How does water quality affect people’s recreation behaviour and welfare in Alberta?

Abstract

This thesis studies the effects of lakes’ water quality on recreation demand across provincial parks of Alberta using a travel cost model. Canada has an extremely large number of lakes with fairly good water conditions. However, poor water quality is found in many Albertan lakes and population growth, agricultural pollution, and climate change may worsen water quality in the future. I employed revealed preference of over 70,000 individuals per year in conjunction with the beach advisories of 73 campsites for the years between 2014 and 2018. This study measures beach advisories' economic impacts on campers’ behaviour at the participation decision and site choice stages through a sequentially estimated two-stage Nested Logit (NL) model. I estimate a recreation demand model of combining single and multiple-day trips, calculating travel costs, using Alternative Specific Constants (ASCs) and Time Specific Constants (TSCs) to control for time-variant and unobserved sites characteristics. The results show that participation and site decisions are formed independently, and campers would prefer to substitute the recreation destination with any other campsites rather than alter with different types of activities or staying at home. Campers were found to be negatively affected by the presence of beach advisory at the site. Our results demonstrate that campers are willing to pay $151 more per trip for removing the beach advisory. I use the model to evaluate the welfare impacts of removing all beach advisories. The result can be useful to evaluate the non-market benefits of improving lake water quality.