The study compared rural western counties with the greatest percentage of federal land (blue bars) to counties with the least percentage of federal land (brown bars). The study found from 1970 to 2014, rural western counties with the most federal land performed better in some key areas. (Headwaters Economics)

Western rural counties with the highest proportion of federally owned land or federally protected land tend to have faster economic growth than areas with the least amount of federal land, according to a study by an independent research nonprofit.

The study looked at 276 nonmetropolitan counties in the 11 contiguous states from the Rockies west. It found that rural counties with the highest percentage of federal land averaged quicker expansion in population, jobs, and income than other western counties.

The study comes as Western states discuss federal land policy, sometimes with dramatic consequences like the Oregon standoff at a federal wildlife refuge earlier this year.

The study of federal land broke Western counties into four groups, ranked by the percentage of federal lands and federally protected lands they contained. Then researchers compared population, per capita income, and other data between the top and bottom groups of counties.

Counties with the most federal land or federally protected land performed better than counties with the least, said Megan Lawson, an economist with Headwaters Economics, an independent, nonpartisan organization based in Montana.

The charts show the results of her study. Comparing counties with a high percentage of federal lands to those with a low percentage over a 44-year period, the study shows that counties with more federal land had bigger percentage increases in population, employment, and personal income. Per capita income grew slightly.

The study also found similar results for protected lands – federal property that is within a national park, wildlife refuge, wilderness area, or other designated area.

Federal Land Fare Better-02
The study used the same methodology to compare counties with the most protected federal lands with counties with the least. Protected lands include designations such as national parks, wildlife refuges, and wilderness areas.

Lawson said her research does not prove that federal lands cause economic growth. But it does contradict claims that federal land hurts the local economy, she said.

“We don’t see any evidence that federal lands are impeding local growth,” said Lawson.

Another economist, Paul Jakus, a professor of applied economics at Utah State University, said he thinks the study reveals more about historic land-use patterns than the influence of federal land on local economies. Counties with less federal land are more likely to depend on agriculture, he said.

“What the study is telling me is that rural counties with large private land holdings are relying on production agriculture, and those counties are growing more slowly than other parts of the West,” he said.

But Jakus did say his own research concurs, in part, with Lawson’s findings that counties with more federal land are growing more quickly than other counties on average. “The study suggests that the assertion federal land ownership harms rural communities unambiguously is not as clear cut as some claim,” he said. “The situation is much more nuanced.”

In 2014 Jakus was part of a study commissioned by the Utah Legislature to look at the potential economic impact of transferring federal land to state ownership and management. That study said that while modest amounts of federal land are associated with economic growth, larger amounts can be a drag on the local economy. “The turning point at which the drag begins is county-specific, but overall occurs when 40 to 45 percent of a county’s land is owned and managed for multiple uses by federal agencies,” the Utah Standard Examiner reported in 2014.

Jakus’ study in Utah, done with Weber State University Professor of Economics Therese C. Grijalva, used a different methodology and looked at data from 2013. Besides looking at local economic impact, that study also sought to determine whether Utah would come out ahead financially if it owned and managed 31.2 million federal acres. Jakus and Grijalva found that the state wouldn’t suffer financially from such a move. But that analysis was based on mineral royalties remaining flat at 2013 levels. Since that time, the price of crude oil has dropped by more than half.

Lawson said the role of federal lands in local growth has shifted in the past 40 years. Instead of merely providing commodities like timber or oil, the natural amenities and recreational uses of federal lands help attract entrepreneurs and skilled service workers to rural areas, she said.

Interactive Map

Counties with the greatest percentage of federal lands are dark red; counties with the least are gray. Click on the map to see county-level data from the study.

“Federal lands are an asset,” Lawson said. “It’s not just about natural resource extraction or just recreation. There can be a mix of uses, and diverse economies tend to do better.”

The Headwaters study examined rural counties in Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.

The complete study is available online.

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