Estimating Social Welfare Using Count Data Models: An Application to Long-Run Recreation Demand Under Conditions of Endogenous Stratification and Truncation

Abstract

This paper develops a negative binomial model of recreation demand that corrects for both truncation and endogenous stratification. This approach recovers the demand associated with the general population, not just the users of the site. This model demonstrates the importance of the joint nature of the population's latent demand for trips and the consumer surplus associated with those trips. The empirical results provide an estimate of the willingness-to-pay by Washington state residents for hiking opportunities in the Cascade Mountain Range. These results are used to forecast total trips and willingness-to-pay over the next forty years. Copyright 1995 by MIT Press.