HABIT FORMATION AND VARIETY SEEKING IN A DISCRETE-CHOICE MODEL OF RECREATION DEMAND

The recreational site choice decision modeled in most economic analyse s seldom contains previous experience with the site as a characteristi c or attribute. A rational dynamic model is used to incorporate previo us experience with the site in a model of the choice of recreation sit es. Based on the comparison of dynamic and static models, it is appare nt that dynamic elements influence choice. The use of previous consump tion as an attribute (either in a naive or rational form) is an improv ement over static models of choice. In welfare analysis, this effect m ay be a significant factor. For example, a change in prices or quality attributes may have a much larger impact on those individuals who hav e developed habits.