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Optimal Allocation of Land between Productive Use and Recreational Use
Author(s) -
Giménez Eduardo L.,
GonzálezGómez Manuel
Publication year - 2003
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/1467-9787.00299
Subject(s) - recreation , set (abstract data type) , point (geometry) , pareto principle , pareto optimal , economics , microeconomics , general equilibrium theory , empirical research , computer science , mathematical economics , operations management , mathematics , ecology , statistics , geometry , biology , programming language
This paper is an inquiry into the optimal allocation of time and natural areas to recreational uses, which have the feature of being a pure and continuous public good. We address this issue with a comprehensive approach. A static rational general equilibrium framework is developed in which heterogeneous agents allocate land and time endowments between alternative uses. This modeling has important advantages. First, Pareto‐optimal and voluntary‐contribution equilibrium allocations are obtained in a unified set‐up. Second, the suboptimality result of the decentralized equilibrium, the free‐rider problem on the provision of this nonexcludable public good, and different mechanisms to return the economy to its first‐best are analyzed. Finally, a methodological critique is made of some empirical literature, and it is suggested that our theoretical microeconomic‐based structure seems to be a suitable starting point for empirical research.