Question

There are several environment and resource valuation methods. Explain the Travel-cost method using an example of natural resource.

Answer 1

Travel cost method is one of the methods of the economic valuation of something that cannot be measured with the help of market prices. It is used in cost benefit analysis.

It is that method which can help to value the environmental goods by observing how much people are willing to pay for the goods related.

For example, with the help of travel cost method, the estimation of economic value of a natural park can be done. For this purpose, full travel costs like time, appicable fee of visiting the natural park is taken into consideration. On the basis of this cost, how much people are willing to visit the park, the economic value is estimated.