Estimating demand systems when outcomes are correlated counts
AbstractWe describe and employ a Bayesian posterior simulator for fitting a high-dimensional system of ordinal or count outcome equations. The model is then applied to describe the multiple site recreation demands of individual agents, and we argue that our approach provides advantages relative to existing methods commonly applied in this area. In particular, our model flexibly adjusts to match observed frequencies in trip outcomes, permits a flexible correlation pattern among the sites visited by individuals, and the posterior simulator for fitting this model is relatively easy to implement in practice. We also describe how the posterior simulations produced from the model can be used to conduct a variety of counterfactual experiments, including predicting behavioral changes and describing welfare implications resulting from shifts in exogenous demographic and site characteristics. We illustrate our method using data from the Iowa Lakes Project by modeling the visitation patterns of individuals to a set of twenty-nine large Iowa lakes. Consistent with previous findings in the literature, we see strong evidence that own and cross-price effects on trip demand are negative and positive, respectively, that higher income increases the likelihood of visiting most sites, and that a commonly used indicator of water quality, Secchi transparency, is positively correlated with the number of trips taken. In addition, the correlation structure among the errors reveals a complex pattern in which unobserved factors affecting trip demand are generally (though not strictly) positively correlated across sites. The flexibility and richness with which we are able to characterize the demand system provides a solid platform for counterfactual analysis, where we find significant behavioral and welfare effects from changes in site availability, water quality, and travel costs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Econometrics.
Volume (Year): 147 (2008)
Issue (Month): 2 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/jeconom
Demand systems Count data Recreation demand;
Other versions of this item:
- Herriges, Joseph A. & Phaneuf, Daniel J. & Tobias, Justin, 2008. "Estimating Demand Systems when Outcomes Are Correlated Count," Staff General Research Papers 12934, Iowa State University, Department of Economics.
- C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ozuna, Teofilo, Jr & Gomez, Irma Adriana, 1994. "Estimating a System of Recreation Demand Functions Using a Seemingly Unrelated Poisson Regression Approach," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 356-60, May.
- Patrick Bayer & Christopher Timmins, 2007.
"Estimating Equilibrium Models Of Sorting Across Locations,"
Royal Economic Society, vol. 117(518), pages 353-374, 03.
- Patrick J. Bayer & Christopher D. Timmins, 2004. "Estimating Equilibrium Models of Sorting Across Locations," Yale School of Management Working Papers ysm415, Yale School of Management.
- Patrick Bayer & Christopher Timmins, 2003. "Estimating Equilibrium Models of Sorting across Locations," Working Papers 862, Economic Growth Center, Yale University.
- Dionne, G. & Gagne, R. & Gagnon, F. & Vanasse, C., 1994.
"Debts, moral hazard and airline safety : an empirica evidence,"
CEPREMAP Working Papers (Couverture Orange)
- Dionne, Georges & Gagne, Robert & Gagnon, Francois & Vanasse, Charles, 1997. "Debt, moral hazard and airline safety An empirical evidence," Journal of Econometrics, Elsevier, vol. 79(2), pages 379-402, August.
- Dionne, G. & Gagne, R. & Gagnon, F. & Vanasse, C., 1993. "Debt, Moral Hazard and Airline Safety : An Empirical Evidence," Cahiers de recherche 9309, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- von Haefen, Roger H. & Phaneuf, Daniel J., 2003. "Estimating preferences for outdoor recreation:: a comparison of continuous and count data demand system frameworks," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 612-630, May.
- Jeffrey Englin & Peter Boxall & David Watson, 1998. "Modeling Recreation Demand in a Poisson System of Equations: An Analysis of the Impact of International Exchange Rates," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 255-263.
- Egan, Kevin J. & Herriges, Joseph A., 2006.
"Multivariate Count Data Regression Models with Individual Panel Data from an On-Site Sample,"
Staff General Research Papers
12573, Iowa State University, Department of Economics.
- Egan, Kevin & Herriges, Joseph, 2006. "Multivariate count data regression models with individual panel data from an on-site sample," Journal of Environmental Economics and Management, Elsevier, vol. 52(2), pages 567-581, September.
- Koop, Gary M & Poirier, Dale J & Tobias, Justin, 2007.
"Bayesian Econometric Methods,"
Staff General Research Papers
12722, Iowa State University, Department of Economics.
- Koop,Gary & Poirier,Dale J. & Tobias,Justin L., 2007. "Bayesian Econometric Methods," Cambridge Books, Cambridge University Press, number 9780521671736, December.
- Koop,Gary & Poirier,Dale J. & Tobias,Justin L., 2007. "Bayesian Econometric Methods," Cambridge Books, Cambridge University Press, number 9780521855716, December.
- Winkelmann, Rainer, 2000. " Seemingly Unrelated Negative Binomial Regression," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(4), pages 553-60, September.
- Siddhartha Chib & Edward Greenberg & Rainer Winkelmann, 1996.
"Posterior Simulation and Bayes Factors in Panel Count Data Models,"
9608003, EconWPA, revised 25 Nov 1996.
- Chib, Siddhartha & Greenberg, Edward & Winkelmann, Rainer, 1998. "Posterior simulation and Bayes factors in panel count data models," Journal of Econometrics, Elsevier, vol. 86(1), pages 33-54, June.
- Chib, Siddhartha & Winkelmann, Rainer, 2001. "Markov Chain Monte Carlo Analysis of Correlated Count Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 428-35, October.
- Wang, Peiming & Cockburn, Iain M & Puterman, Martin L, 1998. "Analysis of Patent Data--A Mixed-Poisson-Regression-Model Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(1), pages 27-41, January.
- John Mullahy, 1997. "Instrumental-Variable Estimation Of Count Data Models: Applications To Models Of Cigarette Smoking Behavior," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 586-593, November.
- Jeffrey T. LaFrance & W. Michael Hanemann, 1989. "The Dual Structure of Incomplete Demand Systems," Monash Economics Working Papers archive-21, Monash University, Department of Economics.
- Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
- Hausman, Jerry A, 1981. "Exact Consumer's Surplus and Deadweight Loss," American Economic Review, American Economic Association, vol. 71(4), pages 662-76, September.
- Herriges, Joseph A. & Phaneuf, Daniel J., 2002. "Inducing Patterns Correlation and Substitution in Repeated Logit Model of Recreation Demand," Staff General Research Papers 5035, Iowa State University, Department of Economics.
- Joseph A. Herriges & Daniel J. Phaneuf, 2002. "Inducing Patterns of Correlation and Substitution in Repeated Logit Models of Recreation Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1076-1090.
- Ruser, John W, 1991. "Workers' Compensation and Occupational Injuries and Illnesses," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 325-50, October.
- Ferdous, Nazneen & Eluru, Naveen & Bhat, Chandra R. & Meloni, Italo, 2010. "A multivariate ordered-response model system for adults' weekday activity episode generation by activity purpose and social context," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 922-943, September.
- Smith, Michael S. & Kauermann, Göran, 2011. "Bicycle commuting in Melbourne during the 2000s energy crisis: A semiparametric analysis of intraday volumes," Transportation Research Part B: Methodological, Elsevier, vol. 45(10), pages 1846-1862.
- Bhattacharjee, Subhra & Kling, Catherine L. & Herriges, Joseph A., 2009. "Kuhn-Tucker Estimation of Recreation Demand – A Study of Temporal Stability," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49408, Agricultural and Applied Economics Association.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.