A Note on Estimating Nested Constant Elasticity of Substitution Preferences for Outdoor Recreation

Abstract

A generalized version of a well‐known statistical result is used to suggest an alternative strategy for estimating nested constant elasticity of substitution preferences for recreation demand. Parameter and welfare estimates from nested constant elasticity of substitution count data demand system models are presented and compared to estimates from the multinomial approaches developed previously. A significant advantage of the count data estimation strategy over the multinomial‐based approaches is that the analyst avoids the difficulties associated with choice occasion specification and interpretation.

Keywords: demand system estimation, count data models, welfare measurement