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Linking Recreation Demand and Willingness to Pay with the Inclusive Value

Linking Recreation Demand and Willingness to Pay with the Inclusive Value. John C. Whitehead, Peter A. Groothuis, Rob Southwick. Whitehead (1995a, 1995b). X = a 0 + a 1 C + a 2 Q + a 3 Y WTP( D Q) = b 0 + b 1 C + b 2 D Q + b 3 Y where b 1 ≈ D X if b 1 =0, then WTP = nonuse value

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Linking Recreation Demand and Willingness to Pay with the Inclusive Value

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  1. Linking Recreation Demand and Willingness to Pay with the Inclusive Value John C. Whitehead, Peter A. Groothuis, Rob Southwick

  2. Whitehead (1995a, 1995b) • X = a0 + a1C + a2Q + a3Y • WTP(DQ) = b0 + b1C + b2DQ + b3Y • where b1≈DX • if b1=0, thenWTP = nonuse value • Huang, Haab and Whitehead (1997) …

  3. Whitehead (2005) • When C is hard to measure (multiple sites, access points, etc) • WTP(DQ) = g0 + g1DX + g2DQ + g3Y • DX = f(DQ,Y,Z) • Identification of DX is a hassle …

  4. Current Proposal

  5. Deterministic utility

  6. Choice

  7. Conditional Logit

  8. Inclusive value

  9. Welfare

  10. Linking discrete and continuous choices

  11. Welfare with trip changes

  12. Variation function

  13. Empirical variation function

  14. Link between X and WTP

  15. Scope?

  16. Convergent validity?

  17. Use and nonuse values?

  18. 2005 Mail Survey

  19. Saginaw Bay Watershed

  20. Saginaw Bay Wetlands

  21. Sample • Fishing and Hunting license holders in the watershed • 22% response rate • n = 251 license holders • General population sample …

  22. Typical Trip RUM No trip 46% Iosco 6% Arenac 7% Bay 25% Huron 9% Tuscola 6%

  23. WTP > 0? • Would you be willing to make a one-time donation of money to the Saginaw Bay Coastal Marsh Trust Fund within the next 12 months?

  24. WTP > 0

  25. WTP > A? • If about 1 percent (1 in 100) of all households in Michigan made a one-time donation of $A, the Trust Fund would have enough money to purchase and manage X acres of coastal marshes. • Remember, if you made a one-time donation of $A into the Trust Fund, you would have $A less to spend on other things. • Also remember that protected marsh would no longer be available for conversion to other uses. • Would you be willing to make a one-time donation of money to the Saginaw Bay Coastal Marsh Trust Fund within the next 12 months?

  26. WTP > A

  27. Conclusions • Recreation nonusers hold nonuse values • Recreation users do not hold nonuse values. • Much of the willingness to pay estimate is comprised of nonuse values and the additivity assumption adopted by Whitehead et al. (2006) is appropriate

  28. Future Research • Other applications … • NC beach recreation (2003 data): inclusive value is positive and statistically statistic but offers no improvement over minimum travel cost

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