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Does economic endogeneity of site facilities in recreation demand models lead to statistical endogeneity?

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  • Chen, Min
  • Lupi, Frank

Abstract

Different kinds of endogeneity problems in Random Utility Models of recreation demand have been studied in previous literature. Some site characteristics, like facilities, could be endogenous in an economic sense due to the interplay of supply and demand. That is, it may be that more popular recreation sites tend to have better site characteristics since managers with limited budgets would be more willing to invest in them. If recreation site improvements are more likely to occur at the more popular sites, then might this economic endogeneity cause problems for econometric models linking site demand to facilities. In this paper, we use Monte Carlo simulations to test whether this economic endogeneity will lead to statistical endogeneity.

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  • Chen, Min & Lupi, Frank, 2009. "Does economic endogeneity of site facilities in recreation demand models lead to statistical endogeneity?," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49449, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea09:49449
    DOI: 10.22004/ag.econ.49449
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    1. Backstrom, Jesse D. & Woodward, Richard T., 2017. "Using Qualitative Site Characteristics Data in Marine Recreational Fishing Models: A New Site Aggregation Approach," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258276, Agricultural and Applied Economics Association.

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