TCM

TRAVEL COST METHOD (TCM)

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Case Study

Zonal Travel Cost Method - (watch video from an equivalent class)

  • Exercise. Estimate the recreational value of the Parc d'Aiguestortes i Estany de Sant Maurici national park, according the data provided

  • Data. In [excel] format

  • Solution. See the two variants from the [excel] file

  • Additional problem. Assuming a discount rate of 10%, what would be the overall capital value of the park to society, attending to its current recreational service?

Individual Travel Cost Method - (watch video from an equivalent class)

  • Exercise. Using a Poisson Model, estimate mean of the consumer surplus associated with the the probability of taking an additional trip to collect mushrooms, according to the data provided

  • Data. Number of trips per year and individual cost per trip to collect mushrooms in the Catalan region of Solsones, in [txt] and [limdep] format

  • Solution. 34.26 euro per trip

  • Additional problem. Assuming an expected mean value of 7 euro for the collected mushrooms per trip, should the 7 euro be subtracted from the 34.26 euro to obtain the pure recreational value, or does the 34.26 euro already reflect the recreational value without the mushroom value? In other words, is the estimated pure recreational value (a) 27.26 euro; (b) 34.26 euro; (c) 41.26 euro; or (d) none of the above?

  • Additional problem 2. If you are keen in econometrics, check how the results would vary if a Binomial Negative Model is used

Readings

- Hotelling, Harold (1947) “The Economics of Public Recreation.” In The Prewitt Report. Department of the Interior, Washington, D.C.

- Class notes from a Barcelona Graduate School of Economics equivalent subject (by Pere Riera)

Software

- NLogit-Limdep (Limited Dependent Variable Models)

Suggested homework

  • Exercise. Using your own words, summarize Hotelling's 1947 letter

  • Exercise. Simulate your own data and solve a zonal travel cost application, as in the single step procedure from the case study above

  • Exercise. Using 5000 artificial agents, embed each one with a number of trips per a given period to consume a local good, and a cost per trip. Estimate mean of the consumer surplus associated with the the probability of taking an additional trip

  • Data. Generate the data with the software of your choice

  • Solution. In [NLogit-Limdep] [text] format. N.B. Lim files can be opened as a txt files

  • Additional problem. If you a keen in econometrics, repeat the exercise after adapting the data for an Inflated Count Data Model

Other References

- Michael D. Creel, John B. Loomis (1990) Theoretical and empirical advantages of truncated count data estimators for analysis of deer hunting in California. American Journal of Agricultural Economics, 72(2):434-41

- David Hoyos, Pere Riera (2013) Convergent validity between revealed and stated recreation demand data: some empirical evidence from the Basque Country, Spain. Journal of Forest Economics, 19(3):234-248

- Pere Riera, Kenneth E McConnell, Marek Giergiczny, Pierre-Alexandre Mahieu (2011) Applying the Travel Cost Method to fifty one Minorca beaches. Some policy results. In: International Handbook on Non-Marketed Environmental Valuation. Edited by Bennett Jeffrey. Cheltenham: Edward Elgar; 60-73.

- Robert J. Smith (1971) The evaluation of recreation benefits: The Clawson method in practice. Urban Studies, 8(2):89-102

Inquiries and suggestions: Pere Riera prieram@gmail.com

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