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Spatial Limits of the TCM revisited: Island Effects

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  • Loomis, John B.
  • Gonzalez-Sepulveda, Juan Marcos
  • Gonzalez-Caban, Armando

Abstract

The purpose of this paper is to address a problem that may arise with the assumption of a continuous spatial market in the TCM model. We find that this assumption can be challenged by geographical limitations that an area of study might have. Particularly for islands (or isolated island-like areas) that have a valuable non-market resource or good, the spatial market characteristic of the TCM model might be limited or truncated. The geographical truncation limits the observed maximum travel cost of the demand curve falsely implying a lower WTP than otherwise. The study uses a dichotomous choice CVM to confirm that the resulting demand schedules from the TCM underestimates WTP for day trips to the Caribbean National Forest in Puerto Rico. This results in a considerably smaller TCM WTP for the value of recreation sites at $17 to $29 versus $109 per day trip from the dichotomous choice CVM.

Suggested Citation

  • Loomis, John B. & Gonzalez-Sepulveda, Juan Marcos & Gonzalez-Caban, Armando, 2007. "Spatial Limits of the TCM revisited: Island Effects," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9088, Western Agricultural Economics Association.
    • Handle: RePEc:ags:waeapo:9088
    DOI: 10.22004/ag.econ.9088
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    References listed on IDEAS

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    1. Shaw, Daigee, 1988. "On-site samples' regression : Problems of non-negative integers, truncation, and endogenous stratification," Journal of Econometrics, Elsevier, vol. 37(2), pages 211-223, February.
    2. K. E. McConnell, 1992. "On-Site Time in the Demand for Recreation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(4), pages 918-925.
    3. repec:hal:spmain:info:hdl:2441/f0uohitsgqh8dhk9820172631 is not listed on IDEAS
    4. Richard Blundell & Jean-Marc Robin, 2000. "Latent Separability: Grouping Goods without Weak Separability," Econometrica, Econometric Society, vol. 68(1), pages 53-84, January.
    5. Abraham E. Haspel & F. Reed Johnson, 1982. "Multiple Destination Trip Bias in Recreation Benefit Estimation," Land Economics, University of Wisconsin Press, vol. 58(3), pages 364-372.
    6. Douglas M. Larson & Sabina L. Shaikh, 2001. "Empirical Specification Requirements for Two-Constraint Models of Recreation Choice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 428-440.
    7. Richard T. Carson & Nicholas E. Flores & Kerry M. Martin & Jennifer L. Wright, 1996. "Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods," Land Economics, University of Wisconsin Press, vol. 72(1), pages 80-99.
    8. Gregory L. Poe & Kelly L. Giraud & John B. Loomis, 2005. "Computational Methods for Measuring the Difference of Empirical Distributions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 353-365.
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    Cited by:

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