Measuring Values Of Environmental Quality Improvement And Leisure Time Through Combining Contingent Valuation and Travel Cost Data

Young Sook Eom and Douglas M. Larson
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Young Sook Eom: Chon Buk National University
Douglas M. Larson: University of California, Davies

Korean Economic Review, 2004, vol. 20, 213-238

Abstract: This paper demonstrates a utility-theoretic empirical framework for estimating values of environmental quality improvement by combining travel cost and contingent valuation data in a two-constraint (time and money) budget framework. Recgninzing the role of time "prices" and time budget, the recreation demand and willingness to pay (WTP) functiuons are specified with full price and full budget arguments, with the opportunity cost of time being a fraction of wage rate. When applied to the case of water quality improvement of the Man Kyoung River basin in the Chollabukdo province, the joint model of actual demand, contingent WTP, and marginal value of time is hihgly significant with correct sings on the principal economic variables. The WTP estimate is about $34 for a water quality improvement to the swimmable level. The value of leisure time is 90% of the market wage.

Keywords: Left-side strong second-degree stochastic dominance (L-SSSD); Monotone probability ratio (MPR); Left-side strong increases in risk (L-SIR); Prudence (search for similar items in EconPapers)
JEL-codes: J22 Q26 (search for similar items in EconPapers)
Date: 2004
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