Narrow choice sets in a random utility model of recreation demand

We consider the implications of narrow choice sets on welfare estimation in a random utility model of recreation demand We hypothesize that careful fo rmulation of the choice set focusing on the sites of policy interest and th eir closest substitutes will give reasonably accurate welfare estimates. We use nearby sites as close substitutes and treat more distant sites as aggr egate alternatives in our application to fishing in Maine. We find that the welfare estimates are rather sensitive to narrowing choice sets in this ma nner The sensitivity largely tracts variation in the estimated travel cost coefficient across the different models considered. (JEL Q26).