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Phi Phi Islands vs. Sardinia

Phi Phi Islands vs. Sardinia. Applications of CVM at Comparison. AGENDA. Environment Valuation Contingent Valuation Method Papers Comparison Phi Phi Islands Geopark La Maddalena Gennargentu Main results. ENVIRONMENT VALUATION. Environmental A menities  Public Goods

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Phi Phi Islands vs. Sardinia

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  1. Phi Phi Islands vs. Sardinia Applications of CVM at Comparison Economic Valuation of Environmental and Natural Resources

  2. AGENDA • EnvironmentValuation • ContingentValuationMethod • PapersComparison • Phi PhiIslands • Geopark • La Maddalena • Gennargentu • Mainresults Economic Valuation of Environmental and Natural Resources

  3. ENVIRONMENT VALUATION • EnvironmentalAmenities Public Goods • Non-excludability • Non-rivalry • Cost-BenefitAnalysis: • People oftenundervalueenvironmentalservices • Public authorities face limitedbudgets Market failure; Needforgovernmentintervention Economic Valuation of Environmental and Natural Resources

  4. ENVIRONMENT VALUATION (cont.) TEV = UV + OV + NUV • Total EconomicValue: • UV = UseValue(direct + indirect) • OV = OptionValue • NUV = Non-useValue (bequest + existence) • Indirect or RevealedPreferenceMethod • TravelCostMethod; HedonicPricing • Observing the individual’s economic behaviour in a related market • Direct or StatedPreferenceMethod • CVM, Attribute-basedMethod • Surveying the individual on his/her WTP Economic Valuation of Environmental and Natural Resources

  5. ContingentValuationMethod • 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 appraisaltechnique; • CBA forprojectsimpactingenvironment Economic Valuation of Environmental and Natural Resources

  6. ContingentValuationMethod (cont.) • Biases • Incentive: • Strategic • Compliance • Implied value • Starting point • Range • Relational • Importance • Position • Scenario Misspecification • Theoretical • Amenity • Context • 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 complexity Economic Valuation of Environmental and Natural Resources

  7. PAPERS COMPARISON • UdomsakSeenprachawong (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 Economic Valuation of Environmental and Natural Resources

  8. Phi PhiIslands • Located off the west coast of Southern Thailand, between the large island of Phuket and the mainland • Main islands: • Phi Phi Don • Phi PhiLeh Economic Valuation of Environmental and Natural Resources

  9. Phi PhiIslands (cont.) • Objectives • Estimate recreational benefits • Estimate the consumers’ WTP for improved coral reef quality • Methodology • TCM + CVM; personal interviews • Paymentvehicle • Contributionto a trust fund • Elicitation format • Single-boundeddichotomouschoice Economic Valuation of Environmental and Natural Resources

  10. CoralReefFunctions • 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 Economic Valuation of Environmental and Natural Resources

  11. Phi PhiIslands (cont.) • Objectives • Estimate recreational benefits • Estimate the consumers’ WTP for improved coral reef quality • Methodology • TCM + CVM; personal interviews • Paymentvehicle • Contributionto a trust fund • Elicitation format • Single-boundeddichotomouschoice Economic Valuation of Environmental and Natural Resources

  12. Phi PhiIslands (cont.) • Descriptive analysis • Not performed in the paper • Econometricanalysis • Random utility model • Errormodelledas a logisticvariable • Parametricestimationofcoefficients • Mean WTP Economic Valuation of Environmental and Natural Resources

  13. 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 Economic Valuation of Environmental and Natural Resources

  14. 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 Economic Valuation of Environmental and Natural Resources

  15. Geopark (cont.) • Objectives • Estimate direct use value • Identify main characteristics of tourists interested in visiting the Geopark • Methodology • CVM; personal interviews • Paymentvehicle • Visit ticket • Elicitation format • Single-boundeddichotomouschoice + open-ended Economic Valuation of Environmental and Natural Resources

  16. Geopark (cont.) • Descriptive analysis • Large number of variables • Bivariate analysis • Contingency tables • Econometricanalysis • Leastsquaresmethod • Logarithmicspecification • Wald test • Adj.R2comparisons Economic Valuation of Environmental and Natural Resources

  17. 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 Economic Valuation of Environmental and Natural Resources

  18. La Maddalena (cont.) • Objectives • Estimate variation in touristic demand • Focus is on touristic-recreational use value only • Methodology • CVM; personal interviews • Paymentvehicle • None: vacationdays, not WTP, are elicited • Elicitation format • Open-ended Economic Valuation of Environmental and Natural Resources

  19. La Maddalena (cont.) • Descriptive analysis • Only for the significant variables • Econometricanalysis • Tobitmodel • Non-neg. censoredvariable • Log-linearspecification • Narrowerconfidenceintervals • Likelihoodratio test Economic Valuation of Environmental and Natural Resources

  20. Gennargentu • Mountain range, in the district of Nuoro • Punta La Marmora: 1,834 m • National Park created in 1998 • resistances from local populations • Heterogeneityof sample:3 sub-samples • Locals • OtherSardinians • Mainlandtourists • Pilotsurvey Economic Valuation of Environmental and Natural Resources

  21. Gennargentu (cont.) • Objectives (PilotSurvey) • Test elicitation format • Gather information on WTP distribution • Focus is on total economicvalue • Methodology • CVM; phoneinterviews (sample unit: household) • Paymentvehicle • Regional contribution • Elicitation format • Double-boundeddichotomouschoice Economic Valuation of Environmental and Natural Resources

  22. Gennargentu (cont.) • Descriptive analysis • Bivariate analysis • WTP not significantly related to any socio-economic characteristic • Econometricanalysis • Probit vs. Logitmodel • Negative log-likelihood • Linear vs. Log-linearspecification Economic Valuation of Environmental and Natural Resources

  23. MAIN RESULTS • Mainobjectofanalysis • Environmentalamenity with cultural features in the Geopark case • Mainobjective • Estimate recreationaldirectusevalue • Mostpopularelicitation format • Single-boundeddichotomouschoice • Descriptiveanalysis • Commonlyperformed in Sardinianstudies • Interest in tourists’ characteristics Economic Valuation of Environmental and Natural Resources

  24. Q & A THANK YOU! Economic Valuation of Environmental and Natural Resources

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