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The Travel Cost Method: an Empirical Investigation of Randall's Difficulty

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  • Michael S. Common

    (University of Strathclyde)

  • Tim Bull

    (Australian Bureau of Agricultural and Resource Economics)

  • Natalie Stoeckl

    (University of Canberra)

Abstract

Randall (1994) argued that the Travel Cost Method, TCM, cannot do what it is supposed to do - generate monetary measures of recreation site benefits for use in Cost Benefit Analysis. Randall argues that what is relevant to recreational decision making is the subjective, and unobservable, price of travel, whereas what TCM uses is the observer assessed cost of travel. Hence, the best that can be expected from TCM is ordinally measurable welfare estimates. This paper formulates `Randall's difficulty' as an estimation problem and derives some results for that problem. A survey data set and Monte Carlo simulations based upon it, where many of the problems usually attending TCM application are absent, are used to illustrate and quantify Randall's difficulty. The meaning of, prospects for, and usefulness of ordinal measurement are explored, and the question of the existence of a solution to Randall's difficulty is considered.

Suggested Citation

  • Michael S. Common & Tim Bull & Natalie Stoeckl, 1997. "The Travel Cost Method: an Empirical Investigation of Randall's Difficulty," Working Papers in Ecological Economics 9705, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program.
    • Handle: RePEc:anu:wpieep:9705
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    References listed on IDEAS

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    1. John R. McKean & Richard G. Walsh & Donn M. Johnson, 1996. "Closely Related Good Prices in the Travel Cost Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 640-646.
    2. John R. McKean & Charles F. Revier, 1990. "An Extension of: "Omitted Cross-Price Variable Biases in the Linear Travel Cost Model: Correcting Common Misperceptions"," Land Economics, University of Wisconsin Press, vol. 66(4), pages 430-436.
    3. Peter C. Boxall & Wiktor L. Adamowicz & Theodore Tomasi, 1996. "A Nonparametric Test of the Traditional Travel Cost Model," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 44(2), pages 183-193, July.
    4. Englin Jeffrey & Shonkwiler J. S., 1995. "Modeling Recreation Demand in the Presence of Unobservable Travel Costs: Toward a Travel Price Model," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 368-377, November.
    5. John R. McKean & Donn M. Johnson & Richard G. Walsh, 1995. "Valuing Time in Travel Cost Demand Analysis: An Empirical Investigation," Land Economics, University of Wisconsin Press, vol. 71(1), pages 96-105.
    6. Ian J. Bateman & Guy D. Garrod & Julii S. Brainard & Andrew A. Lovett, 1996. "Measurement Issues In The Travel Cost Method: A Geographical Information Systems Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 191-205, January.
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    Cited by:

    1. Bowker, James Michael & Starbuck, C. Meghan & English, Donald B.K. & Bergstrom, John C. & Rosenberger, Randall S. & McCollum, Daniel W., 2009. "Estimating the Net Economic Value of National Forest Recreation: An Application of the National Visitor Use Monitoring Database," Faculty Series 59603, University of Georgia, Department of Agricultural and Applied Economics.
    2. Chin-Huang Huang & Chiung-Hsia Wang, 2015. "Estimating the Total Economic Value of Cultivated Flower Land in Taiwan," Sustainability, MDPI, vol. 7(4), pages 1-19, April.
    3. Ovaskainen, Ville & Neuvonen, Marjo & Pouta, Eija, 2012. "Modelling recreation demand with respondent-reported driving cost and stated cost of travel time: A Finnish case," Journal of Forest Economics, Elsevier, vol. 18(4), pages 303-317.
    4. Marina Farr & Natalie Stoeckl & Rabiul Alam Beg, 2011. "The efficiency of the Environmental Management Charge in the Cairns management area of the Great Barrier Reef Marine Park," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 322-341, July.
    5. Jeff Bennett, 2005. "Australasian environmental economics: contributions, conflicts and ‘cop‐outs’," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(3), pages 243-261, September.
    6. Mwebaze, Paul & Bennett, Jeff, 2012. "Valuing Australian botanic collections: a combined travel-cost and contingent valuation study," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(4), pages 1-23, December.
    7. Roberto Martinez-Espineira & Joe Amoako-Tuffour, 2008. "Multi-destination and multi-purpose trip effects in the analysis of the demand for trips to a remote recreational site," EERI Research Paper Series EERI_RP_2008_19, Economics and Econometrics Research Institute (EERI), Brussels.
    8. Natalie Stoeckl, 2003. "Measurement error and functional form: implications for welfare estimates," Applied Economics Letters, Taylor & Francis Journals, vol. 10(5), pages 259-270, April.
    9. Akbar Marvasti, 2010. "A welfare estimation of beach recreation with aggregate data," Applied Economics, Taylor & Francis Journals, vol. 42(3), pages 291-296.
    10. Chun-Chu Yeh & Cheng-Shen Lin & Chin-Huang Huang, 2018. "The Total Economic Value of Sport Tourism in Belt and Road Development—An Environmental Perspective," Sustainability, MDPI, vol. 10(4), pages 1-14, April.
    11. van Rensburg, Tom M. & Mill, Greig A. & Common, Mick & Lovett, Jon, 2002. "Preferences and multiple use forest management," Ecological Economics, Elsevier, vol. 43(2-3), pages 231-244, December.

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