xid-7988635_2 - Thursday Oct 20 1 T ravel cost method...

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T hursday, Oct 20 1. T ravel cost method Typically used to value recreational resources; Value of recreational resource is inferred from willingness to pay to use the resource Requires collection of survey data on: distance of travel, cost of travel time, hotel & other related costs, Often collects data on visits from ‘zones’ surrounding the recreational site. Use the data to estimate a demand curve by statistical methods, - use the demand curve to calculate total benefits. If there is a change in the recreational site, can be used to determine effect and value of the change. Simple example: Suppose: survey reveals following information: at a travel cost of $20, 100 visits annually, at a travel cost of $40, 75 visits annually, at a travel cost of $55, 30 visits annually, at a travel cost of $75, 10 visits annually, at a travel cost of $100, 0 visits annually. A demand curve can be estimated from this data, and then benefits (ie, consumer surplus) can be calculated.
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Strengths of travel cost method: Makes use of actual recreational behavior Data relatively easy to collect Weaknesses: Complications from multiple-purpose trips Travel cost model collects data from users only – so, only use value. 2. Stated Preference - based on surveys; generally the only way to get estimates of nonuse values Contingent valuation (CVM), contingent choice - usually in a hypothetical setting Ask questions - ask of valuation, 'what if' quality gives a contingent characteristic. As estimate of WTP or WTA. Example - cleanup of petroleum contamination from leaking underground storage tanks in Washington state. What is benefit? Protection of groundwater from contamination Surveys - once, done by phone (costly, complicated, sue to yes/no and related questions) or by mail (less costly, but simpler and less informative); now, frequently on web. a. collect basic background data from respondents - demographic information, views on the problem (maybe). Then, question - would you vote to require oil companies to begin overhaul of tanks
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xid-7988635_2 - Thursday Oct 20 1 T ravel cost method...

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