Value Beyond Markets
Non-market valuation explores the value of environmental and social goods that are not traded in traditional markets.
Adan’s first approximation to non-market valuation was as a Bachelor in Economics’ student, when in 2002 he implemented the Travel Cost Method to estimate the value of recreational use of Mexico City’s peri-urban forests. Since then, his passion is to uncover values that people assign to nature and social goods and services.
Featured Research
This working paper explores the challenges of endogeneity in the travel cost (TC) method, which models the number of trips to a recreation site as a function of the costs to reach it. Endogeneity arises because travel costs are chosen by the visitor, leading to a correlation between the cost and the number of trips. The paper proposes a control function approach to address this issue by utilizing information from stated preference (SP) responses. We suggest that unobserved variables impacting both the TC equation and the SP equation can be inferred from the SP equation through a finite mixture specification, and then plugged back into the TC equation to break the endogeneity. This "infer and plug-in" strategy is tested by revisiting data analyzed by Fix and Loomis (1998) and the paper finds evidence that not controlling for endogeneity leads to an overestimation of welfare measures. The paper concludes by highlighting the broader applicability of this strategy beyond recreation demand applications, such as in energy economics and residential electricity demand modeling.
Most of my publications are available via open access or in my ResearchGate. However, if you’re unable to access any of the papers, feel free to reach out to me directly. I’m always happy to share a copy—it’s great to know someone is interested in my work!