Economic Valuation of Travel Costs - Assignment Example

The first step is to collect the travel cost and the visitation information or rather the data. Direct costs are the costs used in this method. They are the costs which are normally related to the whole process of visiting the National Botanic Gardens directly. The costs of fuel, accommodation, food, and all other expenses that will be required in the whole process are used. It is very important to ensure that all the travel costs to the National Botanic Gardens are represented in the calculation. The next thing is the travel time. A lot of weight should be given to this area. The appropriate value to assign to the travel time should be considered very carefully. It should be the wage rate when people do not have the option to work during the weekends. The children should also be included in the travel time. Visit time is that time spent while at the National Botanic Gardens. The best method to use is the individual method where the visit rate is normally calculated per individual in a given period. The factors that influence this rate are for that specific person. It does not require averaging and a lot of calculations. Some of the challenges that are involved in using this method include the presence of substitute sites. Those who prefer one site over the others have higher values compared to other people. This should be differentiated. Statistical problems might also affect the obtained results. The choice of the variables and the method used should be done very carefully to avoid this. There are also those people who live near the site to reduce transport costs and time during this travel. Their value is higher and this should be noted keenly. Most people also view travelling as a hobby and hence a great experience and not a huge cost. This should be noted during the calculations.

Averages across the zones normally limit the number of observations because you will only take groups of people and then divide them by the population of that zone. Working with individual counting increases the number of observations and hence a much more accurate result.

Multiple regression analysis uses the following formula: y = ax3 + bx2 + cx + d + , where a, b, c, d and e are the variables used in the calculations.

The environmental management decisions that are made under the conditions of risk are normally in situations where people or rather the managers lack the complete information on the issue at hand. This condition is rather difficult since the manager may comprehend the alternatives and the problem at hand, he or she does not have a guarantee on how each of the solutions will work out. When an unfamiliar problem comes up, haste decisions which had not been planned before are normally used to solve the current situation. This decision normally involves human judgment more than computer assistance. Since risks are normally bound to happen, putting early warning information about crises, and developing management crisis plans are the best ways to help avert these problems. This is the condition of risk where virtually no information is available to help know what will happen in the future and be in a position to take the necessary precautions. The managers or rather the involved parties will therefore be risking and will rely heavily on emergency decisions.

In a condition of uncertainty, the information is normally poor and the managers cannot be in a position to know the outcomes that are likely to occur. This condition is very difficult and the managers are normally left to rely more on their creativity in solving the arising problems. Guessing and intuition normally come in handy here but still leave room for errors. Groups work well in this situation as it helps in figuring out the probable problems. It is always advisable to stay put and be ready for the occurrence of such a situation. The best method of environmental decision-making is the rational method. I would use it in each of the two circumstances. It is an up-to-a-point method which is most applicable in cases where the data is limited and more uncertainty levels. It uses a series of simple equations that are used to predict a certain outcome. This method gives the most precise prediction of an outcome and s widely used in other areas of prediction such as calculating the runoff. The lack of uncertainty in assessing an investment in a nuclear waste containment facility in a region where earthquakes can be expected to occur is evident. This is because earthquakes can trigger the spilling of nuclear waste into the environment which can be very hazardous to both the people working in the plant as well as the environment. This risk is very high due to the earthquakes and it increases the levels of uncertainty. Therefore, when assessing this risk, the level of certainty is very low. The investor will know the necessary precautions to take before venturing into this deal. They will have full information on what to expect and what they are going into and thus be in a position to plan for a future problem or rather accident.