Modeling Recreation Demand when the Access Point is Unknown

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2013-10-01
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Ji, Yongjie
Herriges, Joseph
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Kling, Catherine
Distinguished Professor Emerita
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Center for Agricultural and Rural Development

The Center for Agricultural and Rural Development (CARD) conducts innovative public policy and economic research on agricultural, environmental, and food issues. CARD uniquely combines academic excellence with engagement and anticipatory thinking to inform and benefit society.

CARD researchers develop and apply economic theory, quantitative methods, and interdisciplinary approaches to create relevant knowledge. Communication efforts target state and federal policymakers; the research community; agricultural, food, and environmental groups; individual decision-makers; and international audiences.

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The task of modeling the recreation demand for geographically large sites, such as rivers and beaches or large parks with multiple entrances, is often challenged by incomplete information regarding the access point used by the individual. Traditionally, analysts have relied upon convenient approximations, defining travel time and travel distances on the basis of the midpoint of a river or beach segment or on the basis of the nearest access point to the site for each individual. In this paper, we instead treat the problem as one of aggregation, drawing upon and generalizing results from the aggregation literature. The resulting model yields a consistent framework for incorporating information on site characteristics and travel costs gathered at a finer level than that used to obtain trip counts. We use a series of Monte Carlo experiments to illustrate the performance of the traditional mid-point and nearest access point approximations. Our results suggest that, while the nearest access point approach provides a relatively good approximation to underlying preferences for a wide range of parameter specifications, use of the midpoint approach to calculating travel cost can lead to significant bias in the travel cost parameter and corresponding welfare calculations. Finally, we use our approach in modeling recreation demand for the major river systems in Iowa using data from the 2009 Iowa Rivers and River Corridors Survey.

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