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Extension of the Traditional Travel Cost Method to a Collective Framework: An Empirical Application

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Author Info
Marcella Veronesi () (Corresponding author, Università di Verona and University of Maryland)
Martina Menon () (Università di Verona)
Federico Perali () (Università di Verona)
Abstract

This study proposes a novel approach to estimating a travel cost model that accounts for intrahousehold resource allocation. We define it ‘Collective Travel Cost Method’ (CTCM). The technique is based on an analogy borrowed from the literature of collective household behavior and adapted to the recreational setting. Knowledge of the travel cost to the recreational site of each household member allows us to identify the sharing rule within the household and to estimate a collective Almost Ideal Demand System that takes into account the role of each member’s preferences for consumption choices and how resources are allocated within the household. We show how to identify and estimate welfare measures, such as the equivalent variation (EV), to infer the Willingness-To-Pay (WTP) to access a natural park of each household member. Moreover, the development and estimation of the CTCM allows: (1) to test whether the WTP estimated by the traditional unitary TCM is significantly different from the WTP estimated by the CTCM; (2) to test whether two spouses have equal or different WTP to access the recreational site, and (3) whether the individual WTP estimated by the CTCM is significantly different from the WTP derived by applying the Contingent Valuation Method (CVM) on the same sample of individuals.

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File URL: http://dse.univr.it/RePEc/ver/Wpaper/WP42.pdf
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Publisher Info
Paper provided by Università di Verona, Dipartimento di Scienze economiche in its series Working Papers with number 42.

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Length: 44
Date of creation: Oct 2007
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Handle: RePEc:ver:wpaper:42

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Related research
Keywords: collective model compensating variation equivalent variation revealed preferences travel cost method Willingness-To-Pay.

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Find related papers by JEL classification:
D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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    Other versions:
  3. A. Ali Koç & Savaş Alpay, 2003. "Estimation of Complete Demand System Under Data Limitation," Eastern European Economics, M.E. Sharpe, Inc., vol. 41(3), pages 70-86, May. [Downloadable!] (restricted)
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    Other versions:
  6. Vincenzo Atella & Carlos Arias & Federico Perali & Raffaella Castagnini, 2003. "Estimation of the Sharing Rule Between Adults and Children and Related Equivalence Scales Within a Collective Consumption Framework," CEIS Research Paper 28, Tor Vergata University, CEIS. [Downloadable!]
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  7. Vermeulen, Frederic, 2002. " Collective Household Models: Principles and Main Results," Journal of Economic Surveys, Blackwell Publishing, vol. 16(4), pages 533-64, September. [Downloadable!] (restricted)
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  8. Chavas, Jean-Paul & Stoll, John & Sellar, Christine, 1989. "On the Commodity Value of Travel Time in Recreational Activities," Applied Economics, Taylor and Francis Journals, vol. 21(6), pages 711-22, June.
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  10. Donna Dosman & Wiktor Adamowicz, 2006. "Combining Stated and Revealed Preference Data to Construct an Empirical Examination of Intrahousehold Bargaining," Review of Economics of the Household, Springer, vol. 4(1), pages 15-34, 03. [Downloadable!] (restricted)
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  13. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February. [Downloadable!] (restricted)
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  14. Martin Browning & Pierre-André Chiappori & Valérie Lechene, 2006. "Collective and Unitary Models: A Clarification," Review of Economics of the Household, Springer, vol. 4(1), pages 5-14, 03. [Downloadable!] (restricted)
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  15. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June. [Downloadable!] (restricted)
  16. Pollak, Robert A & Wales, Terence J, 1978. "Estimation of Complete Demand Systems from Household Budget Data: The Linear and Quadratic Expenditure Systems," American Economic Review, American Economic Association, vol. 68(3), pages 348-59, June.
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