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Valuation of Trips to Second Homes in the Country: Do Environmental Attributes Matter?

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  • Lankia, Tuija
  • Huhtala, Anni

Abstract

Although spending time in a summer home is a popular leisure activity in many developed countries, little is known about the welfare impacts of such recreation in monetary terms. We use data from Finland to provide first estimates of the extent of the recreation benefits obtained from visits to second homes. Special emphasis is placed on how environmental attributes of second homes, such as the presence of algae, the availability of a beach, and electricity, influence the recreation value of visits. The impacts are valued through revealed preferences using the travel cost method. We estimate the recreation value to be about EUR 170 – 205 per trip if a summer home is electrified, if a beach is available and if algae do not prevent aquatic recreation. The aggregate nonmarket benefits of the use of the current summer home stock are considerable – about EUR 500 million per annum. The presence of algae that prevent aquatic recreation decreases the value per trip by 40 percent, and the lack of a beach reduces it by 45 percent; electrification increases the value by 3–5 percent. These impacts should be balanced against the social costs of second homes when designing environmental policies on leisure-time housing.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114405.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:114405

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Keywords: Consumer/Household Economics; Environmental Economics and Policy; Resource /Energy Economics and Policy;

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  3. Tanya O’Garra, 2009. "Bequest Values for Marine Resources: How Important for Indigenous Communities in Less-Developed Economies?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 44(2), pages 179-202, October.
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  7. Loomis, John B. & Gonzalez-Caban, Armando & Englin, Jeffrey E., 2001. "Testing For Differential Effects Of Forest Fires On Hiking And Mountain Biking Demand And Benefits," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(02), December.
  8. Ojumu, Oluwagbemiga & Hite, Diane & Fields, Deacue, 2009. "Estimating Demand For Recreational Fishing In Alabama Using Travel Cost Model," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46858, Southern Agricultural Economics Association.
  9. Palmquist, Raymond B., 2005. "Weak complementarity, path independence, and the intuition of the Willig condition," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 103-115, January.
  10. Blackwell, Boyd, 2007. "The Value of a Recreational Beach Visit: An Application to Mooloolaba Beach and Comparisons with other Outdoor Recreation Sites," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 37(1), pages 77-98, March.
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