Rounding in Recreation Demand Models: A Latent Class Count Model

Keith Evans and Joseph Herriges

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: A commonly observed feature of visitation data, elicited via a survey instrument, is a greater propensity for individuals to report trip numbers that are multiples of 5's, relative to other possible integers (such as 3 or 6). One explanation of this phenomenon is that some survey respondents have difficulty recalling the exact number of trips taken and instead choose to round their responses. This paper examines the impact that rounding can have on the estimated demand for recreation and the bias that it may induce on subsequent welfare estimates. We propose the use of a latent class structure in which respondents are assumed to be members of either a nonrounding or a rounding class. A series of generated data experiments are provided to illustrate the range of possible impacts that ignoring rounding can have on the estimated parameters of the model and on the welfare implications from site closure. The results suggest that biases can be substantial, particularly when then unconditional mean number of trips is in the range from two to four. An illustrative application is provided using visitation data to Saylorville Lake in central Iowa.

Keywords: recreation demand; count data; rounding (search for similar items in EconPapers)
JEL-codes: C25 Q51 (search for similar items in EconPapers)
Date: 2010-06-02
New Economics Papers: this item is included in nep-ecm and nep-tur
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Rounding in recreation demand models: a latent class count model (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:31594

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