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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jeem.2010.05.005 Byline: Koichi Kuriyama (a), W. Michael Hanemann (b), James R. Hilger (c) Abstract: In this paper, we extend the latent segmentation approach to the Kuhn-Tucker (KT) model. The proposed approach models heterogeneity in preferences for recreational behavior, using a utility theoretical framework to simultaneously model participation and site selection decisions. Estimation of the latent segmentation KT model with standard maximum likelihood techniques is numerically difficult because of the large number of parameters in the segment membership functions and the utility function for each latent segment. To address this problem, we propose the expectation-maximization (EM) algorithm to estimate the model. In the empirical section, we implement the EM latent segmentation KT approach to analyze a Southern California beach recreation data set. Our empirical analysis suggests that three groups exist in the sample. Using the model to analyze two hypothetical beach management policy scenarios illustrates different welfare impacts across groups. Author Affiliation: (a) Division of Natural Resource Economics, Graduate School of Agriculture, Kyoto University, Oiwake-cho, Kitashirakawa, Sakyo-ku, Kyoto 606-8502, Japan (b) Department of Agricultural and Resource Economics, University of California, Berkeley, United States (c) National Marine Fisheries Service, Southwest Fisheries Science Center, United States Article History: Received 21 September 2009

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jeem.2007.03.002 Byline: Sheila M. Olmstead (a), W. Michael Hanemann (b), Robert N. Stavins (c)(d) Keywords: Water demand; Price elasticity; Non-linear pricing Abstract: We estimate the price elasticity of water demand with household-level data, structurally modeling the piecewise-linear budget constraints imposed by increasing block pricing. We develop a mathematical expression for the unconditional price elasticity of demand under increasing block prices and compare conditional and unconditional elasticities analytically and empirically. We test the hypothesis that price elasticity may depend on price structure, beyond technical differences in elasticity concepts. Due to the possibility of endogenous utility price structure choice, observed differences in elasticity across price structures may be due either to a behavioral response to price structure, or to underlying heterogeneity among water utility service areas. Author Affiliation: (a) School of Forestry and Environmental Studies, Yale University, 230 Prospect Street, New Haven, CT 06511, USA (b) Department of Agricultural and Resource Economics, University of California, Berkeley, CA 94720, USA (c) John F. Kennedy School of Government, Harvard University, Cambridge, MA 02138, USA (d) Resources for the Future, 1616 M Street, NW, Washington, DC 20036, USA Article History: Received 24 May 2006

This paper presents several models of the demand for quality differentiated goods in which the consumer decides which brand of product to select as well as how many units to buy. The models cover a variety of preference structures and can readily be estimated using standard techniques for switching regressions. From the fitted demand equations, one can calculate monetary measures of the welfare effects of changes in the price, quality, or variety of the brands. The models are then applied to data on households' demands for recreation sites i n the Boston area, and the values of the sites are calculated.