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Specification of Driving Costs in Models of Recreation Demand

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  • Danielle Hagerty
  • Klaus Moeltner

Abstract

Existing recreation demand models have paid much attention to the heterogeneous nature of the opportunity cost of time, but generally stipulate constant per mile costs in access price specifications. This study proposes two alternative approaches to introduce user-specific driving costs into recreation demand models. The first approach is based on a refined measurement of driving costs based on engineering considerations. The second strategy estimates perceived per mile cost as a function of vehicle attributes in an empirical framework. We find strong evidence that driving costs are a visitor-specific concept, and that prescribed and perceived costs differ substantially. However, welfare measures generated by these alternative specifications are not statistically different from those produced by the standard model in our application of jet skiing in the Lake Tahoe region.

Suggested Citation

  • Danielle Hagerty & Klaus Moeltner, 2005. "Specification of Driving Costs in Models of Recreation Demand," Land Economics, University of Wisconsin Press, vol. 81(1).
  • Handle: RePEc:uwp:landec:v:81:y:2005:i:1:p127-143
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Crooker, John R., 2007. "Nonparametric Bounds on Welfare with Measurement Error in Prices: Techniques for Non-Market Resource Valuation," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(02), pages 239-252, October.
    2. Ovaskainen, Ville & Neuvonen, Marjo & Pouta, Eija, 2012. "Modelling recreation demand with respondent-reported driving cost and stated cost of travel time: A Finnish case," Journal of Forest Economics, Elsevier, vol. 18(4), pages 303-317.
    3. Abdulbaki Bilgic & Wojciech Florkowski, 2009. "The impact of license regulation on the number of recreation trips: is it worth considering?," Journal of Regulatory Economics, Springer, vol. 35(1), pages 45-69, February.
    4. de Rezende, Carlos Eduardo & Kahn, James R. & Passareli, Layra & Vásquez, William F., 2015. "An economic valuation of mangrove restoration in Brazil," Ecological Economics, Elsevier, vol. 120(C), pages 296-302.
    5. Roberto Martinez-Espineira & Joe Amoako-Tuffour, 2008. "Multi-destination and multi-purpose trip effects in the analysis of the demand for trips to a remote recreational site," EERI Research Paper Series EERI_RP_2008_19, Economics and Econometrics Research Institute (EERI), Brussels.
    6. Davis, Alison & Moeltner, Klaus, 2010. "Valuing the Prevention of an Infestation: The Threat of the New Zealand Mud Snail in Northern Nevada," Agricultural and Resource Economics Review, Cambridge University Press, vol. 39(01), pages 56-74, February.
    7. Egan, Kevin J. & Corrigan, Jay R. & Dwyer, Daryl F., 2015. "Three reasons to use annual payments in contingent valuation surveys: Convergent validity, discount rates, and mental accounting," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 123-136.
    8. Devkota, Nirmala & Paudel, Krishna P. & Hall, Larry M. & Caffey, Rex H., 2006. "Use of Bootstrap Method to Obtain Reliable Parameter Estimations on Travel Cost Demand Model," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35471, Southern Agricultural Economics Association.
    9. Isabel Mendes & Isabel Proença, 2009. "Measuring the Social Recreation Per-Day Net Benefit of Wildlife Amenities of a National Park: A Count-Data Travel Cost Approach," Working Papers Department of Economics 2009/35, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    10. Mahadev Bhat & Ramachandra Bhatta & Mohamed Shumais, 2014. "Sustainable funding policies for environmental protection: the case of Maldivian atolls," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(1), pages 45-67, January.
    11. Kenneth A. Baerenklau, 2010. "A Latent Class Approach to Modeling Endogenous Spatial Sorting in Zonal Recreation Demand Models," Land Economics, University of Wisconsin Press, vol. 86(4), pages 800-816.
    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. Amoako-Tuffour, Joe & Martınez-Espineira, Roberto, 2008. "Leisure and the Opportunity Cost of Travel Time in Recreation Demand Analysis: A Re-Examination," MPRA Paper 8573, University Library of Munich, Germany.
    14. repec:eee:touman:v:33:y:2012:i:4:p:971-977 is not listed on IDEAS
    15. Sánchez, José J. & Baerenklau, Ken & González-Cabán, Armando, 2016. "Valuing hypothetical wildfire impacts with a Kuhn–Tucker model of recreation demand," Forest Policy and Economics, Elsevier, vol. 71(C), pages 63-70.
    16. Baerenklau, Kenneth A. & González-Cabán, Armando & Paez, Catrina & Chavez, Edgar, 2010. "Spatial allocation of forest recreation value," Journal of Forest Economics, Elsevier, vol. 16(2), pages 113-126, April.
    17. Roberto Martinez-Espineira & Joe Amoako-Tuffour, 2005. "Recreation Demand Analysis under Truncation, Overdispersion, and Endogenous Stratification: An Application to Gros Morne National Park," Econometrics 0511007, EconWPA.

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    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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