INTERNATIONAL JOURNAL OF REAL ESTATE AND LAND PLANNING VOL.1 (2018)

eISSN 2623-4807 Available online at https://ejournals.lib.auth.gr/reland

Economic valuation of protected areas: The case of lake Pamvotis Alexia Lazogloua, Dimitra Vagionab*

aDepartment of Spatial Planning and Development, Aristotle University of , Thessaloniki, 54124,

bDepartment of Spatial Planning and Development, Aristotle University of Thessaloniki, Thessaloniki, 54124, Greece

Abstract

Lake Pamvotis (-Greece) belongs to Natura 2000 network and is universally recognized, for its unique and valuable biodiversity that is protected by international and national policy frameworks. Despite its environmental importance and ecological value, the lake is under various anthropogenic pressures. The primary objective of this study is to estimate the residents’ willingness to pay (WTP) to contribute to the enhancement of the quality of the natural environment. A questionnaire survey is designed and distributed in order to collect sociodemographic data and residents’ environmental opinion about the area as well as their willingness to pay for its protection. Most respondents agree to pay an extra amount of money in their water bill to contribute to the proper protection of the lake. The unwillingness to pay is related to protest votes. Considering the environmental degradation of the lake, several actions are suggested.

Keywords: Contingent valuation method, economic valuation, willingness to pay, lake Pamvotis

1. Introduction

The maintenance of biodiversity and the protection of the environment are major problems all over the world. Although the need to conserve natural resources is increasingly recognized since the 20th century, the environmental degradation continues. Therefore, numerous methodologies have been developed to assess in economic terms, environmental goods and services. Clearly, there is the need to define a hypothetical market that makes it possible to evaluate environmental goods through individuals’ willingness to pay. Considering that the environment has many characteristics that belongs to humans, the estimation of willingness to pay requires the use of the appropriate methods to discover the true value of environmental goods and services (Halkos, 2013, p. 238). The Contingent Valuation Method (CVM) has been widely acknowledged and accepted, thanks to various research implementations that has been realized, making it more reliable and reducing its possible constraints (Rahim, 2008, p.2; Perrot-Maitre, 2005, p. (slide) 21). It is a flexible method, whose application, analysis and description of results is easy to be understood (Whitehead and Blomquist, 2001, p.10; Awad and Holländer, 2010, p.78). This method is widely used today as a tool for assessing the value of the environment and environmental goods through willingness to pay or through willingness to accept. It is considered to be the most widespread and

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REAL ESTATE AND LAND PLANNING 2018 Available online at https://ejournals.lib.auth.gr/reland

used method in assessing environmental goods (Zawojska and Czajkowski, 2015, pp 2-3; Catalano et al., 2016, p 4), since it creates hypothetical scenarios, where no real transactions take place.

The CVM has been widely applied to international as well as national protected sites. The application of this method for assessing the environment in economic terms is increasing. Hadker et al. (1997), performed a study on Borivli National Park of the Bombay Metropolitan Region, in India. The main purpose of this study was conducted to survey the residents’ opinion and elicit their willingness to pay for the maintenance and preservation of Borivli National Park using the Contingent Valuation (CV) method. Zhongmin et al. (2003), used the CVM in China to obtain estimates of willingness to pay for restoring Ejina ecosystem services. Adams et al. (2008), implemented the CVM in the area of the Atlantic Rainforest, Morro do Diabo State Park (MDSP), in São Paulo State (Brazil) with the objective of estimating the population's willingness to pay (WTP) for the conservation of MDSP and for the Atlantic Rainforest's remnants in São Paulo State. Additional Ramajo-Hernández and Saz-Salazar (2012) conducted a CVM, in the Guadiana river, situated in Spain. The aim of this study was focused on the evaluation of the non-market benefits of water quality improvements in the Guadiana river basin (GRB).

