Testing the stability of welfare estimates in travel cost random utility models of recreation: An application to the Rotorua Lakes, New Zealand

Assessing the stability of values over time is vital because non-market valuation studies only provide a snapshot of values at a particular point in time. However, policy analysts are often required to extrapolate these values to future scenarios. Studies conducted to explore the stability of values over time report mixed results. A number of factors are said to contribute to changes in values over an extended period of time. Environmental non-market valuation studies testing the stability of values over time have used models that assume scale homogeneity across respondents. In this study we explore the extent to which scale heterogeneity across individuals can contribute to differences in welfare estimates across data sets. The availability of two independent fishing choice data sets for the Rotorua Lakes, collected six years apart, allowed this investigation to be carried out.