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Extensions of the Traditional Travel Cost Model of Non-Market Valuation to a Collective Framework: Evidence from the Field

Marcella Veronesi (), Martina Menon () and Federico Perali ()

No 42/2007, Working Papers from University of Verona, Department of Economics

Abstract: Traditional recreation demand models do not make a distinction between a household and an individual as the reference decision-making unit, thus assuming that a family maximizes a single utility function, even if it consists of different individuals. Such models ignore the possibility of family members’ divergent preferences for non-market goods. This study proposes a novel approach—the “collective travel-cost model” (CTCM)—to eliciting individual preferences for a non-market good such as a recreation site by using revealed preference data. This approach accounts for the intra-household resource allocation and the role of each household member’s preferences. We show that the collective travel-cost model can be applied to estimating a recreation demand model that yields individual welfare estimates appropriate for policy analysis of non-market goods, such as the willingness-to-pay to access a recreation site. We find that how resources are distributed within the household reflects significant differences in welfare measures.

Keywords: collective model; intra-household resource allocation; non-market valuation; recreation demand model; sharing rule; travel-cost model; unitary model; willingness-to-pay (search for similar items in EconPapers)
JEL-codes: D13 H41 Q26 Q51 (search for similar items in EconPapers)
Pages: 50
Date: 2007-01
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Published in American Journal of Agricultural Economics (2014)

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Journal Article: Recovering Individual Preferences for Non-Market Goods: A Collective Travel-Cost Model (2014) Downloads
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