Valuing Marine Protected Areas (MPAs) in Belize: A case study using Contingent Valuation Methodology (CVM) to determine tourists’ willingness to pay (WTP)
A thesis presented to
the faculty of
the Center for International Studies of Ohio University
In partial fulfillment
of the requirements for the degree
Master of Arts
José Edwardo Trejo
June 2005
This thesis entitled
Valuing Marine Protected Areas (MPAs) in Belize: A case study using Contingent Valuation Methodology (CVM) to determine tourists’ willingness to pay (WTP)
By
José Edwardo Trejo
has been approved for
the Department of International Development Studies and
the Center for International Studies by
Ariaster Chimeli Assistant Professor of Economics
Josep Rota Director, Center for International Studies
TREJO, JOSE E. M.A. June 2005. International Development Studies Valuing Marine Protected Areas (MPAs) in Belize: A case study using Contingent Valuation Methodology (CVM) to determine
tourists’ willingness to pay (64pp.)
Director of Thesis: Ariaster Chimeli
Marine Protected Areas (MPAs) number more than 1,300 world wide (Hall et.al., 2002). They serve as an important tool in helping to protect delicate marine ecosystems from environmental degradation. This study uses Contingent
Valuation Methodology (CVM) to determine the willingness to pay (WTP) for
MPAs in Belize. In keeping with this methodology a total of 331 tourists were interviewed at two key locations, the Hol Chan Marine Reserve (HCMR) and the
Phillip Goldson International Airport (PGIA). Using an ordered probit approach
the findings revealed that Europeans had a higher WTP than North Americans,
males had a lower WTP while other inland activities surprisingly led all independent variables in terms of levels of significance. Most importantly the estimates revealed that higher income was positively correlated with WTP.
Approved :
Ariaster Chimeli Assistant Professor of Economics
Dedication
I dedicate this thesis to my wife, Diana and our two little ones Nyah Lisa and Isabel Alya whose shared sacrifices have carried me through what seemed to be an endless journey.
I also would like to thank my parents, Sylvestre and Rita Trejo for their unwavering support and for taking on the responsibility of rearing our children in our absence, a debt we can never repay. Acknowledgements
The author would like to thank all those anonymous tourists that participated in the survey, without them this study would not have been possible.
To my committee in particular Dr. Ariaster Chimeli, the head of the committee,
whose insights proved most invaluable and other professors who were kind
enough to offer their assistance with this study.
I also take the opportunity to thank the following:
The Center for International Studies of Ohio University for providing partial
funding for the data collection exercise conducted in Belize.
The staff and management of the Hol Chan Marine Reserve (HCMR) for their
financial assistance as well as hosting me for the duration of the data collection
in San Pedro.
The Belize Airports Authority (BAA) for allowing access to the departure lounge
at the Phillip Goldson International Airport (PGIA).
The Fisheries Department for providing transportation to the PGIA as well as
their assistance in providing interviewers.
My niece, Sophia Michelle Paz whose enthusiasm overwhelmingly led to a
significant portion of the survey obtained at the PGIA.
6 Table of Contents
Abstract ...... 3
Acknowledgements ...... 5
List of Tables ...... 8
List of Figures...... 9
Chapter 1. Introduction ...... 10 1.1 Sustainable Development: A Global Agenda...... 10 1.2 Tourism and Development in Belize ...... 11 1.3 Research Objectives...... 12
Chapter 2. Background...... 14 2.1 Belize: An Overview...... 14 2.2 The Belizean Economy...... 14 2.3 Tourism Overview...... 15 2.4 Marine Protected Areas (MPAs) in Belize...... 18
Chapter 3. Methodology and Survey Design ...... 26 3.1 Contingent Valuation Methodology (CVM)...... 26 3.2 Problem Areas Associated with CVM ...... 28 3.3 CVM Studies in Central America and the Caribbean...... 30 3.4 Sample Selection...... 33
Chapter 4. Data Analysis...... 40 4.1 Descriptive Statistics...... 40 4.2 Tourist Destination and Activities...... 43 4.3 The Model...... 43 4.4 Regression Results...... 44
Chapter 5. Conclusion ...... 48 5.1 Summary ...... 48 5.2 Objectives Revisited ...... 49 5.3 Policy Implications ...... 50
References ...... 52
Appendix A: Sample of Survey Form...... 56
Appendix B: Proportions of Sample (%) ...... 59
Appendix C: Raw Regression Results...... 60 7 Appendix C1: Marginal Effects for WTP1 ...... 61
Appendix C2: Marginal Effects for WTP2 ...... 62
Appendix C3: Marginal Effects for WTP3 ...... 63
Appendix D: Marginal Effects of Income on WTP...... 64 8 List of Tables
Table 1: Marine Reserves by Region/Subregion 2005 ...... 19
Table 2: Marine Protected Areas in Belize 2005...... 22
Table 3: Visitors to Marine Protected Areas in Belize 1998-2004...... 24
Table 4: List and Definitions of Variables ...... 38
Table 5: Descriptive Statistics...... 40
Table 6: Responses to WTP Question ...... 42
Table 7: Regression Results ...... 47 9 List of Figures
Figure 1: Tourist Arrivals in Belize 1998-2003...... 16
Figure 2: Marine Protected Areas in Belize ...... 21
Figure 3: Coastal Development of San Pedro Town 1993-2003 ...... 25
Figure 4: Household Telephone Services between Urban and Rural Areas...... 34
Figure 5: Hol Chan Marine Reserve ...... 36
Figure 6: Excerpt from WTP Survey: WTP Question...... 37
Figure 7: Marginal Effects of Income on WTP ...... 45 10 Chapter 1. Introduction
1.1 Sustainable Development: A Global Agenda
Economically challenged economies have long depended on their natural resources as a gateway to development. Negligence and inadequate information, however, over time have become the root causes for misuse and abuse to the extent where some developing countries are paying a huge price.
In today’s economy there is no room for misguided policies especially where it concerns natural environments and developing countries are learning that inherent in sound economic and development policy is the need to exercise socio economic responsibility over the proper use of natural environments. Thus the emergence of sustainable development as a policy tool to guide and nurture policies, which will ensure that the natural environment is at the fore of economic development policy.
While reference is made to emphasize the need for developing countries
to embrace sustainable development, it is important to note that this is a global
agenda, one that has transcended international borders. Environmental
deterioration has long been a concern for world leaders1 as evidenced from
Stockholm to Rio de Janeiro to Johannesburg. The World Summit in
Johannesburg 2002 recognized that “poverty eradication, changing consumption and production patterns and protecting and managing the natural resource base
for economic and social development are overarching objectives of and essential
1 Report of the World Summit on Sustainable Development, Johannesburg, South Africa, 2002, http://daccessdds.un.org/doc/UNDOC/GEN/N02/636/93/PDF/N0263693.pdf?OpenElement (Accessed: May 17, 2005). 11 requirements for sustainable development” (United Nations, 2002). Whether
successful or not, governments across the globe have collectively committed to
the objectives entrenched in achieving sustainable development.
1.2 Tourism and Development in Belize
Belize, as developing country is at a critical juncture in its development
given economic growth has recently hinged on a booming tourism industry. The
lackluster and unpredictable nature of Belize’s traditional sectors2 as an engine of economic growth has led to new opportunities in the form of tourism for the wider Belizean public. During the period 2001-2003, tourism expenditures increased from $112.1 mn USD to $145.1 mn USD (Central Bank of Belize,
2003)3. However, there is widespread environmental concern over the robust growth of tourism in Belize. The country boasts the second longest barrier reef in the western hemisphere, a marine ecosystem so diverse it has become the playground for tourists from all corners of the world. However, while tourism may be flourishing, many view the industry as a direct threat to the country’s natural setting and have expressed caution over the use of tourism as an economic flagship, claiming that the country is meandering along an unsustainable path.
To avoid an environmental debacle, there has been an increasing call for the
Government of Belize (GOB) to synchronize development policy with environmental responsibility. Despite these concerns, tourism is widely seen as
2 Belize is primarily dependent on its traditional sectors sugar, citrus and banana. During the period 1994- 2003 the traditional sectors on average alone accounted for 62.0% of domestic export earnings. 3 All references from the Central Bank of Belize were retrieved from the Central Bank of Belize 2003 Annual Reports and Accounts, http://www.centralbank.org.bz/docs/newAR03revised.pdf (Accessed: April 22nd, 2005). 12 playing an instrumental role in facilitating a sustainable development approach
to environmental protection (Lindsey and Holmes, 2002) and thus its use as an
environmental policy tool is far reaching.
In order to ensure that the country maintains the integrity of its natural
resources, namely its marine resources, there has been a strong commitment by
the Government of Belize (GOB)-through legislation and partnership agreements
between local and international bodies-to pursue this objective. Consequently,
there have been a total of 14 MPAs established along Belize’s coastline. While
MPAs are necessary to protect biodiversity they also serve as a source of direct
and indirect revenues, which enables countries to balance economic
development with environmental protection (Mathieu et al., 2003).
