Recently posted at RePEc:
A Benefit-Cost Analysis of the Middle Fork Greenway Trail
John C. Whitehead, John Lehman and Melissa Weddell
Abstract: The Town of Boone, NC Greenway Trail is a 3.84 mile long paved trail with additional unpaved sections that attract many types of users including walkers, joggers, and cyclists. The proposed Middle Fork New River extension would add 6.5 miles to the total paved mileage. In order to estimate recreation benefits of the extension we use revealed and stated preference data to estimate the change in value of current visits and change in visits with the additional mileage. The total opportunity cost of the project includes land acquisition, construction, operation and maintenance costs. Considering only recreation benefits the Middle Fork Greenway Trail passes a benefit-cost test. The net present value is estimated to be $2.78 million. This conclusion does not change after considering a number of partial sensitivity analyses.
The primary contribution of this paper is to illustrate how multiple stated preference questions can be used to augment a small sample of revealed preference data (without significant cost variation) to the extent that a demand curve can be estimated. This is one of the lesser known benefits of joint estimation of revealed and stated preference data. Also, it jumps through the hoops of a number of textbook steps in a benefit-cost analysis.