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Valuing Water Quality as a Function of Water Quality Measures

Employing a unique and rich data set of water quality attributes in conjunction with detailed household characteristics and trip information, we develop a mixed logit model of recreational lake usage and undertake thorough model specification and fitting procedures to identify the best set of explanatory variables, and their functional form for the estimated model. Our empirical analysis shows that individuals are responsive to the full set of water quality measures used by biologists to identify the impaired status of lakes. Thus, changes in these quality measures are not simply a scientific exercise, but they also translate into changes in the recreational usage patterns and well-being of individual households. Willingness-to-pay (WTP) estimates are reported based on improvements in these physical measures. Copyright 2009, Oxford University Press.

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Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 91 (2009)
Issue (Month): 1 ()
Pages: 106-123

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Handle: RePEc:oup:ajagec:v:91:y:2009:i:1:p:106-123
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  1. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
  2. Daniel J. Phaneuf & Catherine L. Kling & Joseph A. Herriges, 2000. "Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 83-92, February.
  3. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
  4. von Haefen, Roger H., 2000. "Incorporating Observed Choice In The Construction Of Welfare Measures From Random Utility Models," 2000 Annual meeting, July 30-August 2, Tampa, FL 21836, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Herriges, Joseph A. & Kling, Catherine L., 2003. "Recreation Demand Models," Staff General Research Papers 10211, Iowa State University, Department of Economics.
  6. George R. Parsons & Mary Jo Kealy, 1992. "Randomly Drawn Opportunity Sets in a Random Utility Model of Lake Recreation," Land Economics, University of Wisconsin Press, vol. 68(1), pages 93-106.
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