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Valuing Water Quality as a Function of Water Quality Measures

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  • John A. Downing

Abstract

Employing a unique and rich data set of water quality attributes in conjunction with detailed household characteristics and trip information, we develop a mixed logit model of recreational lake usage and undertake thorough model specification and fitting procedures to identify the best set of explanatory variables, and their functional form for the estimated model. Our empirical analysis shows that individuals are responsive to the full set of water quality measures used by biologists to identify the impaired status of lakes. Thus, changes in these quality measures are not simply a scientific exercise, but they also translate into changes in the recreational usage patterns and well-being of individual households. Willingness-to-pay (WTP) estimates are reported based on improvements in these physical measures. Copyright 2009, Oxford University Press.

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File URL: http://hdl.handle.net/10.1111/j.1467-8276.2008.01182.x
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Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 91 (2009)
Issue (Month): 1 ()
Pages: 106-123

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Handle: RePEc:oup:ajagec:v:91:y:2009:i:1:p:106-123

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References

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  1. Herriges, Joseph A. & Kling, Catherine L., 2003. "Recreation Demand Models," Staff General Research Papers 10211, Iowa State University, Department of Economics.
  2. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
  3. 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.
  4. 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.
  5. George R. Parsons & Mary Jo Kealy, 1992. "Randomly Drawn Opportunity Sets in a Random Utility Model of Lake Recreation," Land Economics, University of Wisconsin Press, vol. 68(1), pages 93-106.
  6. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
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Cited by:
  1. Abidoye, Babatunde & Herriges, Joseph A., 2010. "Model Uncertainty in Characterizing Recreation Demand," Staff General Research Papers 32028, Iowa State University, Department of Economics.
  2. Yongjie Ji & Joseph A. Herriges & Catherine L. Kling, 2013. "Modeling Recreation Demand when the Access Point is Unknown," Center for Agricultural and Rural Development (CARD) Publications 13-wp540, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  3. Smirnov, Oleg A. & Egan, Kevin J., 2012. "Spatial random utility model with an application to recreation demand," Economic Modelling, Elsevier, vol. 29(1), pages 72-78.
  4. Azevedo, C.D. & Crooker, J.R. & Pattiz, B., 2012. "Bid Imprecision As A Source Of Hypothetical Bias In Contingent Valuation Estimation: Analysis Of A Survey Of Respondent’S Attitudes For The Battle Of Lexington State Historic Site (Shs)," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 12(2).
  5. Mkwara, Lena Asimenye & Marsh, Dan, 2011. "Valuing Trout Angling Benefits of Water Quality Improvements while Accounting for Unobserved Lake Characteristics: An Application to the Rotorua Lakes," 2011 Conference, August 25-26, 2011, Nelson, New Zealand 115514, New Zealand Agricultural and Resource Economics Society.
  6. 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.
  7. Kuwayama, Yusuke & Olmstead, Sheila & Krupnick, Alan, 2013. "Water Resoures and Unconventional Fossil Fuel Development: Linking Physical Impacts to Social Costs," Discussion Papers dp-13-34, Resources For the Future.
  8. Khatri-Chhetri, Arun & Collins, Alan R., 2011. "Estimation of a Surface Water Quality Valuation Index for the Appalachian Region," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103653, Agricultural and Applied Economics Association.
  9. Boyd, James & Krupnick, Alan, 2009. "The Definition and Choice of Environmental Commodities for Nonmarket Valuation," Discussion Papers dp-09-35, Resources For the Future.
  10. Jeon, Yongsik & Herriges, Joseph A. & Kling, Catherine L. & Downing, John A., 2005. "The Role of Water Quality Perceptions in Modeling Lake Recreation Demand," Staff General Research Papers 12474, Iowa State University, Department of Economics.
  11. Kosenius, Anna-Kaisa, 2010. "Heterogeneous preferences for water quality attributes: The Case of eutrophication in the Gulf of Finland, the Baltic Sea," Ecological Economics, Elsevier, vol. 69(3), pages 528-538, January.
  12. Yongsik Jeon & Joseph Herriges, 2010. "Convergent Validity of Contingent Behavior Responses in Models of Recreation Demand," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(2), pages 223-250, February.
  13. Newbold, Stephen C. & Massey, D. Matthew, 2010. "Recreation demand estimation and valuation in spatially connected systems," Resource and Energy Economics, Elsevier, vol. 32(2), pages 222-240, April.
  14. Kinell, Gerda & Söderqvist, Tore & Elmgren, Ragnar & Walve, Jacob & Franzén, Frida, 2012. "Cost-Benefit Analysis in a Framework of Stakeholder Involvement and Integrated Coastal Zone Modeling," CERE Working Papers 2012:1, CERE - the Center for Environmental and Resource Economics.
  15. Ge, Jiaqi & Kling, Catherine L. & Herriges, Joseph A., 2013. "How Much is Clean Water Worth? Valuing Water Quality Improvement Using A Meta Analysis," Staff General Research Papers 36597, Iowa State University, Department of Economics.
  16. Lankia, Tuija & Huhtala, Anni, 2011. "Valuation of Trips to Second Homes in the Country: Do Environmental Attributes Matter?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114405, European Association of Agricultural Economists.
  17. Hoque, Mohammad Mainul & Kling, Catherine L. & Herriges, Joseph A., 2013. "Is Outdoor Recreation Recession-proof? An Empirical Investigation on Iowan’s Lake Recreation Behavior During 2009 Recession," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150640, Agricultural and Applied Economics Association.
  18. Van Houtven, George & Mansfield, Carol & Phaneuf, Daniel J. & von Haefen, Roger & Milstead, Bryan & Kenney, Melissa A. & Reckhow, Kenneth H., 2014. "Combining expert elicitation and stated preference methods to value ecosystem services from improved lake water quality," Ecological Economics, Elsevier, vol. 99(C), pages 40-52.
  19. Bernal García, Juan Jesús & Martínez Maria-Dolores, Soledad María & Sánchez García, Juan Francisco, 2006. "Study of the potentiality of the electronic commerce in the Region of Murcia by means of a model of logistic regression/Estudio de la Potencialidad del Comercio Electrónico en la Región de Murcia me," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 24, pages 499-529, Abril.

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