University of TehranJournal of Environmental Studies1025-862040220140622The Application of One and One-Half Bound (OOHB) Choices in the Contingent Valuation to Determine Tourists Consumer Surplus of Sisangan Forest ParkThe Application of One and One-Half Bound (OOHB) Choices in the Contingent Valuation to Determine Tourists Consumer Surplus of Sisangan Forest Park4394505121110.22059/jes.2014.51211FAMahmoud SabouhyAssociate Professor, Agricultural Economics, University of Zabol, IranKamal Ataie SoloutPhD. Students, Agricultural Economics, University of Zabol, IranJournal Article20130618Introduction
Forest for biodiversity and ecological functions is the main natural habitats. The most important function of forest is zonal and global climate regulation, recreation and ecotourism, water saving, regulation of hydrological cycle, flood control, and prevention of soil erosion. Valuation of public goods was noticeably widespread in the last decades. An understanding of the relationship between environmental economics and business economics is essential for policy makers. The influence of environmental resources functions increase vitality and joy of spirit and community development feasibility assessments of these areas. Today, a country that thinks more about economic development has seen tourism as a necessary. To ecotourism as an important branch of tourism has been paid serious attentionis. Even though there is no market for many ecosystem services where they could be traded by supply and demand, they do have value and are not really ‘free of charge’ or ‘cost-free’ in that there are almost always opportunity costs involved. For instance, their current use is at the expense of their future use as is the case for non-renewable energy resources such as oil and gas. Additionally, their use by one particular group is at the expense of another group of people as is the case when we have overcrowded common pool resources like natural parks or beaches, or discharge wastewater in a river impairing recreational fishing opportunities. Understanding the economic value for local, national and global policy is very important.
According to the influential role of environmental resource functions to increase the vitality and mental joy of individuals and to assess the feasibility of developing these regions, it is essential to determine the value of these resources functions. The purpose of this study is to identify factors influencing Willingness to pay of tourists in Sisangan Forest Park in Mazandaran province for recreationand to determine quantity of willingness to pay with One and One-Half Bounded (OOHB) choice in the Contingent Value.
Material & Methods
The study area for this research is Sisangan Forest Park located in the Mazandaran Province, about 30 km from Noushahr City and 20 km West of Nour city. The forest park area is 625 hectares with 200 meter width and 3 kilometer length on coastline of the Caspian Sea. It has very pleasant and attractive places for recreation and leisure for travelers to Mazandaran Province.
According to the internal and external studies in valuation non-market functions of environmental resources, the widely expressed Willingness to Pay method (contingent valuation method (CVM)) has been used to determine the value of ecotourism of environmental resources. Contingent valuation method is an established survey-based methodology that can be used to determine the value of non-market goods which are derived from natural and environmental resources, such as recreational function. The CVM attempts to determine willingness to pay (WTP) of individuals under certain hypothetical market scenarios.
According to economic theory, a rational person maximizes utility with respect to the expenditure limitation due to an incomplete understanding of optimization.As, an analyst is unable to accurately measure all relevant variables there are many errors in the maximization. Therefore, it is assumed that each respondent has a random utility function.
This theory is based on probability choice and it is assumed that individuals make choices that will maximize their utility, from the set of Frequently Asked Questions. In this context, indirect utility function for respondent i in equation 1 can be divided into two parts. Deterministic component (Observed by the researcher) is typically as an index of specific features of individual and effective option. It ischosen as option j in the proposed fees for use of special functions. Other section is random components (imperceptible by the researcher) that indicate invisible effects on the person choice:
U<sub>i</sub>=V<sub>i</sub> (X<sub>i</sub>) + e<sub>i</sub> = βX<sub>i </sub>+ e<sub>i </sub> (1)
Where, U<sub>i</sub> represents indirect utility of person, V<sub>i</sub> is deterministic component, e<sub>i</sub> stochastic component, X<sub>i</sub> individual specific features and effective option to accept the proposed amount, and i is number of responders.
