Fezzi, Batemen and Ferrini in JEEM:
The opportunity Value of Travel Time (VTT) is one of the most important elements of the total cost of recreation day-trips and arguably the most difficult to estimate. Most studies build upon the theoretical framework proposed by Becker's (1965) by using a combination of revealed and stated preference data to estimate a value of time which is uniform in all activities and under all circumstances. This restriction is relaxed by DeSerpa's (1971) model which allows the value of saving time to be activity-specific. We present the first analysis which uses actual driving choices between open access and toll roads to estimate a VTT specific for recreation trips, thereby providing a value which conforms to both Becker's and DeSerpa's theoretical models. Using these findings we conduct a Monte Carlo simulation to identify generalizable results for subsequent valuation studies. Our results indicate that 3/4 of the wage rate provides a reasonable approximation of the average VTT for recreation trips, while the commonly implemented assumption of 1/3 of the wage rate generates downward biased results.
Using MRFSS data Haab, Hicks, Shnier and Whitehead found significant heterogeneity in the travel cost coefficient. I was clueless about why but then one of my co-authors patiently explained that the travel cost variable was measured with considerable error.
Oh. I knew that.
But, 3/4 the wage rate is much higher than 1/3. I've gone from being dubious to hopeless about the travel cost method. :)