Note: This paper was written in 2019 as a class assignment. I plan on writing a response to this paper to see what changes have occurred since this paper was written.

Abstract
Living in the information age, people all across the world expect information to be at the touch of a button, our demand for media is no different. The market for streaming services is engaged in a war for subscribers, where the best content wins. With Netflix currently monopolizing the market, how will they complete in the future with increasing competition and rising costs. This paper takes a look into the video streaming market and analyzes Netflix’s current monopoly, and the future of the market as Disney and Comcast bring deep pockets and fresh new popular content.

In January of 2007 Netflix announced that it would launch its new video streaming service. This announcement comes four months after Amazon’s similar announcement, and a year before Hulu’s announcement. Since that announcement, Netflix has seemingly been unopposed in its seizing of market power and growth. Many streaming companies have gone out of business over the years since Netflix’s announcement, and many more have announced their own streaming services, increasing the competition in the video streaming market. Even with new entrants and increased competition, Netflix started separating itself from companies such as Hulu, YouTube, and Amazon through market and price control (Fitzgerald, Kendall 2018). “Netflix, the platform inspiring fear and mega deal-making among legacy media companies, is the dominant player…But deep-pocketed new rivals, some armed with unmissable content, are coming for it” (Winkler 2019). The current market has Netflix holding fast to the #1 spot, but the future is anyone’s game. Will Netflix be able to hold on with new and stronger competition? Or will some new company with greater content and pricing be able to regain market control once controlled by Netflix? This paper seeks to evaluate the current market structure and through economic analysis, predict what the future holds for the main players in the video streaming market.

Attempting to determine the market type that Netflix, Hulu, and Amazon amongst others are in requires a careful examination of many variables, such as; product differentiation, competition, number of firms, and barriers to entry. Quickly analyzing Graph 3, it shows that are six major firms in the market, with most of the competition happening in the bottom five, leaving Netflix at the top, unopposed. Limited competition between very few producers, slight product differentiation (original content, and bought content), and medium to high barriers to entry are main characteristics in this market. Thus, the best market type for video streaming services is an oligopoly. The average oligopoly has evenly spread out market power as to limit influence on the others, and that’s where this market becomes unique. Unlike other oligopolistic markets, Netflix has an almost monopolistic control over the other major players. With 55 million domestic subscribers, Netflix has more consumers than Hulu and Amazon combined. Apart from that, “movie executives think that Netflix’s deep pockets and willingness to spend big on original series may be the early sign of a monopoly” (Elder 2016), as well as “the TV industry is now alluding to Netflix as a potential monopolist” (Elder). Netflix currently operates on a different supply and demand curve than the rest of the competitors and is clearly operating at a higher revenue level and no duopoly exists. A duopoly would exist if there was a firm capable of producing the capital necessary to match that of Netflix. “This means that Netflix operates under a natural monopoly where a barrier of entry exists” (Cho 2012). This oligopoly is unique in that there is a natural monopoly within its market that has its own separate barriers of entry to catch up to Netflix’s level.

It is hard to classify Netflix, as it can either be a monopoly or oligopoly. In either instance, entry into the market is difficult as only a few firms have the economies of scale to compete with Netflix. Even the firms who have the economies of scale have difficulty producing, marketing, and securing content for themselves. In other words, the market is very limited in size and scope so that only a few firms have both the economies of scale and can render services at a profit along the demand schedule Netflix falls under (Cho).

Netflix has been in the game too long and has gotten too big for other firms expanded their services slowly to catch up quickly and effectively. A major barrier to entry that exists is content. In order to obtain consumers, one needs to have something for them to watch. Acquiring popular content is a costly endeavor that requires large amounts of capital and a reasonable amount of market power to force the competitors’ hand. Without highly demanded content, one’s product won’t be desirable to the masses and others will flock to a competition company to get the content that is desired.

Graph 3 provides insight into the video streaming market, and the six major players that have a major stake in the market. Going in order of least amount of market power to greatest, the six major companies analyzed are; HBOGo, SlingTV, Hulu, Amazon, YouTube, and Netflix. The graph explains that Netflix is in 73 percent of houses in America, compared to Hulu at around 18
percent.

Table 2 further helps explain the number of subscribers that Netflix has compared to Amazon and Hulu.

Subscribers provide these companies with revenue, which helps further their ability to control the market content and produce content that consumers want. Since 2010, Netflix has had a steady increase in subscribers and today has more subscribers than Hulu and Amazon
combined (domestic subscribers). As Netflix dominates both the market power and battle for subscribers, many new competitors are planning on entering the market to increase competition and even the playing field. Comcast, Disney, and Warner Media are all bidding to enter the market as larger competitors to put pricing pressure on Netflix and the other competitors.

