Although the major concern of the federal government is with the character of the facilities provided, the calculation of the efficiency benefits of recreational investment is an appropriate part of the process of design of water resource systems. Recreation is a purpose of water resource development that should be considered in project evaluation. A demand curve was simulated for recreation at the Lake of the Ozarks, Niangua Arm. Using distance as a proxy for price, the consumers' surplus implied by the demand curve was measured. Cross‐sectional variations in associated costs simulated price variations for recreation, a nonmarket commodity. The pilot calculation ascertained what basic data are required. A knowledge of a county's population, population density, distance from the site, and mean income of residents was useful in predicting the demand from a county. Factors such as mobility and the availability of alternative recreational opportunity did not appear to be useful in the forms in which they were available. Some relevant considerations in the design of the sample survey are indicated.
It is important to be able to say whether or not an enterprise in the public sector is efficient and to measure this aspect of its performance. Public enterprises sometimes have legitimate reason to treat efficiency as secondary, but they also may resist efficiency measurement for other reasons.Statistical cost functions containing experience from similar enterprises provide useful yardsticks for public administrators. A purported cost function can be inadequate, however, as is shown in one example.Statistical cost functions allow comparison of bus properties by giving a range within which costs of an efficient property should fall. While random influences cannot be excluded, if observed costs fall outside two standard errors of prediction, there is a good case to say the property is inefficient. The usefulness of the standard error of prediciton as a measure of precision is explored:Nationally estimated cost functions were used to investigate the bus operations only of three San Francisco companies. Two were found within sampling error, one was significantly more costly on its motorbus operations than average experience in the nation. A closer look would then be in order by those funding this property. Several years' experience is explored showing changes over time as well as across companies.
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