Valuation of trips to second homes: do environmental attributes matter?

Abstract

We use Finnish data to estimate the extent of the recreation benefits obtained from visits to second homes. Special emphasis is placed on how environmental attributes of second homes influence the recreation value of visits. The impacts are valued using the travel cost method. We estimate the recreation value to be about approximately €170– 205 per trip. The aggregate non-market benefits of the use of the current summer home stock are considerable – approximately €500 million per annum. The presence of algae that prevent aquatic recreation decreases the value per trip by 40%, and the lack of a beach reduces it by 45%; electrification increases the value by 3–5%. These impacts should be balanced against the social costs of second homes when designing environmental policies on leisure-time housing.

Keywords:

• travel cost
• recreation
• water quality
• benefits
• Finland

Notes

1. The significance of the summer home phenomenon in rural areas is supported by the statistics of second homes. According to Müller (2007), there are about approximately 1.5 million summer homes in the Nordic Countries. In the United Kingdom, the number has been estimated to be 250,000 (Gallent and Tewdwr-Jones 2001), in Germany 230,000 (Newig 2000, according to Dijst, et al . 2005) and in the USA 3,580,000 (U.S. Census Bureau 2004). Regarding the Russian dacha phenomenon, see, e.g. Struyk and Angelici (1996).

2. Non-use values refer to values that people derive from the environment independently of any use. For example, an individual may value the environment simply because it exists. (O'Garra 2009).