Truncation and Endogenous Stratification in Various Count Data Models for Recreation Demand Analysis
AbstractThis paper extends the truncated and endogenously stratified Poisson and negative binomial models to three alternative discrete distributions, namely the generalized Poisson, geometric, and Borel distributions. Our primary intention here is to demonstrate how improper treatment of the data generates divergent outcomes by applying those distributions to recreation trip data gathered from surveys of visitors to an indigenous horse park in Japan. Our empirical application shows that failure to account for overdispersion, truncation, and endogenous stratification leads to substantial changes in parameter estimates and their standard errors. The parameter on the travel cost tends to be underestimated in absolute value in the standard setups. This results in serious overestimation of the economic benefit that the recreation site offers to society. Even when the endogenous stratification is incorporated, ignoring overdispersion causes the per capita per trip consumer's surplus to be over seven times larger than that obtained when endogenous stratification and overdispersion are considered.
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 615.
Length: 21 pages
Date of creation: 30 Nov 2005
Date of revision:
Publication status: Published as Nakatani, Tomoaki and Kazuo Sato, 'Truncation and Endogenous Stratification in Various Count Data Models for Recreation Demand Analysis' in Journal of Development and Agricultural Economics, 2010, pages 293-302.
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More information through EDIRC
Count data models; Endogenous stratification; Overdispersion; Recreation demand analysis; Consumer's surplus;
Find related papers by JEL classification:
- C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-09 (All new papers)
- NEP-CUL-2005-12-09 (Cultural Economics)
- NEP-TUR-2005-12-09 (Tourism Economics)
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