The impact of license regulation on the number of recreation trips: is it worth considering?

Abstract

A two-stage nonlinear least-squares model (2NLS) with an endogenous treatment effect on recreation trips describes the behavior of recreationists with and without a fishing/hunting license. The proposed 2NLS is applied to the derivation of the policy-relevant average gains in the presence of an endogeneity bias to a license fee implementation program regulated by states. Recreationists who purchased a license are likely to recreate more than are the nonlicensed holders because the regulation may reduce congestions at sites where licensee visit often. The license regulation has a greater impact on the use of natural resources after controlling observed and unobserved confounders which might be correlated with the probability of being a license holder and with the final outcome, the number of recreation trips. We confirm that the individual without a permit regards the recreation trip as less valuable than does the individual having a license permit. We also found that the likelihood of purchasing a license among young adult recreationists is not at the level the states may desire. In addition, the number of trips demanded is more responsive to the nontransportation-related implicit travel cost than to the transportation-related implicit travel cost, although travel implicit costs are price inelastic.