Adapting the travel cost method to estimate changes in recreation benefits in the Hawkesbury–Nepean River

ABSTRACT

The travel cost method (TCM) has been widely used to estimate values of visits to recreational and heritage sites. However, its conventional use is limited to the estimation of visitors’ values given the current condition of the site. In this article, the TCM is combined with the contingent behaviour (CB) technique to allow the estimation of changes in values associated with a change in site condition. This approach provides marginal value estimates that are suited to inclusion in benefit–cost analysis. The context used to apply this conceptual development is the estimation of marginal benefits associated with improvements in the condition of the Hawkesbury–Nepean River system, an iconic waterway in NSW, Australia. Pollution, reduced flows downstream of dams and weirs, and water extraction have contributed to algal blooms and aquatic weed growth in the River. To address this decline in river health a new regime of environmental flow releases is under consideration. The increases in recreation values at six main recreation sites along the River that would result from environmental flows were estimated using the dual travel cost/CB approach. The marginal benefits were estimated to be within a range of $1.7 m to $6.6 m per annum.

KEYWORDS:

• Travel cost method
• Hawkesbury–Nepean River
• Metropolitan Water Plan
• recreation value

Acknowledgements

The authors would like to acknowledge Helen Betts O’Shea who supervised the field operations and Gretta Collins, a BDA Group interviewer who during the course of fieldwork rescued four people from drowning in dangerous conditions at the Hawkesbury River and for which she was awarded a silver medal for bravery by the Governor of NSW.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. There are two variants of the TCM that take a different approach to estimation of the visitation rate. The individual form of the travel cost method can only be used where respondents who live different distances from the recreation site have a variety of visitation rates per annum to the recreation site. Where most respondents only visit a site once per year, then the visitation rate for the analysis becomes the annual visits per head of population of specified geographic zones that are different distances from the recreation site. The TCM questionnaire for this study allowed for both approaches. However, with data indicating a variety of visitation rates from survey respondents, the individual TCM was adopted.

2. Further adjustments to truncated models can be made to address endogenous stratification (see Melichar 2011). Endogenous stratification is where those who visit more frequently are more likely to be sampled than an occasional visitors. However, this study primarily underook blanket sampling of all visitors during the survey period and hence endogenous stratification is less likely to be an issue. Melichar (2011) has found that failure to address endogenous stratification where it occurs results in underestimation of consumer surplus.

3. This may reflect the small sample size for Sackville Ski Park.

4. It is acknowledged that the economic value of contingent visits may be an upper-level estimate of the economic value of these visits as the TCM questionnaire did not elicit information on the activities the respondent would be giving up to increase visitation to the subject sites. However, this approach is consistent with the ceteris paribus assumption of cost–benefit analysis.

Additional information

Funding

The work was funded by NSW Department of Finance and Services.