1. (5 points) Suppose the following data were collected from a random sample of people who...

 

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1. (5 points) Suppose the following data were collected from a random sample of people who live at varying distances from a nearby national park. The data are organized into zones based on the average driving distances from each zone to the park. Use the data to calculate the value of the park to the sampled individuals. Zone Population Distance 1 2 3 4 5 6 Visits/year 8.8 8,403 12.5 17,779 26.3 7,700 40.9 2,065 77.1 $42,000 667 102 $40,000 2 Notes: distances are measured in round trip miles to the park. Incomes are measured as annual salaries based on a 2,000 hour per year work effort. 12,005 36,450 25,668 10,326 6,665 3,331 Income $52,000 $55,000 $52,000 $40,000 Calculate the surplus value of the park. Make sure you list all assumptions that you make regarding (i) how travel costs are calculated, (ii) how you have determined the maximum willingness to pay for access to the park, (ii) your assumptions for how you extrapolate your WTP estimate to the population that lives. near the park, (iv) any other assumptions that are important for interpreting/understanding your estimates. 1. (5 points) Suppose the following data were collected from a random sample of people who live at varying distances from a nearby national park. The data are organized into zones based on the average driving distances from each zone to the park. Use the data to calculate the value of the park to the sampled individuals. Zone Population Distance 1 2 3 4 5 6 Visits/year 8.8 8,403 12.5 17,779 26.3 7,700 40.9 2,065 77.1 $42,000 667 102 $40,000 2 Notes: distances are measured in round trip miles to the park. Incomes are measured as annual salaries based on a 2,000 hour per year work effort. 12,005 36,450 25,668 10,326 6,665 3,331 Income $52,000 $55,000 $52,000 $40,000 Calculate the surplus value of the park. Make sure you list all assumptions that you make regarding (i) how travel costs are calculated, (ii) how you have determined the maximum willingness to pay for access to the park, (ii) your assumptions for how you extrapolate your WTP estimate to the population that lives. near the park, (iv) any other assumptions that are important for interpreting/understanding your estimates.