Costs and benefits of developing nature areas: regional versus national impact

Developing nature areas generates various benefits for the economy. The main benefits concern growing incomes for the recreation sector (hotels, camping, restaurants, etc.), higher prices of houses, etc. In this study the costs and benefits of developing nature in a rural area in the south-east of the Netherlands have been analyzed.Our study revealed that effects for the regional economy are considerable. On the national level, however, these effects appear to be negligible. This is due to the fact that on an interregional level the effects largely balance each other out. Thus, nature development in a certain region will increase the number of visitors to that region, but at the expense of other regions. In other words, due to substitution effects the net interregional effect of nature development on recreational spending is negligible. This raises the question whether the national government should finance regional nature development