Random utility/discrete choice

Random utility/discrete choice models

Suitability for the forest ecosystem services to be valued:
Recreational services
Description of the method:
Random utility / discrete choice models arise from the empirical assumption that people know their preferences (utility) with certainty, but there are elements of these preferences that are not accessible to the empirical observer. Thus, parameters of peoples’ preferences can be recovered statistically up to a random error component. This econometric approach is used to estimate modern travel-cost models.
Benefits of the method:
Uniquely designed to estimate values for attributes of recreation sites, which include the quantity and quality of the ecosystem services
The best approach to use to estimate benefits for specific characteristics, or quality changes, of sites, rather than for the site as a whole
The most appropriate approach when there are many substitute sites
Limitations of the method:
Data needed not only from one site but also concerning all other sites
Econometric models are more complex