• location of the visitor¡¦s home ¡¦ how far they traveled to the site
  • how many times they visited the site in the past year or season
  • the length of the trip
  • the amount of time spent at the site
  • travel expenses
  • the person¡¦s income or other information on the value of their time
  • other socioeconomic characteristics of the visitor
  • other locations visited during the same trip, and amount of time spent at each
  • other reasons for the trip (is the trip only to visit the site, or for several purposes)
  • fishing success at the site (how many fish caught on each trip)
  • perceptions of environmental quality or quality of fishing at the site
  • substitute sites that the person might visit instead of this site
  • The value of improvements in water quality was only shown to increase the value of current beach use.  However, improved water quality can also be expected to increase overall beach use. 
  • Estimates ignore visitors from outside the Baltimore-Washington statistical metropolitan sampling area. 
  • The population and incomes in origin zones near the Chesapeake Bay beach areas are increasing,  which is likely to increase visitor-days and thus total willingness to pay.
  • changes in access costs for a recreational site
  • elimination of an existing recreational site
  • addition of a new recreational site
  • changes in environmental quality at a recreational site
  • number of visits from each origin zone (usually defined by zipcode)
  • demographic information about people from each zone
  • round-trip mileage from each zone
  • travel costs per mile
  • the value of time spent traveling, or the opportunity cost of travel time
  • exact distance that each individual traveled to the site
  • exact travel expenses
  • substitute sites that the person might visit instead of this site, and the travel distance to each
  • quality of the recreational experience at the site, and at other similar sites (e.g., fishing success)
  • perceptions of environmental quality at the site
  • characteristics of the site and other, substitute, sites
  • The travel cost method closely mimics the more conventional empirical techniques used by economists to estimate economic values based on market prices.
  • The method is based on actual behavior¡¦what people actually do¡¦rather than stated willingness to pay¡¦what people say they would do in a hypothetical situation.
  • The method is relatively inexpensive to apply.
  • On-site surveys provide opportunities for large sample sizes, as visitors tend to be interested in participating.
  • The results are relatively easy to interpret and explain.
  • The travel cost method assumes that people perceive and respond to changes in travel costs the same way that they would respond to changes in admission price.
  • The most simple models assume that individuals take a trip for a single purpose ¡¦ to visit a specific recreational site. Thus, if a trip has more than one purpose, the value of the site may be overestimated. It can be difficult to apportion the travel costs among the various purposes. 
  • Defining and measuring the opportunity cost of time, or the value of time spent traveling, can be problematic. Because the time spent traveling could have been used in other ways, it has an "opportunity cost." This should be added to the travel cost, or the value of the site will be underestimated. However, there is no strong consensus on the appropriate measure¡¦the person¡¦s wage rate, or some fraction of the wage rate¡¦and the value chosen can have a large effect on benefit estimates. In addition, if people enjoy the travel itself, then travel time becomes a benefit, not a cost, and the value of the site will be overestimated. 
  • The availability of substitute sites will affect values. For example, if two people travel the same distance, they are assumed to have the same value. However, if one person has several substitutes available but travels to this site because it is preferred, this person¡¦s value is actually higher. Some of the more complicated models account for the availability of substitutes.
  • Those who value certain sites may choose to live nearby. If this is the case, they will have low travel costs, but high values for the site that are not captured by the method.
  • Interviewing visitors on site can introduce sampling biases to the analysis.
  • Measuring recreational quality, and relating recreational quality to environmental quality can be difficult.
  • Standard travel cost approaches provides information about current conditions, but not about gains or losses from anticipated changes in resource conditions.
  • In order to estimate the demand function, there needs to be enough difference between distances traveled to affect travel costs and for differences in travel costs to affect the number of trips made. Thus, it is not well suited for sites near major population centers where many visitations may be from "origin zones" that are quite close to one another.
  • The travel cost method is limited in its scope of application because it requires user participation. It cannot be used to assign values to on-site environmental features and functions that users of the site do not find valuable. It cannot be used to value off-site values supported by the site. Most importantly, it cannot be used to measure nonuse values. Thus, sites that have unique qualities that are valued by non-users will be undervalued.
  • As in all statistical methods, certain statistical problems can affect the results. These include choice of the functional form used to estimate the demand curve, choice of the estimating method, and choice of variables included in the model.
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Travel Cost Method (TCM)

