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Recreation demand estimation and valuation in spatially connected systems

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  • Newbold, Stephen C.
  • Massey, D. Matthew
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    Abstract

    Recreation demand models frequently are used to explain outdoor recreation behavior and to estimate willingness to pay for changes in environmental quality at recreation sites. Among the most commonly used recreation demand models are site choice models based on the multinomial logit framework, which account for the spatial relationships between each recreator's home and multiple alternative destinations thereby capturing the substitution possibilities among recreation sites. However, standard applications of this framework typically do not account for the possibility of spatial connections among the sites via movements of the target species, such as fish in connected water bodies in recreational angling applications or terrestrial species in hunting or wildlife viewing applications. In this paper we examine aspects of environmental valuation and natural resource dynamics that generally are addressed separately. Specifically, we show that in such spatially connected systems, a "reduced form" application of the standard site choice modeling approach, using proxy measures of environmental quality rather than direct measures of species abundances, can produce biased estimates of willingness to pay for environmental improvements. Furthermore, we show that under some conditions poorly targeted environmental improvements in spatially connected systems can lead to welfare decreases. In such systems a structural model of recreator site choices and species sorting behavior and population dynamics may be required to fully account for the spatial linkages among sites and the feedback effects between recreators and the target species.

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    Bibliographic Info

    Article provided by Elsevier in its journal Resource and Energy Economics.

    Volume (Year): 32 (2010)
    Issue (Month): 2 (April)
    Pages: 222-240

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    Handle: RePEc:eee:resene:v:32:y:2010:i:2:p:222-240

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    Web page: http://www.elsevier.com/locate/inca/505569

    Related research

    Keywords: Bioeconomic Site-choice model Spatial spillovers;

    References

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    1. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, April.
    2. Daniel J. Phaneuf & Catherine L. Kling & Joseph A. Herriges, 2000. "Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 83-92, February.
    3. Egan, Kevin J. & Herriges, Joseph A. & Kling, Catherine L. & Downing, John A., 2004. "Valuing Water Quality As a Functionof Water Quality Measures," Staff General Research Papers 12210, Iowa State University, Department of Economics.
    4. Adamowicz, Wiktor & Swait, Joffre & Boxall, Peter & Louviere, Jordan & Williams, Michael, 1997. "Perceptions versus Objective Measures of Environmental Quality in Combined Revealed and Stated Preference Models of Environmental Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 65-84, January.
    5. Huang, Ju-Chin & Haab, Timothy C. & Whitehead, John C., 1997. "Willingness to Pay for Quality Improvements: Should Revealed and Stated Preference Data Be Combined?," Journal of Environmental Economics and Management, Elsevier, vol. 34(3), pages 240-255, November.
    6. Kaoru, Yoshiaki, 1995. "Measuring marine recreation benefits of water quality improvements by the nested random utility model," Resource and Energy Economics, Elsevier, vol. 17(2), pages 119-136, August.
    7. Murdock, Jennifer, 2006. "Handling unobserved site characteristics in random utility models of recreation demand," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 1-25, January.
    8. Sanchirico, James N. & Wilen, James E., 1999. "Bioeconomics of Spatial Exploitation in a Patchy Environment," Journal of Environmental Economics and Management, Elsevier, vol. 37(2), pages 129-150, March.
    9. Phaneuf, Daniel J. & Kling, Catherine L. & Herriges, Joseph A., 1998. "Valuing Water Quality Improvements Using Revealed Preference Methods When Corner Solutions Are Present," Staff General Research Papers 1377, Iowa State University, Department of Economics.
    10. Massey, D. Matthew & Newbold, Stephen C. & Gentner, Brad, 2006. "Valuing water quality changes using a bioeconomic model of a coastal recreational fishery," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 482-500, July.
    11. Timmins, Christopher & Murdock, Jennifer, 2007. "A revealed preference approach to the measurement of congestion in travel cost models," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 230-249, March.
    12. Smith, Martin D. & Sanchirico, James N. & Wilen, James E., 2009. "The economics of spatial-dynamic processes: Applications to renewable resources," Journal of Environmental Economics and Management, Elsevier, vol. 57(1), pages 104-121, January.
    13. Catherine L. Kling & Cynthia J. Thomson, 1996. "The Implications of Model Specification for Welfare Estimation in Nested Logit Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 103-114.
    14. Smith, Martin D. & Zhang, Junjie & Coleman, Felicia C., 2008. "Econometric modeling of fisheries with complex life histories: Avoiding biological management failures," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 265-280, May.
    15. Costello, Christopher & Polasky, Stephen, 2008. "Optimal harvesting of stochastic spatial resources," Journal of Environmental Economics and Management, Elsevier, vol. 56(1), pages 1-18, July.
    16. Kling, Catherine L. & Herriges, Joseph A., 1995. "Empirical Investigation of the Consistency of Nested Logit Models with Utility Maximization (An)," Staff General Research Papers 1499, Iowa State University, Department of Economics.
    17. Smith, Martin D. & Wilen, James E., 2003. "Economic impacts of marine reserves: the importance of spatial behavior," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 183-206, September.
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    Cited by:
    1. Fenichel, Eli P. & Abbott, Joshua K., 2014. "Heterogeneity and the fragility of the first best: Putting the “micro” in bioeconomic models of recreational resources," Resource and Energy Economics, Elsevier, vol. 36(2), pages 351-369.

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