Environ Resource Econ (2009) 43:63–79 DOI 10.1007/s10640-008-9252-6 Benefit Incidence of Public Recreation Areas—Have the Winners Taken Almost All? Anni Huhtala · Eija Pouta Received: 14 November 2007 / Accepted: 2 December 2008 / Published online: 23 December 2008 © Springer Science+Business Media B.V. 2008 Abstract This study presents a framework for investigating the benefit incidence of provision of public recreation opportunities. The proportion of individuals who use out- door recreation services increases with income, and frequency of use differs by the users’ gender and life situation (e.g., depending on whether they are students or older citizens). The decomposition of distributive incidence shows that a bias in favor of high-income groups may be accentuated when the perceived value of these services is taken into account in mon- etary terms. We compare alternative strategies in terms of equity for improving recreation opportunities, e.g., reduced distance to or increased acreage of recreation sites. Our results indicate that although these strategies improve the welfare distribution among the income groups, a considerable proportion of benefits nevertheless accrue to high-income groups. Keywords Distribution · Household · Public goods · Income JEL Codes D13 · D3 · Q26 · Q51 1 Introduction Who benefits most from government services? Do the rich benefit more than the poor? A sizeable literature on public goods and benefit incidence has investigated these questions, but empirical analyzes are still few due to practical difficulties in the measurement of ben- efits. 1 Where environmental public goods are concerned, there is some indication that pro- vision of recreation opportunities benefits high-income more than low-income households (Kalter and Stevens 1971); visitor surveys, for example, have yielded considerable evidence that recreation services are more often used by relatively wealthy people (e.g., Vaux 1975; Cordell et al. 2002). Studies on the income elasticity of the demand for public parks 1 For recent analytical modeling, see, e.g., Ebert and Tillman 2006 and Kaplow 2006. A. Huhtala (B ) · E. Pouta MTT Economic Research, Agrifood Research Finland, Luutnantintie 13, 00410, Helsinki, Finland e-mail: anni.huhtala@mtt.fi 123