Valuing Complex Natural Resource Systems

Valuing Complex Natural Resource Systems

The Case of the Lagoon of Venice

The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development

Edited by Anna Alberini, Paolo Rosato and Margherita Turvani

In complex natural resource systems, modifications or disruptions tend to affect many and diverse components of the ecological system, settlements and groups of people. This book uses the Lagoon of Venice – a unique natural resource, wildlife habitat, centre of cultural heritage and recreational site – as an example of one such system that has been heavily affected by human activities, including the harvesting of natural resources and industrial production. The contributors explore the Lagoon’s potential for regeneration, examining public policies currently under consideration. The aim of these policies is to restore island coastlines and marshes, fish stocks, habitat and environmental quality, defend morphology and landscape through the strict control of fishing practices, and to protect the islands from high tides.

Chapter 2: Recreational Demand, Travel Cost Method and Flow Fixed Costs

Edi Defrancesco and Paolo Rosato

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


Edi Defrancesco and Paolo Rosato 2.1 INTRODUCTION The Travel Cost Method (TCM) is one of the most frequently used approaches to estimating the use values of recreational sites. The TCM was initially suggested by Hotelling (1949) and subsequently developed by Clawson (1959) in order to estimate the benefits from recreation at natural sites. The method is based on the premise that the recreational benefits at a specific site can be derived from the demand function that relates observed users’ behaviour (i.e., the number of trips to the site) to the cost of a visit. One of the most important issues in the TCM is the choice of the costs to be taken into account. The literature usually suggests considering direct variable costs and the opportunity cost of time spent travelling to and at the site. However, some authors (Walsh, 1986, p. 275) have underscored the importance of studying the effect of fixed costs (equipment, license fees, and so on) on the long-run price elasticity of demand. The first aim of this chapter is to discuss the role played by a category of fixed costs that we term annual flow fixed costs, that is annual fixed expenses related to the recreational activity, on the consumer decision-making process under different time horizons. These considerations are important when, as is often the case, a recreational user incurs substantial fixed costs directly related to the recreational activity on an annual basis, regardless of the number of trips undertaken (for example, an annual site licence)...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information