Is Outdoor Recreation Recession-proof? An Empirical Investigation on Iowan’s Lake Recreation Behavior During 2009 Recession.

The US economy was hit hard by a recession during 2008–2009, which is considered the longest and most severe economic crisis since the end of Great Depression. The recession affected individual economic well-being through unemployment, stock market crashes, and falling real estate prices, all of which generated low consumer confidence. While much is known about the effect of recessions on macro-level variables, much less is known about how the effects of recession alter household-level consumption behavior. Specifically, during periods of high unemployment, many households will experience lower income, which results in lower spending on normal goods. However, with changes in employment status, members of some households will also experience a lower opportunity cost of time, and may therefore undertake more household activities that are time intensive. To study effects of this type requires detailed household-level data both before and after a recessionary event. In this paper, we utilize a panel data set that is uniquely suited to studying the effects of recession on micro decision making in the context of household recreational choices. Specifically, utilizing a panel from the “Iowa Lakes Project” comprised of both pre-recession and post-recession data on household employment status, usage of recreational sites, and a suite of socioeconomic variables, this paper investigates how employment status changes during the recession impact lake-based recreation demand.