With wetlands functions and resources, the divergence between large total 

 values and very low (zero) marginal values lies behind much of the controversy 

 as to the appropriate procedure for imputing values to wetlands preservation 

 benefits. If some type of wetland habitat is not a limiting factor in the 

 production of some target wildlife species, the marginal value product of that 

 habitat type is zero. The total social marginal product of the wetlands habitat 

 type or complex may be very large, but if the removal of the last unit does not 

 diminish total output, reallocating the land to more valuable economic activities 

 increases social welfare. 



CONSUMER AND PRODUCER SURPLUS AS MEASURES OF NET 

 ECONOMIC BENEFITS AND THE TRAVEL COST METHOD 



The commonly used measure of social benefits conferred by a good or service 

 is the area of the triangular region between the horizontal line that extends 

 between the price axis and the intersection of the supply and demand curve 

 (Figure 1). This region, DPP', is marked by horizontal lines; market expendi- 

 tures are given by the rectangle OPP'A. This aj^ea is called the consumer's 

 surplus conferred by the good or service. The triangular region between this 

 same horizontal line and the supply curve is called the producer's surplus. This 

 region, SPP', is marked by vertical lines; the horizontal axis measures quantity 

 per unit time, and the vertical axis measures price. Often these two ar'eas are 

 added together to form a total social surplus estimate; but for recreation sites, 

 which are often owned and managed by government agencies, consumer surplus is 

 usually used as the relevant index of social benefits. Since the entrance fee 

 for the site is usually zero or a low nominal value, the ratio of market 

 expenditures to consumer surplus is relatively low; little of the potential 

 consumer surplus is extracted as revenue, and nonmarket benefits conferred by 

 the site can be substantial. Clearly this raises difficulties for recreation 

 economists, since actual market data cannot be used to estimate demand curves 

 for recreation sites. Participation rates for site usage will diminish as 

 recreationists move further away from the site. Hence there is a systematic 

 (inverse) relation between travel costs and per capita trips that has the same 

 general shape as a demand curve. This inverse relation forms the basis of the 

 travel cost method (TCM). 



Historically, the estimation of TCM demand curves involves drawing 

 concentric circles around the site, and determining the participation rate and 

 travel cost associated with each of these circular regions. For the circular 

 region closest to the site, the participation rate is highest and travel costs 

 are Towest. For the circular region farthest away from the site, the participa- 

 tion rate is lowest and the travel cost highest. The triangular area under the 

 demand curve, but above a zone's mean travel cost, is taken as the consumer 

 surplus associated with travel cost method estimates, of recreation site demand 

 curves. Summation of the consumer surplus over travel zones gives the aggregate 

 consumer surplus estimate (Clawson and Knetsch 1966; Samples and Bishop 1985). 



