Does ignoring multidestination trips in the travel cost method cause a systematic bias?

Timo Kuosmanen, Eleonora Nillesen and Justus Wesseler

Australian Journal of Agricultural and Resource Economics, 2004, vol. 48, issue 4, 23

Abstract: The present paper demonstrates that treating multidestination trips (MDT) as single‐destination trips does not involve any systematic upward or downward bias in consumer surplus (CS) estimates because the direct negative effect of a price increase (treating MDT as a single‐destination trip) is offset by a shift in the estimated demand curve. Still, ignoring MDT can greatly underestimate or overestimate the CS. In addition, we demonstrate that there is a sound theoretical basis for using preference information for allocating travel costs between different sites included in the MDT package. A novel extreme value approach is proposed, which does not require any overly restrictive assumptions about consumer preferences. This approach is applied to the zonal travel cost model of the Bellenden Ker National Park, Australia. Parametric and non‐parametric estimation techniques are used for calculating CS estimates, and the effects of different MDT treatments and estimation methods are compared.

Keywords: Research; Methods/Statistical; Methods (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (6)

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Journal Article: Does ignoring multidestination trips in the travel cost method cause a systematic bias? (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aareaj:117997

DOI: 10.22004/ag.econ.117997

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