Gamage, B.G.D. U. I.Geethanjana, G.P.D.P.G.Karunarathne, L.G.S.H.M.Rathnayaka, R.M.H.T.Jayathilaka, M.D.R.K.2025-10-112025-10-112019-07-18Peradeniya International Economics Research Symposium (PIERS) – 2019, University of Peradeniya, P 137 - 141978955589284123861568https://ir.lib.pdn.ac.lk/handle/20.500.14444/5291Introduction Poverty is one of the major challenges the world faces, with massive implications that hinder sustainable development. More than 4.3 billion people out of the global population of 7.5 billion are in poverty, affected mostly from causes which are preventable with low cost and proven interventions (UNICEF, 2010). Statistics reported by the Department of Census and Statistics (DCS, 2016) indicates that 169,392 households and 843,913 persons live in poverty in Sri Lanka. Furthermore, the mean monthly income was Rs. 62,237, while the mean monthly household expenditure on recreational activities was only Rs.908 (2.5 % of total non-food expenditure). The literature has focused extensively on income and expenditure patterns and recreational activities, and how it can affect the level of poverty. As stated by Chacón-Araya and Crow (2015), since 1988, expenses associated with recreational and leisure activities was slightly high for people in the lowest and highest income quan tiles. Heckman model and Probit analysis used by Haq, et al. (2018), pointed out that the probability of the household contribution for leisure and tourism increased with favorable changes in income, level of education and women's empowerment. Similarly, household spending on tourism is influenced positively by the age of the head of household and negatively by the number of children and adults in Pakistan. However, even though there are numerous studies conducted on poverty, there is no significant study on recreational activities and their impact on poverty in Sri Lanka. As such, this study addresses this research gap, by highlighting the significance of recreational activities with in-depth insights. The new findings gathered from this research will be of immense use to Government of Sri Lanka in formulating better policies for entrepreneurs in the business sector, who are one of the stakeholders in recreational activities in the country. Furthermore, this is an opportunity for all national stakeholders to discover untapped market segments. Thus, these insights are important for investors in the social sector including leisure and entertainment industries, covering cultural and religious activities too.enRecreational ActivitiesPovertyProbit ModelArticle