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An Entrance Fee System for National Parks in Thailand

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An Entrance Fee System for National Parks in Thailand ECONOMY AND ENVIRONMENT PROGRAM FOR SOUTHEAST ASIA Environmental Valuation: An Entrance Fee System for National Parks in Thailand Adis Isangkura EEPSEA RESEARCH REPORT SERIES EEPSEA is supported by a consortium of donors and administered by IDRC. Mailing Address: Tanglin PO Box 101, Singapore 912404 Visiting Address: 7th Storey RELC Building, 30 Orange Grove Road Telephone: 65 235 1344 Fax: 65 235 1849 Internet: [email protected] or [email protected] ARCHIV Website: http://www.idrc.org.sg/eepsea 108523 Comments should be sent to the author Adis Isangkura E-mail: [email protected] The Economy and Environment Program for South East Asia (EEPSEA) was established in May, 1993 to support research and training in environmental and resource economics. Its objective is to enhance local capacity to undertake the economic analysis of environmental problems and policies. It uses a networking approach, involving courses, meetings, technical support, access to literature and opportunities for comparative research. Member countries are Thailand, Malaysia, Indonesia, the Philippines, Vietnam, Cambodia, Laos, China, PNG and Sri Lanka. EEPSEA's funding is provided by a consortium of donors. As of June 1998, these sponsors consisted ofIDRC (Canada), Sida (Sweden), Danida (Denmark), the Ministries of Foreign Affairs of Norway and the Netherlands and the MacArthur Foundation (USA). EEPSEA Research Reports are the outputs of research projects supported by EEPSEA. They have been peer reviewed and edited. In some cases, longer versions are available from the authors. EEPSEA also issues a Special Papers Series, consisting of commissioned papers emphasizing research methodology. EEPSEA is supported by a consortium of donors and administered by IDRC. Mailing Address: Tanglin PO Box 101, Singapore 912404 Visiting Address: 7th Storey RELC Building, 30 Orange Grove Road Telephone: 65 235 1344 Fax: 65 235 1849 Internet: [email protected] or [email protected] 0 Website: http://www.idrc.org.sg/eepsea IDRC - Lib. , -) eS 3 ECONOMY AND ENVIRONMENT PROGRAM FOR SOUTHEAST ASIA Environmental Valuation: An Entrance Fee System for National Parks in Thailand Adis Israngkura * August 1998 * The author wishes to acknowledge the research grant extended by EEPSEA and valuable comments provided by H. Jack Ruitenbeek of EEPSEA and Ian Ferguson of the School of Forestry and Resource Conservation, The University of Melbourne. ABSTRACT In this study, the contingent ranking method is used to measure the value of environmental benefits of three recreational areas in northern Thailand: Doi Inthanon National Park, Doi Suthep and Mae Sa Waterfall. These recreational values are then used to determine new entrance fees for these recreational areas. The study finds that it is easier for respondents to indicate their preferences in the contingent ranking format than in the open-ended Willingness-To-Pay (WTP) format. The parameter estimates from the indirect utility function are used to calculate the welfare gains derived from visiting these recreational areas. These welfare gains are then used to determine the entrance fees. The study recommends that the entrance fee for Doi Inthanon National Park be increased from 5 baht (US12 cents) per person to 40 baht (US$1) per person. This would increase park revenue from 5 million baht (US$125,000) per year to 40 million baht (US$1 million) per year. Additional user charges should be applied at environmentally sensitive sites around Doi Inthanon. The entrance fee for Mae Sa Waterfall should be increased from 5 baht (US12 cents) per person to 20 baht (US50 cents) per person. This would increase park revenue from 2 million baht (US$50,000) per year to 8 million baht (US$200,000) per year. As for Doi Suthep, the entrance fee should remain at zero given the difficulty of assessing the predominantly spiritual value of the site. The study also recommends that special consideration be given to low-income visitors. For instance, a total waiver or partial reduction of entrance fees should be applied to school children on educational tours and to senior citizens, as well as to the general public during some public holidays. Certain parts of Doi Inthanon (such as the lower section of the park) might charge a lower entrance fee to facilitate access to low- income families, while full entrance fee could be charged for the middle and upper sections of the park. This systematic adjustment in the entrance fees, together with special entrance fee reductions, should help increase revenue from the national parks with minimal negative impact on low-income visitors. This increased revenue will be useful for recreational management and will help ensure the continuity of recreational services provided by national parks in Thailand. TABLE OF CONTENTS ABSTRACT 1.0 INTRODUCTION 2.0 DESCRIPTION OF DOI INTHANON NATIONAL PARK AND SUTHEP-PUI NATIONAL PARK 2 2.1 Doi Inthanon National Park 2 2.2 Suthep-Pui National Park 3 3.0 LITERATURE 5 4.0 METHODOLOGY 