Random utility theory posits that the person i choose c choice from C<sub>n</sub> range of choices that indirect utility of C is larger than any other choice, such as O. It is shown in equation 2:
U<sub>iC </sub>> U<sub>iO </sub>=≫ V<sub>iC </sub>+ e<sub>iC </sub>> V<sub>iO </sub>+ e<sub>iO </sub>(2)
Now, the probability that a particular respondentprefer C choice from a chosen range relative to any choice like O, can be said a probability that the utility associated with option C is the most desirable options stated.
prob((U<sub>iC</sub>>U<sub>iO</sub>) ∀ C≠O) = prob((V<sub>iC</sub> - V<sub>iO</sub>) > (e<sub>iC</sub> - e<sub>iO</sub>) ; C, O ∈ Cn (3)
Now, we proposed One-One Half Bounded (OOHB) questionnaire to determine recreational willingness to pay by Sisangan visitors. One-One Half Bounded (OOHB) questionnaire is presented with a range (B<sub>i</sub><sup>-</sup>, B<sub>i</sub><sup>+</sup>), where B<sub>i</sub><sup>-</sup> < B<sub>i</sub><sup>+</sup>. One of these two prices is selected in random, and the respondent is asked whether she/he would be willing to pay that amount. She/he is asked about the second price only if that is compatible with her/his response to the first price. If the lower price, B<sub>i</sub><sup>-</sup> is randomly drawn as the starting bid, the three possible response outcomes are (no), (yes, no), and (yes, yes); we denote the corresponding response probabilities by π<sub>i</sub><sup>N</sup>, π<sub>i</sub><sup>YN</sup>, π<sub>i</sub><sup>YY</sup>. If the higher price, B<sub>i</sub><sup>+ </sup>is randomly drawn as the starting bid, the possible response outcomes are (yes), (no, yes) and (no, no). We denote the corresponding response probabilities by π<sub>i</sub><sup>Y</sup>, π<sub>i</sub><sup>NY</sup>, π<sub>i</sub><sup>NN</sup>. Observe that:
(4)
(5)
(6)
Let d<sub>i</sub><sup>N</sup>= 1 if either the starting bid is B<sub>i</sub><sup>-</sup> and the response is (no) or the starting bid is B<sub>i</sub><sup>+</sup>and the response is (no, no), and 0 otherwise; let d<sub>i</sub><sup>YN</sup> = 1 if either the starting bid is B<sub>i</sub><sup>- </sup>and the response is (yes, no) or the starting bid is B<sub>i</sub><sup>+ </sup>and the response is (no, yes), and 0 otherwise; and let d<sub>i</sub><sup>YY</sup> =1 if either the starting bid is B<sub>i</sub><sup>-</sup> and the response is (yes, yes) or the starting bid is B<sub>i</sub><sup>+</sup> and the response is (yes), and 0 otherwise. Then, the log likelihood function for the response to a CV survey is using the OOHB format:
<br clear="ALL" /> This study is assayed to calculate separately willingness to pay of persons who have Lexicographic and Consequentialist tendencies.
Results and conclusions
Based on the extracted data from the General Administration of Cultural Heritage and Tourism Organization of Mazandaran Province, Iran, about 700,000 people visited the park in 2012. Accordingly, in the pre-questionnaire, respondents were asked a question that is: “Do you have willingness to pay for visit and recreational use of Sisangan Park or not”. This is a question to determine the sample size based on the trait variance of the answers. Variance of the responses in the 40 pre-questionnaires were 0.341 that using the Cochran's sampling formula, the required sample size is 180 cases.
From Logit model estimated in this study, it was clear that variables such as bid price amount, size of household, numbers of annual visits, Lexicographic, and monthly income of household have significant effects on person’s willingness to pay. Percentage of Right Predictions in this estimated model is equal to 0.88 and Cragg-Uhler R-Square equal to 0.69772. Likelihood Ratio Test is also equal to 239 with 8 degree of freedom in model. This shows that the model is significant in 99 percentage of confidence interval. <em> </em>
Willing to pay among households that have Consequentialist tendencies is 11,751 Rials per household in average, and among those who had Lexicographic tendencies is equivalent to 13,409 Rials (1Rial is nearly equal to about 3.333*10<sup>-5</sup> USD$).Finally, Based on the Result of the present study by calculating the weighted average, Consequentialist households and Lexicographic (0.77 and 0.23), the average willingness to pay (WTP) of households is estimated to be 12,201 Rials annually. The total recreation value of this park with using OOHB choice on the contingent value method is also estimated about 11.32 Billion Rials and 377 million Rials per hectare in the 2012.
