Review of outdoor recreation economic demand studies with nonmarket benefit estimates, 1968-1988

Abstract

While issues in estimating nonmarket values continue to cause concern, resource economists now have more reason to be optimistic than ever before.More progress toward improved measurement has been made in the past five years than in the previous quarter century since development of the contingent valuation and travel cost methods.The new challenge is to learn how to adjust past studies to est1mate nonmarket values for future policy analysis.The process involves developing an understanding of the important variables that explain the observed differences in estimates.This paper illustrates how the results thus far could be adjusted to develop some tentative estimates of the recreation use value of Forest Service resources.We updated and eval uated a previous l1terature review that adjusted reported benef1ts for omission of the opportun1ty cost of travel t1me, sample truncation to instate residents, and use of the ind1vidual observation approach.The travel time adjustment is supported by the regression results and the other adjustments arEl less than indicated by the coefficients.Overall, they did not significantly change average benefit estimates because of offsetting effects.Recently, fewer studies have required adjustments for these reasons.Newer methods of contro l"li ng for the effects of these and rel ated variations in estimation give reason to believe that it may be possible to resolve many of the problems of information transfer for policy app11cation in the future.These include adjusting for variation in the treatment of monetary and time cost of travel, substitution, site quality, and the functional form used in TCM applications.CVM problems include adjusting for variations in the method of payment, functional form used to analyze dichotomous choice questions, and information on resource quality, uncertainty, and substitution possibilities.In both the TCM and CVM approaches, the tie between consumer theory and statist1cal estimation is being improved via use of discrete choice and qualitative response models, with maximum likelihood statist1cal techniques.In the future, more research projects should provide for the translation of findings to answer po11cy questions.Most of the studies reviewed here were designed to answer a specific question at a particular recreation site.As a result, certain types of research on some recreation activities have claimed substantial amounts of public support although they offer little prospect of affecting a basic change in recreation opportunities for the future.In those instances, there may be new lines of emphasis which promise larger returns.The new problem becomes to design dual purpose studies, with a d1rect use in po11cy application at the study sites and an indirect use to answer policy questions at other times and places.