Combining Farrell Frontier and Hedonic Travel Cost Models for Valuing Estuarine Quality
Review of Economics and Statistics
This paper extends the Brown-Mendelsohn hedonic travel cost (HTC) model by estimating the travel cost function for each recreationist as a technically efficient frontier. It also constrains the marginal prices for desirable characteristics to be non-negative. The model is used to value improvements in the quality of sport fishing in the Albermarle-Pamlico Estuary in North Carolina. The application compares the performance of the frontier HTC with ordinary least squares estimates and finds the former to be free of problems identified in the literature and to provide more plausible and robust benefit estimates for quality improvements.
Smith, V. Kerry, Raymond B. Palmquist and Paul M. Jakus. 1991. “Combining Farrell Frontier and Hedonic Travel Cost Models for Valuing Estuarine Quality.” Review of Economics and Statistics, 73(4):694-699.