The Travel Cost Method: an Empirical Investigation of Randall's Difficulty

Michael S. Common (), Tim Bull and Natalie Stoeckl
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Michael S. Common: University of Strathclyde
Tim Bull: Australian Bureau of Agricultural and Resource Economics

Working Papers in Ecological Economics from Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program

Abstract: 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.

Date: 1997-07
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Journal Article: The Travel Cost Method: an empirical investigation of Randall's Difficulty (1999)
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