MODELING RECREATION DEMAND IN THE PRESENCE OF UNOBSERVABLE TRAVEL COSTS - TOWARD A TRAVEL PRICE MODEL

An important issue in the application of travel cost models is the con struction of a travel cost variable. This paper develops an econometri c approach that views travel costs as an unobserved latent variable. T he latent variable approach utilizes indicators to capture the role of individual travel costs in recreational demand models. The latent var iables approach has at least two advantages over conventional approach es. One, the indicators can include both traditional components such a s time and distance and non-traditional components such as the scenic beauty. Second, the estimation procedure results in each indicator bei ng valued in dollar terms. (C) 1995 Academic Press, Inc.