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