zonal travel cost method data

• location of the visitor¡¦s home ¡¦ how far they traveled to the site
• how many times they visited the site in the past year or season
• the length of the trip
• the amount of time spent at the site
• travel expenses
• the person¡¦s income or other information on the value of their time
• other socioeconomic characteristics of the visitor
• other locations visited during the same trip, and amount of time spent at each
• other reasons for the trip (is the trip only to visit the site, or for several purposes)
• fishing success at the site (how many fish caught on each trip)
• perceptions of environmental quality or quality of fishing at the site
• substitute sites that the person might visit instead of this site
• The value of improvements in water quality was only shown to increase the value of current beach use.  However, improved water quality can also be expected to increase overall beach use. 
• Estimates ignore visitors from outside the Baltimore-Washington statistical metropolitan sampling area. 
• The population and incomes in origin zones near the Chesapeake Bay beach areas are increasing,  which is likely to increase visitor-days and thus total willingness to pay.
• changes in access costs for a recreational site
• elimination of an existing recreational site
• addition of a new recreational site
• changes in environmental quality at a recreational site
• number of visits from each origin zone (usually defined by zipcode)
• demographic information about people from each zone
• round-trip mileage from each zone
• travel costs per mile
• the value of time spent traveling, or the opportunity cost of travel time
• exact distance that each individual traveled to the site
• exact travel expenses
• substitute sites that the person might visit instead of this site, and the travel distance to each
• quality of the recreational experience at the site, and at other similar sites (e.g., fishing success)
• perceptions of environmental quality at the site
• characteristics of the site and other, substitute, sites
• 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.
• 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 person¡¦s 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 person¡¦s 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.
• GolfSW.com - Golf Southwest tips and reviews.
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Richard T. Melstrom

RESOURCE ECONOMICS AND POLICY

Zonal travel cost method of nonmarket valuation

Carson Reeling and I recently published a paper describing a new method to measure the value of outdoor recreation areas to visitors. The method works off a model that identifies trip patterns using aggregate data, such as visitor counts and census populations . This contrasts with traditional approaches that use individual trip information collected via surveys, which tend to be costly and time-consuming. Either way, it is this trip information (and the cost thereof) that conveys the value of recreation experiences.

The paper shows the proposed and traditional approaches produce similar estimates in a couple of applications with real-world data. One of these applications compares publicly available hunting data, available here , to individual trips numbering in the 100,000s (which is proprietary data from the Indiana DNR). While there are some differences, there are more similarities, and we find the our proposed approach produces even more similar results when we account for the fact that the residential location of hunters is more rural than the (census) population as a whole. So, overall, this suggests the method provides a practical, cost-effective and accessible alternative to measuring the economic value of recreation sites.

Our work builds on a large amount of earlier research. The travel cost method originated in a letter written to the U.S. National Park Service by Harold Hotelling in 1947. This letter described measuring the economic value of a visit in a linear demand framework using data on travel costs and per capita visitation rates from concentric zones around a park. Over time, economists and other researchers moved away from this simple design toward more utility-theoretic methods. One thing I liked about this project is learning how to use utility theory to infer individual from aggregate behavior (although this paper is far from the first to do that; see here ).

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Travel-cost method

The travel-cost method (TCM) is used for calculating economic values of environmental goods. Unlike the contingent valuation method, TCM can only estimate use value of an environmental good or service. It is mainly applied for determining economic values of sites that are used for recreation, such as national parks. For example, TCM can estimate part of economic benefits of coral reefs, beaches or wetlands stemming from their use for recreational activities (diving and snorkelling/swimming and sunbathing/bird watching). It can also serve for evaluating how an increased entrance fee a nature park would affect the number of visitors and total park revenues from the fee. However, it cannot estimate benefits of providing habitat for endemic species.

TCM is based on the assumption that travel costs represent the price of access to a recreational site. Peoples’ willingness to pay for visiting a site is thus estimated based on the number of trips that they make at different travel costs. This is called a revealed preference technique, because it ‘reveals’ willingness to pay based on consumption behaviour of visitors.

The information is collected by conducting a survey among the visitors of a site being valued. The survey should include questions on the number of visits made to the site over some period (usually during the last 12 months), distance travelled from visitor’s home to the site, mode of travel (car, plane, bus, train, etc.), time spent travelling to the site, respondents’ income, and other socio-economic characteristics (gender, age, degree of education, etc). The researcher uses the information on distance and mode of travel to calculate travel costs. Alternatively, visitors can be asked directly in a survey to state their travel costs, although this information tends to be somewhat less reliable. Time spent travelling is considered as part of the travel costs, because this time has an opportunity cost. It could have been used for doing other activities (e.g. working, spending time with friends or enjoying a hobby). The value of time is determined based on the income of each respondent. Time spent at the site is for the same reason also considered as part of travel costs. For example, if respondents visit three different sites in 10 days and spend only 1 day at the site being valued, then only fraction of their travel costs should be assigned to this site (e.g. 1/10). Depending on the fraction used, the final benefit estimates can differ considerably.

