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APPLICATION OF TRAVEL COST METHOD
SAIDPUR VILLAGE
ABSTRACT
Find the monitory value of a non-marketed
commodity
Application of Travel Cost Method
Main purpose of
this research
ABSTRACT
• One of the favorite picnic place in Islamabad
• Situated on the slope off Margalla Hills
• One of the oldest villages of Pakistan
• Questionnaire survey • Data was analyzed• The willingness to pay • Demand curves
INTRODUCTIONSAIDPUR VILLAGE: AN OVERVIEW
• Situated on the slopes of Margalla Hills • Oldest villages of Pakistan• Known for its heritage, history and folklore• Major tourist attractions • Local and foreign visitors • Signs of a contrasted culture
RESTAURANTS
DES PARDES
THE POLO LOUNGE
Café 99
ANDAAZ
HINDU TEMPLES AND GURDWARA
TRAVEL COST METHOD
• The travel cost method (TCM) was first represented by Hotelling (reported in Prewitt, 1949)
• It is used to value sites that are used for recreation, though it can be used for any “destination” that is used as an amenity.
METHODOLOGY
FIELD SURVEY OF VISITORS
• The information was collected by conducting an on-site survey of visitors to the Saidpur Village by designing the questionnaires.
• A sample size of 10 was selected
• It asked about the visitors, mode of transportation used, travel expenses, miscellaneous expenses at the site, income group, time spent at the village and other data required for the travel cost analysis
MODE OF TRANSPORTATION USED BY VISITORS OF SAIDPUR VILLAGE:
70%
30%
Car
Bike
DATA ANALYSIS
INCOME GROUPS OF VISITORS TO SAIDPUR VILLAGE
In our questionnaires, we asked the visitors to choose from among the three income ranges to which they belong. These are:o < Rs.10, 000/-o 10,000-30,000/-o >30,000/-
<10,000
10,000-30,000
>30,000
0 1 2 3 4 5 6 7 8
No.of Visitors
No.of Visitors
Income in rupees
People prefer other recreational sites more than the Saidpur village
40%
60%
Preference of Substitute SitesNo Yes
90% of the visitors were visiting the site only for the sake of recreation while just 10% were there for
some other purpose.
90%
10%
Purpose of VisitRecreation Other
Visitor Distance Travelled(km)
Fuel Cost for Distance travelled (Rs.)
Entrance Fee (Rs.)
Total Travel Cost (Rs.)
A 48 2000 0 2000
B 50 2100 0 2100
C 28 1000 0 1000
D 150 3000 0 3000
E 20 700 0 700
F 24.1 800 0 800
G 160 3100 0 3100
H 200 4000 0 4000
I 9 250 0 250
J 48 2000 0 2000
ESTIMATION OF TRAVEL COST
TOTAL TRAVEL COST PER YEAR
Visitor Fuel Cost per visit No. of visits per year Total travel cost per year (Rs.)
A 2000 5 10,000
B 2100 6 12,600
C 1000 1 1000
D 3000 1 3000
E 700 6 4200
F 800 6 4800
G 3100 4 12,400
H 4000 6 24,600
I 250 1 250
J 2000 3 6000
ESTIMATION OF TIME COST
We can determine the time cost by knowing the earning of an individual during the time which he/she is spending in their visit to the recreational site.
Suppose: Earning in 23 days (Excluding holidays) = Rs.10,000/-So, earning in 1 day = 10,000/23 = Rs.434/-So, if a person works 8 hours daily in working days, his income per hour will be = 434/8 = Rs.54/-
ESTIMATION OF TIME COST
Visitor Time for round trip(hours/min)
Time spent at site (hour/min)
Total Time consumed(hour)
Monthly Income (Rs.)
Income per hour(Rs.)
Time Cost= income per hour*total time consumed(Rs.)
A 1 1 2 ≥30,000 163 326
B 2 3 5 20,000 108 540
C 40 min 2 2hr40min ≥30,000 163 165
D 2 1 3 ≥30,000 163 489
E 30 min 45 min 1hr15min 20,000 108 135
F 2 30 min 2hr30min ≥30,000 163 407
G 30 min 30 min 1 ≥30,000 163 163
H 4 2 6 ≥30,000 163 978
I 40 min 2 2hr40min ≤10,000 54 144
J 55 min 1 1hr55min ≥30,000 163 312
TOTAL WILLINGNESS TO PAY
• In economics, the willingness to pay (WTP) is the maximum amount a person would be willing to pay, sacrifice or exchange in order to receive a good or to avoid something undesired, such as pollution.
• It can gives us the estimation of money value of a specific recreational site.
• We can calculate the total willingness to pay for each questioned visitor simply by adding up the amounts of travel cost per visit, time cost per visit and miscellaneous expenses.
WILLINGNESS TO PAY = TRAVEL COST + TIME COST + MISCELLANEOUS EXPENSES
Visitor Travel cost per visit(Rs.)
Time Cost per visit (Rs.)
Total Miscellaneous Expenses (Rs.)
Total Willingness to Pay (Rs.)
A 432
80
5000 5512
B 450
135
2000 2585
C 252
106
3000 3358
D 13,500
120
1500 15120
E 180
34
0 214
F 216.9
100
0 316.9
G 1440
40
1000 2480
H 1800
240
5000 7040
I 81
106
1500 1687
J 432 77 4000 4509
TOTAL WILLINGNESS TO PAY
DEMAND CURVES
Relation between Number of Visits per Year and Travel Cost per Year for Each visitor
0 5000 10000 15000 20000 25000 300000
1
2
3
4
5
6
7
Cost per Year
No
of V
isits
Relation between Number of Visits per Year and Monthly Income for Each Visitor
0 1 2 3 4 5 6 70
5,000
10,000
15,000
20,000
25,000
30,000
35,000
No of Visits per year
Mon
thly
Inco
me
Relation between Distance Travelled and Total Time Consumed for Each visitor
0 200 400 600 800 1000 1200 1400 16000
50100150200250300350400
Distance travelled (km)
Tota
l tim
e co
nsum
ed (m
in)
RESULTS AND DISCUSSIONS
• Most of the visitors use personal vehicle
• Majority of the visitors belonged to high income group
• 60% preferred substitute sites to visit instead of Saidpur village
• No entrance fee
• Recreational purpose only
• People travelling from small distances visited Saidpur Village several times
• Also, visitors with greater income visited the recreational site more
• We determined the total willingness to pay for each of our subject by adding up their travel costs, time cost and miscellaneous cost.
Total Willingness to Pay of our total Sample: Rs.42,988/-
This is only the amount that we calculated from the data obtained from our questioned sample.
TOTAL WILLINGNESS TO PAY
CONCLUSION
• Major holiday attraction to the number of people who visit it for the sake of recreation
• The beauty of this attractive site is being forsaken because of lack of cleanliness and waste dumping in open places
• While the entry fee remains is 0 to visit this place, people’s WTP is estimated to be quite large
