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Efficient Allocation of Land between Productive Use and Recreational Use

Listed author(s):
  • Eduardo L. Giménez Fernández

    (Departamento de Fundamentos da Análise Económica e Historia Económica. Universidade de Vigo)

  • Manuel González-Gómez

    (Departamento de Fundamentos da Análise Económica e Historia Económica Universidade de Vigo)

In this paper the efficient allocation of natural recreational areas is analysed. Natural recreational areas have the features of public goods. We present the efficient allocation of this non-excludable public good in a rational general equilibrium model with heterogeneous agents. This allows us to deal with the free-rider problem in the provision of the public good. This framework could be considered as a microfoundation of the Lopez, Shah and Altobello (1994) model. In addition we study both the "existence" value and the "use" value of the recreational area in the same setting. A methodological critique is also made of previous empirical literature. It is suggested that our theoretical framework is a suitable starting point for further empirical research. Finally an empirical application for the Galician case is presented. Our results suggest that current allocations of land to natural recreational areas in Galiza are not efficient.

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Paper provided by IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia in its series Documentos de trabajo - Analise Economica with number 0015.

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Length: 39 pages
Date of creation: 2000
Publication status: Published in Journal of Regional Science, May 2003, pages 269-294
Handle: RePEc:edg:anecon:0015
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