Demand and Welfare Effects in Recreational Travel Models: A Bivariate Count Data Approach

Jörgen Hellström () and Jonas Nordström ()
Additional contact information
Jörgen Hellström: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden
Jonas Nordström: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 648, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: In this paper we present a non-linear demand system for households' joint choice of number of trips and days to spend at a destination. The approach, which facilitates welfare analysis of exogenous policy and price changes, is used empirically to study the effects of an increased CO2 tax. In the empirical study, a bivariate zero-inflated Poisson lognormal regression model is introduced in order to accommodate the large number of zeroes in the sample. The welfare analysis reveals that the equivalent variation (EV) measure, for the count data demand system, can be seen as an upper bound for the households welfare loss. Approximating the welfare loss by the change in consumer surplus, accounting for the positive effect from longer stays, imposes a lower bound on the households welfare loss. From a distributional point of view, the results reveal that the CO2 tax reform is regressive, in the sense that low income households carry a larger part of the tax burden.

Keywords: demand analysis; welfare effects; count data; bivariate zero inflation (search for similar items in EconPapers)
JEL-codes: C15 C34 C35 C51 D12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env
Date: 2005-02-25
View list of references

Downloads: (external link)
http://www.econ.umu.se/ues/ues648.pdf (application/pdf)
http://www.econ.umu.se/ues/ues648.pdf.zip (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:hhs:umnees:0648

Access Statistics for this paper

More papers in Umeå Economic Studies from Umeå University, Department of Economics
Address: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Contact information at EDIRC.
Series data maintained by Kjell-Göran Holmberg ().