A welfare estimation of beach recreation with aggregate data
A single-site travel cost recreation demand model for a representative agent visiting a beach is employed that uses an indirect utility function. Alternative specifications of the expected demand function are estimated with aggregate time-series data from a local beach park. The estimated parameters are used to compute the value of the consumer surplus. The recreational value of the park is expectedly sensitive to the functional form used. Also, own-price and income elasticities for various functional forms vary. The results from the Box-Cox procedure suggest that the semi-log function is the most appropriate for the data used in this study. Confidence intervals are calculated to deal with the reliability problem of the consumer surplus estimates. An alternative algorithm, which assumes omitted variable as the source of the error in the demand function, is also presented.
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Document Type: Research Article
Affiliations: Department of Economics and Finance, University of Southern Mississippi, 118 College Drive #5072, Hattiesburg, MS, 39406-0001, USA
Publication date: 2010-02-01