1)Use the following information to estimate a travel cost model. The travel cost
ID: 1169232 • Letter: 1
Question
1)Use the following information to estimate a travel cost model. The travel cost regression equation is shown at the bottom of the tables. Let the visitation fee be $20. Calculate the number of visitors. Show your work.
This table gives the visitation rates from, and population in, each zone.
Zone
Total Visits/Year
Zone Population
Visits/1000
0
400
1000
400
1
500
2000
250
2
600
4000
150
3
600
8000
75
Beyond 3
0
Total Visits
2100
This table gives the travel costs. Assume that travel time is worth $10.00 per hour. Assume that the estimated visitation regression is:
Visits/1,000 = 374 - 3.899*Travel Cost
Zone
Round Trip
Travel Distance
(miles)
Round Trip
Travel Time
(minutes)
Distance times Cost/Mile ($.30)
Travel Time times Cost/Minute ($?)
Total Travel Cost/Trip
Total Travel Cost/Trip
+$20 fee
Visits/
1,000
Total
visits
0
0
0
0
0
1
40
60
2
80
120
3
160
240
What are the steps
Zone
Total Visits/Year
Zone Population
Visits/1000
0
400
1000
400
1
500
2000
250
2
600
4000
150
3
600
8000
75
Beyond 3
0
Total Visits
2100
Explanation / Answer
Distance time cost per mile = $0.3
Miles in round trip for Zone 1 = 40, Zone 2 = 80, and Zone 3 = 120
Total travel cost per trip for Zone 1 = 40 x 0.3 = $12, Zone 2 = 80 x 0.3 = $24 & Zone 3 = 120 x 0.3 = $36
Total travel cost per trip + Visiting fees ($20) for
Zone 0 = $0 + $20 = $20
Zone 1 = $12 + $20 = $32
Zone 2 = $24 + $20 = $44
Zone 3 = $36 + $20 = $56
We now substitute the travel cost in the regression equation of 374 – 3.899 x Travel cost and we get the values as
Zone 0 visits per 1000 = 296
Zone 1 visits per 1000 = 249
Zone 2 visits per 1000 = 202
Zone 3 visits per 1000 = 156
Total visits for
Zone 0 = 296 x 1000 / 1000 = 296
Zone 1 = 249 x 2000 / 1000 = 498
Zone 2 = 202 x 4000 / 1000 = 810
Zone 3 = 156 x 8000 / 1000 = 1245
Zone Round trip in miles Round trip in minutes Distance time cost/mile Travel time cost/mile Total travel cost/trip Total travel cost/trip + $20 Visits/1000 Population Total visits 0 0 0 0 0 $0 $20 296 1000 296 1 40 60 0.3 0.2 $12 $32 249 2000 498 2 80 120 0.3 0.2 $24 $44 202 4000 810 3 120 240 0.3 0.15 $36 $56 156 8000 1245Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.