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Travel Cost Method (TCM)

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Travel-cost method

The travel-cost method (TCM) is used for calculating economic values of environmental goods. Unlike the contingent valuation method, TCM can only estimate use value of an environmental good or service. It is mainly applied for determining economic values of sites that are used for recreation, such as national parks. For example, TCM can estimate part of economic benefits of coral reefs, beaches or wetlands stemming from their use for recreational activities (diving and snorkelling/swimming and sunbathing/bird watching). It can also serve for evaluating how an increased entrance fee a nature park would affect the number of visitors and total park revenues from the fee. However, it cannot estimate benefits of providing habitat for endemic species.

TCM is based on the assumption that travel costs represent the price of access to a recreational site. Peoples’ willingness to pay for visiting a site is thus estimated based on the number of trips that they make at different travel costs. This is called a revealed preference technique, because it ‘reveals’ willingness to pay based on consumption behaviour of visitors.

The information is collected by conducting a survey among the visitors of a site being valued. The survey should include questions on the number of visits made to the site over some period (usually during the last 12 months), distance travelled from visitor’s home to the site, mode of travel (car, plane, bus, train, etc.), time spent travelling to the site, respondents’ income, and other socio-economic characteristics (gender, age, degree of education, etc). The researcher uses the information on distance and mode of travel to calculate travel costs. Alternatively, visitors can be asked directly in a survey to state their travel costs, although this information tends to be somewhat less reliable. Time spent travelling is considered as part of the travel costs, because this time has an opportunity cost. It could have been used for doing other activities (e.g. working, spending time with friends or enjoying a hobby). The value of time is determined based on the income of each respondent. Time spent at the site is for the same reason also considered as part of travel costs. For example, if respondents visit three different sites in 10 days and spend only 1 day at the site being valued, then only fraction of their travel costs should be assigned to this site (e.g. 1/10). Depending on the fraction used, the final benefit estimates can differ considerably.

Two approaches of TCM are distinguished – individual and zonal. Individual TCM calculates travel costs separately for each individual and requires a more detailed survey of visitors. In zonal TCM, the area surrounding the site is divided into zones, which can be either concentric circles or administrative districts. In this case, the number of visits from each zone is counted. This information is sometimes available (e.g. from the site management), which makes data collection from the visitors simpler and less expensive.

The relationship between travel costs and number of trips (the higher the travel costs, the fewer trips visitors will take) shows us the demand function for the average visitor to the site, from which one can derive the average visitor’s willingness to pay. This average value is then multiplied by the total relevant population in order to estimate the total economic value of a recreational resource.

TCM is based on the behaviour of people who actually use an environmental good and therefore cannot measure non-use values. This method is thus inappropriate for sites with unique characteristics which have a large non-use economic value component (because many people would be willing to pay for its preservation just to know that it exists, although they do not plan to visit the site in the future).

The travel-cost method might also be combined with contingent valuation to estimate an economic value of a change (either enhancement or deterioration) in environmental quality of the NP by asking the same tourists how many trips they would make in the case of a certain quality change. This information could help in estimating the effects that a particular policy causing an environmental quality change would have on the number of visitors and on the economic use value of the NP.

For further reading:

Ward, F.A., Beal, D. (2000) Valuing nature with travel cost models. A manual. Edward Elgar, Cheltenham.

Ecosystem valuation [ www.ecosystemvaluation.org/travel_costs.htm ]

This glossary entry is based on a contribution by Ivana Logar 

EJOLT glossary editors:   Hali Healy, Sylvia Lorek and Beatriz Rodríguez-Labajos

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Travel cost method

This article deals with the Travel Cost Method, which is often used in evaluating the economic value of recreational sites. This is particularly important in the coastal zone because of the level of use and the potential values that can be attached to the natural coastal and marine environment.

