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The Extent of Information: Its Relevance for Random Utility Models

Author

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  • Robert L. Hicks
  • Ivar E. Strand

Abstract

This paper examines the effect of the researcher's definition of a recreator's choice set on the parameter and welfare estimates from standard random utility models. Three choice set definitions are compared: choice sets based on all alternatives within the survey, those alternatives within a specified distance from the respondents home, and alternatives familiar to the individual. We show that parameter and welfare estimates are sensitive to the definition of the choice set. Welfare measures of site closures differ in varying ways depending on the familiarity level of the sites in question.

Suggested Citation

  • Robert L. Hicks & Ivar E. Strand, 2000. "The Extent of Information: Its Relevance for Random Utility Models," Land Economics, University of Wisconsin Press, vol. 76(3), pages 374-385.
  • Handle: RePEc:uwp:landec:v:76:y:2000:i:3:p:374-385
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    Cited by:

    1. 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.
    2. Jordan Louviere & Kenneth Train & Moshe Ben-Akiva & Chandra Bhat & David Brownstone & Trudy Cameron & Richard Carson & J. Deshazo & Denzil Fiebig & William Greene & David Hensher & Donald Waldman, 2005. "Recent Progress on Endogeneity in Choice Modeling," Marketing Letters, Springer, vol. 16(3), pages 255-265, December.
    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. 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.
    5. 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.
    6. 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.
    7. Moore, Rebecca & Macpherson, Alex & Provencher, Bill, 2005. "A Dynamic Principal-Agent Model of Human-Mediated Aquatic Species Invasions," Staff Paper Series 485, University of Wisconsin, Agricultural and Applied Economics.
    8. John C. Whitehead & Timothy C. Haab, 1999. "SE MRFSS: Distance and Catch Based Choice Sets," Working Papers 9912, East Carolina University, Department of Economics.
    9. MacPherson, Alexander J. & Moore, Rebecca & Provencher, Bill, 2006. "A Dynamic Principal-Agent Model of Human-Mediated Aquatic Species Invasions," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(1), April.
    10. Haab, Timothy C. & Hicks, Robert L., 1997. "Accounting for Choice Set Endogeneity in Random Utility Models of Recreation Demand," Journal of Environmental Economics and Management, Elsevier, vol. 34(2), pages 127-147, October.
    11. repec:eee:jeeman:v:88:y:2018:i:c:p:159-179 is not listed on IDEAS
    12. Mario Du Preez & Deborah Ellen Lee & Stephen Gerald Hosking, 2011. "The recreational value of beaches in the Nelson Mandela Bay area, South Africa," Working Papers 239, Economic Research Southern Africa.
    13. 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.
    14. 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).
    15. Kathleen P. Bell & Ivar E. Strand, 2003. "Reconciling Models of Recreational Route and Site Choices," Land Economics, University of Wisconsin Press, vol. 79(3), pages 440-454.
    16. 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.
    17. Cropper, Maureen L. & Isaac, William, 2011. "The Benefits of Achieving the Chesapeake Bay TMDLs (Total Maximum Daily Loads): A Scoping Study," Discussion Papers dp-11-31, Resources For the Future.

    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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