1.3 Research Objectives
This thesis seeks to characterize the demand for MPAs in Belize by determining those factors that help to influence the value and perceptions that tourists’ place on MPAs. It is expected that this exercise will provide guidance for the implementation of practical fee structures to ensure that Belize’s natural environment, particularly its marine environment are adequately maintained.
Belize is currently being marketed as an eco-tourist destination and given the growing trends in nature-based tourism; there is no doubt that increasing numbers at environmental attractions such as MPAs will impose a significant amount of pressure on these fragile environments (Huybers and Bennett, 2003).
For purposes of this thesis, the CVM was chosen given its popularity among economists as a tool in estimating the value of a wide variety of 13 environmental goods, these include air and water quality, outdoor recreation
and landscape and wildlife conservation (Hanley, 2000). CVM requires
conducting a survey whereby tourists in this instance were asked to express their
WTP for the use of MPAs in Belize, with WTP depending on the description of
the contingent market4; what they know about the environmental good which depends on the information they are provided within the CVM survey; their own preferences; their budget constraints and the availability of substitutes and
complements.
A background is provided in Chapter 2 as a means of establishing
familiarity with Belize, its economy, the role of tourism and general MPA current
functions and structures. In Chapter 3 the methodology and survey design used
are described along with a discussion of the general problem areas associated
with CVM. Particular attention is given to the problems faced using this
methodology in Central America and the Caribbean. In Chapter 4 analysis of the
data are presented and discussed. Chapter 5 is a summary along with a
discussion of policy implications of the study.
4 Hanemann (1994) states, “while demand is not observable, there still exists a latent demand curve that perhaps can be teased out through other means” pp 38. He suggests two approaches to doing this, indirect methods and CVM. 14 Chapter 2. Background
2.1 Belize: An Overview
Belize, a post independent British colony, is the smallest nation5 located in
Central America, bounded on the north by Mexico, on the south west by
Guatemala and the Caribbean Sea to the east. Its historical setting gives it a unique characteristic of bringing a taste of two worlds, with its cool Caribbean seabreeze traversing its rich marine ecosystems and its lush and teeming forests, once the playground of the mystical Maya in Central America, makes it the envy of the region. However, like many other Central American and
Caribbean territories its rich natural and cultural diversity is not spared from the frequent threats of hurricanes as they make their way towards the Caribbean
Basin during the months of June to November.
2.2 The Belizean Economy
Belize is an upper middle income and small open economy and is primarily dependent on its traditional sectors. During the period 1998-2003, the economy grew at an average growth of 8.7% (Central Bank of Belize, 2003). In light of increasing global pressures brought on by the twin processes of trade liberalization and globalization, the Government of Belize (GOB) during the latter part of the 1990s chartered its development policies to expand its economic
base. While there has been moderate success in diversifying away from the
traditional sectors, by far the most dramatic change in the Belizean economy has
been the shift towards the services sector. During 1998-2003, the sector on the
5 It is the smallest both in terms of its physical size (8,867 square miles) and population (270,000). 15 margin accounted for more than half (69.2%) of Gross Domestic Product
(GDP) (Central Bank of Belize, 2003).
2.3 Tourism Overview
The growth of the services sector is largely due to the phenomenal growth in the tourism and hospitality industry over the last decade. Inflows from tourism receipts undoubtedly boast the largest contribution to foreign exchange earnings, overshadowing both agriculture and manufacturing (Central Bank of Belize,
2003). While the sector continues to register successive growth, generating income and employment throughout the national economy, environmental concerns over the potential strain imposed on Belize’s natural resources have been mounting. Today, the over arching concern is centered on the impact of tourism on Belize’s marine resources, given the escalating numbers of tourist
arrivals, particularly those reflected in the cruise ship industry 6(Figure 1). During the period 2001-2003, expenditures by cruise visitors grew from $2.0 mn USD to
$22.3 mn USD, by far overshadowing the growth in expenditures by stayovers,
which grew from $110.1 mn USD to $123.1 mn USD.
During the period 1998-2003, the number of cruise ships making port calls
to Belize escalated from 25 to 315 in 2003 (Central Bank of Belize, 2003). This
is partly due to an initiative to have daily ports calls as well as recent massive
public and private led investments in infrastructure. Despite robust growth in
cruise tourism, however, Belize has one of the lowest cruise ship arrivals in the
Caribbean region and thus remains as a moderate to low density destination
6 The cruise ship industry is fairly new as cruise ships first started to make port calls to Belize in 1998 (Thomson, 2004 pp 183). 16 even though revenues are relatively high (Boxil, 2002) which to some extent
offers some level of comfort.
Figure 1: Tourist Arrivals in Belize 1998-2003
600,000
500,000
400,000
300,000
200,000
100,000
0 1998 1999 2000 2001 2002 2003
Total stop over arrivals Cruise ship
Source: Central Bank of Belize. Key Tourism Statistics http://www.centralbank.org.bz/dm_browse.asp?pid=79 (Accessed: April 2 2005)
Belize offers a variety of inland and offshore tourist activities but it is more known internationally for the rich diversity, which extends along its coastline such as its barrier reef (the second longest in the western hemisphere), three major offshore atolls and numerous mangrove systems. In essence, Belize’s shores, only several hundreds of miles away and almost at the heels of its primary market in North America, make it an ideal haven for recreational activities such as snorkeling, scuba diving, sport fishing and other sight seeing activities. 17 Belize like so many other developing countries is caught in a sweeping push for the merging of global markets, which leaves little room for already marginalized economies. As such, the very economic structures, the product of the core-periphery relationship conceptualized in development theory, lends to high levels of vulnerability. Today this “dependent development” (Britton, 1982 pp 333) seemingly continues to manifest itself in the form of tourism development
throughout the developing world. “With tourism accounting for about one quarter
of all regional export earnings, the Caribbean can legitimately be described as
the world’s most tourism-dependent region” (Weaver, 2001 pg 161). Belize’s
share in the Caribbean region is growing steadily and the tourism industry is fast
approaching the “development” stage within the tourism area cycle of evolution7
(Butler, 1980 pp 8). This is mainly due to intensified efforts by the Belize Tourism
Board (BTB) and the GOB to market the country in North America, as a premier eco-tourist destination.
Since the 1990s there has been considerable evidence that the Caribbean has adopted and embraced issues in sustainable tourism to improve its image. A shift towards a green paradigm has thus become the driving force of tourism development policy to combat unsustainable levels of mass tourism (Gould,
1999). Belize faces fierce competition within the Caribbean region and Central
America. In order to keep pace, Belize has fast taken up this approach and
7 R.W. Butler devised a hypothetical model for development of tourism at destinations. Butler identified several stages: discovery-destination receives few visitors as it is gradually introduced to the market; development- high frequency of visits with foreign dominated investments; consolidation-rate of increase in numbers will decline, although total numbers will still increase and total visitor numbers exceed the number of permanent residents; stagnation- peak numbers will level off, from thereon either the destination experiences rejuvenation- changes in attractions on which tourism is based or decline- destination loses its appeal ultimately losing its tourist function completely. 18 recently jumped on the bandwagon, adopting this marketing strategy wholeheartedly. Given that the industry is in its infancy stage of development,
the country has the opportunity to ensure that its policies for sustainable
management and nature-based tourism concept hold true to its commitment to
use nature-based tourism to protect the natural environment. While Weinberg
et.al. (2002) note that ecotourism is the fastest growing sector of the tourism
industry; they also argue that this development strategy can no longer be
questioned given that there are cases of it working.
Fortunately, Belize was largely overlooked by the exploding Caribbean beach tourist industry in the 1960s, 1970s and 1980s, thus placing it in a unique position of learning from the unfortunate experiences in other Caribbean island states (Gould, 1999). It should be then, that the country should not aspire for astounding levels of tourism; rather, it should ensure that it remains in the high end of the tourism market –focusing on quality of visitors and not quantity - so that it can avoid mass tourism. This should allow the country to remain on the path of low to moderate tourism (Boxil, 2002). To this end, it is hoped that its decision-makers will assertively implant policies that will effectively implement and ensure responsibility to its natural and human capital for the industry to remain viable and sustainable.
2.4 Marine Protected Areas (MPAs) in Belize
Marine protected areas have become increasingly important to developing countries that are heavily reliant on their natural environments as a source of revenue (http://www.panda.org/). They serve as environmental buffers for 19 economic growth, ensuring that the use of a country’s natural environment
remains sustainable in the long run. On a global scale marine reserves are
located mainly in the Pacific region, which accounts for more than half (61.0%) of
marine reserves. On the other hand, Belize accounts for 78.0% of marine
reserve in the Americas alone.