The Travel Cost Method (TCM) is one of the most frequently used approaches to estimating the use values of recreational sites. The TCM was initially suggested by Hotelling [1] and subsequently developed by Clawson [2] in order to estimate the benefits from recreation at natural sites. The method is based on the premise that the recreational benefits at a specific site can be derived from the demand function that relates observed users’ behaviour (i.e., the number of trips to the site) to the cost of a visit. One of the most important issues in the TCM is the choice of the costs to be taken into account. The literature usually suggests considering direct variable costs and the opportunity cost of time spent travelling to and at the site. The classical model derived from the economic theory of consumer behaviour postulates that a consumer’s choice is based on all the sacrifices made to obtain the benefits generated by a good or service. If the price ( [math]p[/math] ) is the only sacrifice made by a consumer, the demand function for a good with no substitutes is [math]x=f(p)[/math] , given income and preferences. However, the consumer often incurs other costs ( [math]c[/math] ) in addition to the out-of-pocket price, such as travel expenses, and loss of time and stress from congestion. In this case, the demand function is expressed as [math]x = f(p, c)[/math] . In other words, the price is an imperfect measure of the full cost incurred by the purchaser. Under these conditions, the utility maximising consumer’s behaviour should be reformulated in order to take such costs into account. Given two goods or services [math]x_1, x_2[/math] , their prices [math]p_1, p_2[/math] , the access costs [math]c_1, c_2[/math] and income [math]R[/math] , the utility maximising choice of the consumer is:

[math]max \, U = u(x_1,x_2) \quad subject \, to \quad (p_1+c_1)x_1+(p_2+c_2)x_2=R . \qquad (1)[/math]

Now, let [math]x_1[/math] denote the aggregate of priced goods and services, [math]x_2[/math] the number of annual visits to a recreational site, and assume for the sake of simplicity that the cost of access to the market goods is negligible ( [math]c_1 \approx 0[/math] ) and that the recreational site is free ( [math]p_2=0[/math] ). Under these assumptions, equation (1) can be written as:

[math]max \, U = u(x_1,x_2) \quad subject \, to \quad p_1x_1+c_2x_2=R . \qquad (2)[/math]

Under these conditions, the utility maximising behaviour of the consumer depends on:

The TCM is based on the assumption that changes in the costs of access to the recreational site [math]c_2[/math] have the same effect as a change in price: the number of visits to a site decreases as the cost per visit increases. Under this assumption, the demand function for visits to the recreational site is [math]x_2=f(c_2)[/math] and can be estimated using the number of annual visits as long as it is possible to observe different costs per visit. The basic TCM model is completed by the weak complementarity assumption, which states that trips are a non-decreasing function of the quality of the site, and that the individual forgoes trips to the recreational site when the quality is the lowest possible [3] , [4] . There are two basic approaches to the TCM: the Zonal approach (ZTCM) and the Individual approach (ITCM). The two approaches share the same theoretical premises, but differ from the operational point of view. The original ZTCM takes into account the visitation rate of users coming from different zones with increasing travel costs. By contrast, ITCM, developed by Brown and Nawas [5] and Gum and Martin [6] , estimates the consumer surplus by analysing the individual visitors’ behaviour and the cost sustained for the recreational activity. These are used to estimate the relationship between the number of individual visits in a given time period, usually a year, the cost per visit and other relevant socio-economic variables. The ITCM approach can be considered a refinement or a generalisation of ZTCM [7] .

Demand function.jpg

[math]x_2 = g(c_2) . \qquad (3)[/math]

The demand function can also be estimated for non-homogeneous sub-samples introducing among the independent variables income and socio-economic variables representing individual characteristics [8] . Therefore, if an individual incurs [math]c_2^e[/math] per visit, he chooses to do [math]x_2^e[/math] visits a year, while if the cost per visit increases to [math]c_2^p[/math] the number of visits will decrease to [math]x_2^p[/math] . The cost [math]cp[/math] is the choke price, that is the cost per visit that results in zero visits. The annual user surplus (the use value of the recreational site) is easily obtained by integrating the demand function from zero to the current number of annual visits, and subtracting the total expenditures on visits.

