How Does Congestion Affect the Evaluation of Recreational Gate Fees? An Application to Gulf Coast Beaches

Abstract

We investigate how congestion influences the welfare, revenue-raising, and distributional implications of gate fees at outdoor recreational sites. A simple conceptual framework decomposes the effects of gate fees into three components, which are then quantified in an application to Gulf Coast beaches. Simulation results suggest that when congestion is a disamenity, the deadweight loss from gate fees declines, the revenue raised grows, and leakage to untaxed sites is less. Congestion feedbacks do not substantively change our distributional analysis, which implies that gate fees are regressive, do not disproportionately affect minorities, and privilege local recreators at the expense of overnight visitors.