Comparing welfare estimates of environmental quality changes from recreation demand models

Abstract

This paper presents a procedure for examining the reliability of welfare estimates resulting from the estimation of multiple site recreation demand models. A simulation approach is suggested where a utility function is combined with observations on individual and site characteristics to generate simulated data sets. Welfare measures associated with an improvement in site quality are calculated. Recreation demand models are estimated using the simulated data sets. Estimated welfare measures resulting from the recreation demand models are then compared to the true welfare measures calculated from the simulated data. The procedure is demonstrated using two commonly employed recreation demand models.