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Time is Money: Improved Valuation of Time and Transportation Costs

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  • Dietrich Earnhart

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Abstract

The proper valuation of time isimportant for estimating the demand for severaleconomic goods. This paper explores the propervaluation of time when estimating recreationaldemand, where time costs represent asubstantial portion of the ``purchase price''. Toestimate demand, this paper uses a travel costframework to analyze actual behavior (``revealedpreference data'') and hypothetical behavior(``stated preference data''), which is induced byhypothetical increases in access fees, traveltime, and travel distance. By comparing theresponses to these three contingencies, theanalysis adjusts and improves the valuation oftime costs. As evidence of this improvement,this analysis demonstrates a great increase inthe consistency between the revealed and stateddata. Similarly, this paper improves thevaluation of transportation-related costs. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Dietrich Earnhart, 2004. "Time is Money: Improved Valuation of Time and Transportation Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(2), pages 159-190, October.
  • Handle: RePEc:kap:enreec:v:29:y:2004:i:2:p:159-190
    DOI: 10.1023/B:EARE.0000044604.77782.6b
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    References listed on IDEAS

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    Cited by:

    1. Amoako-Tuffour, Joe & Martınez-Espineira, Roberto, 2008. "Leisure and the Opportunity Cost of Travel Time in Recreation Demand Analysis: A Re-Examination," MPRA Paper 8573, University Library of Munich, Germany.
    2. Isabel Mendes & Isabel Proença, 2009. "Measuring the Social Recreation Per-Day Net Benefit of Wildlife Amenities of a National Park: A Count-Data Travel Cost Approach," Working Papers Department of Economics 2009/35, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    3. Roberto Martínez-Espiñeira & John B. Loomis & Joe Amoako-Tuffour & Joseph M. Hilbe, 2008. "Comparing Recreation Benefits from On-Site versus Household Surveys in Count Data Travel Cost Demand Models with Overdispersion," Tourism Economics, , vol. 14(3), pages 567-576, September.
    4. Ovaskainen, Ville & Neuvonen, Marjo & Pouta, Eija, 2012. "Modelling recreation demand with respondent-reported driving cost and stated cost of travel time: A Finnish case," Journal of Forest Economics, Elsevier, vol. 18(4), pages 303-317.
    5. Roberto Martinez-Espineira & Joe Amoako-Tuffour, 2005. "Recreation Demand Analysis under Truncation, Overdispersion, and Endogenous Stratification: An Application to Gros Morne National Park," Econometrics 0511007, University Library of Munich, Germany.

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    Keywords

    preference; recreation; revealed; stated; time;

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