Recreational Demand, Travel Cost Method and Flow Fixed Costs

The Travel Cost Method (TCM) is one of the most frequently used approaches to estimating the use values of recreational sites. The first aim of this chapter is to discuss the role played by a category of fixed costs that we term annual flow fixed costs, that is annual fixed expenses related to the recreational activity, on the consumer decision-making process under different time horizons. These considerations are important when, as is often the case, a recreational user incurs substantial fixed costs directly related to the recreational activity on an annual basis, regardless of the number of trips undertaken (for example, an annual site licence). Second, we develop a simple model to account for the effect of flow fixed costs on consumer surplus and behaviour in a full annual perspective.