Related articles

  • ↑ Hotelling, H. (1949), Letter, In: An Economic Study of the Monetary Evaluation of Recreation in the National Parks , Washington, DC: National Park Service.
  • ↑ Clawson, M. (1959), Method for Measuring the Demand for, and Value of, Outdoor Recreation . Resources for the Future, 10, Washington, DC.
  • ↑ Freeman, A.M. III. (1993). The Measurement of Environmental and Resource Values: Theory and Method , Washington, DC: Resources for the Future.
  • ↑ Herriges, J.A., C. Kling and D.J. Phaneuf (2004), 'What’s the Use? Welfare Estimates from Revealed Preference Models when Weak Complementarity Does Not Hold', Journal of Environmental Economics and Management , 47 (1), pp. 53-68.
  • ↑ Brown, W.G. and F. Nawas (1973), 'Impact of Aggregation on the Estimation of Outdoor Recreation Demand Functions', American Journal of Agricultural Economics , 55, 246-249.
  • ↑ Gum, R.L. and W.E.Martin (1974), 'Problems and Solutions in Estimating the Demand for and Value of Rural Outdoor Recreation', American Journal of Agricultural Economics , 56, 558-566.
  • ↑ Ward, F.A. and D. Beal (2000), Valuing Nature with Travel Cost Method: A Manual , Northampton: Edward Elgar.
  • ↑ Hanley, N. and C.L. Spash (1993), Cost Benefit Analysis and the Environment , Aldershot, UK: Edward Elgar.
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travel cost method tcm

Travel Cost Method (TCM)

Oct 21, 2014

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Travel Cost Method (TCM). The travel cost method is used to estimate economic use values associated with environmental goods and services that are used for recreation.  The method can be used to estimate the economic benefits or costs resulting from:

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Presentation Transcript

Travel Cost Method (TCM) • The travel cost method is used to estimate economic use values associated with environmental goods and services that are used for recreation.  • The method can be used to estimate the economic benefits or costs resulting from: • changes in access costs for a recreational site • elimination of an existing recreational site • addition of a new recreational site • changes in environmental quality at a recreational site

TCM- Definition • The basic idea of the travel cost method is that the time and travel cost expenses that people incur to visit a site represent the “price” of access to the site.  • Thus, peoples’ willingness to pay to visit the site can be estimated based on the number of trips that they make at different travel costs.  • This is analogous to estimating peoples’ willingness to pay for a marketed good based on the quantity demanded at different prices.

TCM- Variations • There are three variations of the travel cost method.  These include: • Zonal travel cost approach: Uses mostly secondary data, with some simple data collected from visitors. • Individual travel cost approach: Uses a more detailed survey of visitors. • Random utility approach: Uses survey and other data, and more complicated statistical techniques.

TCM- Zonal Approach • The zonal travel cost method is the simplest and least expensive approach.  • It will estimate a value for recreational services of the site as a whole.  • It cannot easily be used to value a change in quality of recreation for a site, and may not consider some of the factors that may be important determinants of value. 

TCM- Zonal Approach • The zonal travel cost method is applied by collecting information on the number of visits to the site from different distances.  • Because the travel and time costs will increase with distance, this information allows the researcher to calculate the number of visits “purchased” at different “prices.”  • This information is used to construct the demand function  for the site, and estimate the consumer surplus , or economic benefits, for the recreational services of the site.

TCM-Zonal Approach • Step 1:The first step is to define a set of zones surrounding the site.  These may be defined by concentric circles around the site, or by geographic divisions that make sense, such as metropolitan areas or counties surrounding the site at different distances.  • Step 2:The second step is to collect information on the number of visitors from each zone, and the number of visits made in the last year. 

TCM-Zonal Approach • Step 3:The third step is to calculate the visitation rates per 1000 population in each zone.  This is simply the total visits per year from the zone, divided by the zone’s population in thousands.  • Step 4: The fourth step is to calculate the average round-trip travel distance and travel time to the site for each zone.  Assume that people in Zone 0 have zero travel distance and time.  Each other zone will have an increasing travel time and distance.  Next, using average cost per mile and per hour of travel time, the researcher can calculate the travel cost per trip. 

