Travel Cost Demand Model Research Articles

Challenges and Solutions for Applying the Travel Cost Demand Model to Geographically Remote Visitor Destinations: A Case Study of Bear Viewing at Katmai National Park and Preserve

ABSTRACTRemote and unique destinations present difficulties when attempting to construct traditional travel cost models to value recreation demand. The biggest limitation comes from the lack of variation in the dependent variable, defined as the number of trips taken over a set time frame. There are various approaches that can be used for overcoming limitations of the traditional travel cost model in the context of remote destinations. This study applies an adaptation of the standard model to estimate recreation benefits of bear viewing at Katmai National Park and Preserve in Alaska, which represents a once-in-a-lifetime experience for many visitors. Results demonstrate that visitors to this park’s Brooks Camp area are willing to pay an average of US$287 per day of bear viewing. Implications of these findings for valuing recreation at other remote destinations are discussed.

Factors determining the demand for water recreation in the Middle Olifant Sub- Basin: A case study of Loskop Recreation Centre in South Africa

The aim of the study was to estimate the parameters determining the demand for water recreation and the relationship between the number of trips and the costs to the Loskop Dam recreation site of the Middle Olifant Sub-Basin. Simple random sampling was used to select 48 respondents from the study site and data were collected from the sampled respondents using a structured questionnaire. Factors that determine the number of visits to the middle Olinfant Sub-Basin and the relationship between the number of trips and the cost to the recreation site were identified and quantified using the Poisson Regression and Travel Cost Demand Models, respectively. The analysis revealed that there are factors determining the demand for water recreation in the Loskop Dam recreation center and these factors are gender, race of the respondent, and income of the respondent among others. The analysis further revealed that there is a negative relationship between the number of trips and the cost to the recreation center. The aforementioned findings suggest that the Department of Water Affairs and Forestry and Department of Eco- tourism should consider issues around water recreation when distributing water and its resources. The study recommends that the water recreation policy in South Africa should also be effective in order to encourage more developments in water recreation and to stimulate growth of the tourism sector. Key words: Water recreation demand, Middle Olifant, Poisson regression, travel cost demand model,tourists.

How Well Do Travel Cost Models Measure Competition Among Hospitals?

Health plans create competition among hospitals by threatening to “steer” patients to preferred facilities. Mergers can reduce this competition and economists have begun using travel cost demand models to predict their effects. In this paper, we document an anomaly in estimation: for any plausible estimate of the opportunity cost of time, the price of hospital service is several orders of magnitude larger than the estimated value that patients place on the service. This anomaly raises questions about how well travel cost models measure demand for medical care, competition among hospitals, and the increase in bargaining power created by merger.

Willingness‐to‐pay for steelhead trout fishing: Implications of two‐step consumer decisions with short‐run endowments

Choice of the appropriate model of economic behavior is important for the measurement of nonmarket demand and benefits. Several travel cost demand model specifications are currently in use. Uncertainty exists over the efficacy of these approaches, and more theoretical and empirical study is warranted. Thus travel cost models with differing assumptions about labor markets and consumer behavior were applied to estimate the demand for steelhead trout sportfishing on an unimpounded reach of the Snake River near Lewiston, Idaho. We introduce a modified two‐step decision model that incorporates endogenous time value using a latent index variable approach. The focus is on the importance of distinguishing between short‐run and long‐run consumer decision variables in a consistent manner. A modified Barnett two‐step decision model was found superior to other models tested.

The Economic Value of Novel Means of Ascending High Mountain Peaks: A Travel Cost Demand Model of Pikes Peak Cog Railway Riders, Automobile Users and Hikers

In addition to hiking trails, some peaks have alternative transportation routes such as cog railways, trams or roads to reach the summit. The authors use a count data travel cost model to estimate the recreational demand for traditional and novel means of ascending Pikes Peak in Colorado. Their analysis shows statistically significant differences in the demand curve slopes and in the net willingness to pay (consumer surplus) for three categories of recreationists who take alternative means to ascend the mountain. The more exotic or unique the means of ascent, the higher the visitor benefits are. Cog railway and automobile users and those ascending by hiking receive consumer surpluses of US$98, US$54 and US$31, respectively, per day trip.

Comparing Recreation Benefits from On-Site versus Household Surveys in Count Data Travel Cost Demand Models with Overdispersion

On-site surveys of tourists often lead to overestimates of annual tourism because tourists who are frequent repeat visitors are more likely to be sampled. This unrepresentative sample leads to statistical problems known as ‘truncation’ and ‘endogenous stratification’ in widely used travel cost demand models. Further, wide variation in the number of on-site visits among tourists can lead to overdispersion in the dependent variable of count data travel cost models. The authors present the first real-world data correction for all three problems and compare the corrected estimates with the ideal household survey. Correcting for truncation and endogenous stratification in a count data specification allowing for overdispersion (negative binomial specification) lowers the demand and benefit estimate to a mean value not significantly different from the household estimate. If tourism researchers wish to develop visitor use estimates from on-site surveys consistent with household level surveys, the authors' improved demand estimators would allow them to do so with some confidence in the results.

