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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.
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Chapter 12: A Random Utility Model of Beach Recreation

George R. Parsons and D. Matthew Massey


George R. Parsons and D. Matthew Massey 1. INTRODUCTION The purpose of this chapter is to estimate a random utility maximization (RUM) model of beach recreation and use it to value losses associated with beach closures and beach erosion. Our application is to 62 beaches in the Mid-Atlantic region of the USA. We estimate the model using a random sample of 400 beach users from the state of Delaware. The prominent beaches and the state are shown on the map in Figure 12.1. We estimate a simple multinomial and a mixed logit version of the RUM model. The latter allows us to account for general patterns of substitution among the sites (Train, 1999a). We consider day trips only in this analysis. Both versions of the model originally appeared in Massey (2002). The RUM model is a ‘discrete choice’ travel cost model which considers an individual’s choice of one recreation site from among many possible sites. The model yields per-trip values, which may be used to value sites or characteristics of sites. In our case the sites are beaches. The foundations for the model are found in a series of articles by Daniel McFadden (see McFadden, 1974, 1978, 1981, and 2001). The RUM model was first applied to recreation demand by Hanemann (1978) and later developed more fully by Bockstael et al. (1986). The model has been applied to many types of outdoor recreation including fishing, swimming, boating, rock climbing, hunting, viewing, hiking, and so on. There are a number of...

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