TCM-Zonal Approach • Step 4 Continued: A standard cost per mile for operating an automobile is readily available. The cost of time is more complicated. One possible value for the price of time to an individual is their wage rate. • If individuals can choose the number of hours they spend working then they will choose to work up to the point at which an extra hour spent at work is worth the same to them as an hour spent at leisure. At the margin, therefore, leisure time will be valued at the wage rate. In the real world, individuals can only infrequently choose the number of hours they work and the equality between the value of time in leisure and the wage rate is unlikely to hold. Empirical work has been undertaken that has revealed that travel time is valued at somewhere between a third and a half of the wage rate.

TCM-Zonal Approach • Step 5: The fifth step is to estimate, using regression analysis, the equation that relates visits per capita to travel costs and other important variables. From this, the researcher can estimate the demand function for the average visitor. In this simple model, the analysis might include demographic variables, such as age, income, gender, and education levels, using the average values for each zone

TCM-Zonal Approach • Step 6: The sixth step is to construct the demand function for visits to the site, using the results of the regression analysis.  The first point on the demand curve is the total visitors to the site at current access costs (assuming there is no entry fee for the site). The other points are found by estimating the number of visitors with different hypothetical entrance fees (crucially assuming that an entrance fee is viewed in the same way as travel costs).  • Step 7: The final step is to estimate the total economic benefit of the site to visitors by calculating the consumer surplus, or the area under the demand curve.

The model • The following model describes the demand for recreation of a person during a season (12 months) • The quantity demanded is the number of visits • The price is the cost per visit r = number of visits during a season tcr = cost of a visit The quantity (number of visits) is a function of the cost of visits Who lives close to the site has a low cost per visit. S/He should visit the site more often than someone who lives further away.

What determines the number of visits B = total trip cost A+B = Willingness to pay A = consumer surplus A = Access value The ‘choke price’ is the minimum price at which the number of trips falls to zero. The net consumer surplus is equal to The area A ‘choke price’ tcr A tcr0 B r r0

We assumed that only the cost affects the number of visits. Other elements, such as age of the respondent, income, experience, availability of substitute sites may affects the number of visits: • tcs = price of trip to substitute site s (I expect a positive sign) y = income z = vector of socio-demographic characteristics of the respondent (age, experience, etc.)

TCM-Individual Approach • The individual travel cost approach is similar to the zonal approach, but uses survey data from individual visitors in the statistical analysis, rather than data from each zone. • This method thus requires more data collection and slightly more complicated analysis, but will give more precise results.  • Rather than simply collecting information on number of visitors and their distances, the researcher would conduct a survey of visitors. 

TCM-Individual Approach • The survey might ask for the following information: • location of the visitor’s home • how many times they visited the site in the past year or season • the length of the trip • the amount of time spent at the site • travel expenses • the person’s income or other information on the value of their time • other socioeconomic characteristics of the visitor • other locations visited during the same trip, and amount of time spent at each • other reasons for the trip (is the trip only to visit the site, or for several purposes) • perceptions of environmental quality at the site • substitute sites that the person might visit instead of this site

TCM- Individual Approach • Using the survey data, the researcher can proceed in a similar way to the zonal model, by estimating, using regression analysis, the relationship between number of visits and travel costs and other relevant variables.  • This time, the researcher would use individual data, rather than data for each zone.  • The regression equation gives us the demand function for the “average” visitor to the site, and the area below this demand curve gives the average consumer surplus.  • This is multiplied by the total relevant population (the population in the region where visitors come from) to estimate the total consumer surplus for the site.

TCM- Individual Approach • Because additional data about visitors, substitute sites, and quality of the site has been collected, the value estimates can be “fine tuned” by adding these other factors to the statistical model.  • Including information about the quality of the site allows the researcher to estimate the change in value of the site if its quality changes.  • To do so, two different demand curves would be estimated—one for each level of quality.  The area between these two curves is the estimate of the change in consumer surplus when quality changes.

TCM-Advantages • The travel cost method closely mimics the more conventional empirical techniques used by economists to estimate economic values based on market prices. • The method is based on actual behavior—what people actually do—rather than stated willingness to pay—what people say they would do in a hypothetical situation. • The method is relatively inexpensive to apply. • On-site surveys provide opportunities for large sample sizes, as visitors tend to be interested in participating. • The results are relatively easy to interpret and explain.

