Structurally-consistent estimation of use and nonuse values for landscape-wide environmental change

Day, B., Bateman, I., Binner, A., Ferrini, S. and Fezzi, C., 2019. Structurally-consistent estimation of use and nonuse values for landscape-wide environmental change. Journal of Environmental Economics and Management, 98, p.102256.

We address the problem of estimating the use and nonuse value derived from a landscape-wide programme of environmental change. Working in the random utility framework, we develop a structural model that describes both demand for recreational trips to the landscape’s quality-differentiated natural areas and preferences over different landscape-wide patterns of environmental quality elicited in a choice experiment. The structural coherence of the model ensures that the parameters of the preference function can be simultaneously estimated from the combination of revealed and stated preference data. We explore the properties of the model in a Monte Carlo experiment and then apply it to a study of preferences for changes in the ecological quality of rivers in northern England. This implementation reveals plausible estimates of the use and nonuse parameters of the model and provides insights into the distance decay in those two different forms of value.

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