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2.3 Indicators relevant to forested areas: economic indicators

To begin our exploration of potential quality of life indicators, then, we note that a number of recent studies have shown that income is highly correlated with various indices of the quality of life across nations (Diener 1995; Dasgupta 1999) and across U.S. States (Ferriss 2000). Of course, correlation does not imply causation. However, these results suggest that economic variables are useful in providing measures of well-being and should invariably be included in quality-of-life analyses.

From a forestry perspective, forests provide jobs and income to people who grow, harvest and process timber as well as other non-timber forest products such as pine straw, wild edibles and medicines. Forests also provide natural settings for outdoor recreation. Whether providing inputs to the forest products or recreation industries, forests contribute to quality of life by providing income and employment, particularly in rural areas where other economic opportunities may be limited.

Some people have argued that the contribution of the productive aspect of forests to quality of life is greater than simply the jobs created in the forest products sector. They posit that the forest products industry is an important engine for economic growth in forested regions (for example see Schallau 1994). This view is formalized with the "economic base" model, which argues that, through the export of goods and services, basic industries bring in money from outside of the local economy. That money stimulates job creation in the local sector through spending on local goods and services.

Does the export of timber products outside of local economies enhance the quality of life for other participants in the local economy? This question is not easily answered. However, it is informative to consider some of the limitations of the economic base model that have been articulated by forest policy analysts about quality-of-life issues (Crone and others 1999; Niemi and Whitelaw 1999; Power 1996). It has been pointed out that if basic industries have a detrimental impact on the environment, the well-being of people who live there would decrease. Because impacts of industry on the natural environment are not included in economic base calculations, failure to account for such impacts imparts a bias to quality of life assessments. In addition, the economic base model focuses attention on the export of goods and services outside a region, but does not consider the flow of money generated by people who are attracted to an area because of its natural amenities (English and Bergstrom 1994). This omission includes people who visit an area for recreation and tourism as well as people who decide to move to an area because of the quality of the natural amenities found there.