A Dual Approach to Modeling Corner Solutions in Recreation Demand

The dual approach of Lee and Pitt to estimating demand systems for which individuals often choose not to consume one or more of the available goods provides a utility-consistent framework for estimating preferences over visits to recreation sites. Because of the complexity of the model, however, this approach has not been applied in the recreation demand literature. This paper provides the first application of the model to recreation demand and develops a methodology for conducting welfare analysis, relying on Monte Carlo integration to derive estimates of compensating variation. The methods are applied to the demand for fishing in the Wisconsin Great Lakes region