TCM-Limitations • The travel cost method assumes that people perceive and respond to changes in travel costs the same way that they would respond to changes in admission price. • The most simple models assume that individuals take a trip for a single purpose – to visit a specific recreational site. Thus, if a trip has more than one purpose, the value of the site may be overestimated. It can be difficult to apportion the travel costs among the various purposes. 

TCM-Limitations • Defining and measuring the opportunity cost of time, or the value of time spent traveling, can be problematic. Because the time spent traveling could have been used in other ways, it has an "opportunity cost." This should be added to the travel cost, or the value of the site will be underestimated. However, there is no strong consensus on the appropriate measure—the person’s wage rate, or some fraction of the wage rate—and the value chosen can have a large effect on benefit estimates. In addition, if people enjoy the travel itself, then travel time becomes a benefit, not a cost, and the value of the site will be overestimated. 

TCM-Limitations • The availability of substitute sites will affect values. For example, if two people travel the same distance, they are assumed to have the same value. However, if one person has several substitutes available but travels to this site because it is preferred, this person’s value is actually higher. Some of the more complicated models account for the availability of substitutes. • Those who value certain sites may choose to live nearby. If this is the case, they will have low travel costs, but high values for the site that are not captured by the method.

TCM- Limitations • Measuring recreational quality, and relating recreational quality to environmental quality can be difficult. • Standard travel cost approaches provides information about current conditions, but not about gains or losses from anticipated changes in resource conditions. • In order to estimate the demand function, there needs to be enough difference between distances traveled to affect travel costs and for differences in travel costs to affect the number of trips made. Thus, it is not well suited for sites near major population centers where many visitations may be from "origin zones" that are quite close to one another.

TCM- Limitations • The travel cost method is limited in its scope of application because it requires user participation. It cannot be used to assign values to on-site environmental features and functions that users of the site do not find valuable. It cannot be used to value off-site values supported by the site. Most importantly, it cannot be used to measure non-use values. Thus, sites that have unique qualities that are valued by non-users will be undervalued. • As in all statistical methods, certain statistical problems can affect the results. These include choice of the functional form used to estimate the demand curve, choice of the estimating method, and choice of variables included in the model.

TCM-Case study I • The SituationHell Canyon on the Snake River separating Oregon and Idaho offers spectacular vistas and outdoor amenities to visitors from around the country and supports important fish and wildlife habitat. It also has economic potential as a site to develop hydropower. Generating hydropower there would require building a dam behind which would form a large lake. The dam and the resulting lake would significantly and permanently alter the ecological and  aesthetic characteristics of Hell Canyon. 

TCM-Case study I • The ChallengeDuring the 1970’s, there were major controversies regarding the future of Hell Canyon. Environmental economists from Resources For The Future in Washington, D.C. were asked to develop an economic analysis to justify preserving Hell Canyon in its natural state in the face of its obvious economic potential as a source of hydropower.

TCM-Case study I • The Analysis • Researchers estimated that the net economic value (cost savings) of producing hydropower at Hell Canyon was $80,000 higher than at the "next best" site which was not environmentally sensitive. • They then conducted a low-cost/low precision travel-cost survey to estimate the recreational value of Hell Canyon and concluded that it was about $900,000.

TCM-Case Study I • The researchers did not attempt to strongly defend the "scientific" credibility of the valuation method they used or the results. However, at public hearings, they emphasized that, even if the "true value" of recreation at Hell Canyon was ten times less than their estimate, it would still be greater than the $80,000 economic payoff from generating power there as opposed to the other site. • They also illustrated that overall demand for outdoor recreation, for which the supply is limited, was going up,  while many other sources of energy are available besides Hell Canyon hydropower. • Based largely on the results of this non-market valuation study, Congress voted to prohibit further development of Hell Canyon.

TCM-Case Study II • The SituationThe costs to farmers and taxpayers of implementing on-farm best management practices to reduce sediment and nutrient runoff to the Chesapeake Bay are well known. Controversies arose during the 1980’s, which continue today, over the benefits of resulting improvements in water quality. 

