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M6 Travel Cost Method (TCM)

M6 Travel Cost Method (TCM). Travel Cost Method. The basic model of the traveling cost (Travel cost method) TCM was introduced by Hoteling (1949) First used to estimate the recreational benefits by Trice and Wood (1958)

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M6 Travel Cost Method (TCM)

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  1. M6Travel Cost Method (TCM)

  2. Travel Cost Method • The basic model of the traveling cost (Travel cost method) • TCM was introduced by Hoteling (1949) • First used to estimate the recreational benefits by Trice and Wood (1958) • Modified and estimated the recreational benefits and resources by Clawson (1959) • Currently, TCM is Widely used to: • Measure the benefit of recreation activity • Measure the benefit of TOR resources

  3. Travel Cost Method • Estimation of the value of TOR • TCM is based on observed market behaviour ‘direct out of pocket’ and ‘time cost of travel’ • The basic approach of TCM is: The number of trips to a recreation site will decrease with increases in distance traveled; other things remaining equal

  4. Travel Cost Method • Implemented the concept of the whole recreational experience (WRE) • Clawson (1959) suggest that the experience of the recreational trips to the recreation site can be obtained from the five phases; • Planning • Travel to the site • On site • Travel back from the site • Recall the experience

  5. Travel Cost Method • If the objective is to estimate the benefit or satisfaction from the TOR resource then the estimation should be focus on the phase 3 only. • If the benefits from phase 3 can be separated from the all phases (WRE), then the benefit of TOR uses can be obtained • Clawson (1959) suggests the estimation can be done by two processes: • Estimate the Pm curve for the whole recreational experience (WRE) • Derive the Pm curve for the recreation site based on the WRE Pm curve

  6. Travel Cost Method • Stage 1 • Estimating the Pm curve on stage 1 (WRE) • Relationship the number of trips (in one period) from each population origin (population centre with the distance travel) • No of trips = f(travel distance) • The Pm curve is relation to the quantity and the price of trip; • Q = f(H) • H is a price for TOR (TOR public, minimum or ‘0’ and constant for all visitor) • Travel costs • Cost/travel unit X travel distance; then the traveling cost is use for proxy price

  7. Travel Cost Method • The procedure to measure the Pm for recreation sites and resources (involve 2 stages): • Estimating an individual or per capita demand curve • Deriving the site or resource demand curve from it

  8. Travel Cost Method • Stage 1 • The objectives of the estimation of Pm curve in stage 1 are: • To show the relationship between the traveling cost (price) with the quantity demanded of TOR from each population origin • To consider the impact of population size on Pm; then the Pm quantity has been modified and become to ‘per capita trips’ (Total no of trip/origin population)

  9. Travel Cost Method • Stage2 • Derivation or estimation of the Pm curve for TOR resource on stage 2 is derive from the Pm curve in state 1 • The assumptions are based on: • If increase in entrance fee, user in each population will take their action toward a cost increased with the same pattern as increased in traveling cost • User in the population zone nearest to the TOR centre will decrease the number of trip (when the cost increased in the nearest zone) same as user living far from the population zone (constant cost)

  10. Travel Cost Method • Stage 2 • Example: • Let say the traveling cost for user in zone A is RM4 (entrance fee=0) and in zone B is RM6 (entrance fee=0) • If the entrance fee increased by RM2; cost for user in zone A=RM6; then user in zone A will reduce the trip; number of trips for user in zone A is equal to the number of trip in zone B (without entrance fee).

  11. Travel Cost Method • Stage 2 • Pm curve in stage 2 is plot with the relationship with each rate of entrance fee (additional cost) and the total number of trip from all origin population • The total number of trip shows the aggregate Pm for TOR resource centre • The estimation benefits at the TOR resource centre can be obtained by the calculation the areas under the demand curve in stage 2 in the above paid price as ‘consumer surplus’

  12. Travel Cost Method • Individual and Per Capita Method • 1 stage • Quantity demanded = (No of trip/No of Participant) x (no of participants/population) • No of trips to the recreation sites in past 12 months • Independent variable is price is usually the sum of direct out of pocket and time costs per trip • (Travel cost/vehicle)/the number of person per party • Other independent variables; SEV, quality of the resource, congestion, alternative recreation site • 2 stage • The statistical coefficients from the 1st stage are used to calculate each individual or zonal population demand

  13. Travel Cost Method • Zonal TCM • Recreation trips to a site from each zones of varying population and distances from the site entrance • Example?

  14. Travel Cost Method • Disadvantages of the TCM • The assumption stated in this model is one of the limitation • A minor change happen in TOR resource cannot be detect through this method • Inability to measure the ‘option value ’ of TOR resource to user • The Pm determinants should be included in the estimation model in order to reduce the bias effect on Pm and benefits estimation • What are the biases in TCM? • Multiple site visits? • International visitors?

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