Equity effects in the estimation of leisure benefits

The use of cost-benefit analysis in leisure planning has been widespread, but it has invariably been restricted to the consideration of benefits accruing as the result of the allocative efficiency of leisure investments. Recourse to the theory of welfare economics indicates that this is not an exhaustive measure of benefits, since the effects of distributional equity are overlooked. This paper develops a model to encompass both efficiency and equity effects within a cost-benefit framework for leisure, before undertaking an illustrative application for the Derwent Reservoir sailing club in Northumberland, England. The results of this application indicate that benefits are significantly modified when equity, as well as efficiency effects are taken into account, in the measurement of leisure benefits.