Estimating the Value of Urban Forests Using the Travel Cost Method

Willingness of User to Pay

When evaluating a site, the public’s willingness to pay to use it can be compared to the cost of providing the opportunity. This is the essence of benefit-cost analysis. Benefits to users can be measured by their willingness to pay for use of the site, and costs can be measured by the expenses and foregone opportunities incurred in providing for that use. If benefits exceed costs, the site has passed the benefit-cost test for economic efficiency. It is not necessary for users to actually pay for the benefits received; but only to indicate that the benefits received are sufficient to justify the needed expenditure.

Some caution is necessary here. The willingness of users to pay for a site is only a part of the picture. Nonusers are also important because they often place significant values on just knowing that trees and forests are available for others or their own use. In addition, numerous other reasons exist for providing urban trees and forests besides the benefits for on-site users. Consequently, estimates of willingness to pay for visiting a site should be used carefully when evaluating urban forest sites and associated programs because the values to on-site users is only part of the total site value.

The Travel Cost Method

The travel-cost method of estimating the willingness to pay for site use is based on the assumption that individuals react in the same way to both entry fees and travel costs to a site. Individuals living at varous distances from a site face different travel costs to the site. Those who live close face lower travel costs, and they are more likely to use the site and use it more frequently than those who live farther away. The travel cost model assumes that when individuals who previously used a site at no charge are faced with a site entry fee, they will reduce their use of the site to the level of those who live farther away and face a travel cost equivalent to the travel cost plus entry fee. For example, individuals who previously incurred a travel cost of $5 and no entry fee will, when now faced with an entry fee of $2, reduce the number visits to the level of individuals farther away who previously faced a travel cost of $7 and were charged no entry fee. Applying this reasoning to all the users of the site, the level of use can be estimated with the (hypothetical) $2 entry fee.

By assuming successively higher entry fees, it is possible to estimate use for a whole range of entry fees. In this way a demand curve can be estimated for the site, i.e., a graph showing how many visits the site will receive for each possible entry fee. Procedures for estimating the site demand curve are detailed by Dwyer et al. (1977).

The total willingness of people to pay for use of the site is represented by the area under the site demand curve. The average value of a visit can be determined by dividing total willingness of users to pay for the site by the total visits. The site demand curve can also estimate use under alternative fees per visit. This information is becoming increasingly valuable because user fees are being given closer scrutiny as a management tool and a means of generating revenue.

An Application to Urban Forest Resources

The travel cost method was used to estimate the willingness of people to pay for visiting three sites in the Chicago metropolitan area; Morton Arboretum, Lincoln Park Conservatory, and Garfield Park Conservatory. It is not appropriate to present details of the procedures here. For a discussion of data collection and model estimation, see Darragh et al. (in press). Those models were used to derive values according to the procedures outlined by Dwyer et al. (1977). Average willingness of users to pay for a visit were as follows:

These results are presented to indicate the substantial values generated by urban forest sites. In interpreting the specific estimates, it is important to note that a number of factors other than the characteristics of the site will influence the estimates of average willingness of users to pay. The Lincoln Park Conservatory is part of a cluster of attractions that include a zoo, a large park, and the shore of Lake Michigan. The availability of these nearby attractions is likely to increase the ability of the site to draw users from throughout the Chicago metropolitan area, and thus increase the estimated willingness of users to pay for a visit to the site. Consequently, $12.71 is probably an overestimate of average willingness of users to pay for a visit to the Lincoln Park Conservatory. The lower estimated willingness of users to pay for a visit to Garfield Park Conservatory as compared to the Lincoln Park Conservatory is probably due, in part, to the lack of nearby attractions and the deteriorated condition of the surrounding neighborhood. Both the Lincoln Park and Garfield Park Conservatories are advertised as cultural attractions of Chicago, while the Morton Arboretum, some 30 miles west of downtown, is not; and this contributes significantly to the lower estimate of willingness of users to pay for a visit to the Arboretum.

Needed Extensions

The values reported above indicate that urbanites place substantial values on the use of three urban forest sites. However, the analysis provides no information about the influence of specific site attributes or management programs on the value of a visit. Trees, open grassy areas, recreation facilities, water, and many other site attributes may strongly influence the value of these sites to users. Furthermore, the spatial configuration of site resources, as well as the management of trees and forest resources, may strongly influence the value of a site. In many instances the important management question concerns the extent to which implementing management options will alter the willingness of users to pay for visiting a particular site.

Preliminary evidence suggests that the management of urban trees and forests can increase the desirability of a wide range of urban sites. For example, forest resources were a significant variable in models that predict which of 21 Chicago urban forest sites an individual will choose to visit. Those 21 sites include the three sites used in this study, a botanic garden, and a number of forest preserves (Peterson et al. in press). Diversity of vegetation along an urban trail is one of the important attributes that contributes to use and enjoyment of urban forest trails (Allton 1981). Trees and other vegetation in urban parks and forest preserves were the most frequently mentioned features contributing to high site quality as judged by observers viewing photographs of typical sites. (Schroeder in press). Trees ranked highest as an attractive feature in an on-site survey of users of the Forest Preserve District of Cook County. Nearby vegetation also contributes to residents’ satisfaction with the quality of multifamily housing complexes—natural wooded settings were greatly preferred. (Kaplan 1982).

These research results strongly suggest that good management of forest vegetation in recreation sites will increase users’ willingness to pay to visit the sites. If the amount of that increase can be estimated, it can be compared with management costs to determine the effectiveness of management efforts in meeting public needs.

To evaluate the effects of various urban forest resource management options on the willingness of users to pay for a site, it is necessary to gather information about the characteristics of urban forest sites that illustrate a wide range of management practices as well as information about where users come from and the distances they travel. This would permit the estimation of a model or set of models that could predict changes in the willingness of users to pay for sites caused by changes in the management of those sites. This information could be a useful guide to selecting among options for managing urban forest resources.

Developing models to estimate the willingness of users to pay for sites is different but complementary to other approaches for evaluating user preferences and values. Site characteristics found to be important to users in other studies can be built into travel cost models.

Conclusion

Use of a travel cost model to estimate the willingness of users to pay for visits to urban forest sites has demonstrated that these sites provide substantial values to users. Ignoring these values is likely to lead to inadequate and inappropriate expenditures on urban forest resource management. When funds are scarce, information from travel cost models can provide valuable guidance for urban forest management. More useful guidance can be provided when models are developed to estimate changes in the willingness of users to pay over a range of management options. Preliminary studies indicate that the development of these models is feasible, and that the contribution of urban forest resource management to user values is substantial. Although most urban tree and forest managers cannot be expected to become sufficiently skilled in travel cost techniques to estimate the models, they should be aware of their existence and usefulness. The technique is well known among economists and recreation planners and will hopefully be applied more widely to urban forest sites.