Functional form issues and welfare measures of truncated recreation demand models /
| Main Author: | |
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| Other Authors: | , , , |
| Format: | Thesis Book |
| Language: | English |
| Published: |
1989.
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| Subjects: | |
| Online Access: | Link to OAKTrust copy |
| Abstract: | Valuation of natural recreation sites is an important component of benefit/cost analysis carried out for many proposed policies or projects of natural resources. For most natural recreation sites, however, there are no direct markets in which marginal prices are revealed. Alternative valuation methods must rely upon consumer responses obtained through surveys. Surveys of the population at large are most appropriate for estimating demand functions and utility derived from these sites. Surveys of this nature, however, can be quite expensive. Hence, researchers frequently sample on site and collect responses only from recreation site users. Such on site surveys, while less expensive, generate sample data that suffers from truncation bias since it does not include responses from non-users of the site Recreation site demand models have received widespread acceptance and have been applied in many studies. A variety of functional forms have been used in empirical applications of this model. Box-Cox transformation and non-nested hypothesis testing procedures have been employed to discriminate among the competing functional forms. The sensitivity of weifare measures to functional form has also been investigated. Current research, however, has raised questions concerning the validity of all previous studies that failed to account for the truncated nature of recreational demand data. In the present research a Truncated General Box-Cox Model is developed for selecting an appropriate functional form when the data is subject to truncation bias. Recognizing that a problem of heteroskedasticity may exist if the data for this model are cross sectional, the Truncated General Box-Cox Model is modified to included heteroskedastic error terms. Vartia's algorithm was also used to obtain 'approximate' welfare measures for the Box-Cox functional form. An empirical analysis of the value of a coastal recreation site provided a practical application of the Truncated General BoxCox Model. In general, the recreational use value (consumer surplus) of an estuary along the Texas Gulf Coast was estimated to be in the range of $259 to $287 per recreationist. Compensating variation was also estimated to be between $250 and $287 per recreationist. Equivalent variation on the other hand, was estimated to be from $248 to $286 per recreationist. |
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| Item Description: | Typescript (photocopy). Vita. "Major subject: Agricultural Economics." |
| Physical Description: | ix, 117 leaves : illustrations ; 29 cm |
| Bibliography: | Includes bibliographical references. |