Incorporating Endogenous Perceptions of Environmental Attributes in Recreation Demand Models: The Case of Congestion
By Peter C. Boxall and W. L. AdamowiczABSTRACT
Can this notion have significance in examining and incorporating congestion in recreation demand models? We attempt to answer this question by developing a model which incorporates expectations of congestion levels, heterogeneity in these expectations, and the incorporation of some of the consequences of congestion. The model involves the notion of interdependent utility functions in which the probability an individual visits a particular recreation site is a function of the probability that other recreationists visit the site. We utilize the random utility framework in developing the model and apply the model to sample of about 1000 canoeists who visited a system of wilderness areas in the Canadian Shield Region of Canada and the northern USA.
To incorporate Schelling's notion in a random utility model, an instrumental variables approach was utilized. An ordered logit model of anticipated congestion was estimated in which anticipated congestion levels were forecast as a function of individual characteristics and some relevant environmental quality variables. The model was applied to future canoe trips in the system of wilderness parks and predictions of anticipated congestion were developed. These predictions were used as instruments in park choice models developed using revealed preference information.
The resulting parameters and were compared to other choice models in which reported congestion levels were used instead of the congestion predictions. Comparisons of the two models revealed significant differences in welfare estimates associated with hypothetical quality changes in the park system. This framework enabled the estimation of individual specific congestion thresholds, and suggests that their incorporation in recreation demand models would result in significant differences in predicting the responses of recreationists to changes in environmental quality.
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