ABSTRACT
Measuring the benefits and costs of leisure and recreation can help in the decision making of managers, resource holders, politicians, communities and occasionally participants. Usually participants do not go through the formal steps we shall be considering, but take their decision intuitively (measuring intuitively), or through negotiation with others. Where resources are limited, we need the extra information (and formal steps) to help us determine where best to invest, or intervene. Where activities are governed entirely by markets, preferences are revealed through the prices people pay for the goods and services concerned, which are governed by supply and demand. It is this that partly explains the paradox of value, that people seem willing to pay relatively higher prices for what seem to be luxuries and yet much lower prices for necessities. The fundamental assumption in utility theory is that people will seek to maximise their total utility, the total satisfaction, from the consumption of some good. Each successive unit is usually of less value than the last (the concept of marginal utility), and will add rather less to the total utility. This
gives rise to demand curves which show how prices vary with demand. Consumers will pay successively less for each extra unit (and still gain consumer surplus) so long as the price paid remains below the value held. The relationship between demand and price can exhibit elasticity where the extra price paid is related to marginal utility. The relationship will be inelastic if the item is considered basic (where, for example, the consumer considers the good essential) and increasingly elastic as the package is seen to be a luxury.