The threat of new competition doesn’t have everyone convinced that Netflix’s “leadership position is going to last as more and more competitors move into the streaming space, especially in the United States” (Ingram 2017). If this future competition is to give Netflix a run for their money, who has the best chance? In the current market, no one can produce the amount of content, have deep enough pockets, or have the same economies of scale as Netflix, so how will new competition change that? “Disney is the best-positioned to challenge Netflix. Its content, from “Frozen” to “Avengers” and “Star Wars,” is must-have viewing for many households around the globe” (Winkler 2019). Netflix has recently struck up a deal with Disney to get exclusive rights to
stream all of their new content, and with Disney entering the market with their own streaming service, Netflix will either be forced to pay more for these rights, or abandon them and replace them with other popular or original content. “Disney has already indicated that its movies and TV shows in the future will be reserved for its own streaming effort” (Flint 2019). Going forward, the competitions best strategy is to drive Netflix’s production costs up, forcing their revenues to drop and forcing the popular content people demand away from Netflix, towards the other smaller competitors. Netflix hopes to offset these higher production costs, and other variable costs required
to feed their original content spending spree by raising rates. In Table 1, a breakdown of all the major players and their plan prices is presented, and Netflix clearly isn’t the cheapest option, so how can they afford to raise prices time after time?

Due to their substantial market share, the amount of pricing power they have has allowed them to get away with this price increase (Winkler2 2019). Glancing at Graph 1 and Graph 2 one can conclude that even after multiple price increases, Netflix hasn’t seen a slowdown in new subscribers.

Hulu recently lowered their plan prices in hopes to attract more subscribers to increase revenue to more strongly compete with Netflix and Amazon, and has seen some record results from this move (Mullin 2019). Netflix will soon reach a point where the plans they offer get to expensive. “Consumers will shell out only so much to be entertained. What better way to create price competition than launching a free streaming service?”
(Winkler 2019). Graph 5 illustrates this point by showing that as price increases, total revenue (TR) increases until a certain point where consumers are no longer willing to pay for your service.

At this TR maximizing point, TR starts begins decrease. This is because “higher Netflix prices could have frugal customers rethinking how much they spend on rival services” (Flint 2019). Netflix is not the sole provider of popular content, and should not take this new competition lightly as substitutes exist within its own market

A major barrier to entry in the video streaming market, as discussed earlier, is content. A company needs to supply a product that is demanded by consumers. “For Netflix, the best strategy to withstand the challengers is to double-down on original, exclusive programming – as it has been doing” (Winkler 2019). This is shown graphically in Graph 7, indicating that since 2012, Netflix has increased its original content by 3,000 percent.

Original content is the true point of differentiation between the many firms competing for subscribers and increased revenues. “So far, Netflix’s strategy of betting big on programming appears to be paying off” (Flint). Hulu is also seeking to strike gold with original content by increasing its price on its TV plan and lowering the price on its cheap plan, hoping to attract more consumers, thus increasing revenue. This will help Hulu “compete with competitors like Netflix Inc. and Amazon.com Inc. that are spending billions on programming” (Mullin). Netflix currently has a $6 billion content budget, compared to Amazon’s $2 billion, and Hulu’s $2.5 billion. “It is clear that Netflix is spending significantly more
than Hulu and Amazon Prime” (Stewart 2019) and that is shown in the current market place with Netflix leading the market with twice as many subscribers, and deeper pockets than the rest. With Netflix’s deep pockets, it has allowed them to supply the content they want based on the demand
they are seeing, but the increased competition, and the inevitable loss of all Disney content, puts Netflix and the market in an interesting spot. A spot with higher competition and Netflix’s profit margins are expected to take a hit as their costs for new popular content increase. Netflix currently spends $100 million more than Hulu and Amazon (in 2015) combined to acquire new popular
content, showing strong monopolistic power, in an oligopolistic market (as seen in Graph 6).

Netflix finds itself in a pretty comfortable spot right now, with little competition knocking at their doors, allowing them to producing more OGC than any single cable network, operate at low costs (thanks to economies of scale), and provide the content that consumers demand at whatever price they determine. The future isn’t clear, but with future competitors such as Disney threatening a market entrance, the market is seeing new players emerging, putting market pressure on its biggest contender, Netflix. The name of the game is content, and whoever produces the best OGC, wins. Its hard to see Netflix losing its number one spot in the near future, but its monopolistic power over the other firms is likely to dwindle as future competitors enter the market, stealing back content and closing the wide gap Netflix has set for itself.

COVID-19 General Issues Survey

Analysis of CoronaVirus Survey Administered in May-June 2020

Back in May 2020 when the COVID-19 pandemic was still new in the United States, I kept wanting to create a survey about some general issues regarding the virus and pandemic. I finally got around to creating one and administering it via Facebook. The response I got was amazing! A total of 184 people responded. WAYYYY more than I was expecting. So I would like to formally thank you each one of you for your participation in this personal project.