According to the results it seems inevitable that more attention by the relevant authorities must be paid to extend the recreational functions of Sisangan Forest Park for more general welfare of tourists.People who believe it their duty to protect the environment have more WTP (equivalent to 14.1 percent) than those who beleive the support of the Environmental Protection has huge benefits that they can get from protecting the the park. So, if it does not benefit them, they may be reluctant to protect the environment. Therefore, we can providemany additional costs for maintenance, utilization, and development of environmental resources if household educations that have Lexicographic tendencies are strengthened to accept protection of environment as a task.Introduction
Forest for biodiversity and ecological functions is the main natural habitats. The most important function of forest is zonal and global climate regulation, recreation and ecotourism, water saving, regulation of hydrological cycle, flood control, and prevention of soil erosion. Valuation of public goods was noticeably widespread in the last decades. An understanding of the relationship between environmental economics and business economics is essential for policy makers. The influence of environmental resources functions increase vitality and joy of spirit and community development feasibility assessments of these areas. Today, a country that thinks more about economic development has seen tourism as a necessary. To ecotourism as an important branch of tourism has been paid serious attentionis. Even though there is no market for many ecosystem services where they could be traded by supply and demand, they do have value and are not really ‘free of charge’ or ‘cost-free’ in that there are almost always opportunity costs involved. For instance, their current use is at the expense of their future use as is the case for non-renewable energy resources such as oil and gas. Additionally, their use by one particular group is at the expense of another group of people as is the case when we have overcrowded common pool resources like natural parks or beaches, or discharge wastewater in a river impairing recreational fishing opportunities. Understanding the economic value for local, national and global policy is very important.
According to the influential role of environmental resource functions to increase the vitality and mental joy of individuals and to assess the feasibility of developing these regions, it is essential to determine the value of these resources functions. The purpose of this study is to identify factors influencing Willingness to pay of tourists in Sisangan Forest Park in Mazandaran province for recreationand to determine quantity of willingness to pay with One and One-Half Bounded (OOHB) choice in the Contingent Value.
Material & Methods
The study area for this research is Sisangan Forest Park located in the Mazandaran Province, about 30 km from Noushahr City and 20 km West of Nour city. The forest park area is 625 hectares with 200 meter width and 3 kilometer length on coastline of the Caspian Sea. It has very pleasant and attractive places for recreation and leisure for travelers to Mazandaran Province.
According to the internal and external studies in valuation non-market functions of environmental resources, the widely expressed Willingness to Pay method (contingent valuation method (CVM)) has been used to determine the value of ecotourism of environmental resources. Contingent valuation method is an established survey-based methodology that can be used to determine the value of non-market goods which are derived from natural and environmental resources, such as recreational function. The CVM attempts to determine willingness to pay (WTP) of individuals under certain hypothetical market scenarios.
According to economic theory, a rational person maximizes utility with respect to the expenditure limitation due to an incomplete understanding of optimization.As, an analyst is unable to accurately measure all relevant variables there are many errors in the maximization. Therefore, it is assumed that each respondent has a random utility function.
This theory is based on probability choice and it is assumed that individuals make choices that will maximize their utility, from the set of Frequently Asked Questions. In this context, indirect utility function for respondent i in equation 1 can be divided into two parts. Deterministic component (Observed by the researcher) is typically as an index of specific features of individual and effective option. It ischosen as option j in the proposed fees for use of special functions. Other section is random components (imperceptible by the researcher) that indicate invisible effects on the person choice:
U<sub>i</sub>=V<sub>i</sub> (X<sub>i</sub>) + e<sub>i</sub> = βX<sub>i </sub>+ e<sub>i </sub> (1)
Where, U<sub>i</sub> represents indirect utility of person, V<sub>i</sub> is deterministic component, e<sub>i</sub> stochastic component, X<sub>i</sub> individual specific features and effective option to accept the proposed amount, and i is number of responders.
Random utility theory posits that the person i choose c choice from C<sub>n</sub> range of choices that indirect utility of C is larger than any other choice, such as O. It is shown in equation 2:
U<sub>iC </sub>> U<sub>iO </sub>=≫ V<sub>iC </sub>+ e<sub>iC </sub>> V<sub>iO </sub>+ e<sub>iO </sub>(2)
Now, the probability that a particular respondentprefer C choice from a chosen range relative to any choice like O, can be said a probability that the utility associated with option C is the most desirable options stated.
