Individual Travel Cost Method

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Individual Travel Cost Method

• Dr John Tisdell

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Revision of assumptions and requirements

• Most visitors need to make more than one visit
  per year (time period).
• Data has to be collected from surveys often not
  possible due to budget/time/isolation factors.

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Nature of Survey

• Conducted on site
• Covering
• Number in party
• Distance travelled
• Nature of transport
• Multiple or single purpose trip
• Opportunity cost of time
• Social and economic characteristics

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Methodological Issues

• Distance measurement
• Functional form
• Sensitivity Analysis

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Distance Measurement

• Distance to centre of major location, centre of
  statistical region or centre of population?

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Functional form
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Border Ranges 1998
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Sensitivity Analysis

• Distance measure
• Cost of time

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Variance in the value of consumer surplus of
recreation at Border Ranges National Park,
1998 Variables travel speed and reported annual
visits visits Annual visits (82818) 1.96
standard errors Standard error calculated from
the number of observed people per vehicle
Alternate data set Consumer surplus 2,751,000
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Variance in the value of consumer surplus of
recreation at Border Ranges National Park,
1998 Variables travel speed and reported annual
visits and wage
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Conclusion What TCM Can and Cannot Do

• Positives
• Well recognised as a valid technique for
  measuring non-market values of recreational areas
• esp. in the United States and U.K.
• Produces consistent price and income
  elasticities.
• When there are no or limited substitute sites
  demand estimates have been found to be highly
  inelastic. As would be expected the demand is
  highly elastic when substitute site exist. This
  has lead to more strategic investment decisions
  in the U.S.
• Controlled experiments have been found to
  accurately capture underlying consumer
  preferences
• Esp. in the area of variations in environmental
  quality

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• Negatives
• Individual travel cost studies often require
  significant funding to survey remote sites
• Zonal Travel cost studies require a number
  significant assumptions which need to be managed.
• Captures only direct use values at minimum
  value of travel cost it doe not capture
  existence, option or other vicarious values.

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Next Lecture

• In the next lecture we will begin our study of
  stated preference techniques
• Contingent valuation
• Choice modelling and citizen jury