An efficiency approach to choice set formation: theory and application to recreational destination choice
Abstract:An unresolved debate in behavioural choice research surrounds specifying individual choice sets. To overcome the limitations of deterministic and probabilistic approaches in a framework consistent with individual optimizing behaviour, this study develops an efficient frontiers approach to the choice set problem in the context of revealed preference destination choice. Stochastic frontier models relating costly inputs to utility generating outputs are estimated to measure the efficiency of sites; choice sets are then formed by retaining sites that exceed alternative efficiency thresholds. Choice set composition, site choice efficiency and probability of selection and consumer surplus are evaluated in the case of fishery site choice in Maine.
Document Type: Research Article
Affiliations: 1: Department of Economics, University of Central Florida, Orlando, FL 32816-1400 2: Department of Agricultural and Applied Economics, Virginia Polytechnic Institute and State University, Blacksburg, Virgina, USA
Publication date: February 1, 2010