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Spatial Limits of the TCM revisited: Island Effects

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  • Loomis, John B.
  • Gonzalez-Sepulveda, Juan Marcos
  • Gonzalez-Caban, Armando

Abstract

The purpose of this paper is to address a problem that may arise with the assumption of a continuous spatial market in the TCM model. We find that this assumption can be challenged by geographical limitations that an area of study might have. Particularly for islands (or isolated island-like areas) that have a valuable non-market resource or good, the spatial market characteristic of the TCM model might be limited or truncated. The geographical truncation limits the observed maximum travel cost of the demand curve falsely implying a lower WTP than otherwise. The study uses a dichotomous choice CVM to confirm that the resulting demand schedules from the TCM underestimates WTP for day trips to the Caribbean National Forest in Puerto Rico. This results in a considerably smaller TCM WTP for the value of recreation sites at $17 to $29 versus $109 per day trip from the dichotomous choice CVM.

Suggested Citation

  • Loomis, John B. & Gonzalez-Sepulveda, Juan Marcos & Gonzalez-Caban, Armando, 2007. "Spatial Limits of the TCM revisited: Island Effects," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9088, Western Agricultural Economics Association.
    • Handle: RePEc:ags:waeapo:9088
    DOI: 10.22004/ag.econ.9088
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    References listed on IDEAS

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    1. Richard Blundell & Jean-Marc Robin, 2000. "Latent Separability: Grouping Goods without Weak Separability," Econometrica, Econometric Society, vol. 68(1), pages 53-84, January.
    2. K. E. McConnell, 1992. "On-Site Time in the Demand for Recreation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(4), pages 918-925.
    3. Richard T. Carson & Nicholas E. Flores & Kerry M. Martin & Jennifer L. Wright, 1996. "Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods," Land Economics, University of Wisconsin Press, vol. 72(1), pages 80-99.
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    5. Douglas M. Larson & Sabina L. Shaikh, 2001. "Empirical Specification Requirements for Two-Constraint Models of Recreation Choice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 428-440.
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    7. Robert Mendelsohn & John Hof & George Peterson & Reed Johnson, 1992. "Measuring Recreation Values with Multiple Destination Trips," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(4), pages 926-933.
    8. Shaw, Daigee, 1988. "On-site samples' regression : Problems of non-negative integers, truncation, and endogenous stratification," Journal of Econometrics, Elsevier, vol. 37(2), pages 211-223, February.
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    Cited by:

    1. Sonja S. Teelucksingh & Paulo A.L.D. Nunes, 2010. "Biodiversity Valuation in Developing Countries: A Focus on Small Island Developing States (SIDS)," Working Papers 2010.111, Fondazione Eni Enrico Mattei.
    2. Moonsammy, Stephan & Boman, Mattias & Ramdhanie, Vidwatee & Renn-Moonsammy, Donna-Marie, 2024. "State-of-the art valuation of wetland ecosystem services in Small Island Developing States: A systematic review with an emphasis on future research needs," Ecosystem Services, Elsevier, vol. 68(C).

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