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Endogenously chosen travel costs and the travel cost model: an application to mountain biking at Moab, Utah

Peter Fix, John Loomis and Rick Eichhorn

Applied Economics, 2000, vol. 32, issue 10, 1227-1231

Abstract: The travel cost model is frequently used to estimate net willingness to pay for recreation at remote sites by using the visitor's travel costs as a proxy for the price of recreation. However, some concern has been raised over the validity of using the visitor's stated travel costs as a proxy for price. This paper addresses some of these concerns, by examining the possible over-estimation of consumer surplus due to endogenously chosen travel costs. This paper extends past theoretical work for the linear model by developing a correction for endogenously chosen travel costs in more commonly used nonlinear models such as the Poisson or count data model. Also provided is the first empirical test of the presence of endogeneity and an estimate of the magnitude of the error from ignoring endogeneity in travel costs. After applying this test and the correction to data that was gathered for mountain biking at Moab, Utah the estimate of consumer surplus falls from US $153 to US $135, which is a 12% reduction.

Date: 2000
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DOI: 10.1080/000368400404371

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