| Sumario: | The travel cost technique is probably the most widely used method for estimating outdoor recreation demand functions. Specification errors, due to the omission of travel time and congestion effects, have received the most recent attention-with the consensus being that the travel cost technique underestimates the true value of recreational resources if these variables are omitted. The potential effect of the exclusion of both the travel time and congestion variables may be evaluated by regarding the problem as one of omitted variables in a misspecified demand function. The economically efficient use of a natural environment requires a balancing of the net returns to each of its possible uses. The resource allocation decision depends in part upon comparing recreational values with the value that could be derived from other uses (such as development). If recreational values are misestimated, the allocation of natural environments between preservation (recreation) and development uses may be incorrect.
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