Question

Calculate the average round-trip travel distance and travel time for each zone. Assume that people in Zone 0 have a travel distance and time of zero. Every other zone has increasing travel time and distance. Next, using average cost per mile and per hour of travel time, calculate the travel cost per trip. A standard cost per mile for operating an automobile is readily available from AAA or similar sources. Assume that cost per mile is $.30, or use the current expense rate found on the IRS website. The cost of time is more complicated. The simplest approach is to use the average hourly wage. For this example, assume it is $9 per hour (or $.15 per minute) for all zones, although in practice it is likely to differ by zone. Generate calculations using Microsoft Excel or a similar program.

Average Round-Trip Travel Distance and Travel Time Zone Round-Trip TravelRound-Trip Distance Times Travel Time Total Travel Cost/Mile (S.30) Distance Travel Time Times Cost/Minute Cost/Trip ($.15) 0 0 0 0 $4.50 9.00 18.00 0 $10.50 $21.00 $42.00 20 30 12 80 120 $24

For additional practice, add one to two more zones with additional data.

To estimate using regression analysis, use an equation that relates visits per capita to travel costs and other important variables.

From this, estimate the demand function for the average visitor. In this simple model, the analysis might include demographic variables, such as age, income, gender, and education levels, using the average values for each zone. To maintain the simplest possible model, calculate the equation with only the travel cost and visits/1,000.

Visits/1,000 = 330 – 7.755*(Travel Cost)

Answer 1

To calculate the average round-trip travel distance for each zone we multiply average travel distance for each zone by standard cost per mile i.e £0.3 per mile

For zone 0, assume a travel distance and time of zero

For zone 1, we get d= 20x0.3 =$6

Similarly, for zone 2, d=40x0.3=$12

And for zone 3, d=80x0.3=$24

where d is the average round-trip travel distance for each zone.

To calculate the travel time t for each zone, multiply average travel time for each zone by the cost of time 1.e $.15 a minute

Zone 1, t=30x.15=$4.5

Zone 2, t=60x.15=$9

Zone 3, t=120x.15=$18

Adding these two together would give the travel cost per trip for different zones.

Therefore, travel cost per trip for zone 1 is $6+$4.5=$10.5

For zone 2, $9 +$12=$21

For zone 3, $18+$24=$42

No information provided about visits so cannot estimate regression equation.