific business sectors and the state economy as a whole. All components of this project and their results are presented within this text.

THE IMPORTANCE OF ECONOMIC INFORMATION

Many of the driving influences in resource management and utilization originate within state and federal legislatures, government agencies, courtrooms, corporate boardrooms, and media offices. These factors collectively decide not only the financial resources available to manage resources, but also help shape public attitudes that ultimately decide the course and fate of all resource actions and programs. Efforts to initiate positive change and build constructive relationships can be greatly enhanced with sound economic data. Specifically, economics can assist in six general areas:

Legislative Actions: economic information can help gain political support for conservation programs by demonstrating the importance of resource-related activities to constituents and commerce.

Funding Initiatives: greater legislative and/or private funding can be secured by demonstrating the importance of resource related-activities to state residents and commerce.

Establish Management Priorities: used with biological and other sources of data, economics can help government resource managers develop conservation and management priorities and understand the impacts of their actions on local, state and national economies.

Public Communication: economics can help win greater public support for resource-related activities by demonstrating the dependence of many people and communities on local resources such as artificial reefs. Also, economics can help gain the attention of people and organizations who may otherwise not be interested in resources, but who are motivated by commerce and economic issues.

User Management: economics provide insights into people’s actions and motivations thereby helping resource officials effectively manage human use of resources such as artificial reefs.

Habitat Conservation: by demonstrating the values and benefits produced by resource-based harvests and recreation, pressure to develop and alter habitat will be minimized.

SECTION I

Diving and Fishing Trips to Artificial Reefs

Characteristics of Diving Trips and Trip Related Expenditures

This section must begin with a brief note on characteristics of scuba diving in Mississippi coastal waters. Mississippi waters are typically shallow and have low visibility due to wind, current, or river outflow related turbulence. This tends to discourage diving activities. Coastal dive shops reported that the vast majority of locals travel to Florida to dive where water clarity is more favorable. The few who do dive in state waters tend to be more avid, and often must travel a relatively long distance offshore to find clear water, or must wait for periods when currents may shift and bring clearer water near shore. These factors are noticeable in the results of this report where the number of participants and the economic impacts of diving are significantly lower than recreational fishing.

A survey questionnaire was designed to collect basic information from divers describing their trips to coastal Mississippi for scuba diving, focusing on trip expenditures and dives to artificial reefs. A copy of the questionnaire is provided in Appendix A. Questionnaires were distributed to divers via Mississippi coast dive shops. Without a source of Mississippi divers’ names and addresses available, dive shops were used to contact divers. Recognizing that all divers must fill their scuba tanks, and that no other air compressors could be located on the coast independent of dive shops, these shops presented a natural bottleneck for all divers to proceed through at some point before a dive trip. All seven Mississippi coastal dive shops participated.

A cover letter from the Mississippi Department of Marine Resources was included with the questionnaire asking divers to complete and return it to the department by mail in an attached postage-paid return envelope. Dive shops distributed the questionnaires to divers during the summer of 1997. Dive shops were requested to hand a survey to each diver who visited for air fills. A total of 31 questionnaires were returned. Without knowing how many surveys were handed out by dive shops (the project’s limitations prevented detail tracking of all dive surveys and we could not realistically expect volunteer shops to track individual surveys), the response rate is unknown. However, recognizing the very limited number of divers in Mississippi, this sample size was considered adequate.

To determine the total number of coastal Mississippi divers, each questionnaire asked how many airfills that diver purchased in the last 12 months. The dive shops provided estimates on the total airfills sold annually. Some shops had exact records, while others could only provide monthly estimates for off-season and in-season months which were then extrapolated to provide annual estimates of airfills sold. One shop could not provide an estimate. To account for this shop’s sales, we simply substituted the average airfills sold by all other shops annually. The total number of divers was then estimated by dividing the total airfills sold annually by all dive shops by the average numbers of airfills annually purchased per diver.

One adjustment was made to the total number of divers. Many divers rent air tanks from dive shops. When a tank is rented, it comes already filled with air. Therefore, each tank rental represents one air fill. Dive shops reported that most tank rentals are for trips out of state and that 10 percent would be a good estimate of the percentage of rented tanks actually used in state waters. To account for divers who rent tanks, one-tenth of all tanks rented by dive shops was added to the total number of airfills sold by dive shops in Mississippi before being divided by the average number of airfills annually purchased per diver.

Total divers using MS waters were estimated at 113. This does not include divers who used charter boats, which will be presented later in the Charter Boat part of this section. Therefore, 27 percent of all divers were estimated to have participated in this project’s survey.

Total expenditures, days and trips estimates were tabulated by multiplying the number of divers by the average per diver as determined by the surveys.

The results of the scuba diver survey are summarized in Tables 1-8. Table 1 shows: 1) mean number of trips per respondent for the main purpose of scuba diving in coastal Mississippi; 2) mean number of trips per respondent which were not for the main purpose of diving in coastal Mississippi but during which a respondent spent some of the trip diving in coastal Mississippi; and 3) mean number of trips to coastal Mississippi during which diving took place, whether or not the trip was for the main purpose of diving in coastal Mississippi. For these three types of trips, Table 1 also provides the mean length of the most recent trip and the total number of dives taken on the most recent trip. The average number of airfills purchased for dives in coastal Mississippi over the past 12 months is also reported in Table 1. Recognizing the small universe and small sample size associated with this effort, standard deviations for specific variables collected by the survey are presented in Appendix B.