Two approaches of TCM are distinguished – individual and zonal. Individual TCM calculates travel costs separately for each individual and requires a more detailed survey of visitors. In zonal TCM, the area surrounding the site is divided into zones, which can be either concentric circles or administrative districts. In this case, the number of visits from each zone is counted. This information is sometimes available (e.g. from the site management), which makes data collection from the visitors simpler and less expensive.

The relationship between travel costs and number of trips (the higher the travel costs, the fewer trips visitors will take) shows us the demand function for the average visitor to the site, from which one can derive the average visitor’s willingness to pay. This average value is then multiplied by the total relevant population in order to estimate the total economic value of a recreational resource.

TCM is based on the behaviour of people who actually use an environmental good and therefore cannot measure non-use values. This method is thus inappropriate for sites with unique characteristics which have a large non-use economic value component (because many people would be willing to pay for its preservation just to know that it exists, although they do not plan to visit the site in the future).

The travel-cost method might also be combined with contingent valuation to estimate an economic value of a change (either enhancement or deterioration) in environmental quality of the NP by asking the same tourists how many trips they would make in the case of a certain quality change. This information could help in estimating the effects that a particular policy causing an environmental quality change would have on the number of visitors and on the economic use value of the NP.

For further reading:

Ward, F.A., Beal, D. (2000) Valuing nature with travel cost models. A manual. Edward Elgar, Cheltenham.

Ecosystem valuation [ www.ecosystemvaluation.org/travel_costs.htm ]

This glossary entry is based on a contribution by Ivana Logar 

EJOLT glossary editors:   Hali Healy, Sylvia Lorek and Beatriz Rodríguez-Labajos

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The travel cost method: a valuable tool for organizers quantifying the economic value of environmental education—a case study from Oklahoma

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Environmental education (EE) and training is integral to public involvement in environmental stewardship. Although entities supported by grants and public funding provide a range of benefits, determining the economic value of the EE delivered is essential in quantifying the scope of its benefit. Data on this subject are limited; this study aims to address this gap. As a non-market good, evaluating education requires a non-traditional economic approach. An approach offering a methodological value to evaluate EE is the travel cost method (TCM), which is a non-market valuation approach in the field of environmental economics. Conventionally, TCM has been used to assess the economic value of recreational sites. For this study, the TCM is applied to indirectly value EE by using the costs of travel as a proxy for what consumers pay to travel to educational events and what they would be willing to pay (WTP) in addition to the same educational experience if higher travel costs were to be incurred. This study also considers the feasibility of TCM as a method for evaluating the value of EE, particularly for EE event organizers. Data collected via the distribution of surveys at EE events within the state of Oklahoma were incorporated into an econometric model and used to observe demographic predictors associated with a willingness to travel farther to access EE. To quantify the value of EE, the difference between the actual costs and WTP was assessed. This expressed valuation of EE is intended to assist in informed decision-making on allocation of monetary resources for agencies supported by grants and public funding.

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Acknowledgements

This research was made possible by the Oklahoma Water Survey and the numerous government agencies, non-governmental organizations, and other entities across the state of Oklahoma that distributed surveys at their environmental education events. The authors thank Dr. Jadwiga Ziolkowska for her guidance on this project.

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Legg, T.A., Vogel, J.R. & Fleming, J. The travel cost method: a valuable tool for organizers quantifying the economic value of environmental education—a case study from Oklahoma. J Environ Stud Sci (2024). https://doi.org/10.1007/s13412-024-00898-1

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Travel Cost Method (TCM)

Some amenities do not have a direct cost associated with them. For example, recreational sites may be free to enter. In order to apply a value to these types of amenities a value is often derived from a good or service which is complementary to the consumption of the free amenity. One method of estimating a value is therefore to collect data on the travel costs associated with accessing the amenity or recreational site. This is commonly referred to as the travel cost method of estimating the value of an amenity.

The travel cost method involves collecting data on the costs incurred by each individual in travelling to the recreational site or amenity. This ‘price’ paid by visitors is unique to each individual, and is calculated by summing the travel costs from each individuals original location to the amenity. By aggregating the observed travel costs associated with a number of individuals accessing the amenity a demand curve can be estimated, and as such a price can be obtained for the non-price amenity.

