Valuing Nature with Travel Cost Models

Valuing Nature with Travel Cost Models

A Manual

New Horizons in Environmental Economics series

Frank A. Ward and Diana Beal

The book presents a self-contained treatment of TCM along with a wide range of applications to natural resource and environmental policy questions.

Chapter 4: Benefits Theory and TCM

Frank A. Ward and Diana Beal

Subjects: economics and finance, environmental economics, environment, environmental economics


Page 77 4—  Benefits Theory and TCM This chapter deals with some aspects of benefits theory which provide the theoretical foundations of TC methodology. The first section introduces crucial benefits  theory concepts. Welfare measures such as consumer surplus, compensating variation and equivalent variation are explained as are expenditure functions. The chapter  then illustrates the use of these concepts in several TC models from simple single site models to more complex multisite and variable site quality models. Benefits Concepts A benefit is, as we all know, an advantage, a boon, a blessing or an increase in welfare. Benefits­based management is one research approach to measuring the  benefits of outdoor recreation (see, for example, Allen et al., 1996; Driver et al., 1987; Stein and Lee, 1995). This path approaches outdoor recreation as a resource  which promotes better health, reduced stress and improved understanding of nature. The field typically aims to discover more about the resource itself with less  emphasis on its monetary value. TCMs, on the other hand, attempt to translate the physical, psychological and social benefits produced by outdoor recreation into monetary terms so their benefits can  be compared with costs using the common denominator of money. Measuring the benefits of proposed plans to change any aspect of recreational resources is  achieved by estimation of how those proposals are expected to alter visitors' behavior, based on observation and analysis of past experience. TCMs describe individual visitors' preferences for the resources that support outdoor recreation. Using a TCM requires translating the...

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