Using the production possibilities frontier to demonstrate alternative allocations of recreation and wildlife

Abstract

The level of use and geographic extent of recreational activities is increasing (Holecek 1993). The popularity of outdoor activities is affecting wildlife and wildlife habitat (Boyle and Samson 1985). In this context, outdoor recreation research has not produced a decision tool that facilitates effective resource planning (Workman et al. 1990). If the relationship between recreation and wildlife is poorly understood, this may result in undesirable natural resource decision-making. The conflicts between wildlife and recreation are caused by limited resources for the provision of both. As such, an economic model, the production possibilities frontier (PPF) may be an appropriate tool to address this issue. This paper investigates the potential of the PPF for allocating wildlife habitat and recreation, demonstrates the use of cumulative effects modeling in the development of a PPF, and discusses the managerial implications of using the PPF model. In a two-output production decision, input employment is determined by the marginal rate of transformation between the two outputs, their relative prices, and social preferences. The PPF establishes the first of these pieces. In most allocative decisions, the PPF is assumed to be concave (Nicholson 1995), this however, is not necessarily the case in the allocation of recreation and wildlife. Non-concavities that arise could be attributed to the production function of wildlife, which includes a joint variable for recreation. This variable affects the marginal rate of productivity for the other inputs in the function. Therefore, while the PPF assumes all inputs are fixed, this will not be the case if one of the outputs is an input into the production of the other output. The PPF's application for recreation and wildlife production was evaluated using cumulative effects modeling for bald eagles and grizzly bears. Habitat availability was used to represent the potential for stability of the wildlife populations. Results show a concave PPF for grizzly bear habitat and a concave/convex PPF for bald eagle habitat availability. Sensitivity analysis was used to address uncertainty by creating a confidence band around the PPF frontier. The model also allows for divergent data to be mapped onto a PPF and differing frontiers can be compared.