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Efficiency and Equity of an Outdoor Recreation Equipment Tax to Fund Public Lands

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  • Margaret Walls
  • Matthew Ashenfarb

Abstract

We analyze the efficiency and equity implications of a federal excise tax on outdoor recreation equipment for funding U.S. public lands. Using microdata on consumer expenditure, we estimate a two-stage quadratic almost ideal demand system for recreation equipment and simulate the effects of a 5% tax. The tax generates a modest welfare loss as a share of tax revenues raised: $0.04 for every $1 of revenue. It is approximately proportional to income across the entire income distribution, but households in the lowest-income quintile pay more as a share of income than do households in the other four income quintiles.

Suggested Citation

  • Margaret Walls & Matthew Ashenfarb, 2022. "Efficiency and Equity of an Outdoor Recreation Equipment Tax to Fund Public Lands," Land Economics, University of Wisconsin Press, vol. 98(3), pages 520-536.
    • Handle: RePEc:uwp:landec:v:98:y:2022:i:3:p:520-536
    Note: DOI: 10.3368/le.98.3.090821-0108
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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