Rural Economy Research Centre Modelling taste heterogeneity among walkers in Ireland Edel Doherty Rural Economy Research Centre (RERC) Teagasc Department of Economics, National University of Ireland, Galway AESI Presentations, Teagasc 5 th November 2009

Rural Economy Research Centre 2 Property rights issues Currently countryside recreational opportunities are limited in Ireland Improved recreational opportunities could potentially benefit rural areas Study aims to examine demand for walking trails on farmland Background to the Study

Methodology To assess the preferences for attributes of farmland walking trails we employ a discrete choice experiment (DCE) methodology Most commonly applied non-market valuation technique in recent years (Scarpa and Thiene, 2005; Campbell et al., 2008) DCEs ask respondents to pick their most preferred alternative from a number of alternatives based on the attributes of the alternatives (Lancaster, 1966; McFadden, 1974) Rural Economy Research Centre 3

Development of this study Key consideration in DCEs’ is determining the attributes and alternatives that are relevant for the choice tasks Informed by literature, meetings with policy advisors and focus groups Issues identified: access; payment vehicle; managing walking trails; types of farmland Rural Economy Research Centre 4

5 Hill Walk Riverside Walk Field Walk Bog Walk Choose None Length hours hours I would not choose any of the walks. I would stay at home. Car- parking No Fencing From Livestock ___ Yes ___ Trail Type Signage Along Trail, No Path Signage Along Trail, No Path Gravel Path + Signage No Trail, No Signage Distance From Your home 20 Km 80 Km 40 Km 20 Km

Data survey & sample General Population Survey (2008)  Attitudinal information  Current walking activity information  Choice Experiment (12 Choice tasks)  Specific questions on the choices  Socio-economic information  N= 600 Study is spatially and demographically representative of the Irish adult population Rural Economy Research Centre 6

Random Utility Theory (McFadden, 1974) Individual n chooses the alternative that provides them with the highest utility. Utility consists of an observed (V ni ) and unobserved component (ε ni ): U ni = V ni + ε ni Individual n chooses alternative i, if and only if: U ni > U nj Since there is a random component in the utility function we can only make probabilistic statements about the choice outcomes: P ni = Prob (U ni > U nj ) Different assumptions regarding the distribution of the random component ε ni lead to different behavioural models Rural Economy Research Centre 7

Behavioural models  For Standard logit we assume each ε nj is independently, identically distributed extreme value so that choice probability is P ni =  Important limitations of standard logit  More flexible models: Random parameters logit (RPL) and latent class models (LCM): advantage – Taste heterogeneity  Taste heterogeneity has been examined in the recreational literature (Boxall and Adamowicz, 2002; Morey et al., 2003; Hynes et al., 2008)  LCM = Rural Economy Research Centre 8

Results Standard logit model Rural Economy Research Centre 9 Parameter NameStandard Logit 1 Standard Errors Length between 2-3 hours (0.042) Length between 3-4 hours (0.045) Car park 0.238(0.036) Fencing 0.116(0.042) Path + signage (0.045) Signage Only 0.125(0.046) Travel Cost (0.0009) Hill -0.49(0.035) Bog (0.066) field (0.065) River (0.060)

Results: Latent Class Model 10 Parameter NameClass 1S.E. 1Class 2S.E 2Class 3S.E 3 Length between 2-3 hours-2.28(0.249)-0.370(0.048)-0.562(0.054) Length between 3-4 hours-2.98(0.036)-0.530(0.045)-0.850(0.056) Car park0.562(0.160)0.143(0.037)0.443(0.044) Fencing0.125(0.175)0.084(0.052)0.242(0.031) Path + signage0.180(0.178)0.314(0.048)0.877(0.058) Signage Only-0.045(0.174)0.242(0.051)0.278(0.063) Travel Cost-0.086(0.016)-0.007(0.0008)-0.130(0.033) Hill-2.023(0.277)1.731(0.069)1.603(0.082) Bog-1.750(0.282)0.902(0.076)1.167(0.083) field-1.488(0.245)1.662(0.074)1.395(0.087) River-1.039(0.233)2.342(0.070)1.708(0.080) Covariates City-0.670(0.318)1.061(0.250) Currently Walk-0.639(0.284)1.142(0.029) Negative attitude1.52(0.349)0.372(0.415) Employed fulltime-0.771(0.245)-0.132(0.171) Membership Probabilities

Discussion Distinct preference groups for walking trails Significant variation in willingness to pay for attributes of walking trails as a function of attitudinal and socio-economic information Other work: Random parameter logit models; substitution patterns; lexicographic decision-making Rural Economy Research Centre 11

Thank you!