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Estimating Wetland Values: a Comparison of Benefit Transfer and Choice Experiment Values

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Estimating Wetland Values: a Comparison of Benefit Transfer and Choice Experiment Values Estimating wetland values: A comparison of benefit transfer and choice experiment values By Mayula Chaikumbung MSc. (Kasetsart University, Thailand) BSc. (King Mongkut's Institute of Technology Ladkrabang, Thailand) Submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy Deakin University March, 2013 Acknowledgments First of all I would like to express my gratitude to my supervisors, Professor Chris Doucouliagos and Dr. Helen Scarborough for their invaluable support and never-ending guidance throughout this thesis. Without their generous assistance and encouragement, this thesis could never have been completed. I am grateful to staff from the office of the Bung Khong Long Non-Hunting Area and the WWF Greater Mekong, Thailand Country Programme, who assisted me in providing materials and information of the research area, and useful comments regarding the questionnaire adjustment. I am indebted to my Ph.D friend, Rajesh Kumar Rai for his useful comments regarding the questionnaire design and for his technical assistance on the Limdep program and Ngene program. Also, I would like to thank Ph.D candidates (Anshu Mala Chandra, Pablo Jamenez, Abu Sham Md. Rejaul, Mirwan Perdana, Muhamad Habibur Rahnan, Zohidjon Askarov, and Wen Sharpe), not only for the friendship but also for the support they provided. I would like to thank all the data enumerators from Kasetsart University for their cooperation in facilitating the data collection. I would also like to offer special thanks to the residents of Bung Khong Long community, Bung Karn Province, Thailand for their kind collaboration in providing useful information for this research. Finally, I wish to express my deep gratitude to my grandmother, mother, brothers and sister for inspiration, particularly to my younger sister, Passapa, for her support and dedication in looking after my grandmother, mother, and youngest brother, while I pursued my Ph.D in Australia. Thank you very much! i Table of contents Acknowledgments …………………………………………….……….. i Contents………………………………………………………………… ii List of Tables …………………………………………………………… viii List of Figures…………………………………………………………... xi List of Appendices……………………………………………………… xiii Abstract………………………………………………………………..... xiv Chapter 1: Introduction……………………………………….............. 1 1.1 Motivation and rationale for research…………………………….. 1 1.2 Statement of the problem…………………………………………. 4 1.3 Study objectives……………………………………....................... 7 1.4 Research questions………………………………………………... 8 1.5 Overview of methodology………………………………………... 9 1.6 Thesis structure………………………………………………….... 11 13 Chapter 2: A review of the literature and methods………………….. 2.1 The value of the ecosystem services of Bung Khong Long wetland ………................................................................................ 13 2.1.1 Production function. ……………………………………... 16 2.1.2 Regulation function. …………………………………….. 16 2.1.3 Information function..…………………………………..... 18 2.1.4 Habitat function…………………………………………... 19 ii 2.2 The valuation of ecosystem services……………………………… 20 2.2.1 Valuation methods ………………………………………. 20 2.2.2 Average and marginal values ……………………………. 20 2.3 Prior research on economic valuation of Thai natural resources… 21 2.3.1 Scientific studies…………………………………………. 21 2.3.2 Economic valuation studies………………………………. 22 2.4 Prior valuing of ecosystem services and wetlands in developing countries…………………………………………………………... 25 2.5 Prior research on meta-analysis benefit transfer of wetland valuation studies………………………………………………….. 36 2.6 The methodological framework for valuing the ecosystem services of the Bung Khong Long wetland ………………………. 48 2.6.1 Economic valuation method……………………………… 48 2.6.2 Benefit transfer approach………………………………… 50 2.7 Summary……………………………………………...................... 51 Chapter 3: Choice modelling…………………………………………... 53 3.1 Theoretical foundations…………………………………………... 53 3.2 58 Model specifications ……………………………………………... 3.2.1 58 Multinomial logit model (MNL)………………………... 3.2.2 Random parameter logit model (RPL)………………….. 62 3.3 The output of choice models…………………………………….... 64 iii 3.3.1 Compensating surplus (CS) and mean WTP…………… 65 3.3.2 Implicit price or the marginal willingness to pay (WTP). 67 3.4 Summary……………………………………………...................... 69 Chapter 4: Data collection: Choice Experiment application………... 70 4.1 Choice experiment design………………………………………… 70 4.1.1 Identifying the problematic issues……………………… 71 4.1.2 Attribute selection………………………………………. 74 4.1.3 Assigning levels to attributes…………………………… 84 4.1.4 Experimental design……………………………………. 87 4.2 Questionnaire Design……………………………………………... 89 4.3 Administrating Survey……………………………………………. 