prob((U<sub>iC</sub>>U<sub>iO</sub>) ∀ C≠O) = prob((V<sub>iC</sub> - V<sub>iO</sub>) > (e<sub>iC</sub> - e<sub>iO</sub>) ; C, O ∈ Cn (3)
Now, we proposed One-One Half Bounded (OOHB) questionnaire to determine recreational willingness to pay by Sisangan visitors. One-One Half Bounded (OOHB) questionnaire is presented with a range (B<sub>i</sub><sup>-</sup>, B<sub>i</sub><sup>+</sup>), where B<sub>i</sub><sup>-</sup> < B<sub>i</sub><sup>+</sup>. One of these two prices is selected in random, and the respondent is asked whether she/he would be willing to pay that amount. She/he is asked about the second price only if that is compatible with her/his response to the first price. If the lower price, B<sub>i</sub><sup>-</sup> is randomly drawn as the starting bid, the three possible response outcomes are (no), (yes, no), and (yes, yes); we denote the corresponding response probabilities by π<sub>i</sub><sup>N</sup>, π<sub>i</sub><sup>YN</sup>, π<sub>i</sub><sup>YY</sup>. If the higher price, B<sub>i</sub><sup>+ </sup>is randomly drawn as the starting bid, the possible response outcomes are (yes), (no, yes) and (no, no). We denote the corresponding response probabilities by π<sub>i</sub><sup>Y</sup>, π<sub>i</sub><sup>NY</sup>, π<sub>i</sub><sup>NN</sup>. Observe that:
(4)
(5)
(6)
Let d<sub>i</sub><sup>N</sup>= 1 if either the starting bid is B<sub>i</sub><sup>-</sup> and the response is (no) or the starting bid is B<sub>i</sub><sup>+</sup>and the response is (no, no), and 0 otherwise; let d<sub>i</sub><sup>YN</sup> = 1 if either the starting bid is B<sub>i</sub><sup>- </sup>and the response is (yes, no) or the starting bid is B<sub>i</sub><sup>+ </sup>and the response is (no, yes), and 0 otherwise; and let d<sub>i</sub><sup>YY</sup> =1 if either the starting bid is B<sub>i</sub><sup>-</sup> and the response is (yes, yes) or the starting bid is B<sub>i</sub><sup>+</sup> and the response is (yes), and 0 otherwise. Then, the log likelihood function for the response to a CV survey is using the OOHB format:
<br clear="ALL" /> This study is assayed to calculate separately willingness to pay of persons who have Lexicographic and Consequentialist tendencies.
Results and conclusions
Based on the extracted data from the General Administration of Cultural Heritage and Tourism Organization of Mazandaran Province, Iran, about 700,000 people visited the park in 2012. Accordingly, in the pre-questionnaire, respondents were asked a question that is: “Do you have willingness to pay for visit and recreational use of Sisangan Park or not”. This is a question to determine the sample size based on the trait variance of the answers. Variance of the responses in the 40 pre-questionnaires were 0.341 that using the Cochran's sampling formula, the required sample size is 180 cases.
From Logit model estimated in this study, it was clear that variables such as bid price amount, size of household, numbers of annual visits, Lexicographic, and monthly income of household have significant effects on person’s willingness to pay. Percentage of Right Predictions in this estimated model is equal to 0.88 and Cragg-Uhler R-Square equal to 0.69772. Likelihood Ratio Test is also equal to 239 with 8 degree of freedom in model. This shows that the model is significant in 99 percentage of confidence interval. <em> </em>
Willing to pay among households that have Consequentialist tendencies is 11,751 Rials per household in average, and among those who had Lexicographic tendencies is equivalent to 13,409 Rials (1Rial is nearly equal to about 3.333*10<sup>-5</sup> USD$).Finally, Based on the Result of the present study by calculating the weighted average, Consequentialist households and Lexicographic (0.77 and 0.23), the average willingness to pay (WTP) of households is estimated to be 12,201 Rials annually. The total recreation value of this park with using OOHB choice on the contingent value method is also estimated about 11.32 Billion Rials and 377 million Rials per hectare in the 2012.
According to the results it seems inevitable that more attention by the relevant authorities must be paid to extend the recreational functions of Sisangan Forest Park for more general welfare of tourists.People who believe it their duty to protect the environment have more WTP (equivalent to 14.1 percent) than those who beleive the support of the Environmental Protection has huge benefits that they can get from protecting the the park. So, if it does not benefit them, they may be reluctant to protect the environment. Therefore, we can providemany additional costs for maintenance, utilization, and development of environmental resources if household educations that have Lexicographic tendencies are strengthened to accept protection of environment as a task.https://jes.ut.ac.ir/article_51211_42ffb0da7a09a4f7374213b815d7028f.pdf