The Economic Value of Marine Biodiversity to Recreational SCUBA Divers in Barbados

1. The Economic Value of Marine Biodiversity to Recreational SCUBA Divers in Barbados PETER SCHUHMANN (UNCW) JAMES CASEY (W&L) JULIA HORROCKS (UWI) HAZEL OXENFORD (UWI)

2. Roadmap • Introduction • Motivation • Economic Value and… • The Value of Non-Market Valuation • Barbados and Biodiversity • Methods • The Choice Experiment • Results • Discussion

3. Motivation • The economic valuation of ecosystem services is a key policy tool in stemming losses of biological diversity (Abson and Termanson, Cons.Bio. 2011). • There is a growing recognition that conservation often entails trade-offs (Hirsch et al., Cons.Bio. 2011). • We are writing this paper for non-economists. Specifically, we are targeting biologists, managers, and policy-makers.

4. Mismanagement of Natural Resources - The Commons Problem Continues, (Stavins, 2011)) • biodiversity loss and habitat destruction(Shogren et al., 1999; Holland et al., 2009) • Striking a balance (Wunder, 2005)

5. Economic Value • Economics: The “science” of understanding trade-offs.

6. The Economic Valuation of Natural Resources “Public policy should reflect an understanding of the public's values. This is especially true with respect to the environment. Because public values about the environment are not generally expressed in the marketplace, nonmarket valuation has become an important source of information for environmental decision making”. From: Champ, Boyle, and Brown, "A Primer on Nonmarket Valuation"

7. Some benefits of conducting a valuation exercise. The services provided by the natural environment directly affect human welfare in myriad ways, but are often overlooked by some policy makers who only focus on jobs and revenues. Valuation reminds everyone that although the environment is “free”, this in no way implies that it is not valuable.

8. Applications What is the value of … • Access to marine parks and protected areas (Bonaire, Dixon et al (1993), Thur (2010); Jamaica, Spash (2000)). • Polluted beaches and rivers in England (Garrod and Willis, 1999) • Fish abundance, coral cover and encounters with specific species in Turks & Caicos (Rudd, 2001). • Viewing larger or more abundant Nassau groupers (Rudd and Tupper, 2002) • Beach setbacks and tourism (Brau and Cao, 2006) • Loss to SCUBA divers from a decline in coral quality in Bonaire National Marine Park. (Parsons and Thur, 2008) • Coral conservation in the Riviera Maya (Casey et al. 2010)

9. Barbados

10. Barbados • Land area: 166 sq mi • Population = 260,000 • 98% literacy rate • Independence gained in 1966 • Language: English • Ethnicity/race: black 90%, white 4%, Asian/mixed 6% • Economy: tourism and sugar • Per capita income approximately US $8,000

11. Coastal and Marine Issues • Fishery management • Coral reef degradation • Land use / development • Beach erosion • Pollution runoff • Turtle Nesting

12. Why a Choice Experiment? • Unlike other valuation methods, CEs allow multidimensional attribute changes to be valued simultaneously, and can be used to generate estimates of the relative value of multiple attributes (Huybers, 2004). • Hoyos (2010) summarizes the advantages of CE relative to other valuation methods and provides a comprehensive review of the methodology.

13. Formal Model • McFadden (1974) utility derived by an individual from a particular alternative (i) as containing a deterministic component (Vi) and a random component (εi): • (1) Ui = Vi + εi • if an individual chooses alternative (i) over another alternative (j) this implies that the utility from the former outweighs that from the latter. i.e. choice of (i) over (j) implies Ui > Uj. •  Since the utilities include a stochastic component, we can describe the probability of choosing alternative (i) as: • (2) P{i} = P {Vi + εi > Vj + εj} • standard multinomial logit (MNL) model can be specified to facilitate estimation of the probability of choosing alternative (i) (McFadden 1974; Ben-Akiva and Lerman 1985). • (3) P{i} = exp(Vi) /  exp (Vj) • Specification of a functional form for the indirect utility function (1) requires the identification of quality variables which are likely to influence the choice in question. By specifying Vi as linear in observable price and quality attributes of the alternatives, willingness to pay for a given level of an attribute relative to a baseline level can be estimated as: • (4) WTP = - βA/ βP • Where βA is the estimated coefficient on the attribute level, and βP is the coefficient on price, which can be considered the marginal utility of income.

14. Dive trip choice attributes and levels

15. Example of a single paired choice

16. Descriptive statistics (characteristics of respondents’ most recent dive)

17. Who is this person? • A 38 years old male from UK (46%) or the US (32%) • As likely or not to be married • Generally affluent and highly educated • 7 years of diving experience • Most (81%) have been to the Caribbean before • 50% have previously been to Barbados • Many divers in the sample rated the quality of diving in Barbados as better than most places they had been diving (42%) or of equal quality (30%).

18. Willingness to pay for quality improvements relative to baseline attribute levels (US Dollars)

19. Divers want to see more Coral

20. Divers want to see more turtles

21. Divers want to see fewer people

22. Policy Implications • SCUBA divers have a clear appreciation of, and willingness to pay for, lower levels of site crowding and higher levels of coral quality, species diversity and sightings of marine turtles – SO……. • Increase site-level user fees to restrict congestion, improve site quality, and capture revenue for …. • coral head transplanting, reef ball installation, mooring buoy systems, enhanced conservation of sea turtles, and compensate fishers for avoiding species rich areas