Recreational facility provision effects on the estimation of derived demands for boating

Abstract

Outdoor recreation continues to increase as a major use of the nation's natural resources. Rational resource allocation decisions require knowledge of meaningful demand and value estimates for outdoor recreation. A study was conducted to determine the effects of the learning by doing process as it relates to the physical availability of water on the demand for boating in three case study reservoir areas. The learning by doing concept is based on the idea that if facilities are available, individual consumers in time period t would learn or develop a demand for a recreational activity (e.g., boating) which would result in an increase in their demand for boating in time period t2 Moreover, through social interaction, the boating demand of their families and friends increases in t2 also. The effect of new water recreational provisions is a large (relative) decrease in boating price. This price change results in a movement down the consumers' demand curve for boating, but it also results in a shift of the demand curve to the right due to changes in consumers' tastes and preferences and production-consumption technology because of the learning by doing effect. Thus, benefits as measured by consumers' surplus, can be derived from learning by doing. An ordinary least squares regression analysis of combined time-series and cross-section data approach was employed to obtain the statistical demand estimates. The estimations derived establish evidence that these recreational facility provision effects are significant positive influences on the demand for boating. Failure to be cognizant of these effects could lead to resource allocation decisions being made which would result in imbalances of recreational facilities provided.