Comparing the economic effects of fire on hiking demand in Montana and Colorado

We conducted surveys on 33 trails within National Forests in Colorado and Montana to test whether forest fires affected recreation demand. Data were collected on actual and intended number of visits. A count data travel cost demand model was estimated by pooling actual and intended visitation responses in both states. Results indicate that Montana hikers take more trips yet have lower net benefits ($12/trip) than do Colorado visitors ($55/trip). The annual value of trips taken decreases in both states as areas recover from crown fires providing support for the National Fire Plan in terms of fire prevention and suppression.

Travel cost demand model based river recreation benefit estimates with on‐site and household surveys: Comparative results and a correction procedure

Past recreation studies have noted that on‐site or visitor intercept surveys are subject to over‐sampling of avid users (i.e., endogenous stratification) and have offered econometric solutions to correct for this. However, past papers do not estimate the empirical magnitude of the bias in benefit estimates with a real data set, nor do they compare the corrected estimates to benefit estimates derived from a population sample. This paper empirically examines the magnitude of the recreation benefits per trip bias by comparing estimates from an on‐site river visitor intercept survey to a household survey. The difference in average benefits is quite large, with the on‐site visitor survey yielding $24 per day trip, while the household survey yields $9.67 per day trip. A simple econometric correction for endogenous stratification in our count data model lowers the benefit estimate to $9.60 per day trip, a mean value nearly identical and not statistically different from the household survey estimate.

Quantifying recreation use values from removing dams and restoring free‐flowing rivers: A contingent behavior travel cost demand model for the Lower Snake River

A travel cost demand model that uses intended trips if dams are removed and the river restored is presented as a tool for evaluating the potential recreation benefits in this counterfactual but increasingly policy relevant analysis of dam removal. The model is applied to the Lower Snake River in Washington using data from mail surveys of households in the Pacific Northwest region. Five years after dam removal, about 1.5 million visitor days are estimated, with this number growing to 2.5 million annually during years 20–100. Using the travel cost method model estimate of the value of river recreation, if the four dams are removed and the 225 km river is restored, the annualized benefits at a 6.875% discount rate would be $310 million. This gain in river recreation exceeds the loss of reservoir recreation but is about $60 million less than the total costs of the dam removal alternative. The analysis suggests this extension of the standard travel cost method may be suitable for evaluating the gain in river recreation associated with restoration of river systems from dam removal or associated with dam relicensing conditions.

Estimating the Recreation Demand and Economic Value of Mountain Biking in Moab, Utah: An Application of Count Data Models

This paper reports the results of both standard and truncated count data travel cost demand models for estimating demand for and the economic value to participants in mountain biking in the Moab, Utah, area. The empirical estimates for average trip demand per person per season were 2.25 and 2.53 trips under truncated Poisson and truncated negative binomial models, respectively. Consumer surplus per person per trip for both models was approximately US $585. The total annual use value for mountain biking in the Moab area was US $1.33 million. This value suggests that this recreation has a higher value than most other activities in the area and that public land managers should be aware of the relative value of mountain biking as they make allocation decisions.

A Travel Cost Demand Model for Recreational Snapper Angling in Port Phillip Bay, Australia

A travel cost demand model was estimated for recreational angling for snapper Pagrus auratus in Port Phillip Bay based on an on-site expenditure survey conducted during the 1996–1997 season. The model explaining angling trip frequency was initially based on exploratory analysis and Fisher tests on variables including trip-specific expenditure and nonexpenditure factors. A final preferred Poisson count model was then estimated and used to calculate the annual angler surplus (Aus$7,100 per boat party) and the total benefits to the angling population ($128,000,000). The recreational and commercial sectors of the Port Phillip Bay snapper fishery are neither monitored by the same statistics nor valuated by the same methods. Considerable socioeconomic research is needed to calibrate the sectors in support of equitable harvest allocations.

VALUING CAMPSITE CHARACTERISTICS: A GENERALIZED TRAVEL-COST MODEL OF DEMAND FOR RECREATIONAL CAMPING

The multiple-site travel cost demand model of Vaughan and Russell is extended to apply to recreational camping. Unlike previous applications, particular attention is paid to the detection and correction of groupwise heteroscedasticity which is likely to arise in multiple-site models. A semi-log demand model estimated in the context of 48 provincial parks in the Province of Onario, Canada, suggests that recreational camping is likely to be an inferior commodity. Also, the consistent significance of the substitute-site variable implies that the demand parameter estimates are likely to be biased in its absence. The model is also used to obtain estimates of the social values of various campsite characteristics in terms of average and marginal consumer surplus. © 1997 John Wiley & Sons, Ltd.

