West Hayden Island Public Cost-Benefit Analysis

ECONorthwest report analyzes the economic effects of the proposed development of West Hayden Island in Portland, Oregon.

In this report, ECONorthwest analyzes the economic effects of the proposed development of West Hayden Island (WHI).The City’s preliminary plans for WHI include annexing WHI to the City for the purpose of developing 300 acres of the island for a potential future port facility, and protecting and mitigating 500 acres for recreation and open-space use. In this report, ECONorthwest compares the economic differences between current land uses on WHI—which we describe as the Baseline Scenario—with the economic effects of partitioning WHI between 300 acres of port development and 500 acres of open space—which we describe as the Development Scenario.

ECONorthwest includes three types of economic effects in the analysis. The first type, economic values, represents the changes in values of goods and services available that result from the market and non-market activities of the Baseline and Development Scenarios. An increase in value is a benefit, a decrease in value is a cost. Representative values in our analysis include changes in the values of port goods and services, changes in values of ecosystem services, and changes in quality of life in the local community proximate to the WHI port.

The second type of economic effect, economic impacts, represents changes in jobs, employment income, and tax revenues. These impacts occur directly as workers are employed, e.g., on construction and mitigation projects, and indirectly, as dollars spent locally on construction and mitigation cycle through the economy and support other purchases, e.g., food purchased by construction workers. Economists frequently describe these changes using multiplier or impact analyses.

The third type of economic effect, economic distribution, represents the distribution of the other two types of economic effects. This portion of the analysis describes those who pay the costs, those who enjoy the benefits, and their locations.

ECONorthwest's analysis of the Baseline and Development Scenarios also focused on four broad categories of economic effects. The first category, natural-resource effects, includes the economic effects of mitigating for the loss of 300 acres of habitat and changes in the supply and values of ecosystem services provided by natural resources on and around WHI. The second category, recreation effects, takes into account the new recreational opportunities in the Development Scenario. The third category, local effects, includes the changes in quality of life for residents and businesses on East Hayden Island. The fourth category, port effects, focuses on the costs of developing the WHI port and the economic values, jobs, employment income, etc. of the new facilities.

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