Academic journal article Journal of Economics and Economic Education Research

Deriving Demand Curves for Specific Types of Outdoor Recreation

Academic journal article Journal of Economics and Economic Education Research

Deriving Demand Curves for Specific Types of Outdoor Recreation

Article excerpt

GENERAL STATEMENT

Demand theory can be related to outdoor recreation by considering outdoor recreation like any other good or service for which there is demand. Outdoor recreation opportunities may be considered to be used to the extent that people believe their satisfactions are exactly equal to the cost involved. Of course, ignorance and uncertainty about the process may cause a divergence of satisfactions from costs, but this is a circumstance not uncommon in any market.

The major difference between the market for outdoor recreation and the market for the goods usually used in illustrations of demand theory is that the small entrance or user fee, which is the direct cost of using recreation facilities, does not constitute a correct measurement of total cost or price paid to partake of a recreation opportunity. The people who use any particular area for outdoor recreation will incur various costs in doing so--some in cash, some in time, and some of an even more subjective nature. If they continue to use an area, then it is logical to assume that their satisfactions are as great or greater than the total costs. It is the marginal user or the marginal trip by a habitual user who equates his marginal trip costs to his estimate of marginal trip satisfactions. Thus, if entrance or user fees, or for that matter, any of the costs incurred are increased, then this would tend to affect the amount of use made of an area.

The early economists considered certain commodities as "free goods." They recognized that such goods as air, sunshine, and water had very great utility for man, but were free of costs. People, acting through their governments, can artificially place a zero price on a product, and thus make it a free good. Thus, if outdoor recreation is provided is provided in as great a quantity is wanted, at no charge, the recreation opportunity at the point of supply becomes valueless in monetary terms. It is simply a matter of people using it until the marginal utility falls to zero.

Taking all the above into consideration, it is suggested that the total outdoor recreation experience is, to a large extent, a package deal. This means that it must be viewed as a whole, in terms of costs, satisfactions, and time, for all members of the family as a group. In the calculation of consumers by total costs, and comparisons of costs with expected satisfactions, the price of entrance into or use of a recreation area certainly are taken into consideration by users and potential users.

The demand curve for the total recreation experience, like the demand curve for other types of goods or services, is applicable to large numbers of people, rather than to individuals. With large numbers of people, the extreme values, which might characterize some person taken individually, are averaged out so that there is a predictable and measurable reaction to some outdoor recreation opportunity. Therefore, if a demand curve can be established for a large group of people, then it is probable that another similarly characterized large group would respond in similar fashion to prices and other characteristics of a reaction opportunity. That there is a predictability of reaction to similar factors of price and value is an assumption of rationality basic to all demand curve analysis.

DATA AND METHODOLOGY

The procedure suggested for deriving a demand curve for outdoor recreation involves two steps. The first step is to determine the demand for the total recreational experience. The second is to use the demand for the total recreational experience as the basis for a demand curve for a unique recreational opportunity.

The demand for the total recreational experience involves (a) measuring price by the total spending necessary to participate in a visit to some particular recreation site, and (b) measuring quantity in terms of proportions of total population in various tributary distance zones which actually participated. …

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