Lottery-rationed public access under alternative tariff arrangements: changes in quality, quantity, and expected utility

A recent phenomenon is the emergence of quotas restricting individual access to public resources. As regulators commonly ration access opportunities by lottery, this paper extends the traditional, open access destination choice framework for non-market demand and welfare analysis. Conceptual results for one- and two-part tariff lotteries indicate that individuals may sustain welfare losses from improvements in quality or increases in the quota if aggregate demand is sufficiently responsive relative to individual utility. Nested random expected utility models (REUMs) are estimated with a panel dataset of individual choices of lottery-rationed harvest rights for wild game. Empirical results indicate that the types and timing of tariff payments affect participation, choices over rationed and open access alternatives and the benefits derived from changes in the quality and quantity of the lottery-rationed access opportunities.