Table 1: Marine Reserves by Region/Subregion 2005
REGION SUBREGION MARINE RESERVE GRAND TOTAL Africa East Africa 23,251 23,251 Total 23,251 23,251 Americas Caribbean 4,935 4,935 Central America 249,911 249,911 Total 254,846 254,846 Asia South East Asia 102,568 102,568 Total 102,568 102,568 Australia Australia 100,000 100,000 Total 100,000 100,000 Pacific Melanesia 260 260 Polynesia 750,835 750,835 Total 751,095 751,095 Grand Total 1,231,760 1,231,760 Source: Reefbase. A global information system on coral reefs (Online) available from http://www.reefbase.org/ (Accessed: May 5, 2005)
Belize, as a developing country, is committed to safeguarding its natural environment providing the legislative framework, which allows the country to embed environmental quality into its development goals. As such, the country has earned recognition for its efforts in managing its natural environment at the regional and international level (http://www.travelbelize.org). Today, through 20 Ministerial declaration, approximately 45.6% of the country has been designated as protected8 areas. These include national parks, natural monuments, nature reserves and wildlife sanctuaries. While there is a genuine attempt to attach equal importance to managing Belize’s natural resources, the health of marine ecosystems are at the fore of environmental policy. There are currently a total of 14 established marine reserves covering approximately 11.8% of the country’s coastal waters (CZMAI strategy paper). Most are scattered throughout the length of the Barrier Reef, which runs parallel to the mainland, extending 175 miles along Belize’s entire coastline (See Figure 2).
8 The National Parks Systems Act of 1981 provides for the Ministerial declaration of national parks to protect and preserve national and scenic values of national significance; nature reserve to protect biological communities and the maintenance of natural processes in an undisturbed state; natural monuments areas reserved to protect and preserve nationally significant natural features of special interest or unique characteristics; wildlife sanctuaries areas designated as conservation reserves to protect national significant species, groups of species, biotic communities or physical features of the environment.( Chapter 215 of the Substantive Laws of Belize, Revised Edition 2000). Other important pieces of legislation include the Environmental protection Act and the Coastal Zone Management Act Chapter 328 and Chapter 329 of the Substantive laws of Belize Revised Edition 2000. 21 Figure 2: Marine Protected Areas in Belize
Source: Coastal Zone Management Authority and Institute Research/Reference Library http://www.coastalzonebelize.org/library.html (Accessed April 9, 2005)
22 Although the government is committed to ensuring that its natural resources remain intact it has and continues to be constrained by limited resources with which to exercise effective control and management of MPAs.
The Government of Belize, cognizant of the need to strengthen these fundamental issues, has leaned on its social partners to assume partial responsibility of marine reserves through semi-autonomous and co-management arrangements with local and international Non-Governmental Organizations
(NGOs) and Community Based Organizations (CBOs) (Table 2).
Table 2: Marine Protected Areas in Belize 2005
PARK MANAGEMENT AGENCY ESTABLISHED ACRES LEGISLATION Bacalar Chico Fisheries Department 1996 15575 Fisheries Act Blue Hole NA 1996 NA NA Caye Caulker Forest and Marine 1998 9669 Fisheries Act Reserves Association of Caye Caulker/Fisheries Department
Gladden Spit Friends of Nature 2000 25600 Fisheries Act Glover's Reef Fisheries Department 1987 81237 Fisheries Act Goff Caye NA NA NA NA Half Moon Caye Belize Audubon Society NA 9700 NA Hol Chan Fisheries Department 1987 4048 Fisheries Act Laughing Bird NA NA NA NA Caye Port Honduras Toledo Institute of 2000 100378 Fisheries Act Developmet and Environment Sapodilla Cayes Toledo Association for 1996 33401 Fisheries Act Sustainable Tourism and Empowerment
South Water Caye Fisheries Department 1996 118121 Fisheries Act Turneffe Atoll NA NA NA NA Source: Protected Areas Conservation Trust http://www.pactbelize.org/ (Accessed May 3, 2005) Belize Audubon Society http://www.belizeaudubon.org/parks.htm (Accessed May 3, 2005) 23 Despite these arrangements, however, the legal framework rests solely
within the ambit of the government. Other institutional arms with legal mandate
to declare, administer and manage protected areas include the Coastal Zone
Management and Authority and Institute (CZMAI) and the Protected Areas
Conservation Trust (PACT)9.
Marine reserves offer a combination of recreational activities, which tourists and Belizeans alike engage in, however, these activities pose a direct threat to these fragile marine ecosystems10. A study conducted by Lindberg
(2001) revealed that tourists expend a total of 3.5 “marine tourism” days on snorkeling and diving with snorkeling at the HCMR dominating the marine experience in Belize. Entrance fees thus play a critical role in generating much needed revenues to protect these delicate marine ecosystems. Prior to
November 2003 only the HCMR charged an entrance fee to enter the reserve.
Today all marine reserves charge tourist visitors a $5 USD. Despite its relatively small size (4048 acres), the most popular of marine reserves is the HCMR. The
HCMR is an offshoot of a community based initiative coupled with a call from international organizations such as the New York Zoological Society (NYZS) and the Peace Corps, to address high levels of uncontrolled and destructive fishing and diving in the area (http://www.holchanbelize.org/).
9 The Coastal Zone Management Authority and Institute has responsibility for the prudent use of coastal resources but does not have management authority. The Protected Areas Trust is responsible for supporting the management of Belize’s natural and cultural resources. 10 These activities include diving, snorkelling, and glass bottom boating. 24 Table 3: Visitors to Marine Protected Areas in Belize 1998-2004
PARK/RESERVE 1998 1999 2000 2001 2002 2003 2004 Guanacaste 2,567 2,788 1,184 1,452 2,445 2,288 2,306 National Park
Crooked Tree 1,483 1,619 947 1,116 1,440 1,299 2,359 Wildlife Sanctuary
Cockscomb Basin 4,078 3,603 5,189 6,085 6,343 10,062 9,194 Wildlife Sanctuary
Blue Hole 7,098 6,162 10,080 8,853 8,485 7,880 10,448 National Park (Inland)
Half Moon Caye 7,310 7,940 12,317 10,071 10,207 7,141 9,803 National Monument
Belize Zoo & 40,855 39,838 40,828 40,380 69,461 N/A N/A Tropical Education Centre
Mountain Pine 17,896 25,835 24,779 N/A N/A N/A N/A Ridge
Community 4,676 4,011 4,795 4,321 6,567 9,452 16,892 Baboon Sanctuary
Hol Chan Marine 40,048 37,059 36,887 38,687 55,701 74,375 87,136 Reserve
TOTAL 128,009 130,854 139,006 112,966 162,651 114,500 140,142 Source: Belize Tourism Board http://www.belizetourism.org/purpose.html (Accessed January 18, 2005)
The reserve is the first of its kind to be established and over time has become increasingly popular due to its proximity to San Pedro Ambergris Caye,
Belize’s premiere tourist destination (BTB). During the early 1990s, development of inland tourist activity strengthened San Pedro’s image as a beach resort
(Thomson, 2004). Over the last decade and a half, coastal tourism was considered as one of the most important forms of tourism in developing countries 25 (Pearce, 1989). The same can be said of the industry in Belize today. Over the last decade, the island of San Pedro has seen rapid coastal development stemming from a booming tourism industry in Belize.
Figure 3: Coastal Development of San Pedro Town 1993-2003
26 Chapter 3. Methodology and Survey Design
3.1 Contingent Valuation Methodology (CVM)
Contingent valuation methodology is a survey approach to the valuation of goods and services for which an explicit market does not exist. Consumers are directly asked what they would pay for an environmental good if there were a market. As a result, researchers are able to obtain a direct revelation of demand from consumers for the consumption of environmental goods (Kolstad, 2000).
The first published reference to this methodology can be traced to Ciriacy-
Wantrup who in 1947 wrote about the benefits of preventing soil erosion
(Portney, 1994), but it was not until the 1980s that it gained recognition as a reliable valuation technique. An important milestone was the acceptance by the
US courts of the use of CVM in natural resource damage assessments under the
1980 Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA). However, a landmark case in the development of CVM was the case pursued by the State of Alaska and the federal government of the United States against Exxon as a result of the Exxon Valdez oil spill (Hanley, 2000).
Although there has been a proliferation of CVM studies, there is much debate on the use of this technique due to the risk that it may be poorly applied or misused (Mitchell and Carson, 1995). Despite the ongoing debate surrounding CVM studies, however, its use in valuing recreation and environmental goods is now widely accepted (Shultz, 1997). As of 1994 there have been a total of 1,600 reported studies using CVM covering a range of 27 issues in air quality, air pollution, drinking water, highway safety, and
recreation (Hanemann, 1994).
Other methodologies utilized in economic valuations include the travel cost and hedonic valuation methods. The travel cost method, the oldest method of valuing environmental goods, infers the value consumers place on an environmental good by observing the cost of traveling to and efforts expended to enjoy the environmental good (Kolstad, 2000). On the other hand, the hedonic valuation method approaches valuation from the perspective of inferring preferences for environmental goods from observed behaviour in actual market transactions. For instance, measuring variation in prices of houses located in areas with different levels of pollution (Kolstad, 2000).
This study uses the CVM methodology given that it was the most suitable
for purposes of the survey in Belize. Besides, the CVM is favoured over the
travel cost and hedonic methods as an evaluation technique in Latin America and
the Caribbean (Shultz, 1997). By extension CVM helps to differentiate between
use values11– value associated with the consumption of a good and nonuse values12 – gain in a persons utility without the person actually using the good,
that is, an individual may base their valuation based on how others feel (Kolstad,
2000 pg 295-297).
