Recreational Benefits from Improved Water Quality: A Random Utility Model of Swedish Seaside Recreation
AbstractIn 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 InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 121.
Length: 50 pages
Date of creation: Sep 1996
Date of revision:
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More information through EDIRC
random utility; recreation; water; Baltic Sea; eutrophication; discrete choice;
Find related papers by JEL classification:
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
- Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
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