This dissertation consists of three essays addressing non-market valuation of changes in environmental quality. The first two essays develop and test structural models of use and non-use demand for ecosystem services and the last essay focuses on applications of the methods in empirical settings. This dissertation aims to provide theory-based empirical methods to elicit individual's willingness to pay for environmental quality improvement in the context of water resources.ESSAY 1: Estimating Recreation Demand with Incomplete Trip Location InformationThe first essay derives valid estimation procedures in recreation demand models with incomplete data on trip locations. Recreation datasets will often lack details on the locations of some or most trips, and it raises concern that standard estimators could yield biased results. To address this, I derive a likelihood function that is appropriate with or without complete information on trip locations. Using Monte Carlo simulation, I compare three nested logit estimators. In an empirical application, I use data from a web-based survey of trips in Michigan during summer 2018 to estimate a recreation demand model. Monte Carlo results and empirical results show that a convenient trip-weighting strategy that can be implemented in existing nested logit software closely approximates true values and values from a more complex structural model that fully accounts for the censored data.ESSAY 2: Testing the Robustness of a Structural Model for Discerning Use and Non-use Values of Ecosystem ServicesA theoretically consistent structural model facilitates definition and measurement of use and non-use benefits of ecosystem services. Unlike many previous approaches that utilize multiple stated choice situations, we apply this conceptual framework to a travel cost random utility model and a consequential single-referendum contingent valuation research design for simultaneously estimating use and non-use willingness to pay for environmental quality improvement. We employ Monte Carlo generated data to evaluate properties of key parameters and examine the robustness of this method of measuring use and non-use values associated with quality change. The simulation study confirms that this new method can generally, but not always, be applied to successfully identify use and non-use values of various ecosystems while consistency is ensured.ESSAY 3: Comparing Structural Estimation of Use and Non-use Values for Water Quality to Simpler Ad hoc ApproachesThe third essay assesses two components of welfare gains from water quality improvements using a structural model of use and non-use values. The combined revealed and stated preference model, based on a random utility travel cost model (RP) and contingent valuation (SP) method, measures both use and non-use values for water resources. I use recreation use and survey referendum data of the Michigan general population, consistently collected in a web-based survey. First, I estimate use values from a recreation demand model based on travel cost and trip-level data that each respondent reported. Then, I use the stated preference data to estimate total values of water quality improvement for changes in statewide water quality. Third, I extend the structural model of Day et al. (2019) to separately identify use and non-use values via joint estimation and validate the methodology. This paper builds on and contributes to literature on methodologies for estimation and delineation of use and non-use values.
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