The estimated demand for lake recreation in North and South Carolina: A nested RUM approach

The objective of this research is to determine the factors affecting the recreationist decision process and estimate the demand for lake recreation in North and South Carolina. The research utilizes mail and on-site survey data on 16 lakes in the geographic boundary of North and South Carolina. In addition it also uses North and South Carolina lake assessment reports for water quality data.; First four nested multinomial logit models were estimated to study lake recreation demand. Influence of modeling strategy on parameter estimates in terms of different nesting structures and variable specifications were studied. Finally, welfare measures in terms of consumer surplus and compensating variation under different scenarios was estimated.; From all the models, a general conclusion that can be drawn is that geographical grouping of sites into regions is a sensible way of capturing site substitution. Sites close to each other tend to be closer substitutes. The variables that best describe a model structure may not necessarily work well with another model structure. Welfare estimates obtained varied across data sets and specification.; The mean value of the estimated consumer surplus (CS) per trip from model one, two, three, and four were {dollar}31.69, {dollar}27.13, {dollar}31.03, {dollar}27.78 respectively. These numbers suggest how much a recreationist is willing to pay to visit the lake per trip. The benefit estimates per year from these models were {dollar}411.97, {dollar}352.69, {dollar}403.39, and {dollar}472.26 respectively. These consumer surplus estimates provide the lake management with information on the recreationist welfare or the satisfaction derived in monetary terms.; The maximum payment a recreationist will make (CV) for a 10% reduction in the level of nitrogen is {dollar}0.98 and for a 50% reduction is {dollar}1.53, a difference of {dollar}0.55 if the mean values were used. These estimates of CV are rather small considering that even with half the reduction in nitrogen levels the welfare estimate is only {dollar}1.53. These CV estimates represent dollar values or the amount of money an individual is willing to pay per trip to enjoy the improved recreational environment.; The maximum payment a recreationist will make for a 25 space increase in parking is {dollar}32.85 and for a 100 space increase in parking is {dollar}39.43, a difference of {dollar}6.58 if the mean values were used. These values serve as indicators that can be used by the decision making authority at these lakes to sell the idea of additional parking or cleaning the lake. The study suggests that the management of Duke Power lakes may consider increasing parking at the Duke lakes as that the recreationists are willing to pay for increased parking at these lakes.