Valuing Recreational and Conservation Benefits of Coral Reefs: The Case of Bolinao, Philippines

1
Valuing Recreational and Conservation Benefits of
Coral ReefsThe Case of Bolinao, Philippines

• Mahfuzuddin Ahmed, Gloria Magnayon Umali,
• Chiew Kieok Chong, Mary Franz Rull, and Marissa
  C. Garcia

2
Introduction

• Coral reefs are among the most vital, diverse,
  and productive of the marine ecosystems.
• Despite the wide range of benefits, coral reefs
  are among the most threatened marine resources in
  the country.
• Study area Municipality of Bolinao, Philippines

3
Problem/Challenge

• Overfishing
• Absence of clearly defined property rights
• Lack of any significant policy instruments and
  management intervention that protect coral reefs

4
What was done

• Economic valuation of the net recreational
  benefits from coral reefs (travel cost) and the
  conservation benefits attached to them by
  visitors (contingent valuation).

5
Empirical model

• Individual Trip Demand
• Vi/Popi exp(b0)TCib1Yib2
• where Vi number of visits to Bolinao from
  origin i
• Popi population at origin i
• TCi travel costs from origin i
• Yi average income of visitors
  from origin i
• bi coefficients

6
Empirical model

• Willingness to pay (WTP)
• WTP b0SbiXi? if b0SbiXi?gt0
• 0 if b0SbiXi?0
• where Xi age, educational attainment,
  employment status, income, and
• number of days spent on
  recreation
• bi coefficients
• ? error term

7
Data

• Survey was carried out by the WorldFish Center at
  various resorts in Patar, Bolinao Pangasinan.
• A total of 92 respondents participated in the
  on-site survey.

8
Results

• Individual Trip Demand Regression

t-values are in parenthesis. Significant at
the 5 percent probability level. Significant
at the 1 percent probability level.
9
Results

• Aggregate Demand Regression

t-values are in parenthesis. Significant at
the 5 percent probability level. Significant
at the 1 percent probability level.
10
Results/Lesson Learned

• Average consumer surplus of visitors PhP 10,463
  (USD 229) or annual aggregate consumer surplus
  PhP 220.2 million (USD 4.8 million).
• Substantial net economic benefits from visitors
  (strong demand to recreational services), which
  lend support to the importance of coral reefs and
  the provide justification for their conservation.

11
Results

• WTP Regression

t-values are in parenthesis. Significant at
the 5 percent probability level. Significant
at the 1 percent probability level.
12
Results/Lesson Learned

• Individual WTP PhP20.46 (USD 0.45) per visit or
  PhP73.17 (USD1.60) per year.
• Potential user fee revenues PhP 1.54 million
  (USD 33,695.9) that can be utilized to partially
  finance improvements in reef quality.
• 35.4 percent of the respondents thought that
  resource users or the general public should bear
  the cost of public resource maintenance.
• 29.2 percent of the respondents believed that
  government should be held liable for
  environmental preservation pursuits.

13
Lessons Learned

• Low WTP attached to reef quality improvements is
  probably due to the low socio-economic status of
  respondents and the free rider problem attached
  to public goods.
• Although the current capacity to raise revenues
  by charging visitors user fees, especially among
  domestic tourists, to finance reef conservation
  efforts may be limited, economic valuation
  provides the necessary initial step in putting a
  price to coral reefs.

14
Recommendations

• Part of the strategy for sustainable reef
  management should include massive advocacy and
  education campaign to increase awareness and
  understanding of the importance of coral reefs.