11 Use values may include current use-individual is currently using the resource; expected use-individual plans to use the resource in the immediate future, say at the end of the year and possible use-individual might use the resource in the distant future, say within 10 years. 12 Three basic types of nonuse values are existence value-value that an individual places on just knowing that something exists; altruistic value- deriving benefit not from one’s own consumption but from someone else’s gains in utility; bequest value- associated with the well being of descendents. 28 3.2 Problem Areas Associated with CVM
A typical problem that researchers face using CVM rests in the design of the questionnaire. Respondents usually feel that there is something else that they would rather be doing than answering a questionnaire. Therefore, researchers may find themselves caught in a quandary, deciding on the type of questions to ask, the appropriate vocabulary and phrases to include (Whitehead,
2000). The willingness to pay question, however, carries the most weight since the analysis is essentially centered on this variable, thus considerable time must
be expended to ensure that it is clear and succinct (Whitehead, 2000). To avoid
some of the common problems mentioned, the survey used in this study was
designed to be short enough so that tourist visitors would have sufficient time to
respond.
The CVM is fixed on a hypothetical setting, asking respondents to value
an environmental good, for which they may have not otherwise considered.
Early studies in CVM used an iterative technique, known as the bidding game or
close ended approach which asks individuals whether they are willing to pay $X
(Freeman, 1993). If the respondent’s answer is yes then the question is
repeated until the individual answers no. The highest price with a yes response
is interpreted as the maximum willingness to pay. If the original response is no
the iteration proceeds downward until a yes is received. This method suffers,
however, from starting point bias. This occurs when respondents see initial bid
as a reference point for valuation. Respondents who start with a lower initial bid 29 will end up with a lower willingness to pay than those that started with a higher
bid (Mitchell and Carson, 1989).
Another elicitation technique used is the open-ended/direct question
approach. Open-ended questions ask respondents to state their willingness to
pay. The problem with this approach is that it asks respondents a straightforward
question to place a value on an environmental resource for which they may or
may not have sufficient information13. There is abundant evidence that respondents find the open-ended willingness to pay question much more difficult to answer than the close ended one; for market and non market goods alike people are in a better position to say whether they would pay a particular amount than saying what they would possibly pay (Hanemann, 1994). Furthermore,
Mitchell and Carson (1989) argue “respondents often find it difficult to pick up a value out of the air, as it were without some form of assistance” (pg 97).
Consequently, this technique typically results in high non-response rates to the valuation question and/or high proportion of implausibly high or low stated values
(Freeman, 1993).
A variation of the open-ended approach is to provide a payment card, whereby the respondent has the opportunity to choose from a range of alternatives or state their own value if that is not to be found on the payment card. This method was developed to respond to the high proportions of non- responses and protest zeros associated with the open-ended formats. However,
13 Respondents may lack knowledge on current threats and degradation to the environment e.g. the annual loss of coral reefs at the global level due to global warming, sedimentation, agricultural run off, coastal development and their impact on marine ecosystems; listing of species that are on the verge of being placed on the Convention for the International Trade in Endangered Species (CITIES) listings. 30 there is evidence that the use of payment cards and the provision of
information on what is being paid for other public goods reduce the variance in individuals’ responses. Nonetheless, Mitchell and Carson (1989) posit that the payment card gives the respondent some assistance in searching for their valuation.
A more complete approach to determine the willingness to pay is seen in
the dichotomous choice referendum format. This approach is appealing given
that it conjures a real world market decision setting that consumers face on a
daily basis. Respondents are presented with an environmental policy or
program, which is likely to be pursued, and are then asked to vote on the
proposal after the potential environmental benefits accrued are described. The
question format is likely to ask them whether they would be willing to pay xx?
(Nunes, 2002). This approach requires a substantial amount of resources to
conduct and was beyond the reach of the study undertaken in Belize.
3.3 CVM Studies in Central America and the Caribbean
An inventory and assessment of non-valuation studies in Central America and the Caribbean revealed that CVM is the most preferred of valuation technique, used to determine willingness to pay for drinking water and protected areas (Shultz, 1997). Specific problems identified with CVM studies included reliance on the problematic open-ended bidding formats, a lack of detail in information framing and contingent scenarios, problems in defining and surveying population samples, and the danger of possible cultural-strategic biases associated with the use of personal surveys of local residents. 31 The open ended bidding formats were used in almost half of the 12 reported CVM studies rather than the discrete/dichotomous choice or iterative formats. While this approach is relatively simple to design it is often very hypothetical and may be subject to strategic biases whereby respondents overstate or understate their true willingness to pay (Freeman, 1993). Shultz
(1997) reasons that the open bidding format is used extensively due to the lack of knowledge in these countries about recent CVM literature and the state of the art methodologies and the lack of trained professionals, economists and statisticians, specializing in environmental economics14.
Limited information framing was noted in almost all of the CVM studies reviewed. Information framing requires that respondents be presented with the best description of a hypothetical scenario. In the case of one study on protected areas, respondents were asked to opine on a fair price for a particular park and to indicate their willingness to pay to visit the park if the government increased the entrance fee. This particular question suffered from a lack of specific information about the park and the exact purpose behind collecting the higher
entrance fee. The information provided is required to be specific and sufficiently
detailed so that respondents can give a valued response as well as to maximize
on the response rate. Shultz (1997) suggests that apart from the lack of
expertise, researchers also have a tendency to keep the information framing as
14 Expertise in the field may have improved overtime since this particular inventory and assessment was conducted. Shultz admits at the time that campaigns spearheaded both by the National University of Costa Rica (UNCR) and the Research and Training Center for Tropical Agronomy (CATIE) had been initiated to train environmental economists in these countries. Both institutions had begun to offer regional master’s level graduate programmes in ecological economics and environmental economics, respectively. 32 simple as possible so that respondents are not confused. In addition, researchers try to maximize on their surveys by using it to facilitate comparison of willingness to pay values among different study sites and different characteristics. The survey in Belize was designed to be concise and direct given that the setting in which it was conducted required that respondents be able to complete the survey in the least time possible. This will be further discussed in the sample selection process.
In selecting the population sample there was the tendency to choose only actual visitors to the various protected areas through an on site entrance and exit survey. Shultz’s acknowledged that this is an acceptable approach if the purpose of the study was to determine willingness to pay values for the future return visits to these protected areas. However, Shultz (1997) argues that if the purpose of the study was originally intended to capture all visitors (actual and potential), to a protected area, then a biased sampling frame is being used. To avoid sampling the complete population, Shultz (1997) offers spot surveys of international tourists at random points throughout the country, particularly at the international airports when they are leaving the country. Given time constraints and limited resources, the survey conducted in Belize was specifically designed to accommodate both for tourist visitors at one on site location, and the departure lounge at the international airport.
Lastly, Shultz (1997) found strong evidence, which suggested that CVM studies suffered from cultural-strategic bias associated with personal surveys of the resident population. The incidence of strategic bias or incentives to 33 misrepresent values is evidenced in CVM literature whereby respondents
intentionally report false willingness to pay values in order to influence the
valuation process (Freeman, 1993).
“If an individual has any reason to believe that his or her response will have any effect on either the provision of public goods or environmental quality or on the individual’s taxes or other payment responsibilities, then the respondent may try to use the response to influence the outcome of the public policy process” (Freeman, 1993, pp 183).
In two CVM studies conducted in Costa Rica15, Shultz (1997) noted that responses were not typical of traditional strategic bias. Shultz suspects that resident respondents may have falsely reported their willingness to pay values not to purposely influence the valuation of the resource, but due to the lack of familiarity with personal surveys and the process of providing an honest response to interviewers. The survey in Belize somewhat evaded cultural bias since the resident population was not targeted; however, it may have been biased towards the culture of North Americans since it was expected that they would account for majority of the responses.
3.4 Sample Selection
There are various methods available to researchers that choose to undertake a CVM study. These include mail, telephone surveys and face-to-face interviews. However, the latter was chosen in the interest of time and limited resources as well as due to the fact that mail and telephone surveys are not
15 “Valuation of non-priced amenities provided by biological resources within the Monteverde Cloud Forest Preserve, Costa Rica (Echeverria et. al., 1995) and “Opportunities and limitations of contingent valuation surveys to determine national park entrance fees: Evidence from Costa Rica” (Shultz et.al.,1998). 34 widely used tools in Belize. Besides, data from the most recent population census conducted by the Central Statistical Office in Belize in 2000 revealed that only 21,142 of 51,945 households have access to telephone services. Of those that do have access to telephone service, 15,205 households or 71.9% were located in urban areas while 5,937 households or 28.1% in rural areas (Figure 4).
Again it is not customary to conduct surveys via telephone and even so this would probably lead to sample bias since there would be a tendency to select urban over rural households. In addition, the target market was to conduct interviews of tourist visitors and hence neither of these methods would have been practical, especially since the average length of stay for overnight tourists is approximately 7.3 days (Central Bank of Belize, 2003).
