Intertemporal Substitution in Travel Cost Models with Seasonal Time Constraints

https://doi.org/10.3368/le.96.3.399

Lloyd-Smith, P., Abbott, J. K., Adamowicz, W., & Willard, D. (2020). Intertemporal Substitution in Travel Cost Models with Seasonal Time Constraints. Land Economics, 96(3), 399-417. https://doi.org/10.3368/le.96.3.399

Travel cost models using the wage rate to value time make the implicit assumption that the value of time is equalized throughout the year. We develop a seasonal travel cost model that allows the value of time to vary by season. We estimate the model using data from a survey of recreational anglers in the Gulf of Mexico. We find that people’s value of time is 55% larger on average in the summer compared to other times of year and find substantial differences in derived welfare estimates if a time-constant value of time measure is used instead. (JEL Q26, Q51)