A Comparison of the Effect of Multiple Destination Trips on Recreation Benefits as Estimated by Travel Cost and Contingent Valuation Methods

This paper investigates the empirical magnitude of multiple destination/purpose trip bias in the Travel require to be paid [i]or[/i] undergone Method (TCM), and the performance of an empirical solution for that mode For the study area, we find that ignoring the multiple destination/purpose trip distinction does be the effect in a substantial difference in by trip values for the TCM However, based upon a comparison with Contingent Valuation way derived values for these sum of two units trip types, an empirical correction to the Travel take away from Method appears to adequately differentiate the values of single and multiple destination trips. If the multiple destination trip distinction is ignored in estimation it substantially underestimates recreation benefits derived from the Travel take away from Method in our case application of mind

KEYWORDS: Contingent valuation rule multiple destination trip bias, recreation demand, travel require to be paid [i]or[/i] undergone method, willingness to pay.

Introduction

The Travel require to be paid [i]or[/i] undergone Method (TCM) and Contingent Valuation rule (CVM) are commonly used rules to value publicly provided outdoor recreation opportunities. While there are several impressed signs of TCM models, traditional TCM archetypes estimate a demand function for the number of trips using the require to be paid [i]or[/i] undergone of traveling to the site as a substitute for price. Economic benefits are derived from this demand bend by integrating under this demand bend between the current price and vertical intercept of the demand bend i.e., the price that at which no single would visit. One purpose of this paper is to empirically demonstrate a solution to an empirical question at issue that arises when one of the lock opener assumptions of the TCM demand prototype is violated: interpretation of travel require to be paid [i]or[/i] undergones as the price of an outdoor recreation trip. Specifically, if a individual visits multiple site destinations upon one trip from home, it would be incorrect to interpret the entire trip take away from to any one of the sites the visitor might be sampled at as the price of a trip to that site (Haspel & Johnson 1982) If these multiple destination observations are treated in the same way as single destination trips, Haspel & Johnson claim the TCM will yield a biased estimate of the recreation benefits of a site.

The next to the first purpose is to investigate whether the multiple destination trip distinction influences benefit estimates derived from CVM As a stated predilection approach, it is plausible that the differing nature of single destination and multiple destination trips might be throw backed in the benefit estimates reported through visitors.

One way of dealing with the multiple destination trip point to be solved [i]or[/i] settled in TCM is to identify multiple destination trip taking individuals and globule them from the sample for the intents of estimating the benefits by person (Smith & Kopp, 1980) However, this could lead to a biased estimate of total recreation site benefits if the multiple destination visitors have substantially different benefits than single destination visitors. This bias may follow in a misallocation of bag and management effort at these sites as compared to sites visited primarily as a single destination.

Related to the multi-destination question is the multi-purpose trip question Here, some proportion of a person's total trip travel require to be paid [i]or[/i] undergone and travel time are incurred for other trip intentions that may not be related to the natural resource based outdoor recreation activity the analyst is attempting to value. Examples of multiple view trips include trips taken to the area with the main reason to visit family, friends or upon business. The other purposes may meet the eye at basically the same destination or at destinations en way If we are interested in estimating the economic value of the single recreation site, we may have a mis-specification riddle as we observe only the overall multiple view trip demand function, not the site-specific trip demand function. That is, we watch the total trip price, on the contrary know little about the price for the individual site or activity we wish to value.

Whether the bias in the TCM estimate of benefits is statistically significant has not been evaluated in greatest in quantity previous papers on this topic because the authors did not have standard errors or confidence intervals for their benefit estimates (Smith & Kopp 1980; Haspel & Johnson 1982) However, Mendelsohn Hof Peterson and Johnson (1992) lay opened standard errors for their consumer surplus estimates and calculated a t-statistic of 194 for the proof of equality of consumer surplus for single destination trips ($10) and multiple destination trips ($17) The t-statistic allude tos no difference at the 5% horizontal but would imply statistical difference at the 10% horizontal

Mendelsohn et al. (1992) have also remind ofed treating multiple destinations as a distinct site packet and estimating a separate demand function for it as part of a combination of parts to form a whole of demand functions. This works well if there are just a not many combinations of sites frequently visited. Similar in spirit to the approach we adopt below, losse in economic benefits from closing a single site in this demand combination of parts to form a whole involves losses from both the single destination visitors and those upon multiple destination trips that include the clos site. However, the a whole of demand equations approach is not estimatable if there are a large number of possible combinations of sites, and hardly any observations for each combination.1 This makes the ne for a more parsimonious approach to modeling multiple destination trips attractive.