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

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

No 42, Working Papers from Università di Verona, Dipartimento di Scienze economiche

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.

Keywords: collective model; compensating variation; equivalent variation; revealed preferences; travel cost method; Willingness-To-Pay. (search for similar items in EconPapers)
JEL-codes: D13 Q26 Q51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-env, nep-tur and nep-ure
Date: Written
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