Estimating the benefits of recreation under conditions of congestion

The public provisions of free or below cost outdoor recreation sites has resulted in the use of various methods to evaluate the demand. One method is to use travel cost as a price proxy. However, this mechanism does not take into account problems raised by congestion. This paper shows that the use of the travel cost method will always underestimate the true benefits provided by recreation at a site because of the role of congestion. The results are important because they identify a source of bias in measuring benefits of outdoor recreation and suggest how it may be corrected.     

Estimating the benefits of recreation under conditions of congestion congestion

In a recent issue of J. Environ. Econ. Manag. Wetzel showed that the standard travel cost technique will understate recreation benefits under congested conditions because changes in entry fee lead to lowered congestion levels. This comment indicates that benefit projections derived from the travel cost procedure may theoretically overstate the true value of recreation if rising income levels shift the demand curve upwards but fail to account for the contrary effect of increased congestion. The magnitude and direction of the bias that results from omission of a congestion variable is, however, indeterminate when standard econometric techniques are used to develop benefit projections.     

Economic analysis of nature preservation investments: the zonal travel cost approach applied for Harghita County of Romania

The paper is focused on the cost of travel method and specific issues involved by the use of this method for monetization of benefits provided by nature preservation investment projects. Usually, nature preservation investment projects are non revenue generator projects and consequently the monetization of benefits provided is essential in the process of analysis and valuation of these projects, because benefits are the only positive effects able to counterbalance the investment costs. Therefore, the main interest and particularity of the cost-benefit analysis of nature preservation investment projects consists in identification and monetization of the benefits. In the following paper, the method of zonal travel cost is used for indicative valuation of the direct benefits of an investment project for nature preservation, in Harghita County of Romania, as an opportunity and pre-feasibility study completed before making the initial investment decision.     

The value of time in recreation benefit studies

This paper examines the role of time costs—both on-site and travel—in models describing recreation behavior, and draws implications for the travel-cost approach to recreation site benefit estimation. The analysis shows that both recreation and travel time are costly. The latter can be valued in terms of its scarcity value, but the former may be most appropriately valued in terms of the “alue of travel time saved.” Although there are cases in which on-site time costs need not be explicitly considered in recreation benefit models, it is not clear such cases are the rule rather than the exception. Suggestions are made for measuring on-site and travel time costs.     

A regional approach to estimating recreation benefits of improved water quality

Recreation demand and value are estimated with the travel-cost method for fishing, camping, boating, and swimming on a site-specific regional basis. The model regional in that 179 sites are defined for the Pacific Northwest. A gravity model is employed to estimate the number of trips from each origin to its destination in the region, and these data are the basic input in the travel-cost demand curves. The model is illustrated by estimating the recreation benefits that would result from meeting the national environmental goal of “fishable and swimmable” rivers. The main finding is that potential recreation benefits are concentrated in a few select areas, which are accessible to large population centers.     

Theory and estimation of the household production function for wildlife recreation

The household production function is an intuitively appealing way to model man's interaction with nature. This paper models the interaction between the household's behavior and publicly provided inputs into wildlife recreation. The paper shows how to compute benefits, assuming that the household production function is known. The household production function approach collapses to the simple travel cost approach when households are unable to substitute their own inputs for publicly provided inputs. In addition, the paper demonstrates the conditions under which the parameters of cost and preference functions can be identified. The conditions for identification are quite restrictive when several choices are endogenous.     

Modeling Recreation Demand in the Presence of Unobservable Travel Costs: Toward a Travel Price Model

An important issue in the application of travel cost models is the construction of a travel cost variable. This paper develops an econometric approach that views travel costs as an unobserved latent variable. The latent variable approach utilizes indicators to capture the role of individual travel costs in recreational demand models. The latent variables approach has at least two advantages over conventional approaches. One, the indicators can include both traditional components such as time and distance and non-traditional components such as the scenic beauty. Second, the estimation procedure results in each indicator being valued in dollar terms.     

Assessing the Conservation Value of New Zealand's Offshore Islands

New Zealand has over 500 offshore islands. Many consist of relatively pristine wilderness and contain a disproportionately large amount of New Zealand's biological wealth. Increased demand for recreation has increased the pressure to develop these areas. Although the New Zealand public has shown widespread support for the preservation and safeguarding of both wilderness areas and endangered species, economic values attached to the benefits of preservation are not known. Using a telephone survey, we found evidence that the public attaches significant value to the conservation of Little Barrier Island. The results show that these values are influenced by different levels and sources of prior information.     

Appraisal of coastal recreational resources in Qingdao by travel cost method

This paper serves to appraise the monetary cost of coastal recreational resources in Qingdao using the travel cost method (TCM), which is typically used in developed countries. The total revenue produced by Qingdao’s coastal recreational resources is about RMB 5.51×10¹⁰ annually, based on questionnaires given at Qingdao’s major tourist destinations. These questionnaires establish correlation functions that factor in the number of tourists, travel expenses, etc. The data processing software named Eviews was used to determine the tourist demand regression curve and to calculate their residual and actual travel expenses. The results of this study can provide a scientific basis for applicable industries interested in development and management decision-making. Therefore, this study assesses the reasonable usage of coastal recreational resources.     

