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UBC Theses and Dissertations

The economic evaluation of non-marketed recreational resources Laub, Michael Elwood

Abstract

The fundamental difficulty faced by researchers attempting to evaluate recreational sites is that outdoor recreation is seldomly marketed. This thesis investigates the validity and feasibility of a number of techniques that attempt to value recreational benefits by simulating markets for access to recreational sites. First, the relevance of deriving statistical demand functions for outdoor recreation is established, along with some of the limitations inherent in such demand functions. A theoretical model of consumer behavior is then developed to provide an analytical framework within which the validity of the various market simulation techniques for estimating recreational demand function can be evaluated. A number of different demand concepts are developed as a result of (i) the income effect of access fees, and (ii) the quality effect arising from the impact access fees have on congestion. Which demand concept is relevant depends on the evaluational point of view. The discussion then proceeds, to a number of evaluational "short-cuts" that have been used in the past. These "short-cuts" and the reasons the resulting evaluations are unacceptable are briefly outlined. Five market simulation techniques are isolated for more intensive study, four of which are indirect approaches using differentials in travel costs as proxies for prices, while the fifth relies on direct interviews. Since the simulated demand functions are not themselves subject to direct empirical testing without actually creating a market where none exists, the evaluation of the validity of these techniques must rely on consideration of both the internal logic of each technique and the assumptions upon which the theoretical framework is based. In order to provide further insight into the conceptual and practical limitations of each approach, there is a comparative application of three of the techniques to the the problem of evaluating a sport fishery. The application of the interview approach is used to test some of the assumptions underlying the indirect travel cost techniques as well as to explore the implications of using both the price-compensating and price-equivalent concepts of consumers' surplus in the evaluation. High priority is placed on research to replace the single site evaluation approach for which the currently utilized techniques were designed with a systems approach wherein the demand interactions among the various recreational sites are explicitly incorporated. An evaluational technique is proposed that represents a first step in this direction. To date, there has been a serious imbalance in the allocation of research effort with a relative over-emphasis on the problems of implementing the various market-simulation techniques and a relative under-emphasis on the extraction and testing the underlying assumptions. This thesis calls attention to this imbalance and attempts to illustrate its fundamental importance.

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