Advantages of the Travel Cost Method:
¥ The travel cost method closely mimics the more conventional
empirical techniques used by economists to estimate economic values based on market prices.
¥ The method is based on actual behavior—what people actually do—rather than
stated willingness to pay—what people say they would do in a hypothetical
situation.
¥ The method is relatively inexpensive to apply.
¥ On-site surveys provide opportunities for large sample sizes,
as visitors tend to be interested in participating.
¥ The results are relatively easy to interpret and
explain.
Issues and
Limitations of the Travel
Cost Method:
¥ The travel cost method assumes that people perceive and
respond to changes in travel costs the same way that they would respond to changes in admission price.
¥ The most simple models assume that individuals take a trip
for a single purpose – to visit a specific recreational site.
Thus, if a trip has more than
one purpose, the value of the site may be overestimated. It can be difficult to
apportion the travel costs among the various
purposes.
¥ Defining and measuring the opportunity cost of time, or the
value of time spent traveling, can be problematic. Because the time spent traveling could have been used in
other ways, it has an "opportunity cost." This should be added to the
travel cost, or the value of the
site will be underestimated. However, there is no strong consensus on the
appropriate measure—the personÕs wage rate, or some
fraction of the wage rate—and the value chosen can have a large effect on benefit estimates. In
addition, if people enjoy the travel itself, then travel time becomes a benefit, not a cost,
and the value of the site will be overestimated.
¥ The availability of substitute sites will affect values. For
example, if two people travel the same distance, they are assumed to have the same value. However, if one
person has several substitutes available but travels to this site because it is
preferred, this personÕs value is
actually higher. Some of the more complicated models account for the
availability of substitutes.
¥ Those who value certain sites may choose to live nearby. If
this is the case, they will have low travel costs, but high values for the site that are not captured by the
method.
¥ Interviewing visitors on site can introduce sampling biases
to the analysis.
¥ Measuring recreational quality, and relating recreational
quality to environmental quality can be difficult.
¥ Standard travel cost approaches provides information about
current conditions, but not about gains or losses from anticipated changes in resource conditions.
¥ In order to estimate the demand function, there needs to be
enough difference between distances traveled to affect travel costs and for differences in travel costs to affect
the number of trips made. Thus, it is not well suited for sites near major
population centers where many
visitations may be from "origin zones" that are quite close to one
another.
¥ The travel cost method is limited in its scope of application
because it requires user participation. It cannot be used to assign values to on-site environmental features
and functions that users of the site do not find valuable. It cannot be used to
value off-site values
supported by the site. Most importantly, it cannot be used to measure nonuse
values. Thus, sites that have unique qualities that are valued by non-users will be
undervalued.
¥As in all statistical methods, certain
statistical problems can affect the results. These include choice of the
functional form used to estimate the
demand curve, choice of the estimating method, and choice of variables included
in the model.