Issues in Measuring the Value of Saltwater Recreational Fishing Trips
In the recreation demand literature, few issues are more important to modeling recreation behavior and determining the economic values of the recreation trips than the specification of the opportunity cost of time. The opportunity cost of time relates to how much a person's time is worth, and the past literature has shown that economic value estimates (e.g., the value of a fishing trip) are very sensitive to assumptions about its value.
Still, researchers commonly assume the opportunity cost of time is a fixed fraction of a person's wage rate, which is problematic in part because it assumes people who are not currently employed outside the home have an opportunity cost of their time equal to $0.
In this work, we test several assumptions about the opportunity cost of time and propose a specification for the opportunity cost of time that allows for non-wage factors to influence the estimated value of time instead of relying solely on an individual's wage to fully explain the individual's opportunity cost of time.
This specification is used in a relatively sophisticated model of recreation demand of site choices and participation that is estimated with data on saltwater salmon fishing in Southeast Alaska.
The results suggest there are two payoffs to this approach: 1) much better fits in statistical models and 2) new insights about the relationship between the magnitude of economic values (fishing trip values) and assumptions about the opportunity cost of time.
