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.