In Greece, Oglethorpe and Miliadou (2000), were the first researchers to apply the CVM in a greek protected area. This case study aimed to examine the value of conserving the largely non-market assets of recreation and environmental quality as currently provided by the wetland complex. Togridou et al. (2006) applied CVM in the National Marine Park of Zakynthos and their research was the first attempt to examine visitors' actual and estimated consensus regarding WTP. Grammatikopoulou and Olsen (2013), revealed the willingness to pay (WTP) for the conservation of a wetland area in Greece, namely the site of Divari Pilou lagoon, in Messinia, in the Southwestern part of Pelonnese.

Environmental sites consisted of a diversity of species, are protected under specific Management organizations. In Greece, the constitution of Management Authorities for protected areas is relatively recent and their funding is not sufficient to cover all the expenses for the maintenance and preservation of the ecosystem.

The primary aim of this study is to assess the willingness of inhabitants of Ioannina to pay for environmental actions and projects for the protection of the lake Pamvotis. The rest of the paper is organized as follows: section 2 provides information about the study area, its unique characteristics as well as its weaknesses. Section 3 provides the methodology performed. Section 4 includes results of the questionnaire survey as well as the WTP. Finally, section 5 concludes with useful remarks and suggestions.

2. The study area

Lake Pamvotis, is also known as lake of Ioannina and is located in the largest regional Unit of (Ioannina), in northern Greece. Lake Pamvotis is the second oldest lake of Europe, after lake Ohrida and was created about 7 million years ago. Its size reaches 24 square kilometers, while the length of its coastline reaches almost 30 kilometers. Lake Pamvotis, is considered to be a shallow lake, with an average depth of 4.5 meters, while its maximum depth corresponds to 11 meters. It is worth mentioning that a small inhabited island is situated near the northern shore, where Ali Pasha was hiding during the last days of his reign.

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Fig. 1. Study site location

Ecologically speaking, Lake Pamvotis is included into the European ecological network of protected areas known as NATURA 2000, due to the important natural habitats and the rare flora and fauna species hosted in the whole area. The lake provides a shelter for food as well as protection for many organisms and species. The vegetation in and around the lake is valuable not only for the soil protection and the provision of biodiversity, but also for various services to local people. Lake Pamvotis include: 18 types of habitat of fauna areas, 115 species and subspecies of plants, 62 species of aquatic and 31 hydrophilic macrophytes. As far as its fauna is concerned, 170 bird species, 20 fish species, 12 amphibian species, 25 reptile species, 28 mammal species and 49 spineless species have been recorded in the area. Most of them are recorded as endangered species throughout the world.

Lake Pamvotis plays a crucial role to the welfare of the city of Ioannina. Its inhabitants use the wetland values, either as a direct or indirect living resource and the state of its natural environment affects their quality of life. Unfortunately, the lake’s ecosystem is nowadays under a serious threat, since the lake’s quality constantly declines. The most important pressures that the lake experiences concern: urban pollution coming from the city of Ioannina, agricultural effluents of several smaller settlements, light industrial wastes from the surrounding area, deficient water system and eutrophication problems. Apart from the pollution, there is also disruption of water balance due to a dam construction.

3. Methodology

The questionnaire survey was performed during July and August 2017. A total of 234 questionnaires were collected and the sample was randomly selected from the residents of the city of Ioannina. A sample of 12 questionnaires was initially tested to identify any conflicting areas and misunderstanding and after the necessary amendments, the final questionnaire was drafted.

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The structure of the questionnaire was based on CVM literature and previous studies (Carson and Mitchell, 1989, pp. 2-3; Arrow et al, 1993, pp.29-64; Hoyos and Mariel, 2010, pp. 334-337; Tao et al, 2012, p. 2446). The questionnaire consisted of 4 parts and began with a small introduction providing the purpose of the survey and the most important reasons for which the lake should be protected properly. The first part concerned socio- demographics characteristics, such as place of residence, sex, age, number of family members, education level, occupation and annual income (€).

The second part included environmental related questions regarding the lake such as: local’s participation in an environmental organization, their opinion about the lake’s ecological status, their preferred mean of information about the lake, the impact of the lake’s status on their occupation, the frequency of their visit as well as the reasons of their visit, their opinion about whether the lake should be protected or not, their knowledge of whether the lake belongs to the Natura 2000 Network. Moreover, participants were asked to evaluate on a scale from 1 (lowest value) to 9 (highest value), some of the most important threats the lake is subject to as well as the most considerable goods and services it offers.

