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Narrow Choice Sets in a Random Utility Model of Recreation Demand

Author

Listed:
  • George R. Parsons
  • GAndrew J. Plantinga
  • GKevin J. Boyle

Abstract

We consider the implications of narrow choice sets on welfare estimation in a random utility model of recreation demand. We hypothesize that careful formulation of the choice set focusing on the sites of policy interest and their closest substitutes will give reasonably accurate welfare estimates. We use nearby sites as close substitutes and treat more distant sites as aggregate alternatives in our application to fishing in Maine. We find that the welfare estimates are rather sensitive to narrowing choice sets in this manner. The sensitivity largely tracts variation in the estimated travel cost coefficient across the different models considered.

Suggested Citation

  • George R. Parsons & GAndrew J. Plantinga & GKevin J. Boyle, 2000. "Narrow Choice Sets in a Random Utility Model of Recreation Demand," Land Economics, University of Wisconsin Press, vol. 76(1), pages 86-99.
  • Handle: RePEc:uwp:landec:v:76:y:2000:i:1:p:86-99
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    Citations

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    Cited by:

    1. Yongjie Ji & Joseph A. Herriges & Catherine L. Kling, 2016. "Modeling Recreation Demand When the Access Point Is Unknown," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 860-880.
    2. Richard T. Melstrom & Deshamithra H. W. Jayasekera, 2017. "Two-Stage Estimation to Control for Unobservables in a Recreation Demand Model with Unvisited Sites," Land Economics, University of Wisconsin Press, vol. 93(2), pages 328-341.
    3. Steven B. Caudill & Peter A. Groothuis, 2005. "Modeling Hidden Alternatives in Random Utility Models: An Application to "Don’t Know" Responses in Contingent Valuation," Land Economics, University of Wisconsin Press, vol. 81(3).
    4. H. Spencer Banzhaf & V. Kerry Smith, 2007. "Meta-analysis in model implementation: choice sets and the valuation of air quality improvements," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(6), pages 1013-1031.
    5. Hicks, Robert L. & Schnier, Kurt E., 2010. "Spatial regulations and endogenous consideration sets in fisheries," Resource and Energy Economics, Elsevier, vol. 32(2), pages 117-134, April.
    6. Domanski, Adam, 2009. "Estimating Mixed Logit Recreation Demand Models With Large Choice Sets," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49413, Agricultural and Applied Economics Association.
    7. Christopher Jeffords, 2014. "Preference-directed regulation when ethical environmental policy choices are formed with limited information," Empirical Economics, Springer, vol. 46(2), pages 573-606, March.
    8. Bengochea, A., 2003. "Valoración del uso recreativo de un espacio natural," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 21, pages 321-338, Agosto.
    9. Christopher Avery & Caroline Minter Hoxby, 2004. "Do and Should Financial Aid Packages Affect Students' College Choices?," NBER Chapters,in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 239-302 National Bureau of Economic Research, Inc.
    10. Thiene, Mara & Swait, Joffre & Scarpa, Riccardo, 2017. "Choice set formation for outdoor destinations: The role of motivations and preference discrimination in site selection for the management of public expenditures on protected areas," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 152-173.
    11. Roger Haefen, 2008. "Latent Consideration Sets and Continuous Demand Systems," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(3), pages 363-379, November.
    12. Paudel, Krishna P. & Caffey, Rex H. & Devkota, Nirmala, 2011. "An Evaluation of Factors Affecting the Choice of Coastal Recreational Activities," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(02), May.
    13. Robert Deacon & Felix Schläpfer, 2010. "The Spatial Range of Public Goods Revealed Through Referendum Voting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(3), pages 305-328, November.
    14. Hicks, Robert L., 2002. "A Comparison Of Stated And Revealed Preference Methods For Fisheries Management," 2002 Annual meeting, July 28-31, Long Beach, CA 19853, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. repec:eee:jeeman:v:88:y:2018:i:c:p:159-179 is not listed on IDEAS
    16. von Haefen, Roger H., 2003. "Incorporating observed choice into the construction of welfare measures from random utility models," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 145-165, March.
    17. Stephen L. DeJardins & Dennis A. Ahlburg & Brian McCall, "undated". "An Integrated Model of Application, Admission, Enrollment, and Financial Aid," Working Papers 0104, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).
    18. Li, Lianhua & Adamowicz, Wiktor & Swait, Joffre, 2015. "The effect of choice set misspecification on welfare measures in random utility models," Resource and Energy Economics, Elsevier, vol. 42(C), pages 71-92.
    19. Scrogin, David & Hofler, Richard & Boyle, Kevin J. & Milon, J. Walter, 2004. "On The Frontier Of Generating Revealed Preference Choice Sets: An Efficient Approach," 2004 Annual meeting, August 1-4, Denver, CO 20134, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Phaneuf, Daniel J. & Smith, V. Kerry, 2006. "Recreation Demand Models," Handbook of Environmental Economics,in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 15, pages 671-761 Elsevier.
    21. Termansen, Mette & McClean, Colin J. & Jensen, Frank Søndergaard, 2013. "Modelling and mapping spatial heterogeneity in forest recreation services," Ecological Economics, Elsevier, vol. 92(C), pages 48-57.
    22. Kuminoff, Nicolai V., 2009. "Decomposing the structural identification of non-market values," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 123-139, March.
    23. Farr, Marina & Stoeckl, Natalie & Sutton, Stephen, 2014. "Recreational fishing and boating: Are the determinants the same?," Marine Policy, Elsevier, vol. 47(C), pages 126-137.

    More about this item

    JEL classification:

    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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