I would also like to apologize for the time its taken to get this analysis out. I had the majority of it done a while back, but creating this deliverable has taken time as life got busy and kept me from doing it. Better late than never! So without further ado, the analysis of the questions is below. I didn’t analyze each and every question in depth as I felt some questions didn’t need further analysis.

This survey was administered 4 months ago during the early stages of the pandemic. As the pandemic progressed and more information became available, the type of questions I would have liked to ask has changed and I am sure that your answers to some of these questions has changed as well. So when looking at the data below, try and think back to what you answered in May/June and see how different your answer would be today.

Click ‘Download’ below to get the complete dataset for this survey.

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Question 2 – On a scale of 1 to 10, where 1 is No Fear, and 10 is Extreme Fear, What was your fear level when you first heard about the COVID-19 Virus?

Question 3 – Using the same scale as the previous question, where 1 is No Fear, and 10 is Extreme Fear, What is your fear level now that the COVID-19 Virus has impacted the world.

For these two questions, I grouped them for a comparison analysis. Seeing the average changes of fear over time. The first two graphs shown below are the raw data graphs showing how everyone as a group answered.

Shown in the above graph: The average fear level went from 3.97 up to 4.91, an increase of nearly 1 “Fear Unit”. This is where measuring fear gets hard, because what exactly is a “Fear Unit”, but overall, fear increased on average by 1 point as the pandemic went on. Where is your fear level today? Would you still rank yourself around the average? Or are you higher on the scale? I would predict, based on what I’ve seen, the average fear level would be near the 5 or 6 level.

Now, lets break the fear level down by Gender.

Male fear level increased on average from 3.51 to 4.59, an increase of 1.08
Female fear level increased on average from 4.15 to 5.05, an increase of 0.9

The female group started with a higher initial fear level than the male group, but had a slightly lower increase from initial to full pandemic fear levels (difference of .18). I don’t want to come off as gender shaming, saying females are on average more scared than males. That isn’t what I’m going for here. I just wanted to see a general breakdown between male and female.

Now, a breakdown by demographic age group.

18-24 Initial Fear	4.028	Change of:
18 -24 Full Pandemic Fear	4.833	0.806
25-34 Initial Fear	4.192	Change of:
25-34 Full Pandemic Fear	5.329	1.137
35-44 Initial Fear	4.429	Change of:
35-44 Full Pandemic Fear	4.667	0.238
45-54 Initial Fear	2.800	Change of:
45-54 Full Pandemic Fear	5.440	2.640
55-64 Initial Fear	3.895	Change of:
55-64 Full Pandemic Fear	3.842	-0.053
65+ Initial Fear	4.400	Change of:
65+ Full Pandemic Fear	3.400	-1.000

The age group of 45-54 had the largest fear increase, with an average change of 2.64. While the age group of 65+ had the smallest increase (technically a decrease) of -1.0.

Finally, I broke down these two questions by Education Level attained.

Initial Fear (HS or Equiv.)	3.538	Change of:
Full Pandemic Fear (HS or Equiv.)	4.769	1.2307692
Initial Fear (Trade School)	4.800	Change of:
Full Pandemic Fear (Trade School)	3.000	-1.8
Initial Fear (Some College)	3.326	Change of:
Full Pandemic Fear (Some College)	4.721	1.3953488
Initial Fear (Associates)	4.032	Change of:
Full Pandemic Fear (Associates)	4.742	0.7096774
Initial Fear (Bachelors)	4.145	Change of:
Full Pandemic Fear (Bachelors)	5.420	1.2753623
Initial Fear (Masters/Professional)	4.850	Change of:
Full Pandemic Fear (Masters/Professional)	4.500	-0.35
Initial Fear (Doctorate)	3.000	Change of:
Full Pandemic Fear (Doctorate)	4.000	1

Those who received ‘Some College’ had the largest increase (by a slim margin) on average, with an increase of 1.395. Again, on the other end, the smallest increase (technically a decrease) was those who received a ‘Trade School’ degree.

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Question 4

Would you say that your overall mental health has: Increased A lot, Increased Some, Stayed About the Same, Decreased Some, or Decreased A lot.

With the many lockdowns and quarantines that were put in place from federal, state and local governments, one major issues that I was curious about was that of mental health. Being forced to be socially distant from others, being locked in your house, only being able to leave for shopping can have very negative effects on people.

I was extremely relieved to see the results of this question, and that the majority of you were ‘hanging in there’ during these interesting times. Four months have passed and a majority of the lockdowns and quarantines remain in place, so I truly hope that all of you are still ‘hanging in there’ or getting better! If you need help, seek help. Don’t be afraid to ask.

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Question 5

There are two leading theories developing, one that the virus is a lab created Bio-Weapon, and the other that is came from someone eating Bat. Which do you believe more?

As time went on, these two theories and conspiracy theories died off. While this question is today, irrelevant, at the beginning of all the mayhem it was interesting to see what everyone’s point of view was.
With how little was actually known about the situation, but with the “Bat Meat” theory being the most plausible, that theory took the most votes.

