Fixed Costs and Recreation Value

Abstract

Welfare measures from travel cost models net out variable costs such as travel expenses specific to each trip. Costs that are fixed in the short run, such as expenses for equipment that is used over multiple trips, are typically ignored and implicitly netted out. The resulting net value of recreation trips, or consumer surplus, is appropriate for long‐run analysis when consumers can fully adjust their expenditures. However, in cases where some costs are difficult to adjust in the short run, such as when boat owners do not sell their boats in response to the transient effects of an oil spill, traditional consumer surplus measures underestimate the total welfare change. We explain this underestimation and show how to correct for it by adjusting traditional consumer surplus estimates upward. We illustrate our procedure using a model of recreational boating developed to assess damages from the Deepwater Horizon oil spill. In that case, accounting for boating fixed costs resulted in a 50% increase in estimated value relative to estimates of consumer surplus alone.

Distributional Effects of Entry Fees and Taxation for Financing Public Beaches

“…That is, Michiganders with higher incomes take more Great Lakes beach trips, all else equal. People with children 17 or under in their households were significantly less likely to take trips at the 5% level, a result consistent with findings for Gulf coast beaches (English et al, 2018) and boating (English et al 2019b). At a 10% level of significance, all else equal, males take more trips while those employed fulltime take fewer trips.…”

Valuing Provision Scenarios of Coastal Ecosystem Services: The Case of Boat Ramp Closures Due to Harmful Algae Blooms in Florida

“…Estimates produced by this model are biased in both directions. On one hand, the model underestimates since (1) the site-specific CS estimates in Table 3 do not jointly evaluate the closure, and, since (2) they do not account for any losses in fixed costs due to short-term closures [8]. On the other hand, the model overestimates since (1) discontinuing participation in Lee County boating is not a substitution option in the model, and since (2) there may be days where HABs cause a decline in site quality but do not fully close a ramp.…”

“…As shown in Table 3, lost value due to closure can be measured by the sum of the lost CS per choice occasion over the full choice set, which was estimated to be $ 14.63 (2009 dollars, or $17.26 2018 dollars). This approximation undervalues the loss because it does not account for the fact that multiple sites were closed at once nor does it include any losses in fixed costs during short-term closures [8], yet the approximation could overvalue the losses since the model does not allow for substitution out of boating or out of Lee County. Nevertheless, the approach does illustrate how to easily derive a reasonable estimate of losses if one does not have access to the underlying data needed to compute Equation (11).…”

“…Similar models have been successfully employed to measure these changes for a wide variety of coastal ecosystem services [3][4][5][6][7]. As mentioned by [8], the model contributes to the relatively thin existing literature valuing recreational boating.…”

Modelo teórico microeconômico do consumo de turismo

“…Essa característica não é prevista pela teoria microeconômica básica, que trata de bens individuais. A segunda característica relevante é a natureza dicotômica de alguns itens relacionados à realização de uma viagem (English, Herriges, Lupi, McConnell & von Haefen, 2019). O transporte para o destino, por exemplo, pode ser consumido ou não, mas não se presta ao consumo fracionário.…”