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Random utility models rely on the properties of the logistic distribution for ease of estimation, but this distribution implies the independence of irrelevant alternatives (IIA). The random parameters logit model offers a means of avoiding the IIA assumption as well as greater heterogeneity among agents, recreational anglers or beachgoers in the current application. A problem often encountered in the estimation of random utility models with many alternatives is the necessity of sampling alternatives or otherwise reducing the number of choices. Research has shown that in the random utility model, such changes in choice set still lead to consistent parameter estimates. However, with the random parameters logit, there is greater need to sample but no theoretical evidence that sampling is justified. In this paper we show the impact of sampling in a random parameters logit model. We find that sampling does not appear to change the parameter estimates substantially. We investigate two data sets: a study of beach use in the Chesapeake Bay and a study of marine recreational angling behavior for the Northeast of the U.S. [ABSTRACT FROM AUTHOR]

We use a nested-logit model of recreational fishing to examine how varying the range of fishing activities included in the choice set affects welfare measures. The basic analytical results are quite intuitive: welfare calculations with a site-choice travel cost model that omits relevant substitute activities will tend to understate gains and to overstate losses for a fixed sample and a fixed set of model parameters. The magnitude of bias in any particular case will be directly related to the degree of substitution between the omitted activities and the activities included in the model. In our empirical application, we examine changes in the quality of trout and salmon fishing on the Great Lakes and on anadromous runs. For most of the scenarios examined, we find that models that only include Great Lakes and anadromous fishing activities, to the exclusion of inland fishing activities, yield welfare results that are relatively similar to those of models that include the full range of activities, provided care is taken to extrapolate the results to a common population. The results are due to the relatively low predicted rates of substitution between inland and Great Lakes fishing activities. We derive implications for benefits transfer procedures. [ABSTRACT FROM AUTHOR]