Spatial Dependence in Random Utility Model with an Application to Recreation Demand

The purpose of this paper is to establish whether the unobserved spatial interdependencies between individual households influence recreational travel choices. To coherently incorporate spatial interdependencies in the behavioral analysis, we propose spatial random utility model of recreation demand. The key features of the spatial random utility are the set-theoretic concept of spatial neighborhood and endogeneity of spatial interdependencies. Our estimation procedure uses a computationally efficient pseudo maximum likelihood estimator. We apply the model to the study of recreational travel demand in Iowa