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.
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- Common, Mick S. & Bull, Tim & Stoeckl, Natalie, 1999.
"The Travel Cost Method: an empirical investigation of Randall's Difficulty,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 43(4), December.
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