The Individual Travel Cost Method with Consumer-Specific Values of Travel Time Savings

The treatment of the opportunity cost of travel time in travel cost models has been an area of research interest for many decades. This analysis develops a methodology to combine the travel distance and travel time data with respondent-specific estimates of the value of travel time savings. The individual travel time values are elicited with the use of discrete choice stated preference methods. The travel time valuation procedure is integrated into the valuation exercise to create a two equation structural model of site valuation. Since the travel time equation of the structural model incorporates individual preference heterogeneity full structural model provides a travel cost site demand model based upon individualized values of time. The methodology is illustrated in a study of recreational birdwatching, more specifically, visits to a stork village in Poland. We show that the usual practice of basing respondents’ value of travel time savings on their wage rate is largely unfounded.