ABSTRACT
In previous chapters we have discussed approaches to environmental valuation that directly construct markets (contingent valuation and other stated preference approaches) or indirectly reveal values via observed willingness to pay for related goods (e.g., sum of specific damages or hedonic methods). Travel cost is a third method that indirectly values environmental goods by observing willingness to pay for related goods. The travel cost method estimates the economic value of recreational sites or other concentrated environmental amenities (e.g., wildlife observation) by looking at the full travel costs (time, out of pocket, and any applicable fees) of visiting the sites. In existence since a letter written in 1949 from Harold Hotelling to the director of the National Park Service, a very large literature, well over one hundred articles, has sprung forth to value a host of site amenities. Parsons (2003) provides a quite complete exposition of the technical details of the various travel cost approaches, updating that paper with state-of-the-art insights in Parsons (2013). For a much more detailed treatment than is appropriate here, these two papers are excellent sources.
