A Proposal for a Random Utility Model of Recreational Diving at
Natural and Artificial Reef Sites in Florida
George Parsons, University of Delaware
Ash Morgan, University of West Florida
Bill Huth, University of West Florida
February, 2008
We propose to develop a Random Utility Model of recreational diving at natural and
artificial reef sites in Florida. We propose a travel-cost based model using observed data on trips
taken by divers over a selected season. Random Utility Models (or RUM Models) are used to
estimate recreation demand in applications such as fishing, beach use, swimming, boating, hiking,
and other similar activities. The models are often used in benefit-cost analyses and damage
assessments. For example, RUM models have been used to value water quality improvements,
beach closures, added skiing sites, increased beach width, and so forth. Some interesting
applications are Lew and Larson (2005), Phanuef (2002), and Train (1998). Parsons (2003)
provides an overview of how the models are estimated and applied. Milon (1988) estimated a
model of recreational fishing at artificial reef sites in Florida in late 1980’s. His is perhaps the
closest to the work proposed here.
Our Florida diving model would be used to establish priorities for the location of future
vessel disposal and configuration of new (or expanded) dive sites based on the preferences of
divers and on economic return or value. Essentially, recognizing the high cost in maintaining
decommissioned vessels, the model would be used to measure the economic value of sinking
different vessels in NAVY’s inventory at different potential dive sites. It could also be used to
value conservation measures to protect dive sites and other management initiatives to improve
sites. The model would consider divers’ choice of dive sites and frequency of diving based on
characteristics of the sites and characteristics of the individual. In the site choice stage of the
model, a diver is hypothesized to select a site based on its characteristics relative to other sites.
The characteristics would include measures of site quality (visibility, extent of coral cover, type
of reef, and so forth) and cost of reaching the site. Diver characteristics would include experience,
income, age, and other relevant characteristics. The model would be based on survey data and
estimated using discrete choice econometric methods. The sample population would include all
certified divers in the state of Florida. An expanded version of the model might consider out of
state divers. The dive site data set would be developed from site visits, travel guides, and existing
state data.
The steps in developing the model are as follows
1. Design the economic model
2. Design, test, and implement survey of certified divers
3. Define dive sites and compile dive site characteristic data set
4. Estimate RUM model
5. Simulate new dive sites and estimate economic value
The time frame for the entire project is about 6 to 12 months. The actual simulations
(including different types of vessels for disposal) and sites included in the model could be
developed in consultation with NAVY and NOAA. Also, while not the primary purpose of the
research, the model can be used as an input into a regional simulation model to derive the total
economic impact of sinking different vessels at different sites across Florida.
References
Lew, D. K., and D. M. Larson. 2005. Accounting for stochastic shadow values of time in discrete-choice
recreation demand models. Journal of Environmental Economics and Management 50, no. 2: 341-61.
Milon, J. W. 1988. Travel Cost Methods for Estimating the Recreational Use Benefits of Artificial Marine
Habitat. Southern Journal of Agricultural Economics 20, no. 1: 87-101.
Parsons, G. R. 2003. The Travel-Cost Model in P. Champ, K. Boyle, and T. Brown A Primer on
Nonmarket Valuation, Kluwer, Norwell, MA.
Phaneuf, D. J. 2002. A random utility model for total maximum daily loads: Estimating the benefits of
watershed-based ambient water quality improvements. Water Resources Research 38, no. 11: 36-1 36/11.
Train, K. E. 1998. Recreation Demand Models With Taste Differences Over People. Land
Economics 74, no. 2: 230-239.