A Boating Choice Model for the Valuation of Lake Access

Abstract

Most policies that bear on the management of lakes for public boating have regional use implications, with the lake attributes and individual preferences for boating activities determining the quantity of trips (Bockstael, McConnell & Strand, 1991). Managing authorities work to control boating access to lakes and to comply with a variety of internal and federal regulations compelling them to provide water-based recreation to individuals living in areas surrounding the lakes. For example, managing authorities produce operating plans on a periodic basis for the Federal Energy Regulatory Commission as evidence of their compliance with the region's boating needs. Plans incorporate present and future boating use patterns and address the impact of changes in public and private lake access for existing lake conditions and long-range lake developments. Attempts, then, to value the benefits to boaters from lake management policies should have a regional scope and be based on management's understanding of the underlying preferences of boaters and the availability of alternative boating sites (Peterson, Stynes, Rosenthal & Dwyer, 1985). Yet, most studies of lake boating are site specific relying on data from on-site surveys of users.Conceptual and empirical issues associated with the development of methodologies that are applicable to water-based recreation demand and benefits are discussed by Smith (1989); Fletcher, Adamowicz and Tomasi (1990); Bockstael, McConnell and Strand (1991); and in the proceedings on recreation choice behavior (Stankey and McCool, 1985). An assumption common to the analysis of recreation demand and corresponding welfare benefits is that, when making choices, an individual is maximizing the utility (value) derived from pursuing a particular choice.(1) Unfortunately, with indirect approaches for measuring the demand for lake boating, we can never comprehend all the factors underlying choice decisions and describe comprehensively the sequence of decisions (Smith, 1989). Rather, we are organizing what we hypothesize to be the determinants and constraints of individual decisions to participate in lake boating (Smith).This article reports results from the applications of a discrete choice method to alternative choice processes that individuals go through and the factors that are considered when making boating decisions in the context of multiple lakes. The discrete choice or random utility model for studying outdoor recreation demand is described by Bockstael, McConnell, and Strand (1991). Using a random household-based sample of registered boat owners living in the region surrounding the Catawba River Basin in North Carolina, we test our assumptions about the sequences of boating choice decisions that are made by individuals. We begin with a boating activity and destination lake choice problem, and conclude with a more complex choice problem that includes boating activities, an intervening choice of boat launching facilities, and finally destination lakes.Estimations from discrete choice equations produce probabilistic outcomes for boating demands that are useful to managers in determining the amount of boating trips to each lake in a region and in calculating estimates of welfare benefits per boating occasion to each lake. Our welfare estimates are conditioned on a boater wanting to gain access to a lake and if, hypothetically, that boater were to be denied access to the lake per boating choice occasion (Bockstael, McConnell & Strand, 1991). Given the denial of access to a closed substitute lake, the measure of compensating variation, which is calculated from discrete choice models, is interpreted as the welfare estimate of lake access or the amount of compensation per choice occasion an individual in our sample would need if one of the lakes were not made available for a period of time.Modeling Boating ChoiceConsider a simple choice problem of lake boating and three lakes (d). …