phi phi islands vs. sardinia applications of cvm at comparison economic valuation of environmental...

Phi Phi Islands vs. SardiniaApplications of CVM at Comparison

Economic Valuation of Environmental and Natural Resources

Giampaolo Buchicchio 501 00963 29


AGENDA

• Environment Valuation– Contingent Valuation Method

• Papers Comparison– Phi Phi Islands– Geopark– La Maddalena– Gennargentu

• Main results



ENVIRONMENT VALUATION

• Environmental Amenities Public Goods– Non-excludability– Non-rivalry

• Cost-Benefit Analysis:– People often undervalue environmental services– Public authorities face limited budgets


Market failure; Need for government intervention


ENVIRONMENT VALUATION (cont.)

• Total Economic Value:– UV = Use Value (direct + indirect) – OV = Option Value– NUV = Non-use Value (bequest + existence)

• Indirect or Revealed Preference Method– Travel Cost Method; Hedonic Pricing– Observing the individual’s economic behaviour in a related market

• Direct or Stated Preference Method– CVM, Attribute-based Method– Surveying the individual on his/her WTP


TEV = UV + OV + NUV


Contingent Valuation Method

• History– 1947: proposed by Ciriacy-Wantrup– 1963: used by Davis to estimate wilderness area value – 1989: Ohio vs. Department of the Interior

• US government agencies allowed to recover damages including non-use values

– 1989: Exxon Valdez oil spill in Alaska– 1993: NOAA panel recommendations– Today:

• Real estate appraisal technique; • CBA for projects impacting environment



Contingent Valuation Method (cont.)

• Elicitation Format– Open-ended– Bidding game– Close-ended (dichotomous

choice)• Single-bounded• Double-bounded

• Advantages– Estimate non-use values– Estimate good not yet

available in definite form– Applicable at varying degrees

of complexityGiampaolo Buchicchio 501 00963 29

• Biases– Incentive:

• Strategic• Compliance

– Implied value• Starting point• Range• Relational• Importance• Position

– Scenario Misspecification• Theoretical• Amenity• Context


PAPERS COMPARISON

• Udomsak Seenprachawong (2004), “An Economic Analysis of Coral Reefs in the Andaman Sea of Thailand”: PHI PHI ISLANDS

• Strazzera, Brau, Balia and Atzeni (2002), “La disponibilità a pagare e le preferenze dei turisti per i siti del Parco Geominerario della Sardegna: il caso di Porto Flavia”: GEOPARK

• Strazzera (2001), "Stima della domanda turistica nel Parco Marino. della Maddalena: un'applicazione del metodo della valutazione contingente“: LA MADDALENA

• Brau and Strazzera (1998), “Studio di valutazione monetaria per il parco nazionale del Gennargentu. Indagine preliminare”: GENNARGENTU



Phi Phi Islands

• Located off the west coast of Southern Thailand, between the large island of Phuket and the mainland

• Main islands: – Phi Phi Don – Phi Phi Leh



Phi Phi Islands (cont.)

• Objectives– Estimate recreational benefits – Estimate the consumers’ WTP for improved coral reef

quality• Methodology– TCM + CVM; personal interviews

• Payment vehicle– Contribution to a trust fund

• Elicitation format– Single-bounded dichotomous choice



Coral Reef Functions

• Direct use values (extractive)– Food/other resources (fishery, mariculture, jewellery, aquarium

items)– Construction material (sand, rocks)– Pharmaceuticals and other industrial chemicals

• Direct use values (non-extractive)– Tourism and recreation (diving, snorkelling)– Education and scientific interest

• Indirect use values– Biological support (breeding and feeding for offshore fish)– Coastal protection (to prevent sand erosion)– Fall-back life support system (during agricultural crises)

• Non-use values– Genetic resources– Global heritage– Known and unknown future uses of the functions above




• Objectives– Estimate recreational benefits – Estimate the consumers’ WTP for improved coral reef

quality• Methodology– TCM + CVM; personal interviews

• Payment vehicle– Contribution to a trust fund

• Elicitation format– Single-bounded dichotomous choice




• Descriptive analysis– Not performed in the paper

• Econometric analysis– Random utility model– Error modelled as a logistic

variable– Parametric estimation of

coefficients– Mean WTP



Sardinia

• Second-largest island in the Mediterranean Sea

• Special statute of autonomous region under the Italian Constitution

• Area 24,090 km² • Pop. 1,655,677



Geopark

• Geominerary Historic and Environmental Park established by UNESCO in 1998– 8 sites, all over Sardinia– attractive mix of industrial mining

archeology and naturalistic landscapes• Porto Flavia– two-kilometer long visit,

both open-air and underground • Second alternative scenario



Geopark (cont.)

• Objectives– Estimate direct use value– Identify main characteristics of tourists interested in

visiting the Geopark• Methodology– CVM; personal interviews

• Payment vehicle– Visit ticket

• Elicitation format– Single-bounded dichotomous choice + open-ended



Geopark (cont.)

• Descriptive analysis– Large number of variables– Bivariate analysis

• Contingency tables

• Econometric analysis– Least squares method– Logarithmic specification

• Wald test• Adj.R2 comparisons



La Maddalena

• Rocky granitic island in the North Sardinia• Marine Park created in 1994– Area 15,000 ha– Coastal perimeter 180 km

• Direct consumer demand– Quantity• days would spend in the area

– Price• daily expense during current holiday



La Maddalena (cont.)

• Objectives– Estimate variation in touristic demand – Focus is on touristic-recreational use

value only• Methodology

– CVM; personal interviews• Payment vehicle

– None: vacation days, not WTP, are elicited• Elicitation format

– Open-ended



La Maddalena (cont.)

• Descriptive analysis– Only for the significant

variables

• Econometric analysis– Tobit model

• Non-neg. censored variable

– Log-linear specification• Narrower confidence intervals• Likelihood ratio test



Gennargentu

• Mountain range, in the district of Nuoro• Punta La Marmora: 1,834 m• National Park created in 1998

~ resistances from local populations• Heterogeneity of sample:3 sub-samples– Locals– Other Sardinians– Mainland tourists

• Pilot surveyGiampaolo Buchicchio 501 00963 29


Gennargentu (cont.)

• Objectives (Pilot Survey)– Test elicitation format– Gather information on WTP distribution– Focus is on total economic value

• Methodology– CVM; phone interviews

(sample unit: household)• Payment vehicle

– Regional contribution• Elicitation format

– Double-bounded dichotomous choiceGiampaolo Buchicchio 501 00963 29


Gennargentu (cont.)

• Descriptive analysis– Bivariate analysis

~ WTP not significantly related to any socio-economic characteristic

• Econometric analysis– Probit vs. Logit model• Negative log-likelihood

– Linear vs. Log-linear specification



MAIN RESULTS

• Main object of analysis– Environmental amenity

with cultural features in the Geopark case

• Main objective– Estimate recreational direct use value

• Most popular elicitation format– Single-bounded dichotomous choice

• Descriptive analysis– Commonly performed in Sardinian studies

• Interest in tourists’ characteristicsGiampaolo Buchicchio 501 00963 29


Q & A

THANK YOU!


phi phi islands vs. sardinia applications of cvm at comparison economic valuation of environmental...

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