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Contingent valuation of ecotourism in Annapurna conservation area, Nepal: Implications for sustainable park finance and local development

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  • Baral, Nabin
  • Stern, Marc J.
  • Bhattarai, Ranju
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    Abstract

    To determine willingness to pay (WTP) for candidate entry fees, contingent valuation surveys were administered to 315 foreign visitors to the Annapurna Conservation Area, Nepal, during April and May of 2006. The results of logit regression showed that the bid amount, family size, visitors' satisfaction, the use of a guide, and group size were the most significant predictors of WTP. Results suggest that most visitors would be willing to pay an entry fee considerably higher than the current fee of 27 U.S. dollars (USD). The mean and median WTP were 69.2 and 74.3 USD, respectively. The most common explanation for WTP by respondents was a desire to better protect the environment. The most common explanation for unwillingness to pay was that the bid was simply too expensive. Two models were developed based upon different predictions of visitor numbers (an optimistic case and pessimistic case) to calculate the expected revenue production and likely gross local economic impact of candidate entry fees. Based on this analysis, we recommend an increase in the entry fee to USD 50. In the optimistic scenario, this higher entry fee leaves a budget surplus. In the pessimistic scenario, it would reduce current budget deficits.

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    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 66 (2008)
    Issue (Month): 2-3 (June)
    Pages: 218-227

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    Handle: RePEc:eee:ecolec:v:66:y:2008:i:2-3:p:218-227

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    Web page: http://www.elsevier.com/locate/ecolecon

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    1. Kotchen, Matthew J. & Reiling, Stephen D., 2000. "Environmental attitudes, motivations, and contingent valuation of nonuse values: a case study involving endangered species," Ecological Economics, Elsevier, vol. 32(1), pages 93-107, January.
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    6. Shultz, Steven & Pinazzo, Jorge & Cifuentes, Miguel, 1998. "Opportunities and limitations of contingent valuation surveys to determine national park entrance fees: evidence from Costa Rica," Environment and Development Economics, Cambridge University Press, vol. 3(01), pages 131-149, February.
    7. Turpie, Jane K., 2003. "The existence value of biodiversity in South Africa: how interest, experience, knowledge, income and perceived level of threat influence local willingness to pay," Ecological Economics, Elsevier, vol. 46(2), pages 199-216, September.
    8. Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
    9. Cardoso de Mendonca, Mario Jorge & Sachsida, Adolfo & Loureiro, Paulo R. A., 2003. "A study on the valuing of biodiversity: the case of three endangered species in Brazil," Ecological Economics, Elsevier, vol. 46(1), pages 9-18, August.
    10. Jorgensen, Bradley S. & Wilson, Mathew A. & Heberlein, Thomas A., 2001. "Fairness in the contingent valuation of environmental public goods: attitude toward paying for environmental improvements at two levels of scope," Ecological Economics, Elsevier, vol. 36(1), pages 133-148, January.
    11. Andrew S. Laughland & Wesley N. Musser & James S. Shortle & Lynn M. Musser, 1996. "Construct Validity of Averting Cost Measures of Environmental Benefits," Land Economics, University of Wisconsin Press, vol. 72(1), pages 100-112.
    12. Togridou, Anatoli & Hovardas, Tasos & Pantis, John D., 2006. "Determinants of visitors' willingness to pay for the National Marine Park of Zakynthos, Greece," Ecological Economics, Elsevier, vol. 60(1), pages 308-319, November.
    13. Farber, Stephen C. & Costanza, Robert & Wilson, Matthew A., 2002. "Economic and ecological concepts for valuing ecosystem services," Ecological Economics, Elsevier, vol. 41(3), pages 375-392, June.
    14. S. Akbar Zaidi, 1999. "NGO failure and the need to bring back the state," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(2), pages 259-271.
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    Cited by:
    1. Voltaire, Louinord & Pirrone, Claudio & Bailly, Denis, 2013. "Dealing with preference uncertainty in contingent willingness to pay for a nature protection program: A new approach," Ecological Economics, Elsevier, vol. 88(C), pages 76-85.
    2. Mahadev Bhat & Ramachandra Bhatta & Mohamed Shumais, 2014. "Sustainable funding policies for environmental protection: the case of Maldivian atolls," Environmental Economics and Policy Studies, Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(1), pages 45-67, January.
    3. Voltaire, Louinord & Nassiri, Abdelhak & Bailly, Denis & Boncoeur, Jean, 2011. "Testing for Consistency in Tourists' Willingness to Pay for New Nature Reserves in the Gulf of Morbihan (France)," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114378, European Association of Agricultural Economists.
    4. Onofri, Laura & Nunes, Paulo A.L.D., 2013. "Beach ‘lovers’ and ‘greens’: A worldwide empirical analysis of coastal tourism," Ecological Economics, Elsevier, vol. 88(C), pages 49-56.
    5. Louinord Voltaire & Abdelhak Nassiri & Denis Bailly & Jean Boncoeur, 2011. "Effet d’une taxe et d’un droit d’entrée sur les consentements à payer des touristes pour de nouvelles réserves naturelles dans le golfe du Morbihan," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 92(2), pages 183-209.
    6. Baral, Nabin & Dhungana, Anal, 2014. "Diversifying finance mechanisms for protected areas capitalizing on untapped revenues," Forest Policy and Economics, Elsevier, vol. 41(C), pages 60-67.
    7. Halkos, George & Jones, Nikoleta, 2011. "Social factors influencing the decision to pay for the protection of biodiversity: A case study in two national parks of Northern Greece," MPRA Paper 34581, University Library of Munich, Germany.

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