Estimating a value of culture tourism oriented traditional market for traditional market channel policy : focused on the Travel Cost Method

Abstract

This study aims to compute the economic benefits which travelers acquire during their visit to traditional market. This study also intends to evaluate aggregate economic values of traditional market as Culture Tourism Oriented Traditional Market.Traditional market in Korea has been playing a critical role as a venue of exchange of goods in a distribution channel for a long time. Traditional market where customer exchange goods and services not only offers opportunities to retailers and customers to trade goods but also vitalizes the local economy by attracting domestic shoppers. It is a place for the community to meet and enjoy, and an industry at the forefront of good environmental practice.In recent years, however, the distribution channel industry has been changed significantly with the advent of large retailers. Traditional markets have dwindled due to the proliferation of large scale franchise-supermarkets endowed with overwhelming bargaining power. Moreover, the appearance of new types of business, the rapid growth of e-business, and changes in consumers’ purchasing behaviors threaten the existence of traditional markets. The government have been attempting to prevent the declining and to revive the traditional market for a balanced distribution channel development. The government is making diverse efforts to promote the competitiveness of traditional market; one key effort has been to adjust the changed customers’ lifestyle by modernizing the outstated facilities and the management system. Also, tax-relief and modifying the regulation policy have been enacted.In the meanwhile, the government has focused on the socio-cultural approach for this issue from the reason of not only low-competiveness of market structure but also failing the adjustment of current consumption culture so that the government comes up with plans to make the traditional market as a cultural space and a tourist site. The objective of the plan is to vitalize the regional economic and then to become a valuable tourism resource.In the economic value of traditional market, ripple effect of the market in local area and social and cultural value, traditional market have a potential power. Thus, analyzing the market in various aspects is becoming a critical issue. However there has been rare study investigating the quantifying the traditional market value.In order to calculate willingness-to-pay (WTP) values, this study makes use of travel cost method (TCM) as a popularly known as non-market valuation tool. Travel cost models are regularly used to determine the value of recreational sites or particular site characteristics.Specifically, The count data and truncated models are primarily used to account for non-negative integer and truncation properties of recreational trips as suggested by the non-market valuation literature.This studies the quantifying the market value by using Travel Cost Method (TCM) under the assumption that demands of the traditional market are inversely proportion to the travel distance to the market with considering customers’ expense in the market. We also consider service quality as a deterministic factor of visiting the market.The economic values of visit to traditional market are derived using the count data functions reported in Table 8.The economic values of traditional market as Culture Tourism Oriented Traditional Market in terms of consumer surplus(CS) are derived using Zero-truncated count data models. Specifically, Consumer surplus per trip is calculated as the negative reciprocal of the rate of change in the angler trips with respect to travel cost (Haab and McConnell, 2002).This study results suggest that traveler who visited traditional market indicates consumer surplus(CS) of about ₩283,000 and ₩53,100, respectively. The total economic value of traditional market as a tourism destination are also estimated using the total number of travelers.Estimation Model The average benefit per visit Zero-truncated Poisson regression ₩283,000 Zero-truncated negative binomial regression ₩53,100 Benefit estimates Marginal effects of the zero-truncated negative binomial regression In the results of our analysis, the older and lower income customers tend to visit the traditional market, and the higher empathy and the tangible and the lower assurance, among the service quality factors, the more people use the traditional market. After all, customers using culture tourism oriented traditional market visit the market due to emotional factors such as the longing for the past experience or the enjoying fun activity. Even though the customers are not certain the products in market they enjoy the market itself, so that human relationship with empathy is important. But we suggest that convenient facilities and physically well-response service qualities should be secured.When all the studies are combined, traditional market should bring out nostalgia in an emotional aspect and secure the convenience in terms of physical aspect. In addition, the market need to put an effort to expend more for existing customers prior to attract young and new customers. In other words, making to spend more money from the existing customers by up selling and cross selling should be preceded and then enticing new customers such as young people that will follow the existing old customers. Along with this, a tourism product development in the tradition market should be made for the forward step.Our estimated result shows that the average amount of consumption of each customer is ₩50,000 and the total estimated value of YangSuri traditional market is 36.5 billion Won in an year (₩50,000 x 2000 x 365). It shows the significance of the market value and provides foundation for understanding the importance of the traditional market. The traditional market is a potential tourism resource, so that the government has to invest more and utilize it to gather more tourists. The market should be managed professionally by improving the quality factors providing a differentiated services and products, and continued research on the market is needed.The policy implications of this study include working to attract more culture-oriented visitors and managing Tangibles and Empathy as parts of service quality. In addition, the strategic effort is needed to improve the Reliability and Responsiveness. Also, This study quantifies the social and cultural value of the traditional market and provides the basis to the government for making the policy of distribution channel industry and to marketers for build a business strategy. PU - 한국유통학회