This paper develops an approach to welfare measurement from random utility models that
incorporates the implications of an individual's observed choice. The economic and
statistical properties of the proposed approach are discussed, and its empirical implications
are illustrated with an application to outdoor recreation demand. Welfare estimates for two
policy scenarios and four alternative repeated discrete choice specifications—a conditional
logit, a quasi-nested logit, a random marginal utility of income logit, and a full random …

Traditional approaches to constructing Hicksian welfare measures from random utility
models employ the unconditional distribution for the unobserved determinants of choice
along with the specified structure of preferences and the relevant observable individual and
commodity specific characteristics (eg, Small and Rosen [1981], Hanemann [1981]). This
paper proposes an alternative strategy employing the conditional distribution for the
unobserved determinants of choice that incorporates the implications of an individual's …