Question

Allowed 3 questions please answer all 3
1.
The travel cost method is likely to: Select one: a. be used to ascertain the bequest and existence value of an environmental good. b. overstate the value of an environmental good because it includes round trip transportation costs. c. understate the value of an environmental good because it does not include use value. d. understate the value of an environmental good because it does not include non-use value O

2.

3.

Answer 1

Ans 1: D: Travel cost method involves calculation which tend to ignore non use value of a good and hence, end up underestimating the overall value. The non use value of a good is often uncalculated through this method due to the implicit nature of values and calculation

Ans 2: D: In this method, Hedonic pricing calculates value of goods which do not have market prices available but we need to find there values so as to calculate prices of goods.

Ans 3: C: Hedonic pricing involves calculation of consumers willingness to pay for additional improvement in environment and its characteristics.