Exam 2

Question 1

stated preference

Answer 1

contingent valuation method: people explicitly state how much they are willing to pay or accept for a change

Question 2

revealed preference

Answer 2

• travel cost method: valuation of site-based amenities are implied by costs people incur to enjoy them
• hedonic methods: the value of service is implied by what people are willing to pay for the service through purchased in related markets (housing markets usually)
• avoidance or damage costs: valuation on the basis of the cost incurred to avoid damage

Question 3

travel cost method

Answer 3

revealed preference method using travel time and distance as a measure of WTP

Question 4

TCM variables

Answer 4

• dependent: a measure of the quantity of trips/recreation demanded
• independent: travel time and travel costs (opportunity costs)

Question 5

zonal tcm

Question 6

individual tcm

Question 7

how are tcm models estimated?

Answer 7

through multiple regression analysis, different people have different wage structures and recreation time gets structured around work schedules for people

Question 8

what coefficients are significant in a tcm?

Answer 8

travel cost = _time (wage/3)+2* distance* cost/mile

• # of trails = 0.2, meaning there would be 0.2 additional trips made per additional unit of trails

Question 9

if boating access increases how will demand shift?

Answer 9

outward to the right

Question 10

hedonic property method

Answer 10

uses purchase of related goods (housing market) or wages to infer the value of some attribute or no market good

Question 11

house prices reflect:

Answer 11

proximity to some amenity such as a park, open space, lake, visual or ecological conditions

Question 12

how do we use wages for the hedonic property method?

Answer 12

can compare wages for similar work in areas with high and low amenities

Question 13

how is the hedonic property method estimated?

Answer 13

multiple regression analysis

house price = f(location, square footage, year built, nearby rec amenities)

COEFFICIENTS ARE IMPLICIT PRICES FOR EACH OF THE ATTRIBUTES OF THE HOUSE

Betas are WTP for one more unit of X in a house or a property

Question 14

contingent valuation method

Answer 14

stated preference method using a direct interview or survey method to ask a sample of the population affected that their max WTP is continent on a hypothetical change in recreation or resources

Question 15

CVM:

Answer 15

can be used to estimate non-use values and values for the non-recreation benefits of sites

Question 16

payment vehicles ex:

Answer 16

• increased trip costs: would make CVM results most comparable to TCM
• higher entrance fees
• taxes
• increased hunting or fishing license fees
• utility bills: useful to value increased water or air quality

Question 17

methods of payment;

Answer 17

payment vehicle: describes how the person being surveyed would like to pay if willing, should elicit honest answers and true max WTP

Question 18

question format summary

Answer 18

open ended, payment card, iterative bidding, dichotomous choice

Question 19

issues with contingent valuation

Answer 19

people may try to write a strategic response, bias, people not wanting to answer

Question 20

which valuation method should you use?

Answer 20

• TCM: for valuing existing sites and attributes, not applicable if the site doesn’t require relevant travel distance or time
• CVM: for existing and planned sites
  —-for non-use benefits where a person doesn’t need to visit the site to appreciate the benefit