I’m not sure where these theories stand today. I haven’t heard anything about any of them in recent news stories, but I believe that the bat meat is the story people are sticking with.

Here were some random answers I received that didn’t fit into any of the main answers:

• Bio-engineered super solider serum that went all wrong.
• God is speaking. Judgement is coming.
• That it is a bio-weapon or lab created is not substantiated by science. However, when people say it “cane from someone eating a bat”, they’re repeating generalizations and speculation unfounded in actual evidence and motivated by stereotypes of southern China. It undeniably originated from the frontier between human and animal spaces, but there are any number of scientifically backed theories for specific origins, most recently evidence that points to the trade in Raccoon Dog fur.

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Question 6

Do you plan on getting the COVID-19 Vaccine as soon as it becomes available?

As we get closer to actually having a vaccine for the coronavirus, I would imagine that the 45% of people who were unsure are a little more decided in their decision whether or not they plan on receiving the first round of vaccines.

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Question 7

Which of the following PPE have you personally used when you have left your house? (Please select all that apply)

I used a word chart for this question, so the larger the word, the more it was mentioned in the responses.

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Question 8

Have you, or do you plan on, investing money into the historically low Stock Market?

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Question 9

Do you support stay at home orders issued by local and state governments?

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Question 10

On a scale of 1 to 10, Where 1 is “Not at all, life as usual”, and 10 is “I Haven’t left my house except for groceries”, How strictly have you followed your local stay at home order?

Trying to recall the exact number of times you left your house during an entire week is nearly impossible. So questions like these are typically the best guess of the respondent. The data does support that because a majority of people support the government’s stay at home orders (Question 9), it comes at no surprise that the highest concentration of times left the house hovers toward 10.

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Question 11

How Quickly after the stay at home orders are lifted do you plan on returning to normal life?

Whatever you chose in May/June and regardless of what you would choose now, stay safe out there!
Other answers received:
– A combo of 2 and 4. History could repeat itself( Spanish flu 1918)
– He will lead me. Not government.
– I’m an essential employee my life has been pretty normal
– My life is fairly normal right now as an “essential” worker

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Question 12

Has your job been impacted due to the stay at home orders/quarantine?

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Question 13

How many times in the last 7 days did you leave your house? (For both, essential and non-essential purposes)

Another question like Question 10, where remembering the exact number is a hard task, so while the data may be a bit skewed, I believe it to be mostly accurate.

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Question 14

Do you agree or disagree with how your Local Government is handling the COVID-19 Response?

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Question 15

Do you agree or disagree with how your State Government is handling the COVID-19 Response?

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Question 16

Do you agree with the way Donald Trump has handled the entire pandemic situation?

Many times in the U.S. when something major happens (i.e. – recession, pandemic, tragedy, etc.) the current president is to blame. Whether or not it is actually their fault, people will always tend to point the finger at the president. The COVID-19 pandemic is no different. Now in September, as the election gets closer, the job President Trump is doing with the pandemic is a major issue for voters. We aren’t here to talk about who you support or not, but the above graph and the following are how the 184 respondents answered when asked about President Trump’s handling of the pandemic.

For this question, I only broke down the data by political preference, and age.

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This third graph shows all the potential options for political preference and where they lie. This graph got a little busy which is why I decided to group the Right and Left together, to clean it up a bit. I added this so you could see the entire data portrayed as it was received and broken down.

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When looking at age, it was interesting to see the results. Only 1 age group (65+, slight bias from 45-54) had a clear bias towards one answer. Below is the breakdown of the age groups what percentage of the total population the represent.

Below is the breakdown by age group and where each age group lies on the Agree/Disagree scale (% of age group)

Across all age groups, on average respondents selected:

• Strongly Disagree – 18% of the time
• Disagree – 10% of the time
• Neither Agree/Disagree – 26% of the time
• Agree – 36% of the time
• Strongly Disagree – 10% of the time

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Question 17

Would you rather see the economy reopen quickly, and minimize the damage being done, or keep the economy closed until the virus can be contained and controlled?

All 3 of these options were tried nationwide in different states, and from what I have seen, neither option is perfect. All 3 options received mixed results when implemented. As we are now in September, many states are still in the mid-Stages of their re-opening plans (Grey Option), while the virus remains a threat to everyone. The most popular option selected is the one that is used by the majority of governors across the country, and it seems to be working (for the most part, depending on who you ask).

Other answers received:
– Hard to answer. I want it open but, I worry about those that will get sick because of it.
– Let the young and very healthy go back to work. Caution heavily the elderly to go out
– Open completely and let us decide how much to go out.
– Reopen most of the economy, have immunocompromised people still be careful.
– Reopen slowly but make testing mandatory for businesses to reopen. If an employee has been in contact/ or is infected they should be forced to self isolate. Take the necessary precautions to do it right. To minimize a second wave.