TCM-Case Study II The Challenge • Economists were asked to assess the economic benefits of water quality improvements to beach users in the Chesapeake Bay area. • They needed to establish linkages between differences in water quality and differences in willingness to pay for beach use. • The hypothesis to be tested was that average willingness to pay, as reflected in the travel costs to visitors to particular beaches, was positively correlated with water quality. • If the hypothesis was correct the empirical results would allow researchers to estimate the increase in willingness to pay of improving water quality at all beaches.

TCM-Case Study II The Analysis • Researchers selected the concentration of nitrogen and phosphorous in the water at the monitoring station nearest to the beach as an index of water quality at the beach. • This was assumed to reflect the level of objectionable visual and other characteristics that affect the value of beach use.  • A cross-sectional analysis of travel cost data collected from 484 people at 11 public beaches was used to impute the aggregate willingness to pay for a 20% increase in water quality, which was assumed to be associated with a 20% reduction in total nitrogen and phosphorus. 

TCM-Case Study II The Results • The average annual benefits to all Maryland beach users of the improvements in water quality were estimated to be $35 million in 1984 dollars.  These were thought to be conservative for several reasons, including: • The value of improvements in water quality was only shown to increase the value of current beach use.  However, improved water quality can also be expected to increase overall beach use.  • Estimates ignore visitors from outside the Baltimore-Washington statistical metropolitan sampling area.  • The population and incomes in origin zones near the Chesapeake Bay beach areas are increasing,  which is likely to increase visitor-days and thus total willingness to pay.

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COMMENTS

  1. Travel cost method

    HINDU TEMPLES AND GURDWARA. 12. TRAVEL COST METHOD • The travel cost method (TCM) was first represented by Hotelling (reported in Prewitt, 1949) • It is used to value sites that are used for recreation, though it can be used for any "destination" that is used as an amenity. 13.

  2. Travel cost model warawut

    3. Overview • Travel cost is a method of measuring the "use value" of an environmental amenity by using the costs that individuals pay to travel to the site as a proxy for the price of the amenity • Lesser et al.(1997) assuming that the value that people place on a site does not systematically vary with travel distance, it is possible to use travel cost as a proxy for price and derive ...

  3. Travel Cost Method

    The travel cost method is used to estimate economic use values associated with ecosystems or sites that are used for recreation. The method can be used to estimate the economic benefits or costs resulting from: changes in access costs for a recreational site. elimination of an existing recreational site. addition of a new recreational site.

  4. PDF TRAVEL COST METHOD (TCM)

    TCM is used to value recreational uses of the environment. It is commonly applied in benefit cost analyses (BCA) and in natural resource damage assessments. It is based on „observed behaviour‟, thus is used to estimate use values only. TCM is a demand-based model for use of a recreation site or sites. A site: a river for fishing, a trail ...

  5. Environmental valuation techniques a review

    Travel Cost Method The travel cost method is well suited for placing a value on natural resources, amenities, natural parks, hunting, fishing, and wildlife watching sites, and cultural heritage sites. It is based on the concept that if people travel to a site, then their willingness to pay for visiting this site must be at least as large as the ...

  6. Valuation 9: Travel cost model

    3 Travel cost model Most frequently applied to valuation of natural environments that people visit to appreciate Recreation loss due to closure of a site Recreation gain associated with improved quality Natural areas seldom command a price in the market Basic premise: time and travel cost expenses represent the „price" of access to the site WTP to visit the site Travel is a complement to ...

  7. Travel Cost Method (TCM)

    2 TCM- Definition The basic idea of the travel cost method is that the time and travel cost expenses that people incur to visit a site represent the "price" of access to the site. Thus, peoples' willingness to pay to visit the site can be estimated based on the number of trips that they make at different travel costs. This is analogous to estimating peoples' willingness to pay for a ...

  8. Travel cost analysis

    The travel cost method of economic valuation, travel cost analysis, or Clawson method is a revealed preference method of economic valuation used in cost-benefit analysis to calculate the value of something that cannot be obtained through market prices (i.e. national parks, beaches, ecosystems). The aim of the method is to calculate ...

