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Travel Cost Method
The travel cost method of economic valuation, travel cost analysis, or Clawson method is a revealed preference method of economic valuation used in cost–benefit analysis to calculate the value of something that cannot be obtained through market prices (i.e. national parks, beaches, ecosystems). The aim of the method is to calculate willingness to pay for a constant price facility. The technique was first suggested by the statistician Harold Hotelling in a 1947 letter to the director of the National Park Service of the United States for a method to measure the benefit of National Parks to the public. The method was further refined by Trice and Wood (1958) and Clawson (1959). The technique is one approach to the estimation of a shadow price. Methodology The general principle is that individual visitors spend varying amounts of time and money to access a particular resource. The further away an individual from the resource, the more time and money they spend and the less frequent is ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Revealed Preference
Revealed preference theory, pioneered by economist Paul Anthony Samuelson in 1938, is a method of analyzing choices made by individuals, mostly used for comparing the influence of policies on consumer behavior. Revealed preference models assume that the preferences of consumers can be revealed by their purchasing habits. Revealed preference theory arose because existing theories of consumer demand were based on a diminishing marginal rate of substitution (MRS). This diminishing MRS relied on the assumption that consumers make consumption decisions to maximise their utility As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosopher .... While utility maximisation was not a controversial assumption, the underlying utility functions could not be measured with great certainty. Revealed preference ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