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Question 18

Do you agree or disagree with the following statement: A full blown economic shut down, which will result in the loss of many American jobs, small businesses and livelihoods, is worth sacrificing to slow down the spread of the COVID-19 virus.

This question was a clearly biased question. I knew it was a leading and biased question as I wrote it, and purposefully left it in the survey to see what people would say. The results were interesting, and when broken down, provide certain insights into certain demographics. This question is the classic, “you’re on a train, on one track there is 5 people, on the other there is 1, which track do you choose?” type of question. No answer is truly morally sound, but it all comes down to personal opinions, political affiliation, age, lifestyle, etc.

So its understood what you are looking at in terms of results:
To agree with the statement you: agree that shutting down businesses (possible forever) and forcing people out of their livelihoods is the right move to slow down the COVID-19 spread, with potentially a more controlled spread of the virus.

Whereas, if you disagree you: disagree that shutting down businesses to slow down the virus is the right choice, and that businesses should remain open in order to protect people’s hard earned livelihoods and small businesses, but could potentially allow for a large explosion of COVID-19 cases.

Here the data shows the breakdown based on Right Wing and Left Wing political preferences. It comes at no surprise (to me at least) that the Left doesn’t show strong numbers until you hit Neutral and going into the Disagree side. The exact opposite is true for the Right Wing. It has been proven over time that the Left tends to have more empathy than the Right (not saying Right wingers don’t have empathy, because I know A LOT who do), which doesn’t make either 100% right/wrong, but the data presented here supports that claim.

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Question 19

Did you support the 2 Trillion Dollar Stimulus Package passed by Congress that gave Americans a $1,200+ monetary boost?

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Question 20

Do you support future congressional bills to provide financial relief to US Citizens (eg, $2,000/month, Rent/Mortgage payment freeze)?

While doing analysis, this graph was especially interesting. The less likely you are to receive the full $1,200 or even part of it, the less support that group gave. While those who were guaranteed the entire $1,200 stimulus check, showed strong support for the bill.

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Question 21

Do you think that the number of cases/deaths in the United States is being under reported, over reported, or accurately reported?

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Question 22

How many times a day do you check the news for COVID-19 related news? (New Cases/Deaths, vaccine updates, CDC news, etc.)

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Demographics

Gender

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Age

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Marital Status

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Income

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States Where Respondents Live

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Education Level

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Ethnicity

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Political Preference

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That concludes the COVID-19 Survey Analysis! Thank you again so much for participating if you did, and also thank you for checking it out! This was such a fun personal project that was made successful but 184 of you! Never expected to get that many responses back! Hope this was informative, and helpful. The COVID-19 pandemic continues, and many more questions could be asked of all of us, but for now, we have this snapshot into the past (May/June).

The analysis doesn’t necessarily end here! Download the dataset, and mess around with it yourself, and find answers to questions you have about the data received!

Thanks again! Stay safe out there!

Leave a comment below with any questions, insights, or any other comment! Please keep comments civil, this is a family site.

The Pacific Northwest (PNW) is known for its beautiful forests and famous salmon runs. Over the past 50+ years there has been a steady decline in the amount of salmon returning to their breeding grounds, raising concerns over their future. Salmon provide much needed nutrients to the luscious green forests and also support a multi-million-dollar fishing industry. The construction of the hydroelectric dam system on the Columbia River has caused major destruction to the historical habitats of this keystone species. This paper seeks to look at the causes of the destruction of the salmon species and look at previously done studies to determine a value of this important species in an effort to place better protection over them and possibly reverse any damage done to the river system before it’s too late.

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I. Introduction

What is the value of a single salmon fish? An entire salmon generation? Depending on who you ask, you will receive different responses, based on where people live, their occupation, hobbies, and people’s general interest in the environment. While the answers would vary, each person you ask, no matter where they live, would place some value, whether large or small, on the salmon species.

Understanding the entire impact that the Columbia River salmon have on the ecosystem, the economy and our everyday lives requires us to evaluate “the social, ethical, aesthetic and cultural values. (McNeely et. al 1990)” This provides an insight into why “salmon are integral to the ecosystem and the culture of the Pacific Northwest (PNW). In fact, salmon are considered a “keystone species” by scientists because of the benefits they provide to both aquatic and terrestrial ecosystems. (Klein 2017)” With the Salmon being a keystone species in the Columbia River Basin, a value needs to be derived and placed on these endangered species so that present day and future generations can enjoy the existence of the salmon fish, even when they do not seem present.

