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The well-known travel cost method (TC) has been widely applied to outdoor recreation. A second approach has been referred to in the past as the Davis method, the questionnaire approach, and contingent valuation. It will here be termed hypothetical valuation (HV), because it involves creating· a hypothetical situation designed to elicit willingness to pay for or willingness to accept compensation for a recreational or other extramarket good (or bad). TC and HV are termed "indirect methods," because they do not depend on the direct information about prices and quantities that economists would prefer to use where available to value goods and services.A number of potential sources of bias in HV and TC have been discussed in the literature and we shall summarize these in the first section of the paper. When summed together, these potential problems are sufficient to justify considerable skepticism about the accuracy of resulting value estimates. Still, the question remains: How large an impact do these supposed sources of bias have in actual practice? In the second section of the paper we report the results of an experiment where TC and HV values were compared to values based on actual cash transactions. Though preliminary, the results of this experiment indicate that substantial biases exist in both TC and HV estimates. Potential Sources of BiasIn TC, differences in travel and possibly other costs to recreationists at varying distances from the recreation site are used to infer how recreationists would behave if prices higher than the actual admission fee were charged.

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One of the anomalies of modern ecology is that it is