IDEAS home Printed from https://ideas.repec.org/a/ags/jrapmc/243955.html
   My bibliography  Save this article

Using Revealed Preference Behavioral Models to Correctly Account for Substitution Effects in Economic Impact Analysis

Author

Listed:
  • Deisentroth, Daniel B.
  • Loomis, John B.
  • Bond, Craig A.

Abstract

This study presents a methodology to correctly account for substitution patterns in estimates of final demand used in economic impact analysis. Then, this methodology is demonstrated empirically using recreational tourism data. Specifically, this study a) presents the results of a behavioral model for recreation demand; b) uses the predictions from this model to drive changes in final demand for an input-output economic impact model; and c) presents results from this impact model, contrasting them with the naïve assumption of no/limited substitution. Empirical results indicate that failure to account for substitution in final demand could result in gross overestimates of economic impacts.

Suggested Citation

  • Deisentroth, Daniel B. & Loomis, John B. & Bond, Craig A., 2013. "Using Revealed Preference Behavioral Models to Correctly Account for Substitution Effects in Economic Impact Analysis," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 43(2).
    • Handle: RePEc:ags:jrapmc:243955
    DOI: 10.22004/ag.econ.243955
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/243955/files/v43_n2_a5_deisenroth_etal.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.243955?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Keith Criddle & M. Herrmann & S. Lee & C. Hamel, 2001. "Participation decisions, angler welfare, and the regional economic impact of sportfishing," Working Papers 2001-13, Utah State University, Department of Economics.
    2. Watson, Philip & Wilson, Joshua & Thilmany, Dawn D. & Winter, Susan, 2007. "Determining Economic Contributions and Impacts: What is the difference and why do we care?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 37(2), pages 1-7.
    3. Charles Hamel & Hans T. Geier & Mark Herrmann & Keith R. Criddle & S. Todd Lee, 2002. "Linking sportfishing trip attributes, participation decisions, and regional economic impacts in Lower and Central Cook Inlet, Alaska," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 36(2), pages 247-264.
    4. Loomis, John B. & Cooper, Joseph C., 1990. "Comparison Of Environmental Quality-Induced Demand Shifts Using Time-Series And Cross-Section Data," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(1), pages 1-8, July.
    5. Bergstrom, John C. & Teasley, R. Jeff & Cordell, H. Ken & Souter, Ray A. & English, Donald B.K., 1996. "Effects Of Reservoir Aquatic Plant Management On Recreational Expenditures And Regional Economic Activity," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 28(2), pages 1-14, December.
    6. James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, March.
    7. Stephan Weiler & Andrew Seidl, 2004. "What's in a Name? Extracting Econometric Drivers to Assess The Impact of National Park Designation," Journal of Regional Science, Wiley Blackwell, vol. 44(2), pages 245-262, May.
    8. Joseph A. Herriges & Catherine L. Kling (ed.), 1999. "Valuing Recreation and the Environment," Books, Edward Elgar Publishing, number 1315.
    9. Edward R. Morey & Robert D. Rowe & Michael Watson, 1993. "A Repeated Nested-Logit Model of Atlantic Salmon Fishing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 578-592.
    10. Timothy C. Haab & Kenneth E. McConnell, 2002. "Valuing Environmental and Natural Resources," Books, Edward Elgar Publishing, number 2427.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hansen, Kristiana & Duke, Esther & Bond, Craig & Purcell, Melanie & Paige, Ginger, 2018. "Rancher Preferences for a Payment for Ecosystem Services Program in Southwestern Wyoming," Ecological Economics, Elsevier, vol. 146(C), pages 240-249.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Devkota, Nirmala & Fannin, James Matthew & Paudel, Krishna P., 2006. "Economic Impact Estimation Using Bootstrap Samples Obtained From Internet And Intercept Survey Data," 2006 Annual meeting, July 23-26, Long Beach, CA 21150, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. O. Ashton Morgan & Gregory S. Martin & William L. Huth, 2009. "Oyster Demand Adjustments to Counter-Information and Source Treatments in Response to Vibrio vulnificus," Working Papers 09-08, Department of Economics, Appalachian State University.