Beginning with the completion of the Bonneville Dam in 1937, the Columbia River basin began to see the start of a dammed-up river system. Historically, over 30 million salmon would swim upstream to their breeding grounds and lay eggs for the next generation. Currently, less than 5 percent of the 30 million make it back to their breeding grounds (see Figure 1). While dams provide flood control and electricity to the surrounding area, they also “play a significant role in altering the spatial pattern of temperature in rivers and contribute to thermal pollution, which greatly affects the river aquatic ecosystems” (Ling, et al. 2017). The hydroelectric dam system (see Figure 2), has “also played a major role in the decline and extirpation of numerous salmon and steelhead populations, including 13 stocks currently listed under the Endangered Species Act.²” Whether we like it or not, individually or as a society we implicitly or explicitly place a value on environmental resources. Typically, the value placed on an endangered (or threatened) species is typically higher due to a fear of losing the species for future generations and a moral feeling of helping the environment makes people feel good.

Salmon face a much different ecosystem today, then they did before the completion of the hydroelectric dam system was implemented. The dam system (along with other climate changes) has introduced new predators into the waters, both man-made and invasive. It has also increased the water temperature, decreased the river’s flow and has destroyed many of the river’s tributaries which were once home to the gravel beds essential for salmon eggs.

So exactly how much are salmon worth? This paper will seek to examine both the use value and the non-use value (intrinsic value) of the major salmon species in the Pacific Northwest, and specifically in the Columbia River basin. By examining these uses, we will attempt to show through empirical data, the value of this keystone species and briefly explain what can be done to mitigate the harmful effects of the new environment mankind has made for salmon.

II. Motivation

Having lived in the Pacific Northwest, my entire life, I have always enjoyed the beauty that comes with the mountains, forests, wildlife, and the river systems that supply water to both farms, cities, and natural habitats. When one takes a step back and looks at the complex ecosystems that make up the Pacific Northwest, one begins to realizes there are a lot of moving parts that all depend on each other to make the ecosystem function.

In sixth grade my class had the opportunity to be part of an education video on Salmon runs. As part of the video, a few students (including me) were selected to be bears, the main predator of the salmon. The remainder of the students were the salmon. The goal of the Salmon was to get from point A to point B, avoided the large rocks, waterfall, and most importantly the bears. This activity was to show the challenges that salmon had swimming upstream to their breeding grounds. Afterwards, the Idaho Fish and Game taught us about fish ladders, dams, and the entire journey that the salmon make just to be able to breed.

After this experience I became interested in the salmon species that swam through Idaho’s rivers and visited places such as Redfish Lake, Middle Fork of the Salmon River, and the MK Nature Center in Boise (an educational center to learn about Salmon). I was fascinated, and I learned all that I could about the salmon, rivers and dams within Idaho and Oregon. This fascination grew the older I got. My main motivation behind this paper comes from a childhood of being fascinated with salmon. I am motived to share the literature and data that is out there on the effects that the decline in salmon has on the ecosystem. “It is easy to forget how important fish and other aquatic life are, some of which reside at the bottom of the food chain.³” With the salmon fish (and other species) being a keystone species across the entire Pacific Northwest they must be continually protected against extinction, which requires placing a value on this species.

III. Literature Review

The sources and causes of the thermal pollution in U.S. rivers are varied, which makes it difficult to pinpoint the extent of the problem, (Bobat, 2015) and since the thermal pollution caused by hydroelectric plants hardly effects human health, little is done and is generally neglected (Bobat, 2015). Yet, dams play a significant role in altering the spatial pattern of temperature in rivers and contribute to thermal pollution, which greatly affects the river aquatic ecosystems. Understanding the temporal and spatial variation of thermal pollution caused by dams is important to prevent or mitigate its harmful effect (Ling, et al., 2017). Ling, et al. (2017) and Becker (1973), conducted many studies that show temperatures downstream of dams are much cooler than those upstream of dams in summer, while water temperature remains stable along the river in winter, showing evident characteristic of the thermal pollution caused by dams which are spatially and temporally modifying temperature in the Colombia River Basin (Becker, 1973). Other studies also attempted to pinpoint temperature modifying influences existing or anticipated in the Columbia River basin, namely, the impact of impoundments that result from hydroelectric development and the effect of heated discharges from operating reactors (Becker, 1973). Flow reduction and/or flow alteration can also be responsible for changes in river water temperature which is the dominant factor controlling the evolution and activities of all cold-blooded aquatic organisms (Sinokrot B.A. & Gulliver J.S.,2000; Becker 1973), such as migrating salmonid species (Hilborn, 2013).

River temperature is arguably one of the most important parameters which determines many aquatic habitat attributes and the general health of river ecosystems, and the principle contributor of the heat that is changing the rivers temperature and affecting the river’s ecosystem is the electric-power industry (Caissie, 2006; Clarkson & Childs, 2000). According to Clarkson & Childs (2000) each species living in the aquatic ecosystem have become adapted to slight seasonal variations in water temperature in its habitat, but when exposed to extreme shocks of abnormal heat pockets, fish species cannot adapt quick enough and are affected in many ways such as behavioral changes, mortality in larvae, lowering spawning rates, inhibited embryonic development (Clarkson & Childs, 2000), and oocyte degeneration in 50% of female fishes (Verones et al., 2010). If water temperature continues to rise due to hydroelectric power plants at the current rate, this could have important (both positive and negative) effects on aquatic biodiversity and the overall river ecosystem (Verones et al., 2010; Kaushal et al., 2010). Increases in the overall water temperature could also lead to a disruption in the seasonal timing of spawning, larval development (Schindler et al., 2005).

