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.     

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 net benefits of recreation under conditions of excess demand

The public provision of outdoor recreation necessitates the development of nonmarket measures of the value of resources in recreational use. Such values can be used as surrogates for market values in the decision-making process. Another aspect of recreation as a publicly provided good is the absence of a mechanism to eliminate automatically excess demand. The absence of such a mechanism has resulted in conditions of excess demand at many recreation sites.This paper deduces the implications of excess demand for the travel cost method of benefit estimation. We show that when excess demand results in rationing at a particular site, the travel cost method will underestimate the true benefits of the site. The results are important because they help identify the direction of bias of one measure of the benefits from the use of a natural resource.     

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.     

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.     

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.     

Congestion and participation in outdoor recreation: A household production function approach

This paper examines the effects of congestion on recreational behavior within a household production model of consumer behavior. We assume that congestion affects the household's ability to produce constant quality recreational service flows and derive a reduced-form model for participation decisions in remote and developed camping. Empirical estimates of the effects of a congestion measure on the conditional probability of participation as well as on the level of participation are estimated for each activity by the type of trip using information from the 1972 National Recreation Survey. The findings suggest that congestion was most likely to affect the decision to participate and not the level once that decision had been made. While differences in these effects were observed across the activities studied, it is not clear how they should be interpreted since our congestion measure was a proxy variable likely to perform better for remote camping than developed camping.     

What Is Consumer′s Surplus Per Day of Use, When Is It a Constant Independent of the Number of Days of Use, and What Does It Tell Us about Consumers Surplus?

An individual′s consumer′s surplus per day of use for a change in the price of recreational site is the price change, so it is a constant, independent of the number of days of use. Consumer′s surplus per day of use for a change in a site′s characteristics is not, in general, a constant. When a constant compensating variation per day of use exists, it multiplied by the number of days at the site in the original state (proposed state) bounds the compensating variation, CV, from below (above). The average of these two approximations is an almost second-order approximation to the CV. Simulations indicate the approximation biases can be large.     

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.     

A simulation model for the management of low density recreational areas

In order to take account of the congestion externalities associated with increased use intensity during a given period at a low density recreational resource, it is necessary to determine the effects of alternative use levels on the expected quality of each individual's experience. This paper describes a simulation model for wilderness recreation designed to provide such measures. In order to illustrate the model it is applied to the Spanish Peaks Areas in Montana.     

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.     

Welfare cost of eutrophication-caused production losses: A case of aquaculture in Lake Kasumigaura

A general model for man's utilization of water resources is presented, in which the linkage between man's production activities and environmental systems is formulated based on Whitcomb's generalized joint production model and Kneese's transfer function. The general model is specified for a particular case of aquaculture in Lake Kasumigaura so as to evaluate in terms of the price data of 1978 the welfare cost of eutrophication-caused production losses under the assumption of horizontal demand curve.     

On optimal congestion

A number of classic papers conclude that if a congestible facility is the property of a profit maximizing entrepreneur, he will impose a charge for use that induces the socially optimal level of use and congestion. All these papers happen to deal with a special case in which that conclusion holds, but it is not true in general. In general, the socially optimal level of use of a congestible facility is the level at which the marginal cost of providing the service is equal to the sum of the decreases in the users' willingnesses to pay for a unit of service when the level of congestion is optimal, and need not coincide with the level resulting from a profit-maximizing charge. This sum is derived from the integral under a fictitious demand curve constructed by imagining that the level of congestion is the same (and optimal) at all levels of the use-charge.     

Modelling the biochemical oxidation processes in artificial conditions of waste treatment plants

For natural water bodies there are many models of biochemical oxidation of organic pollutants, from simple to complicated ones. For the artificial conditions of waste water treatment plants there are numerous models of oxidation processes too. The authors believe that a better understanding of these processes in nature would be gained if the oxidation processes in more simple artificial conditions were understood.An attempt has been made to explain the variety of types of models of waste treatment in an activated sludge system or a biofilm reactor by the diffusion mechanism of oxidation of single substrates on the one hand, and by superposition of the kinetics of oxidation of single substrates in measurements of the dynamics of oxidation of a complex pollutant on the other hand.The conditions in which zero- and first-order models are valid in the oxidation of single substrates are derived. Respective formulae for rate constants are given. Monod's model is valid in a broader range of substrate concentration variations. An approximate formula for the half-saturation constant is proposed. Satisfactory agreement with experimental data for glucose and ammonia substrates is shown.The formal character of models being used at present is claimed for multicomponent substrates. The accuracy of the calculation is largely governed by the number of model coefficients. Similar results obtained by Monod's and Grau's models, often used in practice, are emphasized.     

