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Does ignoring multidestination trips in the travel cost method cause a systematic bias?

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  • Kuosmanen, Timo
  • Nillesen, Eleonora
  • Wesseler, Justus

Abstract

The present paper demonstrates that treating multidestination trips (MDT) as single‐destination trips does not involve any systematic upward or downward bias in consumer surplus (CS) estimates because the direct negative effect of a price increase (treating MDT as a single‐destination trip) is offset by a shift in the estimated demand curve. Still, ignoring MDT can greatly underestimate or overestimate the CS. In addition, we demonstrate that there is a sound theoretical basis for using preference information for allocating travel costs between different sites included in the MDT package. A novel extreme value approach is proposed, which does not require any overly restrictive assumptions about consumer preferences. This approach is applied to the zonal travel cost model of the Bellenden Ker National Park, Australia. Parametric and non‐parametric estimation techniques are used for calculating CS estimates, and the effects of different MDT treatments and estimation methods are compared.

Suggested Citation

  • Kuosmanen, Timo & Nillesen, Eleonora & Wesseler, Justus, 2004. "Does ignoring multidestination trips in the travel cost method cause a systematic bias?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(4), pages 1-23.
    • Handle: RePEc:ags:aareaj:117997
    DOI: 10.22004/ag.econ.117997
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    2. Heagney, E.C. & Rose, J.M. & Ardeshiri, A. & Kovac, M., 2019. "The economic value of tourism and recreation across a large protected area network," Land Use Policy, Elsevier, vol. 88(C).
    3. Dai, Peichao & Zhang, Shaoliang & Gong, Yunlong & Zhou, Yuan & Hou, Huping, 2022. "A crowd-sourced valuation of recreational ecosystem services using mobile signal data applied to a restored wetland in China," Ecological Economics, Elsevier, vol. 192(C).
    4. Scheufele, Gabriela & Pascoe, Sean, 2023. "Ecosystem accounting: Reconciling consumer surplus and exchange values for free-access recreation," Ecological Economics, Elsevier, vol. 212(C).
    5. Tuan, Tran Hu & Lindhjem, Henrik, 2008. "Meta-analysis of nature conservation values in Asia & Oceania: Data heterogeneity and benefit transfer issues," MPRA Paper 11470, University Library of Munich, Germany.
    6. Doshi, Amar & Pascoe, Sean, 2013. "Investigating the effects of sample heterogeneity on the travel cost model for coral diving in Southeast Asia," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152146, Australian Agricultural and Resource Economics Society.
    7. Khuda Bakhsh & Iqra Meshaal & Hudda Riaz, 2020. "Evaluating visitors’ travel demand and recreational values in Kallar Kahar Lake, Pakistan," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(8), pages 7951-7967, December.

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