Figure 4: Household Telephone Services between Urban and Rural Areas 2000
1.2
1
0.8
t Rural
cen 0.6 Urban Per 0.4
0.2
0 Corozal Orange Belize Cayo Stann Toledo Walk Creek Districts
Source: Population Census 2002, Central Statistical Office of Belize http://www.cso.gov.bz/publications/MF2000.pdf (Accessed: April 30, 2005) 35 Face to face interviews were conducted at the Hol Chan Marine
Reserve (HCMR) and the Phillip Goldson International Airport (PGIA) for a
combined total of 331 tourists. These locations were chosen due to the relatively
high flows of tourists, the HCMR serving as the most visited of Belize’s protected
areas (Table 3)and the PGIA the major point of departure. The majority of the
interviews were collected at the PGIA given that a total of 4 days was dedicated
compared to 3 at the HCMR. In addition, the PGIA was more accommodating
than the HCMR where the interviews were more viewed as an unwanted and
unnecessary interruption of pleasure.
At the HCMR, interviewers accompanied park rangers on scheduled
monitoring activities16, which are conducted on a daily basis. The entire marine reserve covers approximately three square miles (7.8 sq km) and is divided into four zones, ZONE A- The Reef, Zone B – The Seagrass beds, Zone C- The
Mangroves and Zone D- Shark Ray Alley. Tourists were randomly chosen at only two locations within the marine reserve. This included Zone A and D since these are the most heavily visited areas within the park (Figure 5). The survey forms were distributed among tourists before and after they explored the park.
This was partly successful given that upon arriving at the reserve tourists were more than anxious to plunge into the water and thus at times were very unreceptive to being interviewed. On the other hand, after emerging from the
16 Park rangers are required to check each boat for total number of passengers, number of tour guides per tourists-by law tourist operators are required to have one trained guide per every 6 tourist-, licenses and registration. 36 waters the constraint was more of a time factor since most were racing to fit
other activities into their schedules or simply rushing off to return to their cruise ship.
Figure 5: Hol Chan Marine Reserve
Source: Hol Chan Marine Reserve http://www.holchanbelize.org/habitat.html (Accessed March 20, 2005)
Interviews at the PGIA were conducted randomly as tourists waited in the departure lounge. These interviews were somewhat different from those at the
HCMR since individuals were interviewed on a one-on-one basis. Interviewers were able to accommodate inquiries more easily whenever they arose while 37 more than often interviews at HCMR required explaining the study to a group
of tourists.
The survey form was structured into four sections. The first section, which
is standard for a CVM study, collected demographic and socioeconomic
information. The second section was framed to capture tourist motivations for
visiting Belize and thus included a variety of reasons from which to choose from.
The third section was aimed at capturing the activities that tourists engaged in while in the country. The fourth section was the willingness to pay question
(Figure 6) where tourists were given a brief explanation of marine parks and their use in helping to manage and protect valuable resources.
Figure 6: Excerpt from WTP Survey: WTP Question
In recent years, the number of Marine Protected Areas (MPAs) has grown significantly across the globe. MPAs number over 1,300 worldwide. In Belize there are 12. MPAs have grown mainly because they have become instrumental in managing and protecting valuable marine resources. In some countries entrance fees are charged to access marine resources located within MPAs for recreational activities.
Do you agree that an entrance fee should be charged to access MPAs in Belize? If yes/no please state why ______
Tourists were then asked an open ended question (Yes/No) whether they believe that a fee should be charged to enter a marine park in Belize. 38 Regardless of their response they were asked to provide a brief explanation.
Those that indicated that fees should be charged were asked to choose from a
payment card system where values ranging from $1.00 to $ 50.00 USD were provided. Respondents were also given the option to indicate willingness to pay
of less than $1.00 USD or more than $50.00 USD (See Appendix A).
Table 4: List and Definitions of Variables
VARIABLE CODE DEFINITION Socio demographic characteristics: Region Dummy variable: 1 if individual resides in…, 0 otherwise norta North America europe Europe other Any other region Race Dummy variable: 1 if individual's race is…, 0 otherwise white White black Black hisp Hispanic otherace Any other races Gender Dummy variable: 1 if individual is…, 0 otherwise male Male single Single Marital Status Dummy variable: 1 if individual is…, 0 otherwise married Married single Single sepdiv Separated/Divorced Education Dummy variable: 1 if individual has…, 0 otherwise elem Elementary second Secondary Income incmid midpoint of income Frequency and Purpose Dummy variable: 1 if individual…, 0 otherwise firstvis was visiting Belize for the first time business was conducting business in Belize Reasons Dummy variable: 1 if reason stated is…;0 otherwise nature nature beach Beach othermar othermarine 39 Table 4 (continued) prox proximity wild wildlife maya maya sites forest forests protect protected areas exotic exoticism recom recommended othereas other reasons Activity Dummy variables: 1 if respondent participate in…;0 otherwise acsuba scuba ackay kayaking acsail sailing acfish fishing acboat boating acwindsf windsurfing otherinl other inland Location Holch Hol Chan Marine Reserve PGIA Phillip Goldson International Airport Entrance Fee wtpfull int3 Willingness to Pay 40 Chapter 4: Data Analysis
4.1 Descriptive Statistics
Sixty eight percent of the questionaires were completed at the PGIA with women accounting for 51.0% of the sample size, thus indicating a rather fair balance between genders. The mean willingness to pay to access marine parks in Belize was recorded at $10.76 USD. In 2001 a study of several marine parks
– HCMR, Hunting Caye, Laughing Bird Caye, and Halfmoon Caye – in Belize was conducted (Lindberg, 2001). Using an open ended approach, willingness to
pay ranged from $0-$200.00 USD with an average of $13.41 USD. However, the most frequent response was $10.00 USD, followed by $5.00 USD and $20.00.
Table 5: Descriptive Statistics
WTP AGE INCMID Mean 10.76 36.63 53,160.54 Median 10 34 45,000 Maximum 100 76 100,000 Minimum 0 13 5,000 Std. Dev. 10.99247 13.46585 33,369.92
Furthermore, a strategy paper17 produced by the CZMAI in 2003 recommended that the GOB institutionalise an entrance fee of 10.00 USD for all non Belizeans and a $2.50 USD for Belizeans between the ages of 12 and 65 to access all MPAs in Belize. The paper also recommended that a nationwide diving fee for non-Belizeans be charged at $10.00 USD for one tank dives and
17 Operationalizing a Financing System for Coastal and Marine Resource Management in Belize 2003. 41 $30.00 USD for multi tank dives. Of particular interest was a proposed
conservation tax for snorkeling, ranging between $2.00-$5.00 USD which would
be applied anywhere within Belize’s coastal zone. This charge would be levied on non-Belizeans only.
On average women had a higher willingness to pay ($11.22 USD)
compared to men ($10.28 USD). The difference between single females ($12.37
USD) and single males ($9.21 USD) was even more notable. Surprisingly,
women with secondary education had a higher average willingness to pay $13.08
USD compared to those with a higher level of education $11.08 USD.
Conversely, men with higher levels of education had a higher average
willingness to pay of $10.64 USD than those with secondary levels of education,
$9.00 USD. Married individuals, however, had a higher average willingness to
pay of $11.05 compared to single and separated/divorced individuals, which
averaged $10.87 and $7.80 USD, respectively . Nonetheless, the estimated
results suggest that, once income was controlled for, education had no impact on
WTP.
Of the total, North Americans accounted for 82% of the sample size
followed by Europeans which accounted for 12.0% (See Appendix B). As
previously mentioned North America is Belize’s primary market, and most North
Americans were first time visitors. Europeans, however, had a higher average
willingness to pay $14.59 USD compared to North Americans $10.51 USD. The
higher average willingness to pay noted for Europeans may be due to a small
content within the sample. In Central America there is a tendency for Europeans 42 to maximise on travel by visiting more than one country within a limited time
frame and thus choose the most least costly means of travel.
Over all, 279 (93 %) indicated that they were willing to pay an entrance fee to access MPAs in Belize. The most common response tourists’ gave in support of paying an entrance few was mainly for protection and maintenance. Other less frequent responses included using the entrance fee for preservation and conservation, as a source of revenue for the domestic economy, and monitoring and enforcement.
Table 6: Responses to WTP Question
WTP Protection and Maintenance 141 Revenue Source 15 Monitoring and Enforcement 10 Users should pay 9 Costs to maintain 9 Instill value and respect in users 5 Lower Visitation 4 Education Awareness 4 Sustain biodiversity 4 WTP with Reservation If fee collected is not misused 9 If fee is not unreasonable 3 43 4.2 Tourist Destination and Activities
Of the total number of tourists surveyed more than half (74.9%) were first time visitors, with most North Americans indicating that Belize’s marine resources, its barrier reef and beaches were the driving force behind their decision to visit the country. Belize is currently marketed as an ecotourism destination yet few tourists indicated the country’s protected areas status as a reason for their visit. This was followed by inland activities which included the country’s maya sites, forests and wildlife.
The majority of North Americans visiting Belize engaged in snorkeling followed by scuba diving activities. This was expected since majority had indicated that the barrier reef was the primary reason for their visit. North
Americans were also very much interested in other marine activities, in order of significance, kayaking, fishing, sailing, glass bottom boating and windsurfing.
