Economic considerations of privately owned parks

Privately owned parks continue to proliferate worldwide. Their rapid expansion represents an important yet little understood private sector incursion into an activity long dominated by governments. This paper examines economic issues surrounding establishment and operation of privately owned natural areas. We interviewed owners of 68 private parks in Costa Rica to learn more about reserves’ underlying economics. Key findings include: (1) private parks require an expanded definition of optimal reserve size — one in which quality of protection takes precedence over quantity of land protected; (2) profit was a powerful motivator behind private reserve operation, even though many owners did not rely on their reserves for revenue generation; and (3) an important non-market value of private parks was the high bequest value owners placed on them. Last, we identify key information gaps that resource economists can help fill regarding this increasingly popular conservation tool. The analysis contributes to our understanding of private reserves on both theoretical and empirical levels. It should be of interest wherever biodiversity remains threatened, wherever new conservation partners are being sought, and wherever private reserves are being established, which includes most of the industrialized and developing world.