Recreational Demand Functions for Different Categories of Beach Visitor

Abstract

This paper addresses the estimation of the recreational use value of a beach for different categories of beach visitor and its determinants. According to economic theory, it is generally expected that income and the number of beach visits affect the value of a recreational visit. The recreational value should increase as income increases and should decrease as the number of beach visits increases. Nevertheless, anomalies such as the Veblen effect are admitted. The data used for this research were obtained from a questionnaire carried out in Lido di Dante, a coastal tourist resort in Italy. The contingent valuation method (CVM) in the value of enjoyment (VOE) version was applied. Beach visitors were asked to give a monetary value to informal recreational beach use (such as sunbathing, walking and swimming) in three different scenarios: status quo, erosion and artificial defence. Beach services are modelled in private goods terms, because each individual may make a different number of visits, and different categories of beach visitor (all beach visitors, day visitors and residents, and tourists) are described by presenting their respective use value functions. It is shown that household income explains the recreational beach value of all visitor categories considered, while the number of beach days explains only that of day visitors and residents. The coefficients of these two independent variables do not have the expected sign, thus suggesting that the preferences of beach visitors at Lido di Dante belong to the category of anomalies in the economic theory of demand.