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~~ ;"'_"_~"__'_.'_:"_"O ~'..h -,.,;-,,_<'t'>~I,'Y." - , ,'",'-', .,'-/,.';,'.,,':'<'--; Colorado River and Virgin River studies to measure such impacts involves the following steps: 1. determining how the biological needs of endangered fishes will affect the allocation of resources among river users; 2. assessing the direct economic impacts of resource reallocations on river users; and 3. using a general equilibrium model of the affected region to capture all of the direct and indirect affects of resource reallocations. Approaching the estimation of critical habitat impacts in this fashion can avoid pitfalls that arise when the focus is on the losing sectors of a local economy. Perhaps the most publicized economic analysis of proposed critical habitat designations was that for the northern spotted owl (Schamberger et al. 1992). That analysis presented a thorough assessmem of the impacts of critical habitat designations on the timber industry utilizing public forest resources in the Pacific Northwest, and at one time was designated as a "model for subsequem analysis" by the Service (ECO Northwest 1994). Yet the spotted owl study did not address some of the basic economic questions that arise when resources are reallocated, such as how the rate of timber harvesting on private lands and non-critical habitat lands would change in response to critical habitat designations on federal lands, or how labor resources formerly used to harvest lumber of public lands would be redeployed. The case studies described in this paper attempt to address issues such as these in the context of critical habitat designations for endangered fish. II. From Biological Needs to Resource Reallocations2 The first step in both the Colorado River and Virgin River studies was a biologically-based determination of potential critical habitat needs (Maddux et al. 1993, 1995). In many instances, critical habitat studies are conducted for a single species. Since there are several 2 The administrative procedures of the Endangered Species Act prescribe certain steps in the evaluation of the economic impacts of critical habitat. These have been widely discussed elsewhere (see Rolf 1989; Berrens et al. 1997.). / 6