Rent dissipation and efficient rationalization in for-hire recreational fishing

Recreational fisheries are increasingly important in fisheries management; for some species, recreational take rivals or exceeds the amount harvested by commercial fishermen. Most recreational fisheries are regulated with gear restrictions, bag limits, and time/area closures, but there is increasing interest in the market-based solutions employed in commercial fisheries — this despite the lack of an adequate bioeconomic theory of the joint commercial/recreational aspects of many recreational fisheries. This paper integrates a detailed production specification with traditional bioeconomic tools in order to better understand the implications of rationalization schemes targeted at the charter sector. While confirming some of the qualitative conclusions of the commercial fisheries literature on open access and regulated open access our model also generates rich and novel predictions with respect to input choices, the number of vessels and congestion externalities. We devise a system of instruments that generate efficient outcomes and extensively discuss issues associated with their real-world implementation.     

A political economy model of implementing pollution laws

A model of the implementation process as applied in pollution control is developed. It differs from previous bureaucracy models in that it subjects the control agency to pressures from both firms and procontrol citizen groups. Each of these three actors maximizes utility over environmental quality and some other variable. Environmental quality may be in the actor's preference function or it may represent derived demand. Working through the agency budget and other policy variables, each actor constrains another actor's attempts to move policy in preferred directions. This results in movement toward a concensus environmental quality, not necessarily the efficient quality. Several institutional changes are analyzed to demonstrate the workings of the model.     

Improved source,improved quality? Demand for drinking water quality in rural India

This paper tests the hypothesis that the expansion of improved drinking water supplies in rural India reduced household expenditure on water quality, offsetting some of the quality benefits from source protection. I estimate demand for in-home treatment using geological characteristics to predict a household's drinking water source. The probability of treatment and in particular boiling reduces by 18–27 percentage points in response to source protection, offsetting 4% of the water quality gains and saving households 0.5–1% in monthly expenditure. Behavioral choices partly counteract the water quality gains from source protection.     

Three reasons to use annual payments in contingent valuation surveys: Convergent validity,discount rates,and mental accounting

We present three arguments for using ongoing annual payments in contingent valuation (CV) surveys that estimate the benefit of a long-lasting environmental improvement. First, by matching the duration of the payments with the duration of the environmental benefits, survey respondents are spared from performing complicated present value calculations. Second, willingness to pay (WTP) estimates from CV surveys that include ongoing annual payments best match WTP estimates obtained using travel cost surveys. Third, respondents are less likely to face binding mental budget constraints with ongoing annual payments than with a larger one-time payment. In addition, respondents’ discount rates may be estimated by collecting non-hypothetical, individual time preference data as part of the valuation survey.     

On the distribution of public program benefits between landlords and tenants

Many public programs have differential impacts on diverse parts of metropolitan areas. This fact has led analysts to use changes in land values as measures of the benefits of public programs. Using a model derived from theoretical urban economics, this paper demonstrates that changes in land values will only equal total benefits under very restrictive assumptions. Making concrete assumptions about consumer demand, the paper goes beyond previous work to consider the distributional impact of three different kinds of public programs: those which provide uniform benefits to every community, those which attempt to reduce intercommunity inequality, and those which generate improvements in only a subset of the region's towns.     

Do exurban communities want more development?

Most land-use surveys of exurban residents focus on eliciting preferences for residential development and open space conservation. This article, in contrast, reports on a stated preference study of exurban residents that assesses the relative attractiveness of a variety of commercial and recreational land uses. Focus group participants and town planners proclaimed a demand for certain commercial services such as modern grocery stores and fine-dining restaurants, but survey respondents generally exhibit a strong preference for no additional development beyond the current rate of development. Results show that if additional development is to occur, then recreational services are generally preferred over more traditional commercial development. Combining two commercial services in a single development project are strongly preferred to stand-alone developments. Our approach illustrates how planners may uncover misconceptions about and priorities for land conversion through examining residents’ preferences.