However, it was evident that North Americans who engaged in marine activities were also interested in inland activities as well.
4.3 The Model
The econometric anaylsis used an ordered probit to regress a total of 18 independent variables of which, only two were numeric variables - age and income- on three ordered indicator values or intervals for WTP ($0-$15=WTP 1,
$16-$50=WTP 2 and over $50= WTP 3). Estimation of the probit model hinges on the use of maximum likelihood. The problem in this study for instance narrows down to finding those parameter/coefficient values that make the estimated probabilities for each alternative (y=WTP1=outcome1, 44 y=WTP2=outcome2 and y=WTP3=outcome3) as close as possible to the
fraction of those tourists in the sample that selected the previously mentioned alternatives. In other words, the objective of using the ordered probit model is to determine the probablities of tourists falling in the specified intervals for WTP given the specified independent variables (Table 4). The model assumes єi are independent and identically distributed random variables. As well that єi is normally distributed across observations, that is, we normalize the mean and variance of є to zero and 1. With the normal distribution we have the following probablilities:
Prob[y=1]=Φ(-β′x),
Prob[y=2]=Φ(µ2- β′x) - Φ(-β′x), . . . Prob[y=J]=1 - Φ(µj-1-β′x)
In order for all of the probabilities to be positive, we must have
0< µ1< µ2< < µj-1
4.4 Regression Results
The hypothesis of the study is that WTP to visit and use an MPA in Belize will correlate with region, income, education, location, attitudinal and behavioural variables. From the study, the results revealed that Europeans were more willing to pay than North Americans (p<0.10). This is evidenced in the marginal effects which indicated that Europeans were less likely to fall in ranges WTP1 (-0.062) and WTP2 (-0.082) but rather in the range WTP3 (0.145) (See Appendix C1, C2 and C3). The results with respect to income revealed that it is likely to affect 45 WTP (p<0.05). The estimated probabilities as observed from the marginal
effects indicated that tourists with high incomes were not likely to fall in ranges
WTP1 and WTP2 given that the marginal probabities neared zero. In other words tourists stating a WTP of WTP1 and WTP2 decreased with higher levels of income (See Appendix C1 and C2). Conversely, as Figure 6 suggests the probablity of tourists willingness to pay in the range WTP3 (1.64) improved with higher incomes (See Appendix C3).
Figure 7: Marginal Effects of Income on WTP
0.80 0.70 0.60
y 0.50
bilit 0.40
oba 0.30 Pr 0.20 0.10 0.00 0 35,000 70,000 105,000 140,000 175,000 Incmid
WTP1 WTP2 WTP3
In contrast to income, the level of education had no impact on WTP.
Lindsey and Holmes (2002) in a study conducted in Nha Thrang, Vietnam
“Tourist Support for Marine Protection in Nha Thrang, Vietnam” found high
education to have no appreciable effect on support for user fees. In terms of 46 gender, males were, interestingly, less likely to pay an entrance fee for an
MPA (p<0.10) when compared to women, possibly indicating differences in preferences with repsect to MPAs. The marginal effects indicated that males were more likely to fall in ranges WTP1 (0.049) and WTP2 (0.034) See Appendix
(C1 and C2).
Despite that more than half (74.9%) of tourists indicated that they were visiting Belize for the first time, it had no impact on WTP likewise for those visiting on business. The location variable, that is, those tourists surveyed at the
HCMR and the PGIA as well, was found to have no effect on WTP.
The reasons that tourists provided behind their visit were not positive in the initial stages of the anaylsis, as there were no levels of significance observed in any of the variables within this category and were therefore removed. The intuition was that reasons and activities were likely positively correlated thus rendering reasons given insignificant. Of the activities that tourists engaged in marine activities had an impact on the WTP (p<0.10). A noteworthy and interesting finding from the results revealed that other inland activites were statistically significant and had a positive impact on WTP (p<0.01).
Given that the HCMR currently charges a $5.00 USD to access the park,
CVM was used to determine the direct use value (non extractive) by estimating consumer surplus. The mean average WTP for tourist visitors to access the
HCMR alone was $9.53 USD while total number of visitors to the HCMR in 2004 was 87,136, thus consumer surplus was estimated at $394,726.08 USD 47 ($789,452.16 Bz). Total benefits from direct use thus amounted to a total of
$830,406.08 USD ($1,660,812.16 BZ).
Table 7: Regression Results
VARIABLE COEFFICIENT STD. ERROR Z-STATISTIC P>|Z| EUROPE 0.42922 0.222084 1.93 0.053* OTHER -0.55778 0.349142 -1.6 0.11 BLACK 0.05741 0.365240 0.16 0.875 HISP -0.29041 0.355692 -0.82 0.414 OTHERACE 0.61493 0.306594 2.01 0.045** MALE -0.27152 0.144686 -1.88 0.061* SINGLE 0.19770 0.162029 1.22 0.222 SEPDIV 0.04757 0.271529 0.18 0.861 ELEM -0.28825 0.606935 -0.47 0.635 SECOND 0.28389 0.308269 0.92 0.357 FIRSTVIS -0.04015 0.189167 -0.21 0.832 BUSINESS -0.12215 0.270059 -0.45 0.651 ACSCUBA -0.20794 0.159736 -1.3 0.193 ACOTHERMAR 0.24537 0.146224 1.68 0.093* OTHERINL 0.54828 0.157729 3.48 0.001*** INCMID 0.00001 0.000003 1.98 0.047** HOLCH -0.02464 0.155183 -0.16 0.874 AGE -0.00123 0.007646 -0.16 0.872 ***Significant @ 1% **Significant @ 5% *Signifcant @10% 48 Chapter 5. Conclusion
5.1 Summary
As previously mentioned Belize is at a critical juncture in its development.
With the call for the dimantling of international trade barriers brought on by globalization, this small country in Central America and the Caribbean stands to be stripped of the preferential access which key industries have long enjoyed.
However, in recent times there has been an emergence of new economic prospectives, signalling a shift from a once agriculture based economy to one now driven by services, particularly the tourism and hospitality industry. The cost of labour in Belize compared to its Central American counterparts is relatively higher placing the country at a comparative disadvantage, particluarly in the agricultural sector. Since 1991 the total number of individuals employed in the services sector has increased threefold from 2,311 to 6,273 in 2000 (CSO
Census). While agriculture on the other hand, has grown from 16,086 in 1991 to
17,900 in 2000, it nonetheless is and indication that Belizeans are finding the sector less attractive and are seeking other alternatives as a means of improving there standard of living.
Clearly the bouyancy in the tourism sector has made it an attractive sector generating income and employment for the wider Belizean public both small and large players. However, there is general concern that the tourism frenzy which the country is currently experiencing has rendered a myopic view towards the sustainability of the the industry. This is quite common with the use of public goods. The marginal benefits accruing at the inidivdual level is far greater than 49 the cost imposed, yet the the effects of costs is widespread at the aggregate
level where all who benefit stand to lose. It is evident that tourism is a major player in the Belizean economy and thus the objective of the paper is not only to acknowledge this fact but at the same time to provide for informed policies which will help to support resources and environmental management decisions. There is nothing wrong with a country utilising its resources to improve social welfare, however, it must do so in a manner which implicitly and explicitly exercises a high degree of responsibility to the natural environment.
5.2 Objectives Revisited
As previously mentioned the purpose of this study was to determine the factors that influence the value and perceptions that tourist place on the demand for MPAs in Belize. A hypothetical market was thus framed using the CVM to determine the factors that influence WTP for the use of MPAs in Belize. The findings of the survey generally indicated that socio demographics had little impact- in most instances none-on WTP with the exception of Europeans who were noted to have a higher WTP compared to North Americans and gender which interestingly revealed that men were less likely WTP more than women.
Perhaps the most interesting finding of the study is that observed for other inland activities which revealed that tourists who engage or are interested in MPAs are very much inclined to undertake inland activities in Belize. This finding challenges the common perception that tourists are interested exclusively in enjoying the marine activities that Belize has to offer. 50 5.3 Policy Implications
Firstly, it is evident in the case of the interviews carried out at the HCMR that tourists have a WTP greater than the current entrance fees that are being
charged. This taken into consideration suggests that MPAs may consider to
increase the fees currently charged. This is not to say that this has not been
attempted in the past. Cayetano and Wood (2002) state that traditional and non
traditional users of marine parks areas do not generally object to the designation
of protection status. However, they do object to fees claiming that it increases
the cost of the tours they provide. Therefore, the problems with increasing
entrance fee rests not with tourists themselves but with Belizeans. Ignorance is
bliss and in this instance Belizeans cannot be given the benefit of the doubt that
they are aware of the potential threats imposed by tourism activities. Cayetano
and Wood (2002) suggest that there is a need for operator education about the
value of entrance fees and to ensure that they have a role in the decision making
as it relates to entrance fees.
In addition to education, it may be a noteworthy exercise to conduct
further studies to determine consumers surplus in other MPAs. The purpose of
this exercise would be not only help to get a firmer grasp of the size of consumer
surplus – aggregate consumer surplus across MPAs- but have operators aware
that whatever the size of consumer surplus both management operators of MPAs
and tour operators can share in higher entrance fees. This argument makes a
stronger case for higher entrance fees where all parties stand to benefit.
