nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2006‒12‒04
two papers chosen by
Philip Yu
Hong Kong University

  1. On nesting nonhomothetic preferences By Kowal, Paweł
  2. Valuing Beach Access and Width with Revealed and Stated Preference Data1 By John C. Whitehead; Christopher F. Dumas; Jim Herstine; Jeffery Hill; Bob Buerger

  1. By: Kowal, Paweł
    Abstract: We consider nested utility function with nonhomothetic subutility functions. We express demand functions for aggregate goods in terms of marshalian and hicksian demands associated with the standard consumer problem of maximization of aggregate utility function. We also presents a simple method of calibrating such a demand system.
    Keywords: demand systems; nonhomothetic preferences
    JEL: D11
    Date: 2006–11
  2. By: John C. Whitehead; Christopher F. Dumas; Jim Herstine; Jeffery Hill; Bob Buerger
    Abstract: In this paper we present results from a study of recreation demand of southern North Carolina beaches. We combine revealed preference and stated preference data in order to estimate the changes in recreation demand that might occur with beach nourishment and parking improvements necessary to satisfy the requirements for US Army Corps of Engineers cost-share. We illustrate the numerous ways that hypothetical bias in contingent behavior data can lead to increases in the estimates of the economic benefits of recreation and recreation quality improvement. Hypothetical bias affects the number of trips and slope coefficients. Hypothetical bias does not affect elasticity or consumer surplus per trip estimates. When the product of trips and consumer surplus per trip is taken to estimate consumer surplus per season, hypothetical bias leads to upwardly biased seasonal consumer surplus estimates. These results suggest that stated preference recreation demand data, in isolation, is suitable for estimation of consumer surplus per trip but not consumer surplus per season.
    JEL: Q51
    Date: 2006

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