Annual Fees and Recreation Choice

Abstract

Models of recreation behavior have typically ignored the role of fixed annual fees, such as the fee for a recreational license, in determining choice and welfare. We demonstrate how techniques from the literature on discrete‐continuous choice and two‐part tariffs can address a situation where fixed annual fees are essential to determining the choice of a recreation site. We explore how accounting for value captured by fixed fees can influence the way resource changes are assessed.

Keywords: discrete choice, two-part tariffs, nonmarket valuation, recreation demand, shellfishing, accept-reject simulator