Besides, Huybers and Bennett (2003) conclude that environmental management 51 is a strategic investment in a country’s core tourism product and while it may
result in costs to tourism operators there are demand pay offs that justify the
investment. This is better than the alternative which is not to undertake the
invesmtent and suffer the adverse effects in terms of tourism profitability.
It is evident that tourist arrivals are on the rise in Belize and there is not
doubt that this in the long run, may be potentially harmful to the country’s delicate
marine ecosystems. The findings of the study revealed that tourists that engage
in marine activities are also inclined to undertake other inland activities. This suggests that these activities complement marine activities and thus it may serve useful to emphasise the country’s inland attributes as an additional engine for local development. To this end, the GOB along with its social partners should therefore try to encourage tour operators to rethink their marketing strategy by promoting other inland activities as an alternative to enjoy the Belizean experience.
Further studies need to be conducted in Belize on WTP. It might be a useful exercise to conduct a WTP study specifically for domestic residents and visitors to MPAs in the near future for comparative purposes. Seenprachawong
(2003) found that international visitors do not have a higher WTP than domestic visitors. However, given the crippling financial crisis which Belize is currently facing, it may not be the most convenient time to conduct such a survey, especially since the GOB has resorted to higher taxes to help balance the fiscal budget. Nonethless it would be a fruitful exercise. 52 References
Butler, R. W. (1980). The Concept of a Tourist Area Cycle of Evolution:
Implications for Management of Resources. Canadian Geographer, 24(1),
5-12.
Boxil, I. (2002). Towards an alternative tourism for Belize. International Journal
of Contemporary Hospitality, 15(3), 147-150.
Britton, S. G. (1982). The political economy of tourism in the third world. Annals
of Tourism Research, 9, 331-358.
Cayetano M., & Wood, M. E. (2002). Revenue Generation Through Ecotourism
for Marine Protected Areas in Belize. Program for Belize.
The Coastal Zone Management Authority and Institute (2003). Operationalizing
a Financing System for Coastal and Marine Resource Management in
Belize.
Freeman, A. M. (1993). The Measurement of Environmental and Resource
Values: Theory and Methods. Washington, D.C.: Resources for the
Future.
Gould, K. A. (1999). Tactical Tourism: A Comparative Analysis of Rainforest
Development in Ecuador and Belize. Organization and Environment,
12(3), 245-262.
Hall, D. C., Hall, J. V., & Murray, S. N. (2002). Contingent Valuation of Marine
Protected Areas: Southern California Rocky Intertidal Ecosystems.
Natural Resource Modeling, 15(3), 335-368. 53 Hanemann, W. M. (1994). Valuing the Environment Through Contingent
Valuation. The Journal of Economic Perspectives, 8 (4), 19-43.
Hanley, N. (2000). Contingent Valuation as a means of Valuing the Conservation
of Coral Reefs: An Assessment of the Method. In Gustavson, K., Huber,
R. M. and Ruitenbeek, J. (Eds.), Integrated Coastal Zone Management of
Coral Reefs: Decision Support Modeling (pp 241-246). Washington, D.C.:
The World Bank.
Huybers, T., & Bennett, J. (2003). Environmental Management and the
Competitiveness of Nature-Based Tourism Destinations. Environmental
and Resource Economics, 24, 213-233.
Kolstad, C. D. (2000). Environmental Economics. New York: Oxford University
Press Inc.
Lindberg,K. (2001). Visitors to Belize’s marine protected areas: Characteristics,
Evaluations, and Responsiveness to Entrance fees. Griffith University pp
1-18.
Lindsey, G. & Holmes, A. (2002). Tourist Support for Marine Protection in Nha
Trang, Viet Nam. Journal of Environmental Planning and Management,
Issue, 45(4), 461-480.
Matheiu, L. F., Langford, I. H., & Kenyon W. (2003). Valuing Marine Parks in a
Developing Country: A Case Study of the Seychelles. Environment and
Development Economics, 8, 373-390. 54 Mitchell, R. C & Carson, R. T. (1989). Using Surveys to Value Public Goods:
The Contingent Valuation Method. Washington, D.C.: Resources for the
Future.
National Park Systems Act (1981). Substantive Laws of Belize, Revised Edition
2000. retrieved from Substantive Laws of Belize.
Nunes, P. A .L. D. (2002). The Contingent Valuation of Natural Parks: Assessing
the warmglow effect. Cheltenham: Edward Elgar Publishing Ltd.
Pearce, D. G. (1989). Tourist Development. Harlow: Longman Scientific and
Technical.
Portney, P.R. (1994). The Contingent Valuation Debate: Why Economists
Should Care. The Journal of Economic Perspectives, 8(4), 3-17.
Seenprachawong, U. (2003). Economic valuation of coral reefs at Phi Phi
Islands, Thailand. Int. Journal of Global Environmental Issues, 3(1), 104-
114.
Shultz, S. (1997). Non market valuation of natural and environmental resources
in Central America and the Caribbean. Economic Commission for Latin
America and the Caribbean Review 63, 65-76.
Shultz, S., Pinazzo, J. & Cifuentes, M. (1998). Opportunities and limitations of
contingent valuation surveys to determine national park entrance fees:
evidence from Costa Rica. Environment and Development Economics 3,
pp 131-149.
Thomson, P. A. B. (2004). Belize a Concise History. United Kingdom: Macmillan
Caribbean. 55 Weaver, D. B. (2001). Mass tourism and alternative tourism in the Caribbean.
In D. Harrison (Ed.), Tourism and the less developed world: Issues and
case studies (pp 161-174). New York: CAB International.
Whitehead, J. C. (2000). A Practioner’s Primer on Contingent Valuation. East
Carolina University (pp 1-39).
Wienberg, A., Bellows, S., & Ekster, D. (2000 )Sustaining Ecotourism: Insights
and Implications from two successful case studies. Society and Natural
Resources, 15, 371-315. 56 Appendix A: Sample of Survey Form
ID Number: ______
Purpose: This survey is intended to determine the willingness to pay (WTP) for a natural resource in Belize. The data collected will serve as the basis for fulfilling degree requirements at the Masters level at Ohio University, Ohio USA. In this regard, it is strictly an academic study and therefore, has no bearing on current policy pertaining to the use of natural resources in Belize.
1. Country of Origin: ______Country of Residence: ______
2. Race: White Black Hispanic/Latino Asian
Other ______
3. Gender: Male Female
4. Age: ______
5. Marital Status: Married Single Divorced/Separated
6. Highest level of education: Elementary Secondary Higher
7. Level of Annual Income (US$): 0 - 10,000
10,000 - 20,000 20,000 - 30,000
30,000 - 40,000 40,000 - 50,000
50,000 - 60,000
60,000 - 70,000 70,000 - 80,000
80,000 - 90,000 90,000 - 100,000
100,000 +
8. Is this your first visit to Belize? Yes No 57
9. What is the purpose of your visit? Business Pleasure
Other ______
10. Reasons for visiting Belize (please √ all that apply)
Nature Beaches Reef Other marine resources
Proximity Wildlife Maya Sites Tropical Forests
Protected Areas Exoticism Recommended
Other ______
11. Activities that you engaged in while in Belize? (please √ all that apply):
Scuba diving Snorkelling Sea kayaking Sailing
Sport fishing Boating (glass bottom/sub-sea tours)
Windsurfing/sailboarding Inland activities ______
In recent years, the number of Marine Protected Areas (MPAs) has grown significantly across the globe. MPAs number over 1,300 worldwide. In Belize there are 12. MPAs have grown mainly because they have become instrumental in managing and protecting valuable marine resources. In some countries entrance fees are charged to access marine resources located within MPA’s for recreational activities.
12. Do you agree that an entrance fee should be charged to access MPAs in Belize? Yes No Please state why or why not ______
______
58 13. If you answered “Yes” to question 12 above, please indicate what is the most you would be willing to pay per visit (in US$) by circling that value below.
