RT Journal Article
SR Electronic
T1 Discrete and Continuous Preference Heterogeneity in a Kuhn-Tucker Model: Beach Recreational Demand
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 548
OP 561
DO 10.3368/le.97.3.548
VO 97
IS 3
A1 Kabaya, Kei
A1 Kuriyama, Koichi
YR 2021
UL http://le.uwpress.org/content/97/3/548.abstract
AB This study extended an existing Kuhn-Tucker (KT) model to integrate a mixture of discrete and continuous preference heterogeneity to address taste variations at individual and group levels. Specifically, we introduced random parameters into site quality attributes in a latent segmentation KT framework. In an empirical application to beach recreational demand, our proposed model statistically dominated other conventional specifications and revealed heterogeneous preferences for beach quality across and within groups. Our welfare analysis further showed that ignoring either the continuous or discrete component of the mixing distributions might lead to biased welfare estimates as well as opposite policy implications.