Question

1. Suppose we want to use the zonal travel cost model to estimate the total recreational benefits generated by Green Lakes (or the total value the visitors assign to this park). Let's also assume that each of the visitors pay an admission fee of $10, and all the visitors come to the area from 3 different zones. The AAA in its annual report mentions that for all three zones, the vehicle operating costs (gas, insurance, depreciation) are $1 per mile. Assume that each individual travels alone. The following table summarizes the information collected: Zone Round Round trip trip in in Hours Miles 100 .5 30 1.5 80 2 Opportunity cost of time ($/hr) 20 25 20 Average number of trips per person per year 30 20 10 Average number of visitor per year 300 200 150 1.a. Using the information provided, determine the total cost per person per visit to the recreational area. 1.b. Determine the TWTP per individual, per year, per zone, and TWTP per zone and TWTP to visit the park. 1.c. What is the value assigned to this park by the visitors? 1.d. If, for some reasons, the authorities decide to close this park, or not to allow visitors to access the park, what would be the total loss in visitors' net benefits?

Answer 1

Solution : (1) Given Visitors admissim fee = $10 OL = $1 permile. Given informatim is oc Roundtrip in miles Aug noof Round trip in Hrs Augnoof visitors trips 300 300 200 A B c 10 30 80 05 20 30 1.5 25 20 a lo 150 per visit to the recreational (a) The total cost per person area is : Tofaloc Admission total cost / visit Zone $20 A $10 $10 $30 8 890:

(b) total willing nesh to pay per individual, per zone, and in total to visit park: - Total willingness = {810 (per individual) Then one wire willingness : Jone A = 30 + 300 89000) (total-famps), totalwilling = 1890000 Zone Bi = 20* 200 = 84000) (total trips), totalwilling = 84000) zone ci 15000] = 10*150 = ($1500] Gotal trips), Total willing = Total willingness from all zones = 9000ot 40000 +15060 = (145000 6 value assigned to this park by visitors admission fee of park I value offigned = = ($10

@ folal Coil in visitors net benefits is: - Total loss if pork is closed by the authorities] and not allow visitors to a crey Park =1814500g) - O-