Pricing and Management of Recreational Activities Which Use Natural Resources

This paper analyses the economic efficiency ofmanagement regimes for the recreational use of anatural resource. Management must determine the useand development of the natural resource. Thefirst-best policy uses price to offset theexternalities of crowding and deterioration. This iscontrasted with two second-best polices which do notuse pricing: unrestricted access and quotas. Acondition under which a relaxation of quota levelincreases efficiency is derived. Under iso-elasticfunctional forms quotas are less efficient thanunrestricted access.