The Travel Cost Method: an Empirical Investigation of Randall's Difficulty
Randall (1994) argued that the Travel Cost Method, TCM, cannot do what it is supposed to do - generate monetary measures of recreation site benefits for use in Cost Benefit Analysis. Randall argues that what is relevant to recreational decision making is the subjective, and unobservable, price of travel, whereas what TCM uses is the observer assessed cost of travel. Hence, the best that can be expected from TCM is ordinally measurable welfare estimates. This paper formulates `Randall's difficulty' as an estimation problem and derives some results for that problem. A survey data set and Monte Carlo simulations based upon it, where many of the problems usually attending TCM application are absent, are used to illustrate and quantify Randall's difficulty. The meaning of, prospects for, and usefulness of ordinal measurement are explored, and the question of the existence of a solution to Randall's difficulty is considered.
|Date of creation:||Jul 1997|
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- Peter C. Boxall & Wiktor L. Adamowicz & Theodore Tomasi, 1996. "A Nonparametric Test of the Traditional Travel Cost Model," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 44(2), pages 183-193, 07.
- John R. McKean & Donn M. Johnson & Richard G. Walsh, 1995. "Valuing Time in Travel Cost Demand Analysis: An Empirical Investigation," Land Economics, University of Wisconsin Press, vol. 71(1), pages 96-105.
- Ian J. Bateman & Guy D. Garrod & Julii S. Brainard & Andrew A. Lovett, 1996. "Measurement Issues In The Travel Cost Method: A Geographical Information Systems Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1-4), pages 191-205.
- John R. McKean & Charles F. Revier, 1990. "An Extension of: "Omitted Cross-Price Variable Biases in the Linear Travel Cost Model: Correcting Common Misperceptions"," Land Economics, University of Wisconsin Press, vol. 66(4), pages 430-436.
- Englin Jeffrey & Shonkwiler J. S., 1995. "Modeling Recreation Demand in the Presence of Unobservable Travel Costs: Toward a Travel Price Model," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 368-377, November.
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