Using Contingent Behavior and Contingent Pricing Analysis to Improve the Valuation of Travel Cost Components

 

 

 

Dietrich Earnhart

Department of Economics, University of Kansas, 213 Summerfield Hall

Lawrence, KS 66045

Phone: 785-864-2866; Fax: 785-864-5270

Earnhart@ukans.edu

Centre for Economic Policy Research (CEPR) Research Affiliate

William Davidson Institute (WDI) Research Fellow

 

ABSTRACT

 

This paper uses contingent behavior and contingent pricing analyses to explore the proper valuation of time and transport costs within the context of recreation demand. The contingent behavior analysis poses hypothetical increases in access fees, travel time, and travel distance and considers recreation demand responses. As a useful complement, the contingent pricing analysis poses hypothetical decreases in recreation demand and then asks respondents to state the associated increases in travel costs in terms of the same three components. In particular, the contingent pricing analysis poses decreases that eliminate current demand levels (e.g., generate zero demand) and respondents state demand-choking cost increases. By comparing time-related responses and distance-related responses to fee-related responses, the two analyses estimate the proper valuation factors for time and transport components.

Keywords: Recreation, Travel Cost, Contingent Behavior, Contingent Pricing

JEL Classification Numbers: Q26, D12