The third part investigated the Willingness to Pay through several questions. The payment instrument used was an annual tax on water bill. The WTP question was formed as follows: “Are you willing to pay an annual amount in your water bill in order to contribute to the protection of the lake?”. Respondents who replied positive in the above question, was further asked about the amount of money they are willing to pay and were provided by several bid amounts in (€): a) <1, b) 1-5, c) 5-10, d) 10-20, e) >20. In addition, they were asked to note the main reason for their willingness to pay the stated amount as well as their preferred use of the lake. On the other hand, in the case of negative responses, the participants were asked to justify the reason for their unwillingness, selecting among various given statements.

4. Results and Discussion

4.1. Sociodemographic characteristics

The sample was randomly selected, proportionally representing inhabitants of Ioannina unit (117), unit (49), Perama unit (16), unit (27) and unit (25). Most respondents were males (56%). Of 234 respodents, 18.8% was between 18-24 years old, 26.9% between 25-34, 20.1% between 35-44, 26.9% between 45- 64 and 7.3% above 65 years old. As far as educational level is concerned, 38% owed a university degree, 29.5%, graduated the High school, 12% graduated a technical school, 11.1% owed a master degree, 3.8% graduated the primary school, 3.4% graduated the middle school, while 3.1 % owed a PhD. Regarding their occupation, 26.9% were freelancers, 25.6% work as private employees, 16.7% were unemployed, 13.7% were civil servants, 9% were students and 8.1% were retired. Finally, most participants (45.7%) fell into 7.000-15.000 (€) income bracket, while there were few (2.1%) that declared an annual income over 45.000 (€).

4.2. Environmental related issues

The majority of the respondents (93.6%) declared that they do not belong to any environmental group and 63.8% admitted that they do not know that Lake Pamvotis is included into NATURA 2000 ecological network. 41.9% stated that the condition of the lake is bad, 33.3% extremely bad, 23.5% moderate, while only 0.9% and 0.4% admitted that the condition of the lake is good and very good, respectively. 85.4% declared that the condition of

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the lake does not affect their occupation. 89.3% visit the lake frequently mainly for recreational and sport activities. According to their hierarchy ranking of the lake’s pressures, eutrophication was considered as the most important threat, while the vegetation shrinkage the least important. Finally, 89.7% agreed that the lake should be properly protected and noted that recreational activities are amongst the greatest values that the lake offers.

4.3. Willingness to pay

59% were willing to pay an extra amount in their water bill for the conservation and protection of the Pamvotis Lake. From those who declared that were willing to pay, the annually amount that they stated fell into the following value brackets: less than € 1 (8%), € 1-5 (30.4%), € 5-10 (32.6%), € 10-20 (20.3%), more than € 20 (8.7%). It should be noted that 107 out of 138 respondents who are willing to pay (77.5%) believed that the amount should be spent for the whole protection of the lake and not only for one purpose (e.g. irrigation, fishing, sport, tourism, research, recreation). The reasons of willingness and unwillingness to pay are summarized in Table 1.

Table1. Responses to the follow – up WTP question

Descriptions Percent Reasons why respondents were willing to pay (N=138) (more than one alternative could be selected) 1. It is necessary to preserve and protect the lake for the quality of residents' life 44.9 2. The individuals’ awareness on the protection of natural habitats should be increased 36.2 3. I feel that it is my responsibility to protect the quality of life of future generations 31.9 4. The lake is a primary economic resource for the whole area 26.1 Reasons why respondents were not willing to pay (N=96) (more than one alternative could be selected) 1. I do not believe that the amount that I will pay will be spent for the protection of the area 40.6 2. The government should be the only responsible to protect the area 34.4 3. My income is extremely low that I cannot afford to pay for this purpose 30.4 4. I don’t believe that the protection of the area is not a great issue 2.1

Various trials were performed to investigate which variables actually affect the WTP either positively or negatively. Pearson chi square test showed a relation between the variable of WTP and the variables of “age” and “irrigation”, while according to Fisher’s test the proportions of the WTP variable are different depending on the value of the “recreation” variable. One of the main characteristics of CV methods is the flexibility of the statistical calculation (Carson and Mitchell, 1989). In this paper, the monetary value of lake Pamvotis was estimated following two approaches: the multiple regression analysis and the simple statistical analysis.

