Recreation Projection Based on Demand Analysis

Abstract

The first method of projection extends the Hotelling-Clawson model to include population and income as demand shifters. Price, population, and income elasticities of demand for visits to national parks are estimated, leading to projections of a 225-percent increase in visits by 1980. Partly because this method does not consider the distribution of income, a second method is developed based on visitation rates by distance-income-vacation classes. To project future population by income classes, maximum-likelihood estimators are developed of the mean and variance of the log-normal component of a state's income distribution. The second method is applied to an area recreation complex in western North Carolina and to receation packages within the area. It suggests a more rapid increase in visits than the first method, due to projected rise in the proportion of the population in upperincome-vacation classes, which have high visitation rates. HE RELATIVE lack of knowledge about the economics of recreation may be attributed in part to the past idea that recreation is associated with play and as such is not an appropriate area for serious research efforts. The establishment of the Outdoor Recreation Resources Review Commission (ORRRC) in 1958 gave recognition and impetus to a change in this attitude. It is appropriate that a legitimizing of research efforts occurs as recreation assumes an increasing role in people's lives, and utilization of all types of facilities increases at a rapid rate. Under ORRRC auspices, several studies were conducted pertaining to the types of activities engaged in and the characteristics of participants. But up to now, little research has been aimed specifically at projecting recreation demand. Projections made by ORRRC were for participation in various recreational activities at the national level rather than for use of specific recreation resources. Hotelling (as reported by Prewitt [5]) was the first to suggest that demand functions for visits to national parks could be estimated on the basis of visits from concentric distance zones around parks. His basic hypothesis was that travel costs are analogous to price. He reasoned that visualization of concentric zones around a park, with observation of the proportion of the population visiting from different distance zones, gives an indication of the price elasticity of demand. Demand functions could be estimated by studying how visits from each zone vary with travel cost from the zone.