The Value of Time:

Combining Revealed and Stated Preference Data

to Estimate Environmental Benefits

Dietrich Earnhart

Department of Economics

University of Kansas

213 Summerfield Hall

Lawrence, KS 66045


Abstract: This paper explores the proper valuation of time when estimating the demand for recreational goods where time costs represent a substantial portion of the "purchase price". To estimate recreational demand, this paper employs revealed preference data and the associated analytical method -- travel cost analysis -- and stated preference data and the associated analytical method-- contingent behavior analysis. The contingent behavior analysis considers hypothetical increases in access fees, travel time, and travel distance. Based on the responses to these contingencies, this analysis improves the monetary valuation of time costs using the effect of increased access fees as the monetary benchmark. As strong evidence of this improvement, implementing the adjusted time costs in the regression system greatly improves the consistency between the parameters of the revealed preference and stated preference data sets. This implementation also improves the consistency between levels of demand and changes in demand. Similarly, this paper improves the valuation of transportation-related costs.


I wish to thank several people for their guidance and assistance. I thank Todd Abplanalp and Marian Martinez-Pais for their excellent research assistance. I thank Nathan Knust for prompting my exploration of this issue. I thank Don Lien and De-Min Wu for their statistical guidance. I thank the US Army Corp of Engineers -- Clinton Lake project office and the Clinton State Park office for their support and assistance. Finally, I thank V. Kerry Smith, Michael Hanemann, Cathy Kling, and Ju-Chin Huang for expanding my understanding and encouraging my exploration. All errors remain my own.