ue Valuation Example This homework is meant to illustrate how we can use individ

Question

ue Valuation Example This homework is meant to illustrate how we can use individuals' observed behavior to value an environmental 1. Suppose that the federal government is considering the lease of the Roosevelt National Forest side of Cameron Pass to a private tourism company for use exclusively by paying customers. The private ranch has agreed to pay S600,000 per year for exclusive access to the forest. The goal of this exercise is to compare the welf land open to the public to the revenue generated from renting it to the private user. Luckily, the state of Colorado has collected the following data from surveying visitors that will allow us to estimate a consumer surplus value of the public area. This table is in an Excel file on Canvas. are from the Cameron Pass Visitation Visits per Year 5000 3800 5800 Let's use S0.60 as the per-mile opportunity cost of travel. a. Use the data provided to fill out the following table (you can erase the empty table and copy and paste from your Excel file) Zone Cost per Trip Visitation Rate b. Produce a Scatterplot with the cost per trip on the x-axis and the visitation rate on the y-axis. On this Scatterplot, fit a linear curve to the data points and display the equation on the chart. Make sure to label axes and include a title

Explanation / Answer

1. First we calculate vistation rates. To do this, we divide the Visits per year by the Zone population in thousands. So, the chart will look like this.

Zone         Visits per year       Population                 Visits in thousands            Round Trip distance(given)    Distance*

                                                                              (Visitation Rate)                                                         Cost per mile

1                  1880                      2000                (1880/2000) * 1000 = 940                       50                      50 *0.6 = 30

2                  3800                      5000                (3800/5000) * 1000 = 760                       75                     75 * 0.6 = 45

3                  5800                    10000                (5800/10000) * 1000 = 580                    100                    100 *0.6 =60

4                  20000                  50000                (20000/50000) * 1000 = 400                  125                    125*0.6 = 75

5                   4400                   20000                (4400/20000) * 1000 = 220                    150                  150 * 0.6 = 90

The numbers in bold are the cost per trip with respect to each zone.

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