The Choice of Ski Areas: Estimation of a Generalized CES Preference Ordering with Characteristics

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Abstract
A Generalized CES (GENCES) preference ordering is developed and estimated. It incorporates characteristics of both the individual and the activities. The GENCES is used to explain the share of ski time and individual allocates to each ski area as a function of site characteristics, skiing ability, and costs. The stochastic specification limited the shares to the 0-1 simplex. This specification was found to be more appropriate than the conventional normality assumption. The null hypothesis that preferences are homothetic and additive is rejected. Characteristics, ability, and costs are important determinants of demand. The estimated elasticities provide numerous insights into skier behavior.
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