In the multiple regression analysis, an attempt was performed to predict the value of a dependent variable based on the values of a set of independent variables. The general form of the regression model is:

y= a+b1x1+b2x2+b3 x3+….+e (1)

where, a, b1, b2, b3 are the partial regression coefficients, x1, x2, x3 the predictor variables and e is the error on the multiple linear model.

The protest responses were excluded from the multiple regression analysis (Hadker, 1997, p. 116). Thus, participants who claimed either that they do not believe that the certain amount will be spent for the protection of the area or that the government should be the only responsible to protect the area were not included in the

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model. The Adjusted R2 is 8.7% and almost all conditions of the multiple regression analysis are accepted (Lazoglou, 2018, pp. 94-101).

Calculating the mean values of independent variables, the final equation of the regression model is presented below:

LnWTP= 0.278 + 0.049*AGE – 0.032*OCCUPATION– 0.026*LANDSCAPE AESTHETICS (2)

The variable of “age”, “occupation” and “landscape aesthetics”, seem to be the only three variables that affect the willingness to pay value. More specifically, the variable of “age” affects positively WTP, whereas the variable of “occupation” as well as “landscape aesthetics” affect WTP negatively. Solving the equation, LnWTP equals to 0.12, a value that corresponds to WTP=1.13€ annually.

The annual aggregation value was estimated by multiplying the mean values by the number of households of Municipality of Ioannina (25.660 households). The economic value of the study area reaches 29,000€.

Apart from multiple regression, three additional hypothetical scenarios, based on the fact that most respondents were willing to pay 5-10 € annually for the protection of the lake, were considered. The scenarios were formed, considering the minimum (1st scenario), the maximum (2nd scenario) and the average value (3rd scenario) of the stated bracket and each value was multiplied by the total number of households. The economic value of the study area is as follows: 128,000€ (1st scenario), 256,000€ (2nd scenario) and 192,450€ (3rd scenario).

5. Conclusions and Suggestions

The economic valuation of the environment is necessary, especially when the continuous degradation of the environment causes negative impacts on the wellbeing and quality of life of citizens. Water is considered to be a primary good of humans’ life. Unfortunately, last decades, the degradation of groundwater and the deterioration of quality of surface water caused by human activities, as a result of agricultural activities, residential and industrial development is evident. Economic valuation could provide an effective tool to planning processes and decision making policies for the protection of the environment.

In this paper, the economic valuation of lake Pamvotis is performed through the Contingent Valuation Method. Most respondents (59%), participated in a specific designed questionnaire survey, are willing to pay an extra amount of money in their water bill in order to contribute to its preservation and protection. The most preferred amount (32.6%) ranges from 5 to 10 € and the main reason for accepting to pay is their belief that it is necessary to preserve and protect the lake for the quality of residents' life. Moreover, the majority suggested that the amount should be distributed for actions concerning the protection of the lake and not only for one use (tourism, recreation, fishing, etc). On the other hand, those who are not willing to pay (41%) believed that the amount will not be spent for the protection of the area. The economic value of the study area ranges from 29,000€ to 256,000€.

The existing Management Authority of Lake Pamvotis, which is responsible for the protection of the lake lacks funding and the amount calculated through willingness to pay could help various projects to be implemented.

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Measures and actions that could be easily adopted and implemented include: 1) Water Resources Monitoring, 2) Habitant Monitoring, 3) Enrichment of the lake with appropriate fishes, 4) Rational management of reeds, 5) Inactivation of bottom sediment, 6) Oxygenation of the inside part of the lake with recirculation, 7) Construction of dam, 8) Educational seminars for friendly cultivation methods, 9) Educational seminars on identifying species of the natural habitat, 10) Sewage management projects.

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