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    Question

    The Travel Cost Method (TCM) is a Revealed Preference

    Method. What type of environmental good or service is it typically used to value, and what actual consumer expenditure is used as the proxy for price?
    A Used to value existence value of wildlife; proxy is government conservation spending. Correct Answer Incorrect Answer
    B Used to value recreational sites (e.g., parks, beaches); proxy is the time and money costs incurred by visitors to travel to and from the site. Correct Answer Incorrect Answer
    C Used to value public goods like clean air; proxy is the cost of air filters. Correct Answer Incorrect Answer
    D Used to value commercial resources like timber; proxy is the market price of the timber. Correct Answer Incorrect Answer

    Solution

    Solution: The Travel Cost Method is used to estimate the demand for and the economic value of non-market environmental amenities, primarily recreational sites. Since there is no direct admission price, the TCM uses the expenditure on travel (fuel, accommodation, and the opportunity cost of time) as the varying price to establish the demand curve for the site's services.

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