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Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand

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  • Phaneuf, Daniel J.
  • Kling, Catherine L.
  • Herriges, Joseph A.

Abstract

The Kuhn-Tucker model of Wales and Woodland (1983) provides a utility theoretic framework for estimating preferences over commodities for which individuals choose not to consume one or more of the goods. Due to the complexity of the model, however, there have been few applications in the literature and little attention has been paid to the problems of welfare analysis within the Kuhn-Tucker framework. This paper provides an application of the model to the problem of recreation demand. In addition, we develop and apply a methodology for estimating compensating variation, relying on Monte Carlo integration to derive expected welfare changes.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 1355.

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Date of creation: 01 Jan 2000
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Publication status: Published in Review of Economics and Statistics, January/February 2000, vol. 82 no. 1, pp. 83-92
Handle: RePEc:isu:genres:1355

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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References

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  1. Lilyan E. Fulginiti & Richard K. Perrin, 1992. "Theory and Measurement of Producer Response under Quotas, The," Food and Agricultural Policy Research Institute (FAPRI) Publications 92-wp94, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
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  11. Lacroix, Guy & Fortin, Bernard, 1992. "Utility-Based Estimation of Labour Supply Functions in the Regular and Irregular Sectors," Economic Journal, Royal Economic Society, vol. 102(415), pages 1407-22, November.
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  13. Ransom, Michael R, 1987. "An Empirical Model of Discrete and Continuous Choice in Family Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 465-72, August.
  14. Shaw, Daigee, 1988. "On-site samples' regression : Problems of non-negative integers, truncation, and endogenous stratification," Journal of Econometrics, Elsevier, vol. 37(2), pages 211-223, February.
  15. Englin, Jeffrey & Shonkwiler, J S, 1995. "Estimating Social Welfare Using Count Data Models: An Application to Long-Run Recreation Demand under Conditions of Endogenous Stratification and Truncation," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 104-12, February.
  16. Morey, Edward R. & Shaw, W. Douglass & Rowe, Robert D., 1991. "A discrete-choice model of recreational participation, site choice, and activity valuation when complete trip data are not available," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 181-201, March.
  17. Nancy E. Bockstael & Ivar E. Strand, Jr. & Kenneth E. McConnell & Firuzeh Arsanjani, 1990. "Sample Selection Bias in the Estimation of Recreation Demand Functions: An Application to Sportfishing," Land Economics, University of Wisconsin Press, vol. 66(1), pages 40-49.
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  25. Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
  26. Hausman, Jerry A. & Leonard, Gregory K. & McFadden, Daniel, 1995. "A utility-consistent, combined discrete choice and count data model Assessing recreational use losses due to natural resource damage," Journal of Public Economics, Elsevier, vol. 56(1), pages 1-30, January.
  27. Hanemann, W Michael, 1984. "Discrete-Continuous Models of Consumer Demand," Econometrica, Econometric Society, vol. 52(3), pages 541-61, May.
  28. Yen, Steven & Adamowicz, Wiktor L., 1994. "Participation, Trip Frequency and Site Choice: A Multinomial-Poisson Hurdle Model of Recreation Demand," Staff General Research Papers 764, Iowa State University, Department of Economics.
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As found on the RePEc Biblio, the curated bibliography for Economics:
  1. > Industrial Organization > Industry studies > Sports, recreation and tourism > Recreation
  2. > Industrial Organization > Industry studies > Sports, recreation and tourism
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