Welfare economics is often employed to measure the impact of economic policies or externalities. When demand is characterized by discrete choices, static models of consumer demand are employed for this type of analysis because of the difficulty in estimating dynamic discrete choice models. In this paper we provide a tractable approach to estimating dynamic discrete choice models of the Generalized Extreme Value (GEV) family that addresses many of the problems identified in the literature and provides a rich set of parameters describing dynamic choice. We apply this model to the case of recreational fishing site choice, comparing dynamic to static versions. In natural resource damage assessment cases, static discrete choice models of recreational site choice are often employed to calculate welfare measures, which will be biased if the underlying preferences are actually dynamic in nature. In our empirical case study we find that the dynamic model provides a richer behavioral model of site choice, and reflects the actual choices very well. We also find significant differences between static and dynamic welfare measures. However, we find that the dynamic model raises several concerns about the specification of the policy impact and the subsequent welfare measurement that are not raised in static cases.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper provided by University of Alberta, Department of Rural Economy in its series Staff Paper Series with number
24113.
Length: Date of creation: 2000 Date of revision: Handle: RePEc:ags:ualbsp:24113
Contact details of provider: Postal: 515 General Services Building, University of Alberta, Edmonton, AlbertaT6G 2H1 Phone: (780) 492-4225 Fax: (780) 492-0268 Email: Web page: http://www.re.ualberta.ca/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (AgEcon Search).
Cited by: (explanations, 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.)