Table of Contents

The New Economics of Outdoor Recreation

The New Economics of Outdoor Recreation

Edited by Nick Hanley, W. Douglass Shaw and Robert E. Wright

This innovative book presents a series of up-to-date analyses of the economics of outdoor recreation. The distinguished group of authors covers real-world recreation management issues and applies economic understanding to these problems. An extensive introduction by the editors details the historical background of economists’ interests in this subject, and reveals how economics can provide practical insights into improving how we manage our natural recreation areas.

Chapter 7: Modelling Choice and Switching Behaviour Between Scottish Ski Centres

Geoff Riddington, Colin Sinclair and Nicola Milne

Subjects: economics and finance, environmental economics, environment, environmental economics


Geoff Riddington, Colin Sinclair and Nicola Milne 1. INTRODUCTION A key element in appraising an investment is a forecast of the demand for the product or service. Often, when the market is relatively static, then the forecast revolves around the market share and particularly the way customers will switch from current purchase patterns to the new product or service. In turn this means that we need to develop an understanding of the way consumers choose their consumption patterns and to model the effect of the factors underlying the choice. Over the last few years there has been considerable investment in the ski centres in Scotland and more, rather contentious, developments are planned. This chapter tries to identify the factors that determine the effects of expenditure at a site by developing a model that quantifies the relationship between the quality of the facilities, prices and the choice of individual skiers. The layout of the chapter is as follows. First, we briefly examine the market for skiing in Scotland. Secondly, we look at the specification and estimation of the chosen model, the Nested Multinomial Logit. Thirdly, we discuss the data, and specifically the estimation of potential expenditures for non-chosen sites. Fourthly, we examine the final estimated models and the resultant implications for ski investment. Finally we discuss the role and limitations of the approach to investment in leisure activities. 2. THE MARKET FOR SKIING IN SCOTLAND Scotland has five ski centres; Glencoe, Nevis Range, Cairngorm, Glenshee...

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