Pricing recreation use of national parks for more efficient nature conservation: an application to the Portuguese case

This paper considers under what theoretical conditions, based on utilitarian, individual preferences, an entrance fee can be applied to some national parks before clarifying the sustainable effects of this instrument when used for conservation. The fee is discussed in terms of efficiency and equity following on from conclusions of previous theoretical reviewing, and a travel cost empirical approach is further used to estimate one for a Portuguese national park. We conclude that entrance fees are efficient only if parks have positive recreation costs and if fee system administration costs are low. Any efficient fee must be set equal to the marginal costs of supplying the park for recreation where these costs are known and below current recreation demand, or to the marginal recreation benefit of each visitor where they are unknown and/or above the current recreation demand curve. Finally, characteristics of outdoor recreation demand require the adoption of differential entrance fee schemes given revenue and equity issues.