    3. Riera, Pere & Signorello, Giovanni & Thiene, Mara & Mahieu, Pierre-Alexandre & Navrud, Ståle & Kaval, Pamela & Rulleau, Benedicte & Mavsar, Robert & Madureira, Lívia & Meyerhoff, Jürgen & Elsasser, Pe, 2012. "Non-market valuation of forest goods and services: Good practice guidelines," Journal of Forest Economics, Elsevier, vol. 18(4), pages 259-270.
    4. Phaneuf, Daniel J. & Smith, V. Kerry, 2006. "Recreation Demand Models," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 15, pages 671-761, Elsevier.
    5. Parsons, George R. & Jakus, Paul M. & Tomasi, Ted, 1999. "A Comparison of Welfare Estimates from Four Models for Linking Seasonal Recreational Trips to Multinomial Logit Models of Site Choice," Journal of Environmental Economics and Management, Elsevier, vol. 38(2), pages 143-157, September.
    6. Richard T. Carson & Miko_aj Czajkowski, 2014. "The discrete choice experiment approach to environmental contingent valuation," Chapters, in: Stephane Hess & Andrew Daly (ed.), Handbook of Choice Modelling, chapter 9, pages 202-235, Edward Elgar Publishing.
    7. John A. Curtis, 2002. "Estimating the Demand for Salmon Angling in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 33(3), pages 319-332.
    8. Catherine L. Kling & Daniel J. Phaneuf & Jinhua Zhao, 2012. "From Exxon to BP: Has Some Number Become Better Than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 3-26, Fall.
    9. Jayson L. Lusk & F. Bailey Norwood & J. Ross Pruitt, 2006. "Consumer Demand for a Ban on Antibiotic Drug Use in Pork Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 1015-1033.
    10. Babatunde O. Abidoye & Joseph A. Herriges & Justin L. Tobias, 2012. "Controlling for Observed and Unobserved Site Characteristics in RUM Models of Recreation Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(5), pages 1070-1093.
    11. Mark Morrison & Christine M Hill, 2017. "Understanding the Non-Market Value and Equity Implications of the Walsh Bay Arts Precinct Redevelopment," The Economic Record, The Economic Society of Australia, vol. 93(301), pages 302-313, June.
    12. Mark Morrison & Thomas Brown, 2009. "Testing the Effectiveness of Certainty Scales, Cheap Talk, and Dissonance-Minimization in Reducing Hypothetical Bias in Contingent Valuation Studies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(3), pages 307-326, November.
    13. Richard Batley & Thijs Dekker, 2019. "The Intuition Behind Income Effects of Price Changes in Discrete Choice Models, and a Simple Method for Measuring the Compensating Variation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 337-366, September.
    14. Crooker, John R., 2007. "Nonparametric Bounds on Welfare with Measurement Error in Prices: Techniques for Non-Market Resource Valuation," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(2), pages 239-252, October.
    15. F Alpizar & F Carlsson & P Martinsson, 2003. "Using Choice Experiments for Non-Market Valuation," Economic Issues Journal Articles, Economic Issues, vol. 8(1), pages 83-110, March.
    16. Poder, Thomas G. & He, Jie, 2017. "Willingness to pay for a cleaner car: The case of car pollution in Quebec and France," Energy, Elsevier, vol. 130(C), pages 48-54.
    17. Constant I. Tra, 2013. "Nonlinear income effects in random utility models: revisiting the accuracy of the representative consumer approximation," Applied Economics, Taylor & Francis Journals, vol. 45(1), pages 55-63, January.
    18. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    19. Paul Mwebaze & Jeff Bennett & Nigel W. Beebe & Gregor J. Devine & Paul Barro, 2018. "Economic Valuation of the Threat Posed by the Establishment of the Asian Tiger Mosquito in Australia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 357-379, October.
    20. von Haefen, Roger H., 2003. "Incorporating observed choice into the construction of welfare measures from random utility models," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 145-165, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jrapmc:243955. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/mcrsaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.