With the rising river temperatures cold-blooded fish species not only have to deal with thermal shocks affecting their behavior and development, they now are being introduced to invasive warm-blooded fish species (Lawrence et al., 2014). Strategic thinking that recognizes trade-offs that need to be made between ecosystem protection and dam building, among other sources of thermal pollution need to be taken before the effects are irreversible (Mantua et al., 2012; Lawrence et al., 2014).

The future of the salmon in the Pacific Northwest is up in the air, but has constantly received widespread support from public opinion polls (Lackey, 2003). There is a divide within the political poles of America, many are able and willing to bear any burden to protect and restore the remaining salmon runs. While the others acknowledge the importance of the salmon but aren’t willing to accept any economical or societal change to help these endangered runs (Lackey, 2003). Attempts to avoid the extinction of an endangered species is recognized as a passive use value, which is a value given to a species because of their benefit to mankind simply because their existence is known. The Pacific Northwest salmon fit easily into this picture (Loomis, 1999). By combining a use and non-use value, economists and other scientists are able to place a value on a species.

Salmon provide just around 70 percent of a forests nitrogen once their carcasses begin to decompose. This source of nitrogen is essential for the forest to support life, and in return, the nitrogen rich trees then protect the habitat of the salmon (Post, 2008). Without a proper value place on the salmon, not must is expected to change as people don’t fully understand the benefits this keystone species brings to the entire ecosystem nor do they understand the essential trade-off between hydropower and salmon (Håkansson 2007). But placing a value on anadromous fish, and fish runs is a daunting task in a river system such as the Columbia River (Meyer, 1982).

The purpose of this paper is to review the above-mentioned literature and show and propose different methods and techniques to place a value on the salmonid fishes, who use the Colombia River Basin as their breeding ground. Where possible, the use of empirical data will be used in attempts to show the value that the salmon have on the ecosystem and economy of the entire Pacific Northwest. While we seek to place a value on the ecosystem service that these fishes provide, the purpose of this paper isn’t to introduce techniques and practices to fully mitigate the thermal pollution in the rivers, only provide evidence and data that a value exists for the salmonid family within the Columbia River basin.

IV. Data & Analysis

When beginning to do research for this paper, I half expected the data for this topic to be readily available, easy to use and manipulate. Most data that is available in the current literature is data reported within papers as results from other papers, or experiments they have run. Understanding that this is to be a quantitative paper, I will present the few data points I found along with their analysis. After which I will go on and present a theoretical econometric model that I would use to run a regression given that the dataset was available and full (with historical data and current data). Then a continuation of what data I would need to do a deeper in-depth analysis of this paper will be presented and what I would do with that data.

A. Use Value

In environmental economics, when attempting to value a species or environmental resources there are two values you seek to derive, a use value and a non-use value. Use value is “the value of products that are bought and sold on the market… Usually, these values are the only ones that count as part of [GDP]; and then only when they are removed from the ecosystem (McNeely et al, 1990) and “products that are used by people but are not bought or sold on the market. (McNeely et al.)” Salmon is a highly demanded public good in the economies of Oregon and Washington, with large fish markets along the coast. The main feeding grounds for the PNW salmon are thousands of miles from their birth place in the Pacific Ocean. They drive a multimillion-dollar industry that is being hurt by the declining salmon numbers. 4 of the 6 major salmon species are currently protected under the Endangered Species Act (see Figure 1) and are therefore very limited on how much can be caught each year, dropping revenue for fishing boats and fish markets. “As recently as the late 1970s, commercial ocean salmon fishing in Washington, Oregon and California brought in an average annual catch valued at $180 million, and was responsible for 7,200 jobs in fishing, fish processing, and supporting industries. By 1997 estimates, fisheries economist Hans Radtke, the income generated by the ocean catch had dropped to $26 million, and about 6,000 jobs had been lost” (Zuckerman, N.d.). A major drop in the ocean market has occurred, and using the numbers from 2015 (as seen under ‘Current’ in Figure 1) it is safe to assume that the market hasn’t been able to bounce back to its historic levels. With the decrease in salmon continuing today (at a slower rate, due to habitat restoration projects) the economies of these three states could greatly benefit from working towards a more sustainable population of salmon within the basin.

In a handbook prepared by ECONorthwest they analyzed literature and based upon multiple assumptions came to estimate the value of recreational fishing at $200/fish and commercial fishing at $5-$70/fish (as seen in Figure 3).

