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Investigating the effects of sample heterogeneity on the travel cost model for coral diving in Southeast Asia

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  • Doshi, Amar
  • Pascoe, Sean

Abstract

In mid-2010, an impact assessment was undertaken to ascertain the non-market value of coral reefs to scuba divers in Thailand, Malaysia and Indonesia. A travel cost method was employed and it was found that divers had a consumer surplus of about US$590 per dive. However, given the sample consisted of a much larger proportion of international visitors (84%), an analysis was undertaken to ascertain the effects of the sample heterogeneity on the economic value estimates. The results indicated that the pooled results were biased towards the international sub-sample. Domestic visitors had a much lower consumer surplus of about US$130 per dive. In addition, the split-sampling suggested that the assumption of endogenous stratification using count data models was not appropriate for the international sub-sample. Applying the split-sampling based to the three separate countries illustrated further large disparities in consumer surplus, with Thailand the highest at US1200 per dive and Malaysia the lowest at US$260 per dive. This proves consequential in determining the appropriate user fee structure given the different resulting effects on returning divers based on their origins and diving destinations.

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Bibliographic Info

Paper provided by Australian Agricultural and Resource Economics Society in its series 2013 Conference (57th), February 5-8, 2013, Sydney, Australia with number 152146.

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Date of creation: Feb 2013
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Handle: RePEc:ags:aare13:152146

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Related research

Keywords: Travel cost method; coral diving; sample heterogeneity; Demand and Price Analysis; Environmental Economics and Policy; Research and Development/Tech Change/Emerging Technologies;

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