We can show this method of using observed or revealed preferences using a diagram as shown below.

D(Visits) shows the overall trend between travel costs and visit rates at a particular asset or site. To generate an estimate of the recreational value for the site, estimates are needed for the average visitors (V1) total recreational value for the site. This is then multiplied by the total number of visitors per annum giving the total annual recreational value of the site or asset. For a more complete explanation continue to the flash example .

Zonal Travel Cost Method Example

Using the zonal travel cost method a researcher can estimate the value of an asset by exploring the actual visitors or users of a site or asset, rather than potential visitors or users. The level of analysis focuses on the zones in which people live compared to the location of the asset. The researcher is required to specify the zones from which the site users travel to the asset.

Consider an example of valuing a country park. In this example four zones have been designated by the researcher. Zone A has an average travel time of 1 hour, and a distance of 25km. Zone B has an average travel time of 1.5 hours and a distance of 40km. Zone C has an average travel time of approximately 2 hours and a distance of 80km. Finally, zone D has an average travel time of 4 hours and a distance of 120km. The admission cost for all users is the same, and is equal to £10. The number of visits per year has been observed by the researcher for each zone. Zone A has an average of 10,000 visits per year. Zone B has an average of 12,000 visits per year, zone C has 8,000 visits, and zone D has 4,000 visits. This information is shown in the table below.

To calculate the value of the asset (V) for a single visit the researcher now uses the simple equation as follows:

V = ((T x w ) + (D x v ) + Ca) x Va

T = travel time (in hours) w = average wage rate (£/hour) D = distance (in km) v = marginal vehicle operating costs Ca = cost of Admission to asset Va = average number of visits per year

Using the country park example, the value of the asset can be calculated using this formula. It is important that the researcher provides an accurate measure for the average hourly wage rate, and also for the marginal vehicle operating costs. A common value for the operating costs is around £0.16p per km. This is the equivalent of around £0.40p per mile, a standard value given for vehicle operating costs in calculating expenses claims within firms and organisations.

In the example the average hourly wage rate is £10, and marginal vehicle operating costs are calculated at £0.16p per km. The researcher can now calculate the value of the country park for each zone to get an overall value for the asset. This is shown in the table below.

Limitations of the TCM

There are a number of limitations associated with the travel cost method of value estimation. These are as follows:

(1) Difficulties in measuring the cost of visiting a site.

It may actually be quite difficult to measure the cost of accessing a site or amenity. This is because of the opportunity cost associated with the travel time. If the opportunity cost of all individuals is the same then the estimated price will be accurate. If, however, the opportunity cost of individuals accessing the site varies, which is more likely, then the measure will be inaccurate.

For example, one individual’s opportunity cost of the travel time spent accessing a recreational site is equivalent to one hours wage equalling £35. However, another individual’s opportunity cost for an hours wage is only £8. This is problematic to the TCM as if individual’s opportunity costs differ including the costs of time spent at the site, this would change the price faced by different individuals by different amounts.

(2) The estimation of willingness to pay used in the TCM is for entire site access rather than specific features.

As the TCM only provides a price or value relating to the cost of accessing the amenity or recreational site, it does so for the whole site. It may, however, be the case that we wish to value a certain aspect of the site in our project appraisal. For example, we do not wish to value a whole park, but instead the fishing ponds within it.

(3) The exclusion of the marginal cost of other complementary goods.

The travel cost method does not account for the costs involved in purchasing complementary goods which may be required in order to enjoy accessing the amenity. For example, individuals accessing a park area may take a football with them, or a picnic. Alternatively, individuals accessing a recreational site may take walking equipment and tents with them. The marginal costs of using this equipment should be included in the price estimated.

(4) Multi-purpose or multi-activity journeys.

Individuals may visit an amenity or recreational site in the morning, but then visit another site or enjoy some other activity in the afternoon. The travel endured to access the amenity was also undertaken to enable access to the afternoon activity. In this case the cost incurred in travelling to the amenity does not represent the value the individuals place on the amenity, but that which they place on both the amenity they visited in the morning and the one which they visited in the afternoon.

(5) Journey value.

It may be the case that the journey itself has a value to the individual. If this is true then some of the cost incurred in travelling to the amenity should not actually be applied to the individual accessing the amenity, and as such should be removed from the estimation of the amenities value.

(6) Assumed responses to changes in price.

The TCM method assumes that individuals respond to changes in price regardless of its composition. For example, TCM assumes that individuals will react consistently to a £10 increase in travel cost as they would to a £10 increase in admission costs.

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