Fishing is a popular pastime along the Columbia River and its tributaries and people derive a direct use from the salmon fish as they catch them. From both a social and economic aspect, those who go out and fish along the rivers enjoy their time in the water and enjoy the benefit taken from each additional fish caught. With a decline in supply, this popular pastime could see a huge decrease in participants which could explain why such a high use value ($200) has been placed on recreational fishing. Looking at the commercial side, there are 10,000+ fishing boats on the Pacific. These boats have had to reduce salmon catches in recent years to allow the salmon to return home and breed the next generation is large numbers, but a use value still exists. At just $5-$70/fish these fishermen sell to markets (which is then counted in GDP) and sold on our store shelves. market’s judgement is that salmon, at today’s range, isn’t an everyday fish. It’s reserved for restaurant tables and weekend dinners, and end-customers are more than willing to pay for it” (Berge, 2018). As a society, there is a high value placed on salmon as a species because of the direct use we derive from them, in local and state economies, from the delicious meat they provide and from the health benefits that meat delivers. With an intrinsic value in the range of $5-$200, there is a demand for the salmon to be saved so we can continue to benefit from this essential species.

B. Non-use Value

Non-use values are more controversial because many times when attempting to derive a value from someone, it’s a hypothetical situation and they will disregard their income and spit out a larger, more unrealistic amount. Attempting to place a non-use value on the salmon species requires a researcher to determine the public’s willingness to pay (WTP). Anyone familiar with the Pacific Northwest can understand how important the salmon are. They are a cultural identity to the Nooksack and other Northwest Indian tribes (Klein 2017). How can you place a monetary value on a ‘cultural identity’? How can you place a monetary value on the benefits they provide to both aquatic and terrestrial ecosystems? These values can be derived from administering a survey, such as the one found in Figure 4.

By asking a question of, “would you be willing…” asks the respondent their willingness, and derives a value for the species in question. In Figure 2, such a survey was administered and the values they derived (estimated) came out to be $30-97 per household per year. Applying this to Oregon and Washington, that gives you a gross value of $102-$330 million dollars per year!

A study done in Maine on two different endangered species really had me intrigued on a regression that they ran based off data collected. While the following regression model isn’t their exact model, it’s a proposed model that uses much of the data points:

This regression⁴ was to show the effects of the three explanatory variables on the probability that someone would say “yes” on the survey to pay a specified amount to protect a species. The variable ‘bid’ was the amount they were asked to pay, and as expected in the results, the coefficient came back negative. I would expect these same results in a regression ran by data collected in the PNW. Attitude was a variable trying to explain the respondent’s attitude towards the environment, which as I would expect in the PNW as well, returned a positive coefficient. This is because if someone had a good attitude towards saving the environment, they would be more inclined to pay to protect it. Knowledge was the most interesting variable, because the more knowledge one had, the more likely they were to support the environment. This is the major problem facing the PNW and the lack of support for supporting the salmon. Lack of knowledge on their non-use values. Salmon are defined as a “keystone species” within the Columbia River basin, making their survival essential to the health of the ecosystem, and culture of the Pacific Northwest. So why are we continuously damaging their habitats and not searching out their value to better show to everyone that they actually mean something to people and the environment.

Salmon provide up to 70 percent of nitrogen to the forest foliage (Post, 2008) which supports a strong forest growth rate. Along with bringing nitrogen to the area, over 50 species of mammals, birds, and other fish feed on adult salmon and salmon eggs. So, a single generation of fish, if permitted to return to their breeding ground without any major disruptions, provides food for trees, animals, and the river system. This then translate to a beautiful thriving forest for us to enjoy as tourists and residents of the Pacific Northwest. When this information is well known, people establish a deeper connection to the “silver, green, and red forms of wild salmon swimming upstream through the clear depths of a river. (Rahr, N.d.)” Salmon provide such a high non-use value to the PNW and little is being done to restore (there are a select few restoration project being done) their habitat and river system to its previous healthy state. An estimated value has been derived, but more research and data collection need to be done to further derive a non-use value so that policymakers can realize that there are potential impacts on a species when a dam is built, or logging is done, or any other activity is done on their habitat. There is a value that needs to be found, to protect the salmon, and preserve the beauty and cultural significance of the Pacific Northwest.

V. Conclusion

What is the value of a single salmon fish? An entire salmon generation? Asking anyone, someone is bound to give you a value. After looking over a few empirical studies done by other institutions, we can conclude that a value exists. While no exact value exists, we can estimate that the value of a salmon fish, given its use and non-use value, its total value is within the range of $30-$200 dollars. Further studies and WTP surveys need be administered to further the studies into finding a more specific value that scientists can present as findings to further the protection of the salmon habitats. Which in turn protect local economies, state economies, tribal values, and the entire ecosystem of the Pacific Northwest.

1 See Figure 3

2 https://www.americanrivers.org/river/columbia-river/

3 http://www.altenergy.org/renewables/hydroelectric.html

4 Results of the regression from the Maine data can be found in Figure 5

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