  9. Travel-cost method

    The travel-cost method (TCM) is used for calculating economic values of environmental goods. Unlike the contingent valuation method, TCM can only estimate use value of an environmental good or service. It is mainly applied for determining economic values of sites that are used for recreation, such as national parks. For example, TCM can ...

  10. PDF Chapter 15. Travel Cost Method of Valuing Environmental Amenities

    willingness-to-pay for related goods (e.g. SSD or hedonics). The travel cost method is another. indirect measure that is useful in certain circumstances, but which has flaws from both an. economist's and an environmentalist's perspective. The central theoretical flaw in the travel cost method, in common with SSD and.

  11. Travel Cost Method (TCM)

    The travel cost method is used to estimate economic use values associated with environmental goods and services that are used for recreation. The method can be used to estimate the economic benefits or costs resulting from: Slideshow 9712554 by richardn. Browse. Recent Presentations; Recent Stories;

  12. Chapter 15: Environmental Valuation: The Travel Cost Method

    The advantage of the CVM over some other approaches (e.g., Travel Cost Method, Hedonic Price Method, Choice Experiment) is the fact that it is more clear and comprehensible (see also Fatahi ...

  13. Envt valuation techniques

    The surrogate market methods discussed below are the hedonic price method and the travel cost method, with a brief look at the use of random utility models for environmental valuation. The hedonic price method of environmental valuation uses surrogate markets for placing a value on environmental quality.

  14. 100+ Travel cost method PowerPoint (PPT) Presentations ...

    Travel Cost Method. The basic model of the traveling cost (Travel cost method) TCM was introduced by Hoteling (1949) First used to estimate the recreational benefits by Trice and Wood (1958) 517 views • 14 slides

  15. Travel cost method

    The Travel Cost Method (TCM) is one of the most frequently used approaches to estimating the use values of recreational sites. The TCM was initially suggested by Hotelling [1] and subsequently developed by Clawson [2] in order to estimate the benefits from recreation at natural sites. The method is based on the premise that the recreational ...

  16. (PDF) Measuring Recreational Value Using Travel Cost Method (TCM): A

    PDF | On Nov 4, 2018, Leh and others published Measuring Recreational Value Using Travel Cost Method (TCM): A Number of Issues and Limitations | Find, read and cite all the research you need on ...

  17. PDF Travel Cost Method

    travel time - Assume Zone 0 = zero travel distance and time - Multiply average travel distance for each zone by standard cost per mile (£0.3 per mile) - Multiply average travel time for each zone by the cost of time (e.g. average hourly rate, £9/hour or £0.15/minute) - Add travel and time cost together

  18. Presentation: Valuing Ecosystem Services, Methods and Practices

    The method can be used to estimate the economic benefits or costs resulting from: changes in access costs for a recreational site elimination of an existing recreational site addition of a new recreational site changes in environmental quality at a recreational site The basic premise of the travel cost method is that the time and travel cost ...

  19. (PDF) The Travel Cost Model

    The travel cost method, based on welfare estimates typically from preferences revealed in survey responses, is the most well-established and commonly used method for the valuation of recreational ...

  20. The Travel Cost Model

    The travel cost method is used to estimate economic use values associated with environmental goods and services that are used for recreation. The method can be used to estimate the economic benefits or costs resulting from: 1.52k views • 31 slides. Valuation 9: Travel cost model.

  21. Travel Cost Method (TCM)

    Presentation Transcript. Travel Cost Method (TCM) • The travel cost method is used to estimate economic use values associated with environmental goods and services that are used for recreation. • The method can be used to estimate the economic benefits or costs resulting from: • changes in access costs for a recreational site ...

  22. A new model for the travel cost method: the total expenses approach

    The conventional travel cost method (TCM) model (Clawson and Knetsch, 1966; Hof and King, 1992) is based on the premise that recreationists who visit an outdoor recreation site pay more to access the site as the distance between their residences and the site increases. A key assumption of the model is that the opportunity cost of visiting the ...

  23. (PDF) ECONOMIC VALUATION USING TRAVEL COST METHOD

    The findings showed that the benefit estimated using travel cost adjustments, based on satisfaction attained, is €288,000,000, and number of hours spent in the park is €141,000,000, which was ...