Accounting for Skill Levels in Recreational Demand Modelling using a Clustered RUM approach
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Date
2005Author
Garvey, Eoghan
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Hynes, S., Hanley, N., & Garvey, E. (2005) "Accounting for Skill Levels in Recreational Demand Modelling using a Clustered RUM approach" (Working Paper No. 0092) Department of Economics, National University of Ireland, Galway.
Abstract
We adapt the standard random utility model to take account of the heterogeneity of
recreational preferences by using what we call a 'clustered conditional logit
framework'. By separating out our sample of whitewater kayakers into two
exogenously identifiable groups (based on their skill level) and running separate
conditional logits for each group we are able to take account of the fact that kayakers
of different skill levels are looking for different characteristics from the whitewater
site they choose to visit. We find that not taking into account the differences in the
skill of the kayakers and the grade of the river will result in an overestimation of the
welfare estimates associated with improvements to lower grade whitewater sites
(which are frequented by basic/intermediated proficiency level kayakers) and
underestimating welfare estimates associated with changes in the attributes of higher
grade whitewater sites (which are frequented by advanced proficiency level
kayakers).