Benefits of Investing in Ecosystem Restoration

Measures aimed at conservation or restoration of ecosystems are often seen as net‐cost projects by governments and businesses because they are based on incomplete and often faulty cost‐benefit analyses. After screening over 200 studies, we examined the costs (94 studies) and benefits (225 studies) of ecosystem restoration projects that had sufficient reliable data in 9 different biomes ranging from coral reefs to tropical forests. Costs included capital investment and maintenance of the restoration project, and benefits were based on the monetary value of the total bundle of ecosystem services provided by the restored ecosystem. Assuming restoration is always imperfect and benefits attain only 75% of the maximum value of the reference systems over 20 years, we calculated the net present value at the social discount rates of 2% and 8%. We also conducted 2 threshold cum sensitivity analyses. Benefit‐cost ratios ranged from about 0.05:1 (coral reefs and coastal systems, worst‐case scenario) to as much as 35:1 (grasslands, best‐case scenario). Our results provide only partial estimates of benefits at one point in time and reflect the lower limit of the welfare benefits of ecosystem restoration because both scarcity of and demand for ecosystem services is increasing and new benefits of natural ecosystems and biological diversity are being discovered. Nonetheless, when accounting for even the incomplete range of known benefits through the use of static estimates that fail to capture rising values, the majority of the restoration projects we analyzed provided net benefits and should be considered not only as profitable but also as high‐yielding investments. Beneficios de Invertir en la Restauración de Ecosistemas     

Confronting Uncertainty and Missing Values in Environmental Value Transfer as Applied to Species Conservation

Abstract: The nonuse (or passive) value of nature is important but time‐consuming and costly to quantify with direct surveys. In the absence of estimates of these values, there will likely be less investment in conservation actions that generate substantial nonuse benefits, such as conservation of native species. To help overcome decisions about the allocation of conservation dollars that reflect the lack of estimates of nonuse values, these values can be estimated indirectly by environmental value transfer (EVT). EVT uses existing data or information from a study site such that the estimated monetary value of an environmental good is transferred to another location or policy site. A major challenge in the use of EVT is the uncertainty about the sign and size of the error (i.e., the percentage by which transferred value exceeds the actual value) that results from transferring direct estimates of nonuse values from a study to a policy site, the site where the value is transferred. An EVT is most useful if the decision‐making framework does not require highly accurate information and when the conservation decision is constrained by time and financial resources. To account for uncertainty in the decision‐making process, a decision heuristic that guides the decision process and illustrates the possible decision branches, can be followed. To account for the uncertainty associated with the transfer of values from one site to another, we developed a risk and simulation approach that uses Monte Carlo simulations to evaluate the net benefits of conservation investments and takes into account different possible distributions of transfer error. This method does not reduce transfer error, but it provides a way to account for the effect of transfer error in conservation decision making. Our risk and simulation approach and decision‐based framework on when to use EVT offer better‐informed decision making in conservation.     

Congestion and economic valuation: A reconsideration

The topic of congestion in the use of travel cost demand models has received a considerable amount of attention. A number of extensions of the original Wetzel article have extended the question raised in that article. The purpose of this paper is twofold. The first purpose is to raise the general issue of the use of short-run or long-run demand curves for policy analysis. The second purpose is to make some brief specific comments about certain sections of the extensions and corrections offered to the original Wetzel article.     

Temporal variability in winter travel patterns of Yellowstone bison: the effects of road grooming.

The influence of winter recreation on wildlife in Yellowstone National Park (YNP), Wyoming and Montana, USA, is a controversial issue. In particular, the effects of road grooming, done to facilitate snowmobile and snowcoach travel, on bison (Bison bison) ecology are under debate. We collected data during winters, from 1997 to 2005, on bison road use, off-road travel, and activity budgets to quantify temporal trends in the amount of bison road and off-road travel and to identify the ecological factors affecting bison movements and use of the groomed road system in the Madison-Gibbon-Firehole (MGF) area of YNP. Using model comparison techniques, we found bison travel patterns to be influenced by multiple, interacting effects. Road travel was negatively correlated with road grooming, and we found no evidence that bison preferentially used groomed roads during winter. Snow water equivalent, bison density, and the springtime melt period were positively correlated with both bison road and off-road travel. From behavioral scans on 68,791 bison, we found that travel is only a small percentage (11%) of all bison activity, with foraging comprising 67% of observations. Also, only 7% of traveling bison and 30% of foraging bison were displacing snow, and we suggest foraging, rather than traveling, is likely the major energetic cost to bison in winter. Bison utilize their own trail network, connecting foraging areas using stream corridors, geothermal pathways, and self-groomed travel routes. Our results indicate that temporal patterns in bison road travel are a manifestation of general travel behavior and that groomed roads in the MGF do not appear to be a major factor influencing bison ecology and spatial redistribution. We suggest that the changes in bison spatial dynamics during the past three decades have likely been the result of the natural phenomenon of density-dependent range expansion, rather than having been caused by the anthropogenic influence of road grooming.     

