Working Paper: NBER ID: w27541
Authors: H. Spencer Banzhaf; V. Kerry Smith
Abstract: The National Park Service and other agencies have argued that our recreation lands face a crisis of deferred maintenance. This paper evaluates two proposals for funding public lands, increasing gate fees and taxing recreational gear. It analyzes the joint welfare effects of such taxes and the services supported by the revenue. It shows that when the taxed goods and the public service are "weak complements," there is a simple sufficient statistic determining whether the joint effect increases welfare both for consumers and sellers: Namely, the demand for the taxed good increases. The paper illustrates these results with data for recreational services.
Keywords: outdoor recreation; public lands; gate fees; gear tax; welfare effects
JEL Codes: H2; H4; Q2; Q5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increasing gate fees (L90) | Increased welfare for consumers (D69) |
| Increased demand for trips to public lands (Q26) | Increased welfare for consumers (D69) |
| Gear tax (Y20) | Increased demand for recreational gear (L67) |
| Increased demand for recreational gear (L67) | Increased welfare for consumers and sellers (D69) |
| Gear tax (Y20) | Quality improvements in parks (Q26) |
| Quality improvements in parks (Q26) | Increased demand for trips to public lands (Q26) |
| Increasing gate fees (L90) | Increased demand for trips to public lands (Q26) |
| Gear tax (Y20) | Higher sales and prices for firms (L11) |