Distributional Welfare Impacts of Public Spending: The Case of Urban versus National Parks
By: Feinerman, Eli; Fleischer, Aliza; Simhon, Avi
Feinerman, Eli; Fleischer, Aliza; Simhon, Avi, Distributional Welfare Impacts of Public Spending: The Case of Urban versus National Parks, Journal of Agricultural and Resource Economics, Volume 29, Issue 2, August 2004, Pages 370-386
This study examines the optimal allocation of funds between national and urban parks. Since travel costs to national parks are significantly higher than to urban parks, poor households tend to visit the latter more frequently, whereas rich households favor the former. Therefore, allocating public funds to improving the quality of national parks at the expense of urban parks disproportionately benefits high income households. By developing a theoretical model and implementing it using Israeli data, findings indicate all households, except for the richest decile, prefer that the park authority divert a larger proportion of its budget from national to urban parks.