Addressing onsite sampling in recreation site choice models

Independent experts and politicians have criticized statistical analyses of recreation behavior, which rely upon onsite samples due to their potential for biased inference. The use of onsite sampling usually reflects data or budgetary constraints, but can lead to two primary forms of bias in site choice models. First, the strategy entails sampling site choices rather than sampling individuals—a form of bias called endogenous stratification. Under these conditions, sample choices may not reflect the site choices of the true population. Second, exogenous attributes of the individuals sampled onsite may differ from the attributes of individuals in the population—the most common form in recreation demand is avidity bias. We propose addressing these biases by combining two the existing methods: Weighted Exogenous Stratification Maximum Likelihood estimation and propensity score estimation. We use the National Marine Fisheries Service's Marine Recreational Fishing Statistics Survey to illustrate methods of bias reduction, employing both simulated and empirical applications. We find that propensity score based weights can significantly reduce bias in estimation. Our results indicate that failure to account for these biases can overstate anglers' willingness to pay for improvements in fishing catch, but weighted models exhibit higher variance of parameter estimates and willingness to pay.     

Willingness to Pay for Quality Improvements: Should Revealed and Stated Preference Data Be Combined?

In this article we propose theoretically consistent welfare measurement of use and nonuse values for an improvement in environmental quality with revealed and stated preference data. An analytical model based on the comparative static analysis of the variation function that describes the relationship between recreation demand and dichotomous choice contingent valuation models is estimated. Our results show that revealed and stated data should not be combined under the same assumed preference structure unless the two decisions imply the same change in behavior induced by the quality change. In addition, our results indicate scope effects in willingness to pay measures estimated with stated preference data.     

Effects of human demand on conservation planning for biodiversity and ecosystem services

Safeguarding ecosystem services and biodiversity is critical to achieving sustainable development. To date, ecosystem services quantification has focused on the biophysical supply of services with less emphasis on human beneficiaries (i.e., demand). Only when both occur do ecosystems benefit people, but demand may shift ecosystem service priorities toward human-dominated landscapes that support less biodiversity. We quantified how accounting for demand affects the efficiency of conservation in capturing both human benefits and biodiversity by comparing conservation priorities identified with and without accounting for demand. We mapped supply and benefit for 3 ecosystem services (flood mitigation, crop pollination, and nature-based recreation) by adapting existing ecosystem service models to include and exclude factors representing human demand. We then identified conservation priorities for each with the conservation planning program Marxan. Particularly for flood mitigation and crop pollination, supply served as a poor proxy for benefit because demand changed the spatial distribution of ecosystem service provision. Including demand when jointly targeting biodiversity and ecosystem service increased the efficiency of conservation efforts targeting ecosystem services without reducing biodiversity outcomes. Our results highlight the importance of incorporating demand when quantifying ecosystem services for conservation planning.     

Valuing congested recreation sites

This note discusses the issue of measuring consumers' surplus at crowded facilities. It is argued that surplus should be measured with congestion held constant. The area under an aggregate demand curve which has congestion varying has no normative significance. Whether travel cost demand curves estimated for congested facilities properly measured consumers' surplus depends on the sampling procedure and the specification of the demand curves.     

Estimating preferences for outdoor recreation:: a comparison of continuous and count data demand system frameworks

Continuous and count data demand system models have emerged as attractive alternatives to the discrete choice random utility maximization models (RUMs) that currently dominate the seasonal, multi-site recreation demand literature. This paper compares the frameworks conceptually and investigates their empirical performance with a common data set. Although the two modeling approaches employ substantially different behavioral and econometric assumptions, results from a recreation application based on the 1997 Iowa Wetlands Survey suggest that qualitatively similar policy inferences arise from the competing structures.     

Environmental cost of using poor decision metrics to prioritize environmental projects

Conservation decision makers commonly use project‐scoring metrics that are inconsistent with theory on optimal ranking of projects. As a result, there may often be a loss of environmental benefits. We estimated the magnitudes of these losses for various metrics that deviate from theory in ways that are common in practice. These metrics included cases where relevant variables were omitted from the benefits metric, project costs were omitted, and benefits were calculated using a faulty functional form. We estimated distributions of parameters from 129 environmental projects from Australia, New Zealand, and Italy for which detailed analyses had been completed previously. The cost of using poor prioritization metrics (in terms of lost environmental values) was often high—up to 80% in the scenarios we examined. The cost in percentage terms was greater when the budget was smaller. The most costly errors were omitting information about environmental values (up to 31% loss of environmental values), omitting project costs (up to 35% loss), omitting the effectiveness of management actions (up to 9% loss), and using a weighted‐additive decision metric for variables that should be multiplied (up to 23% loss). The latter 3 are errors that occur commonly in real‐world decision metrics, in combination often reducing potential benefits from conservation investments by 30–50%. Uncertainty about parameter values also reduced the benefits from investments in conservation projects but often not by as much as faulty prioritization metrics.