2002 World Congress of Environmental and Resource Economists

The recognition that recreation goods are time costly is well-known, yet the measurement and incorporation of time costs is still a matter of contention. In most applications, researchers assume individuals can trade time for money at the margin, thus allowing the shadow value of that time to be represented as a function of the individuals’ wage rate. This paper proposes a method for estimating a stochastic shadow value of leisure time function jointly with a recreational site choice model that distinguishes between individuals who can freely choose the number of hours they work and those who cannot. A mixed logit random utility model of recreation demand is developed that accounts for the non-linearity of the conditional indirect utility imposed by the endogenous shadow value function. An empirical example using data from a survey of Southern California beach users serves to illustrate the method and contrasts it with commonly used approaches.



	Paper Title:	Jointly Estimating Recreational Choices And The Shadow Value Of Leisure Time
	Presenting Author:	Daniel K Lew (University of California)
	Coauthor 1:	Douglas M Larson
	Coauthor 2:
	Coauthor 3:
	Abstract:	The recognition that recreation goods are time costly is well-known, yet the measurement and incorporation of time costs is still a matter of contention. In most applications, researchers assume individuals can trade time for money at the margin, thus allowing the shadow value of that time to be represented as a function of the individuals’ wage rate. This paper proposes a method for estimating a stochastic shadow value of leisure time function jointly with a recreational site choice model that distinguishes between individuals who can freely choose the number of hours they work and those who cannot. A mixed logit random utility model of recreation demand is developed that accounts for the non-linearity of the conditional indirect utility imposed by the endogenous shadow value function. An empirical example using data from a survey of Southern California beach users serves to illustrate the method and contrasts it with commonly used approaches.
	Link to paper:	Not available

	Session / Day / Time	2E / Monday / 10:15 - 11:45 am

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