INVESTIGATING THE RELIABILITY OF A HEDONIC TRAVEL COST MODEL - A MONTE-CARLO APPROACH

The reliability of nonmarket welfare estimates has been examined by an alysts in a variety of contexts. Much of the focus of previous work ha s been on individual, rather than aggregate values. This paper examine s the reliability of aggregate consumer surplus estimates via a Monte Carlo model. The basic elements of a hedonic travel cost model are rep resented in a forest management decision-making context. One result is that what would appear as minor errors in visitor estimates between s ites has a significant impact on aggregate consumer surplus estimates. The results serve to emphasize that sensitivity analysis is critical when using nonmarket welfare estimates for decision making.