Answer-The Travel Cost Method (TCM) is a Revealed Preference Method. What type of environmental good or ser...

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 sites services.

Question

The Travel Cost Method (TC

M 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.

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.

C Used to value public goods like clean air; proxy is the cost of air filters.

D Used to value commercial resources like timber; proxy is the market price of the timber.

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