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Demand and welfare effects in recreational travel models: Accounting for substitution between number of trips and days to stay

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Author

Summary, in English

In this paper we present a non-linear demand system for households' joint choice of number of trips and days to spend at a destination. The approach, which facilitates welfare analysis of exogenous policy and price changes, is used empirically to study the effects of an increased CO2 tax. In particular, we focus on the effect of including substitution between households choice of the number of trips and days to spend at a destination in the welfare analysis. The analysis reveals that the equivalent variation (EV) measure, for the count data demand system, can be seen as an upper bound for the households welfare loss. Approximating the welfare loss by the change in consumer surplus, accounting for the positive effect from longer stays, imposes a lower bound on the households welfare loss. The difference in the estimated loss measures, from the considered CO2 tax reform, is about 20%. This emphasizes the importance of accounting for substitutions toward longer stays in travel demand policy evaluations. (C) 2011 Elsevier Ltd. All rights reserved.

Publishing year

2012

Language

English

Pages

446-456

Publication/Series

Transportation Research. Part A: Policy & Practice

Volume

46

Issue

3

Document type

Journal article

Publisher

Elsevier

Topic

  • Economics

Keywords

  • Demand analysis
  • Welfare effects
  • Count data
  • Bivariate zero inflation

Status

Published

ISBN/ISSN/Other

  • ISSN: 0965-8564