Testing Transferability of Recreation Demand Models Across Regions: A Study of Corps of Engineer Reservoirs

This research tests the interchangeability of two specifications of travel cost demand models for recreation at U.S. Army Corps of Engineer reservoirs in Arkansas, California, and Tennessee/Kentucky. Statistical tests of coefficient equality for both nonlinear least squares and Heckman sample selection models suggest rejecting a transferable model among all three regions. However, the nonlinear least squares models in Arkansas and Tennessee were similar enough to fail to reject the hypothesis of equal coefficients at the 0.01 significance level. Even so, interchanging the Arkansas and Tennessee nonlinear least squares coefficients produces visitor use and total benefit estimates that are more than 100% too high. However, interchanging coefficients does provide reasonably close estimates of the average consumer surplus per trip for both states using the nonlinear least squares model (±5% to 10%). This is due to similarity of the price coefficients in the two models. Thus a more limited form of transferability which focuses on average benefit per day, rather than on predicting total use and total benefits, appears promising.

Valuing Time in Travel Cost Demand Analysis: An Empirical Investigation

The opportunity cost of time is usu- ally a significant part of the price variable in the travel cost demand model. Thus, its accurate mea- surement is important to the estimation of demand and benefit valuation for nonmarket resources. This paper empirically tests models which assume that income is the basis for opportunity time cost with an alternative pooled model based on a disequi- librium labor market for some recreationists. Ac- ceptance of the hypothesis that disequilibrium mod- els may be necessary for some individuals implies increased survey information requirements so that the appropriate model can be applied to each indi- vidual. (JEL Q21)

A Note on Choice of Residential Location in Travel Cost Demand Models

where x is number of visits to a site, p is price, y is a (k x 1) vector of observed individual characteristics, and e is a random component. 1' is a (1 x k) parameter vector and p, is a scalar parameter. Hundreds of models with this basic demand relationship as a basis have been estimated (see Smith's 1989 review). My concern is that the price used in this model may be endogenous because people base decisions about where to live, in part, on proximity to recreation sites. If so, unobserved taste characteristics in the error term e will be

Measuring the Economic Value of Anglers' Kept and Released Catches

Economic measures of the value of recreational catch typically have been based on the aggregate number offish caught per unit effort. Fishery management councils, however, regulate recreational catch through bag limits and size restrictions that influence the composition of kept and released fish in the catch, not just the number of fish caught. Statistical tests for pooled site travel cost demand models for anglers of king mackerel Scomberomorus cavalla in the Gulf of Mexico region showed that indicators of kept and released catches outperformed an aggregate indicator. Accounting for the composition of catch had a significant effect on economic measures of the gains and losses from catch regulations and suggested that aggregate indicators may give misleading estimates of the change in economic value due to regulations. Economic studies of the value of recreational catch in other fisheries should give more consideration to the effects of regulations on the composition of kept and released catches and to the social factors that influence the keep or release decision.

The Bioeconomic Effects of Timber Harvesting on Recreational and Commercial Salmon and Steelhead Fishing: A Case Study of the Siuslaw National Forest

The economic effects of changes in timber harvest levels on recreational and commercial salmon and steelhead fisheries are estimated by combining a series of simple watershed, habitat, population, and economic models. The economic loss in fishery benefits from future timber harvests on 86,700 acres is estimated to be $1.7 million over a 30-year period. The approach employed in this paper overcomes previous shortcomings in valuing marginal changes in recreational fishing by use of a regional multi-site travel cost demand model that contains fish catch as a site characteristic. Site-specific marginal values per salmon and steelhead caught are derived using this technique.

Specification Considerations for the Price Variable in Travel Cost Demand Models: Reply

Specification Considerations for the Price Variable in Travel Cost Demand Models: Reply

Specification Considerations for the Price Variable in Travel Cost Demand Models: Comment

Specification Considerations for the Price Variable in Travel Cost Demand Models: Comment

Theoretical and Empirical Specifications Issues in Travel Cost Demand Studies

AbstractA travel cost demand model is derived from a utility function which postulates that individuals choose the optimal total number of site recreation days given by the product of the number and length of their recreation trips. By relaxing the assumption that on‐site time is constant across recreationists, the applicability of the travel cost method is extended. The model is estimated using a maximum likelihood procedure appropriate for the truncated sample data which is characteristic of most user‐specific recreation data. Failure to do so would result in overestimating the value of Great Lakes fishing by 3.5 times.