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Estimating the Value of Travel Time to Recreational Sites Using Revealed Preferences

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  • Carlo Fezzi

    (CSERGE, School of Environmental Sciences, University of East Anglia)

  • Ian J. Bateman

    (CSERGE, School of Environmental Sciences, University of East Anglia)

Abstract

The opportunity Value of Travel Time (VTT) is one of the most important parts of the total cost of day-long recreational activities and arguably the most difficult to estimate. While numerous studies have criticized the use of salaries to proxy the relevant shadow values, a consensus on an alternative measure still has to emerge. This paper uses a revealed preference approach to estimate the VTT for recreational trips by modeling individuals' preferences for toll roads and deriving their willingness-to-pay to reduce travel time. Our case-study sites are three beaches located in the Italian Riviera Romagnola, whose road network is a mix of toll and free access roads. By carrying-out face-to-face interviews, we reconstruct respondents' routes, indentify their time-cost trade-offs and ultimately estimate their VTT. Results show considerable heterogeneity in values with the VTT for day-long recreational visits being significantly higher than the one of longer holidays.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2013.64.

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Date of creation: Jun 2013
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Handle: RePEc:fem:femwpa:2013.64

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Related research

Keywords: Value of Time; Value of Travel Time Savings; Recreation Demand Models; Revealed Preferences; Willingness to Pay Space;

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  1. DeSerpa, A C, 1971. "A Theory of the Economics of Time," Economic Journal, Royal Economic Society, vol. 81(324), pages 828-46, December.
  2. Raymond B. Palmquist & Daniel J. Phaneuf & V. Kerry Smith, 2009. "Short Run Constraints and the Increasing Marginal Value of Time in Recreation," NBER Working Papers 14986, National Bureau of Economic Research, Inc.
  3. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
  4. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July.
  5. 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.
  6. David A. Hensher, 2001. "Measurement of the Valuation of Travel Time Savings," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 35(1), pages 71-98, January.
  7. Peter Boxall & Wiktor Adamowicz, 2002. "Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(4), pages 421-446, December.
  8. V. Kerry Smith & William H. Desvousges & Matthew P. McGivney, 1983. "The Opportunity Cost of Travel Time in Recreation Demand Models," Land Economics, University of Wisconsin Press, vol. 59(3), pages 259-278.
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