A comparison of market and non-market methods of estimating the demand for and benefits of outdoor recreation

Abstract

Public investment in the production of outdoor recreation requires estimates of user benefits for informed decision making. Recreation often has no market price so that alternative methods of estimating demand for and benefits of recreational use of non-market goods have been developed. The relationship of these methods to market benefits has not been established. This study utilizes the market for deer hunting leases in Texas as a basis of comparison for two non-market methods, the travel cost and hypothetical market method. A questionnaire was utilized to obtain the information required for each method. Demand functions and benefits were estimated for lease site hunters by utilizing market lease prices and travel cost. Market demand predicted greater quantities and benefits than did the travel cost methods. It was found that the assumption of fixed length of stay required by the travel cost method did not hold for deer hunters. Length of stay varied significantly among users and increased with distance to the site. It was felt that longer stays probably were used as substitutes for additional visits. For those recreation sites visited repeatedly in a given time period and for which time spent at the site can be varied, significant differences in response to travel cost increases and site use fees could be expected. In such cases travel cost estimates should be adjusted for days spent at a site by recreation groups. Little variation in willingness to pay values was explained by income, travel costs, lease costs or site quality. This would tend to cast doubt on the validity of responses to noniterative valuation questions as measures of willingness to pay. Results from the use of willingness to pay values as components of all-or-nothing payments was mixed. All-or-nothing payments were significant in the equation estimated for free site hunters but not for lease hunters.