Estimating Recreational Value of Foy's Lake: An Application of Travel Cost Count Data Model for Truncated Zeros

Abstract

Abstract:To estimate the recreational value provided by the Foy's Lake annually using the most applicable model for on-site data is the main objective of this study. Adhere to the objective of this study; Individual Travel Cost Method (ITCM) has been applied and Zero Truncated Poisson Regression Model has been found plausible among other models to estimate consumer surplus. Based on the findings of the study, an estimate of the consumer surplus or recreational benefits per trip per visitor can be recommended as BDT 5,875 or US $ 73.44 and counting the consumer surplus per trip per visitor, the annual recreational value (total consumer surplus) provided by the lake is found to be BDT 321 million or US $ 40.2 million.

Estimating the recreational use value of Tis-Abay Waterfall in the upstream of the Blue Nile River, North-West Ethiopia

“…The total travel cost, which comprises transportation, accommodation, and opportunity costs of time, is the fundamental explanatory variable in our ZTP model, as the model's foundation relies on the hypothesized relationship between trip frequency for recreation and travel costs as a proxy for the price of accessing the site ( Haab and McConnell, 2002 ). As hypothesized, the travel cost coefficient estimate is significant and negative, indicating an inverse relationship with the count of recreation trips ( Blayac et al, 2012 ; Alam and Hossain, 2017 ; Bigirwa et al, 2021 ; Shah and Islam, 2021 ). An indirect relationship between travel cost and trip frequency is in line with the quantity demanded and price relationships in the basic theory of consumer behavior ( Varian, 2014 ), which implies a higher travel cost results in a lower level of trips for recreation and vice versa ( Blayac et al, 2012 ; Bigirwa et al, 2021 ).…”

“…Based on the regression results, the T c coefficient (T c = -0.004) is a statistically significant correlate of estimated values resulting from hypothesized changes in the quality of the waterfall. Changes in the mean count of recreational trips and the annual number of visitors are also associated with these simulated changes ( Parsons , 2003 , 2013 ; Alam and Hossain, 2017 ).…”

“…Integrating the inverse demand function between one and the estimated mean trip ( λ =1.39), the recreational value of Tis-Abay Waterfall is estimated to be $198.7 for the average number of visits, and the recreational value of the site per visit per person is estimated to be $142.9. Consequently, the estimated annual recreation value of Tis-Abay Waterfall is roughly $9.5 million (based on total visitor registrations for the 2019 fiscal year, for which the survey was undertaken) ( Parsons, 2003 ; Alam and Hossain, 2017 ).…”

“… Poor and Smith (2004) and several other subsequent studies have shown the cost of recreation given by the travel cost estimate is inversely related to the demand for recreation. Thus, its sign is expected to be negative and significant ( Poor and Smith, 2004 ; Blayac et al, 2012 ; Alam and Hossain, 2017 ; Bigirwa et al, 2021 ; Shah and Islam, 2021 ).…”

“…The indefinite integral form is given by equation (18) ( Khoshakhlagh et al, 2013 ; Perman et al, 2013 ). And the estimation of the CS per person per trip is carried out with a formula: where is the regression coefficient associated with the travel cost variable ( Parsons, 2003 ; Alam and Hossain, 2017 ). Equation (19) shows the CS per trip is the inverse of the travel cost coefficient.…”