Abstract
US national parks and other public lands have large deferred maintenance backlogs and a need for more sustainable annual funding streams. Some observers have suggested that dedicated funding sources outside of general revenues would improve the situation. In this study, we analyze the efficiency and equity implications of one option, a federal excise tax on outdoor recreation equipment. Using 12 years of microdata from the US Bureau of Labor Statistics’ Consumer Expenditure Survey, we estimate consumer demand for recreation equipment and use the model to simulate the impacts of a 5 percent federal excise tax. We find that the demand for outdoor gear is highly price-elastic, and thus the tax would generate a sizable welfare loss as a percentage of tax revenues raised. The tax would be nearly proportional to income across the income distribution, though households in the lowest income quintile would pay substantially more as a share of income, on average, than households in the four higher income quintiles. The tax would impose only a small financial burden on an average household, however, and generate about $3 billion annually for public lands. In back-of-the-envelope calculations, we show that raising the same amount of money from national park entrance fees would require very large, and likely unacceptable, increases in those fees.
