EFFICIENT ALLOCATION OF LAND BETWEEN PRODUCTIVE USE AND RECRATIONAL USE
Eduardo L. Gimenez Fernandez
In this paper the efficient allocation of natural recreational areas is anal- ysed. 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 sug- gest that current allocations of land to natural recreational areas in Galiza are not efficient.
Land Allocation, Efficient Allocation, Natural Recreational Areas, Public Good, Social Planner Problem, Voluntary Contribution Competitive Equilibrium, Use Value, Existence Value
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