6 5.0 EMPIRICAL RESULTS 9 5.1 Descriptive Statistics 10 5.2 Implementing Contingent Ranking 10 5.3 Contingent Ranking Method 11 5.4 Open-Ended WTP Question 14 6.0 DETERMINING THE ENTRANCE FEES 15 6.1 Entrance Fee for Doi Inthonon National Park 16 6.2 Entrance Fee for Doi Suthep 18 6.3 Entrance Fee for Mae Sa Waterfall 18 7.0 CONCLUSION 19 REFERENCES 21 APPENDICES 22 APPENDIX A - Questionnaire 22 APPENDIX B - Contingent Ranking Method: An Instruction 26 LIST OF TABLES Table 1 Recreational Features at Doi Inthanon National Park 4 Table 2 Recreational Features at Suthep-Pui National Park 5 Table 3 Summary of Important Recreational Attributes at each Recreational Area 8 Table 4 Descriptive Statistics of the Respondents 9 Table 5 List of Variables used in Ordered Logit Model and WTP Functions 12 Table 6 Parameter Estimates from Ordered Logit Model 13 Table 7 Average Values of Recreational Attributes 14 Table 8 Parameter Estimates of the WTP Functions 15 Table 9 Comparison between Recreational Values calculated from the Contingent Ranking Method and the Open-Ended WTP Question 16 Exchange Rate (August 29, 1998): US$1 = 41.26 baht (week of August 24-28,1998, The Bangkok Post ) ENVIRONMENTAL VALUATION: AN ENTRANCE FEE SYSTEM FOR NATIONAL PARKS IN THAILAND Adis Israngkura* 1.0 INTRODUCTION National parks benefit society in many ways. Besides their ecological functions, national parks also provide recreational benefits to park visitors and help earn foreign exchange from international travellers. In Thailand, more than 80 forest reserves have been declared national parks under the National Park Act of 1961. However, despite the recreational benefits, many national parks in Thailand are currently threatened by various activities such as encroachment by local villagers, forest fire, soil erosion, human settlement inside the parks or pollution created by the villages inside the parks as well as by tourists. This cumulative negative impact on national parks may in part be attributed to insufficient funding for park management. Funds for park management comes from two sources: the central government budget and revenue from park entrance fees. The central government budget allocated for park management has been limited as it competes with other development programmes, such as education, public health care, infrastructure or even military spending. With regard to entrance fees, it has been found that park revenue from entrance fees could be increased if national parks were priced appropriately. In the case of Khao Yai National Park, a study by TDRI/HIID found that the Willingness-To-Pay (WTP) for entrance fee is 22 baht while the Khao Yai National Park currently charges only 5 baht per visitor (Kaosa-ard, Patmasiriwat, Panayotou and Deshazo 1995). Besides, not only are many national parks under-priced, some (such as Doi Suthep) do not collect any entrance fee at all. In addition, the entrance fees of many national parks in Thailand bear no relationship to the level of park recreational services. While Khao Yai National Park provides numerous recreational services to park visitors and charges 5 baht per visitor, Mae Sa Waterfall in Chiang Mai province, which is a much smaller recreational facility, also charges 5 baht per visitor. This suggests that although the central government budget for national parks management is facing competition from other government budget items, park revenue could be raised by adjusting park entrance fees. This study proposes that park entrance fees be increased to reflect the recreational benefits that national parks provide to the visitor. However, in order to adjust the entrance fees, it is imperative to consider not only the recreational benefits that each park provides, but also the degree of substitutability among the national parks. When entrance fees are determined in this * The author is a staff member of The School of Development Economics, National Institute of Development Administration (NIDA), Thailand and a researcher at the Thailand Development Research Institute (TDRI). EEPSEA Research Report Series manner, it would help increase revenue' which can be used for park management, especially recreational services. As such, the objectives of this study are: 1) to measure the recreational values of three recreational areas in northern Thailand; and 2) to use these recreational values to determine the entrance fees. This study will focus on three public recreational areas which belong to two national parks in Chiang Mai province in northern Thailand. These recreational areas are Doi Inthanon National Park, Doi Suthep and Mae Sa Waterfall. This study will use the concept of a multi-park system which will allow the researcher to explore consumer preferences for recreational attributes and how consumers may substitute one recreational area for another. As these recreational areas are different in terms of recreational attributes, adopting a multi-park system will enable the researcher to learn about the consumer preference ordering for these recreational attributes, given that they are able to substitute one recreational area for another.
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