THE ECONOMIC VALUE OF HIKING: FURTHER CONSIDERATIONS OF OPPORTUNITY COST OF TIME IN RECREATIONAL DEMAND MODELS

The paper tests two alternative specifications for the opportunity cost of time in travel cost models. The standard travel cost survey design is enriched to include a contingent valuation type question about peoples' willingness to accept compensation to forgo a precisely defined recreational experience. It is hypothesized that individually revealed value of time more appropriately reflects the opportunity costs of time associated with a particular aspect of recreation than the wage rate which measures the trade-off between work and leisure generally. The results seem to indicate a better overall fit for the models with the elicited value of individual consumer's time than for the models with the more traditional hourly earnings (wage rates). The importance of the corrected measurement of the opportunity cost time is illustrated by showing that estimated consumer surpluses based on two different value of time measurements differ significantly.