Cogestion and recreation site demand: a model of demand-induced quality effects

This analysis focuses on problems of estimating site-specific dollar benefits conferred by outdoor recreation sites in the face of congestion costs. Encounters, crowding effects and congestion costs have often been treated by natural resource economists in a piecemeal fashion. In the current paper, encounters and crowding effects are treated systematically. We emphasize the quantitative impact of congestion costs on site-specific estimates of benefits conferred by improvements in outdoor recreation sites. The principal analytic conclusion is that techniques that streamline on data requirements produce biased estimates of benefits conferred by site improvements at facilities with significant crowding effects. The principal policy recommendation is that the Federal and state agencies should collect and store information on visitation rates, encounter levels and congestion costs at various outdoor recreation sites.