Environmental and Resource Economics

, Volume 17, Issue 1, pp 89–108 | Cite as

Estimating Recreation Preferences Using Hedonic Travel Cost and Random Utility Models

  • Linwood Pendleton
  • Robert Mendelsohn


Over the last decade, several authors have questioned thevalidity of the hedonic travel cost model, arguing instead that the random utility model is a superior method forvaluing recreational site attributes. This paper demonstrates that the two methods emanate from a similar utilitytheoretic framework; yet in practice these methods differ in the assumptions made in their application.Constraining the underlying utility functions to be consistent, both models are applied to the valuation ofrecreational site attributes in the Southeastern United States. The way in which each method estimates preferencesfor site attributes is shown to depend critically on the method and the functional form of theunderlying utility function.

hedonic travel cost RUM recreation demand 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. AAA (1992), ‘Your Driving Costs’, American Automobile Association Public Affairs Publications. Heathrow, FL.Google Scholar
  2. Anderson, S., A. de Palma and J. Thisse (1992), Discrete Choice Theory of Product Differentiation. Cambridge, MA: The MIT Press.Google Scholar
  3. Arguea, N. M. and C. Hsiao (1993), ‘Econometric Issues of Estimating Hedonic Price Functions’, Journal of Econometrics 56, 243-267.Google Scholar
  4. Bockstael, N. (1997), ‘Travel Cost Models’, in D. Bromley, ed., Handbook of Environmental Economics. Cambridge, MA: Blackwell Handbook in Economics.Google Scholar
  5. Bockstael, N. and I. Strand (1987), ‘The Effect of Common Sources of Regression Error on Benefit Estimates’, Land Economics 63(1), 11-20.Google Scholar
  6. Bockstael, N., W. M. Hanemann and C. Kling (1987), ‘Estimating the Value of Water Quality Improvements in a Recreational Demand Framework’, Water Resources Research 23, 951-960.Google Scholar
  7. Bockstael, N., K. McConnell and I. Strand (1991), ‘Recreation’, in J. Braden and C. Kolstad, eds., Measuring the Demand for Environmental Quality. North-Holland: Amsterdam.Google Scholar
  8. Brown, G. and R. Mendelsohn (1984), ‘The Hedonic Travel Cost Method’, Review of Economics and Statistics 66, 427-433.Google Scholar
  9. Cropper, M., L. Deck, N. Kishor and K. McConnell (1993), ‘Valuing Product Attributes Using Single Market Data: A Comparison of Hedonic and Discrete Choice Approaches’, Review of Economics and Statistics 75(2), 225-232.Google Scholar
  10. Englin, J. and R. Mendelsohn (1991), ‘A Hedonic Travel Cost Analysis for Valuation of Multiple Components of Site Quality: The Recreation Value of Forest Management’, Journal of Environmental Economics and Management 21, 275-290.Google Scholar
  11. Freeman, M. (1993), The Measurement of Environmental and Resource Values: Theory and Methods. Resources for the Future.Google Scholar
  12. Hanemann, M. (1984), ‘Discrete-continuous Models of Consumer Demand’, Econometrica 52, 541-561.Google Scholar
  13. Hausman, J. (1981), ‘Exact Consumer's Surplus and Deadweight Loss’, The American Economic Review 71(4), 662-676.Google Scholar
  14. Hausman, J., G. Leonard and D. McFadden (1995), ‘A Utility-Consistent, Combined Discrete Choice and Count Data Model: Assessing Recreational Use Losses Due to Natural Resource Damage’, Journal of Public Economics 56, 1-30.Google Scholar
  15. Kaoru, Y, V. Smith and J. Liu (1995), ‘Using Random utility Models to Estimate the Recreational Value of Estuarine Resources’, American Journal of Agricultural Economics 77, 141-151.Google Scholar
  16. LaFrance, J. T. (1985), ‘Linear Demand Functions in Theory and Practice’, Journal of Economic Theory 37, 137-166.Google Scholar
  17. Lancaster, K. (1966), ‘A New Approach to Consumer Theory’, Journal of Political Economy 74(2), 132-157.Google Scholar
  18. McFadden, D. (1978), ‘Modeling the Choice of Residential Location’, in A. Karlquist, L. Lundquist, F. Snickers and J. Weibull, eds., Spatial Interaction Theory and Planning Models, pp. 75-96. North-Holland: Amsterdam.Google Scholar
  19. Mendelsohn, R. (1984), ‘An Application of the Hedonic Travel Cost Framework for Recreation Modeling to the Value of Deer’, Advances in Applied Microeconomics 3, 89-101.Google Scholar
  20. Mendelsohn, R. (1985), ‘Identifying Structural Equations With Single Market Data’, Review of Economics and Statistics 67, 525-529.Google Scholar
  21. Mendelsohn, R. (1987), ‘A Review of Identification of Hedonic Supply and Demand Functions’, Growth and Change 18(1), 82-92.Google Scholar
  22. Morey, E., R. Rowe and M. Watson (1993), ‘A Repeated Nested Logit Model of Atlantic Salmon Fishing’, American Journal of Agricultural Economics 75, 578-592.Google Scholar
  23. Parsons, G. and M. Kealy (1992), ‘Randomly Drawn Opportunity Sets in a Random Utility Model of Lake Recreation’, Land Economics 68(1), 93-106.Google Scholar
  24. Parsons, G. and M. Needleman (1992), ‘Site Aggregation in a Random Utility Model of Recreation’, Land Economics 68(4), 418-433.Google Scholar
  25. Pendleton, L. and R. Mendelsohn (1998a), ‘Estimating the Economic Impact of Climate Change on The Freshwater Sportsfisheries of the Northeastern United States’, Land Economics 1998 74(4), 483-497.Google Scholar
  26. Pendleton, L., B. Sohngen, R. Mendelsohn and T. Holmes (1998b), ‘Measuring Environmental Quality in the Southern Appalachian Mountains’, Forest Science 1998 44(4), 603-609.Google Scholar
  27. Pudney, S. (1989), Modelling Individual Choice. Oxford: Blackwell.Google Scholar
  28. Randall, A. and J. Stoll (1980). ‘Consumer's Surplus in Commodity Space’, American Economic Review 70(3), 449-455.Google Scholar
  29. Rosen, S. (1994), ‘Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition’, Journal of Political Economy 82, 34-55.Google Scholar
  30. Smith, V. K. and Y. Kaoru (1987), ‘The Hedonic Travel Cost Method: A View From the Trenches’, Land Economics 63, 779-792.Google Scholar
  31. Smith, V., R. Palmquist and P. Jakus (1991), ‘Combining Farrell Frontier and Hedonic Travel Cost Models for Valuing Estuarine Quality’, Review of Economics and Statistics 73(4), 694-699.Google Scholar
  32. USDA (1993). ZIPFIP: A ZIP and FIPS Database. Created by D. Hellerstein, D. Woo, D. McCollum, and D. Donnelly.Google Scholar
  33. Willig, R. (1976), ‘Consumer's Surplus Without Apology’, The American Economic Review 66(4), 589-597.Google Scholar

Copyright information

© Kluwer Academic Publishers 2000

Authors and Affiliations

  • Linwood Pendleton
    • 1
  • Robert Mendelsohn
    • 2
  1. 1.The University of Southern CaliforniaLos AngelesUSA
  2. 2.Yale School of Forestry and Environmental StudiesNew HavenUSA

Personalised recommendations