Estimates of the benefits of environmental improvement, usually a nonmarket commodity, can be a valuable part of the information base for economically efficient environmental decision making. The objective of this paper is to review the literature of one class of nonmarket valuation methodologies based on observed consumption behavior subsumed under the term "travel cost demand models." Relative to travel cost demand models, we examine policy issues and underlying concepts focusing on choice theory and welfare evaluation. In addition, we identify major related empirical issues including demand specification, data problems, demand estimation, and welfare measurement. Unanswered questions may contribute to a research agenda.