A latent class analysis of public attitudes toward water resources with implications for recreational demand

This study examines the extent to which heterogeneous perceptions and opinions toward water resource policy influence recreational demand in a river basin, and the associated valuation of ecosystem services. We first employed a latent class analysis to reveal two distinct groups of respondents that differ in their perceptions and opinions despite similar demographic characteristics. We then estimated a recreational demand model that is conditional on latent class membership. We found that respondents’ perceptions and opinions directly influence recreational demand and valuation. Incorporating preference heterogeneity using latent class analysis, in addition to or instead of demographic characteristics, could help improve estimates of the distributional impacts of a policy designed to enhance ecosystem services.