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Recreational Benefits from Improved Water Quality: A Random Utility Model of Swedish Seaside Recreation

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  • Sandström, Mikael

    ()
    (Department of Economics)

Abstract

In this paper, a random utility maximization (RUM) model of Swedish seaside recreation is used to estimate the benefits from reduced eutrophication of the seas around Sweden. Sight depth data from around the Swedish coast are used as a quality index related to eutrophication. The model is estimated using the nested multinomial logit (NMNL) and conditional logit (CL) specifications. In order to test the relationship between this quality variable and the nutrient concentration in the water, a regression of sight depth on the concentration of phosphorus and nitrogen has been run. The results are used to make policy simulations. Two sets of such simulations have been undertaken. One set assumes a uniform change of the nutrient load along the entire Swedish coastline. The consumer surplus from a reduction of the nutrient load by 50 percent is estimated to be around 140 mSEK if the NMNL model is used, and 540 mSEK if the CL model is used. The other set of policy simulations assumes a change in the nutrient load in the Laholm Bay in south-west Sweden. The consumer surplus for a 50 percent reduction in the nutrient load in the bay is estimated to be 12 mSEK if the NMNL model is used, and 32 mSEK if the CL model is used.

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Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 121.

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Length: 50 pages
Date of creation: Sep 1996
Date of revision:
Handle: RePEc:hhs:hastef:0121

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Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
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Fax: +46-(0)8-31 01 57
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Web page: http://www.hhs.se/
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Related research

Keywords: random utility; recreation; water; Baltic Sea; eutrophication; discrete choice;

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References

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Cited by:
  1. Christine Bertram, Katrin Rehdanz, 2012. "On the Environmental Effectiveness of the EU Marine Strategy Framework Directive," Kiel Working Papers 1760, Kiel Institute for the World Economy.
  2. Stina Hökby & Tore Söderqvist, 2003. "Elasticities of Demand and Willingness to Pay for Environmental Services in Sweden," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 26(3), pages 361-383, November.
  3. Catalina M. Torres Figuerola & Antoni Riera Font, 2009. "Defining environmental attributes as external costs in choice experiments: A discussion," CRE Working Papers (Documents de treball del CRE), Centre de Recerca Econòmica (UIB ·"Sa Nostra") 2009/1, Centre de Recerca Econòmica (UIB ·"Sa Nostra").

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