The economics of managing congestion: with special reference to backcountry recreation

Abstract

The management of congestible recreation resources has been based largely on the concept of satisfaction. This concept is poorly defined and often does not reflect objectives for management of recreation resources. One way of addressing these problems is to define and use measurable objectives for management of recreation resources. One such objective is economic efficiency. The concept of efficiency is defined and economic theory developed to identify efficient allocations of congestible resources, the efficient capacities of resources under different allocation mechanisms, and the efficiency costs of use of lottery-based allocation mechanisms. The usefulness of this body of economic theory in allocation of backcountry recreational resources is addressed through investigation of ability to measure demand for congestible resources, and the problems associated with use of surrogate measures of demand.

Theoretical models of efficient management of congestible resources cannot be applied with the current state of knowledge because existing non-market valuation methods are not able to identify Hicksian-compensated demand functions for congestible backcountry recreation. Use of Marshallian demand measures introduces the possibility of resource misallocations of unknown direction and magnitude.