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Does ignoring multidestination trips in the travel cost method cause a systematic bias?

Does ignoring multidestination trips in the travel cost method cause a systematic bias? The present paper demonstrates that treating multidestination trips (MDT) as single‐destination trips does not involve any systematic upward or downward bias in consumer surplus (CS) estimates because the direct negative effect of a price increase (treating MDT as a single‐destination trip) is offset by a shift in the estimated demand curve. Still, ignoring MDT can greatly underestimate or overestimate the CS. In addition, we demonstrate that there is a sound theoretical basis for using preference information for allocating travel costs between different sites included in the MDT package. A novel extreme value approach is proposed, which does not require any overly restrictive assumptions about consumer preferences. This approach is applied to the zonal travel cost model of the Bellenden Ker National Park, Australia. Parametric and non‐parametric estimation techniques are used for calculating CS estimates, and the effects of different MDT treatments and estimation methods are compared. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Australian Journal of Agricultural Resource Economics Wiley

Does ignoring multidestination trips in the travel cost method cause a systematic bias?

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References (21)

Publisher
Wiley
Copyright
Copyright © 2004 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1364-985X
eISSN
1467-8489
DOI
10.1111/j.1467-8489.2004.00266.x
Publisher site
See Article on Publisher Site

Abstract

The present paper demonstrates that treating multidestination trips (MDT) as single‐destination trips does not involve any systematic upward or downward bias in consumer surplus (CS) estimates because the direct negative effect of a price increase (treating MDT as a single‐destination trip) is offset by a shift in the estimated demand curve. Still, ignoring MDT can greatly underestimate or overestimate the CS. In addition, we demonstrate that there is a sound theoretical basis for using preference information for allocating travel costs between different sites included in the MDT package. A novel extreme value approach is proposed, which does not require any overly restrictive assumptions about consumer preferences. This approach is applied to the zonal travel cost model of the Bellenden Ker National Park, Australia. Parametric and non‐parametric estimation techniques are used for calculating CS estimates, and the effects of different MDT treatments and estimation methods are compared.

Journal

The Australian Journal of Agricultural Resource EconomicsWiley

Published: Dec 1, 2004

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