Allowing for multiple-site visitors in travel cost analysis

Travel cost analysis is one method of non-market valuation whose application to recreational sites and facilities is widely reported in economic literature. A recurring problem is the treatment of joint-consumption benefits when travel costs are shared between more than one site which, if ignored, would lead to overestimation of the consumer surplus value for the particular site being examined. A search of the literature reveals a variety of modifications to the travel cost method suggested to handle this problem, none of which are universally accepted as unambiguously superior to the others. A feature in common with all these modifications is that they adjust the travel cost variable to account for multiple-site trips, but such adjustments may worsen the predictive ability of the model. They are also only possible when sufficient data are available on visits to other sites, but these data are often difficult to collect when using a single-site questionnaire. This paper describes the application of travel cost analysis to a case study, the evaluation of the economic benefits of Whakapapa Skifield in New Zealand, in which, because of the physical conditions encountered and the peculiarities of visitor patterns, the non-observability of visits to other sites produced acute problems for the analysis. It is suggested that, in such circumstances, an alternative method of allowing for multiple-site visits is to adjust the consumer surplus estimate by using a trip index which relates the site visit to the total time away from home on a trip.