A portfolio choice model of the demand for recreational trips

Abstract

This study extends previous recreational demand research by defining an annual portfolio of recreational trips as the elemental alternative. There are three distinct advantages to this approach. First, identifying an angler's choice alternative as a portfolio of recreational trips greatly facilitates a multidimensional analysis of destination, frequency, and duration of angling trips, the most important aspects of recreational fishing. Second, focusing upon an angler's annual portfolio avoids the need to model the effect that trips taken in one part of the year have upon one's ability to make trips at other times in the year. Third, in contrast to the sequential estimation of a multidimensional structure, a portfolio approach eliminates the cumulative errors concern associated with introducing estimated inclusive values at lower levels of a nest into the upper branches.