The Effect of Site Congestion on Valuing Freshwater Fishing for Urban Residents

Richard Melstrom and Taylor Welniak ()
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Taylor Welniak: Department of Agricultural Economics, Oklahoma State University, Stillwater, OK 74078, United States

Water Economics and Policy (WEP), 2020, vol. 06, issue 04, 1-16

Abstract: This paper provides evidence that welfare estimates from recreation demand models can be severely biased if the model omits congestion effects. Congestion effects arise when crowding at popular sites lowers site values. Measuring the effect of congestion is complicated by a well-known endogeneity problem in revealed preference data. We study congestion effects in a sample of licensed anglers in Oklahoma City. We develop a site choice model of freshwater fishing, and correct for endogenous congestion using an instrumental variables strategy. Our results add to the growing weight of evidence that ignoring congestion leads to estimates that understate the value of individual sites and site amenities.

Keywords: Nonmarket valuation; crowding; random utility model; instrumental variables; travel cost (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1142/S2382624X19500085

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