Less $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 than $1 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
$21 $22 $23 $24 $25 $26 $27 $28 $29 $30
$31 $32 $33 $34 $35 $36 $37 $38 $39 $40
More $41 $42 $43 $44 $45 $46 $47 $48 $49 $50 than $50
If you answered “More than $50”, please state how much ______
If you answered “Less than $1”, please state how much ______
Thanks for taking the time to participate in this survey. Your contribution is integral to the success of this study. 59 Appendix B: Proportions of Sample (%)
Region northa 0.82 europe 0.12 other 0.06 Race white 0.86 black 0.03 hisp 0.05 otherace 0.07 Gender male 0.49 Marital Status single 0.44 married 0.49 sepdiv 0.07 Education elem 0.02 second 0.08 higher 0.90 Frequency and Purpose firstvis 0.75 business 0.10 Reasons pleasure 0.87 nature 0.49 beach 0.67 reef 0.73 othermar 0.19 prox 0.09 wild 0.30 maya 0.35 forest 0.31 protect 0.12 exotic 0.12 recom 0.19 othereas 0.15 Activities acscuba 0.28 acsnork 0.82 ackay 0.16 acsail 0.11 acfish 0.15 acboat 0.09 acwindsf 0.06 otherinl 0.27 Location Holch 0.31 PGIA 0.69 60 Appendix C: Raw Regression Results
Number of Obs = 299 Wald chi (18) = 36.77 Prob > chi2 = 0.0056 Pseudo R2 = 0.0665
wtpint3 Coef. Robust Standard Error z P>|z| [95% Confidence Interval] europe 0.4292196 0.2220841 1.93 0.053 -0.0060573 ..8644964 other -0.5577788 0.3491424 -1.60 0.11 -1.242085 ..1265277 black 0.0574058 0.3652401 0.16 0.875 -0.6584516 ..7732631 hisp -0.2904149 0.3556923 -0.82 0.414 -0.9875589 ..4067291 otherace 0.6149319 0.3065941 2.01 0.045 0.0140185 1.215845 male -0.2715208 0.1446864 -1.88 0.061 -0.5551009 ..0120593 single 0.1977014 0.1620289 1.22 0.222 -0.1198693 ..5152722 sepdiv 0.0475675 0.2715291 0.18 0.861 -0.4846198 ..5797548 elem -0.2882513 0.6069353 -0.47 0.635 -1.477823 ..90132 second 0.2838899 0.3082689 0.92 0.357 -0.3203061 ..8880859 firstvis -0.0401548 0.1891671 -0.21 0.832 -0.4109155 ..3306059 business -0.1221548 0.2700591 -0.45 0.651 -0.6514609 ..4071513 acscuba -0.2079412 0.1597361 -1.30 0.193 -0.5210181 ..1051357 acothermar 0.2453671 0.1462235 1.68 0.093 -0.0412257 ..5319598 otherinl 0.5482774 0.1577292 3.48 0.001 0.2391339 ..8574209 incmid 5.38E-06 2.71E-06 1.98 0.047 6.38E-08 ..0000107 holch -0.02464 0.1551833 -0.16 0.874 -0.3287937 ..2795136 age -0.0012328 0.0076455 -0.16 0.872 -0.0162177 ..0137521
_cut1 -0.8650883 0.3905425 (Ancillary parameters) _cut2 1.137779 0.3978899
wtpint3 Probability Observed 1 Pr( xb+u<_cut1) 0.1204 2 Pr(_cut1 Marginal effects after oprobit y =Pr(wtpint3==1) (predict,outcome(1)) =0.10264961 variable dy/dx Std. z P>|z| [95% Confidence Interval] X europe* -0.0621247 0.02557 -2.43 0.015 -0.112244 -0.012006 ..120401 other* 0.1319077 0.10406 1.27 0.205 -0.072049 0.335864 ..063545 black* -0.0099208 0.06104 -0.16 0.871 -0.129549 0.109708 ..0301 hisp* 0.0609025 0.08603 0.71 0.479 -0.107721 0.229526 ..046823 otherace* -0.077345 0.02753 -2.81 0.005 -0.131296 -0.023394 ..06689 male* 0.0487411 0.02608 1.87 0.062 -0.002373 0.099855 ..494983 single* -0.0348533 0.02785 -1.25 0.211 -0.089443 0.019736 ..438127 sepdiv* -0.0082882 0.04609 -0.18 0.857 -0.098614 0.082037 ..06689 elem* 0.0609069 0.14875 0.41 0.682 -0.230628 0.352442 ..020067 second* -0.0434912 0.03919 -1.11 0.267 -0.120309 0.033326 ..080268 firstvis* 0.0070922 0.033 0.21 0.83 -0.057581 0.071765 ..749164 business* 0.0232119 0.0545 0.43 0.67 -0.083614 0.130038 ..103679 acscuba* 0.0393649 0.03189 1.23 0.217 -0.023137 0.101867 ..284281 acothe~r* -0.0428026 0.02461 -1.74 0.082 -0.091031 0.005425 ..414716 otherinl* -0.0841559 0.02318 -3.63 0.00000 -0.129594 -0.038718 ..274247 incmid -9.63E-07 0.00000 -2.02 0.044 -1.90E-06 -2.70E-08 53160.5 holch* 0.0044331 0.02805 0.16 0.874 -0.05054 0.059406 ..314381 age 0.0002205 0.00137 0.16 0.872 -0.002463 0.002904 36.6254 (*) dy/dx is for discrete change of dummy variable from 0 to 1 62 Appendix C2: Marginal Effects for WTP2 Marginal effects after oprobit y =Pr(wtpint3==2) (predict,outcome(2)) =0.66656701 variable dy/dx Std.Err z P>|z| [95% Confidence Interval] X europe* -0.0824109 0.05774 -1.43 0.154 -0.195579 0.030757 ..120401 other* 0.0057117 0.04165 0.14 0.891 -0.075912 0.087336 ..063545 black* -0.0078861 0.05439 -0.15 0.885 -0.11448 0.098707 ..0301 hisp* 0.0185289 0.00948 1.95 0.051 -0.00006 0.037118 ..046823 otherace* -0.139662 0.0946 -1.48 0.14 -0.325076 0.045752 ..06689 male* 0.0336641 0.02009 1.68 0.094 -0.005708 0.073036 ..494983 single* -0.0257852 0.02352 -1.10 0.273 -0.071875 0.020305 ..438127 sepdiv* -0.0064005 0.03902 -0.16 0.87 -0.082873 0.070072 ..06689 elem* 0.0174759 0.0103 1.70 0.09 -0.002719 0.037671 ..020067 second* -0.0499335 0.07048 -0.71 0.479 -0.18807 0.088203 ..080268 firstvis* 0.0052133 0.02545 0.20 0.838 -0.044665 0.055091 ..749164 business* 0.0125989 0.02199 0.57 0.567 -0.030505 0.055703 ..103679 acscuba* 0.0217365 0.01533 1.42 0.156 -0.008312 0.051785 ..284281 acothe~r* -0.032894 0.02287 -1.44 0.15 -0.077722 0.011934 ..414716 otherinl* -0.0957535 0.03727 -2.57 0.01 -0.168801 -0.022706 ..274247 incmid -6.75E-07 0.00000 -1.69 0.091 -1.50E-06 1.10E-07 53160.5 holch* 0.0030377 0.01888 0.16 0.872 -0.033959 0.040035 ..314381 age 0.0001545 0.00096 0.16 0.872 -0.00172 0.00203 36.6254 (*) dy/dx is for discrete change of dummy variable from 0 to 1 63 Appendix C3: Marginal Effects of WTP3 Marginal effects after oprobit y =Pr(wtpint3==3) (predict,outcome(3)) = 0.23078338 variable dy/dx Std.Err z P>|z| [ 95% Confindence Interval ] X europe* 0.1445356 0.08065 1.79 0.073 -0.013535 0.302606 ..120401 other* -0.1376194 0.06575 -2.09 0.036 -0.266495 -0.008743 ..063545 black* 0.0178069 0.11538 0.15 0.877 -0.208342 0.243955 ..0301 hisp* -0.0794314 0.08597 -0.92 0.356 -0.247939 0.089076 ..046823 otherace* 0.217007 0.11855 1.83 0.067 -0.01534 0.449354 ..06689 male* -0.0824052 0.04382 -1.88 0.06 -0.16829 0.00348 ..494983 single* 0.0606385 0.05042 1.20 0.229 -0.03818 0.159457 ..438127 sepdiv* 0.0146887 0.08507 0.17 0.863 -0.152039 0.181416 ..06689 elem* -0.0783828 0.14441 -0.54 0.587 -0.361427 0.204661 ..020067 second* 0.0934247 0.10882 0.86 0.391 -0.119853 0.306702 ..080268 firstvis* -0.0123055 0.05839 -0.21 0.833 -0.126751 0.10214 ..749164 business* -0.0358108 0.07602 -0.47 0.638 -0.1848 0.113178 ..103679 acscuba* -0.0611014 0.04555 -1.34 0.18 -0.150376 0.028173 ..284281 acothe~r* 0.0756966 0.04582 1.65 0.099 -0.014117 0.16551 ..414716 otherinl* 0.1799093 0.05468 3.29 0.001 0.072748 0.287071 ..274247 incmid 1.64E-06 0.00000 1.97 0.049 1.00E-08 3.30E-06 53160.5 holch* -0.0074708 0.04691 -0.16 0.873 -0.099419 0.084477 ..314381 age -0.000375 0.00232 -0.16 0.872 -0.004932 0.004182 36.6254 (*) dy/dx is for discrete change of dummy variable from 0 to 1 64 Appendix D: Marginal Effects of Income on WTP Marginal Probabilities Income WTP1 WTP2 WTP3 5000 0.16 0.68 0.16 15000 0.14 0.68 0.17 25000 0.13 0.68 0.19 35000 0.12 0.68 0.20 45000 0.11 0.67 0.22 55000 0.10 0.67 0.23 65000 0.09 0.66 0.25 75000 0.08 0.65 0.27 85000 0.08 0.64 0.29 95000 0.07 0.63 0.30 150000 0.04 0.55 0.41