91 4.3.1 Pre-test Survey………………………………………….. 91 4.3.2 Sample selection………………………………………... 93 4.3.3 Main Survey…………………………………………….. 93 4.4 Summary……………………………………………...................... 94 Chapter 5: Stated preference estimated values for Bung Khong Long …………………………………………………………………….. 95 5.1 Respondents’ socioeconomic and attitudinal characteristics …….. 95 5.2 Model specification ……………………….................................... 99 5.2.1 Multinominal logit model (MNL) model results………. 100 5.2.2 Random parameter logit (RPL) model results………….. 105 iv 5.3 Estimation of Willingness to pay…………………………………. 111 5.3.1 Implicit prices (marginal willingness to pay, WTP)……. 111 5.3.2 Welfare implications……………………………………. 112 5.4 Discussion of the findings………………………………………… 120 5.4.1 Results of the RPL model………………………………. 120 5.4.2 Implicit price estimates………………………………… 123 5.4.3 Welfare implications……………………………………. 125 5.4.4 Policy implications: Application of choice experiment to wetland management…………………………………… 126 5.5 Conclusions………………………………………………………. 131 Chapter 6: The ecosystem service value of wetlands in developing countries: a meta-regression analysis…………………………………. 133 6.1 Prior meta-studies………………………………………………… 134 6.2 The meta-regression methodology……………………………… 136 6.2.1 Appropriate estimator…………………………………... 137 6.2.2 Publication selection bias……………………………….. 138 6.2.3 Multiple estimates……………………………………… 140 6.2.4 Missing observations…………………………………… 141 6.2.5 Study quality……………………………………………. 141 6.2.6 Group specific intercepts……………………………….. 142 6.3 The meta-analysis data……………………………………………. 143 v 6.3.1 Search for studies……………………………………….. 143 6.3.2 Criteria for inclusion……………………………………. 144 6.3.3 Definitions of MRA variables…………………………... 151 6.4 Results and Discussion…………………………………………… 165 6.4.1 Publication selection bias………………………………. 165 6.4.2 OLS MRA results………………………………………. 169 6.4.3 WLS MRA results……………………………………… 175 6.4.4 WLS MRA results with imputed Data…………………. 180 6.4.5 Fixed effects and study quality…………………………. 182 6.4.6 Robustness and sensitivity analysis…………………….. 182 6.4.7 Discussion………………………………………………. 187 6.5 Summary and Conclusions……………………………………….. 194 Chapter 7: Valuing Thai wetlands through benefit transfer………... 195 7.1 Theoretical background of benefit transfer……………………….. 197 7.2 In-sample performance of MRA benefit transfer functions………. 201 7.3 Out-of-sample performance of MRA benefit transfer functions…. 206 7.3.1 Benefit transfer for Bung Khong Long wetland………... 206 7.3.2 Benefit transfer for other Thai wetlands………………... 210 7.3.3 Validity tests……………………………………………. 214 7.4 Limitations and a potential for improving the accuracy of benefit transfer……………………………………………………………. 217 vi 7.4.1 Limitations for meta-benefit transfer application………. 217 7.4.2 Potential for improving accuracy of benefit transfer…… 218 7.5 Summary and Conclusions……………………………………….. 220 Chapter 8: Conclusions and recommendations………………………. 222 8.1 Key findings………………………………………………………. 222 8.2 Limitations………………………………………………………... 230 8.3 Directions for further research……………………………………. 233 References……………………………………………………………..... 235 Appendices……………………………………………………………… 270 vii Lists of Tables Table 2.1 Comparison of results from wetland meta-analyses ………. 45 Table 4.1 Stages of choice experiment design………………………... 71 Table 4.2 Threats to wetland resources and strategies to protect Bung Khong Long wetland.…………………………………….... 72 Table 4.3 The examples of ecosystem services and attributes from 59 CE studies of wetlands……………………………………... 76 Table 4.4 The possible attributes of Bung Khong Long wetland……... 77 Table 4.5 Attributes and levels used in choice sets…………………… 87 Table 5.1 Socioeconomic and attitudinal definitions and descriptive statistics…………………………………………………….. 98 Table 5.2 Ranking of social and environmental problems in Bung Khong Long community…………………………………… 99 Table 5.3 Results of MNL models……………………………………. 104 Table 5.4 Results of RPL Models…………………………………….. 110 Table 5.5 WTP for wetland ecosystem restoration programme……… 112 Table 5.6 CS or mean WTP for wetland ecosystem restoration programme…………………………………………………. 118 Table 5.7 Aggregate WTP for wetland ecosystem restoration programme…………………………………………………. 119 viii Table 5.8 The value of the ecosystem services of the Bung Khong Long wetland………………………………………….......... 130 Table 6.1 Summary of the prior wetland meta-studies……………….. 135 Table 6.2 Country distribution of studies included in the meta- analysis……………………………………………………... 147 Table 6.3 Wetland definitions and descriptive statistics……………… 154 Table 6.4 Ecosystem service variable definitions and descriptive statistics…………………………………………………….. 157 Table 6.5 Valuation method, variable definitions and descriptive statistics…………………………………………………….. 161 Table 6.6 Location variable definitions and descriptive statistics…… 163 Table 6.7 Explanatory variables used in the
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