Final answer:
The travel cost method is an economic valuation technique used to estimate the value that individuals or households place on leisure trips, based on the costs they incur to travel to a destination. It is commonly used in environmental economics to determine the economic value of natural resources and ecosystems that are used for recreational activities.
Step-by-step explanation:
The travel cost method is an economic valuation technique used to estimate the value that individuals or households place on leisure trips, based on the costs they incur to travel to a destination. It is commonly used in the field of environmental economics to determine the economic value of natural resources and ecosystems that are used for recreational activities.
For example, let's say you are planning a trip to a national park. Using the travel cost method, you would calculate the costs of transportation, such as fuel or airfare, accommodation, meals, and any other travel expenses you incur during your visit. These costs would then be used to estimate the value you place on the trip, reflecting your willingness to pay for the experience.