Economic Valuation of Forest Recreation Facilities in the Liguria

Region in Italy

Presentation by: Ivy Sakansky Beller &

Katie Shea

Presentation Outline

Valuing Outdoor Recreation Facilities Traditional Approaches of Valuing/Techniques used Contingent Value Method Travel Costs Method Case Study: Liguria Region

Application and findings of the Contingent Value Method

Application and findings of the Travel Costs Method

Conclusions and Policy Implications

Estimating Non-Market Values

Use Value— benefits to usersIndirect Use Values: the enjoyment people get from the facilities by knowing it exists, rather than by directly using it.

Non-use ValuesOption Value-future use value, irreversibility factor Existence Value

Bequest Value

Techniques of Valuation

Contingent Value Method-Essentially survey method

-Hypothetical—no money exchanged-Estimate of willingness to pay (WTP)-Or, estimate of willingness to accept (WTA)

Demand-Side Methods-Valuation technique more closely related to people’s market

decisions-Hedonic Pricing-Travel Cost Methods

Economic Valuation of the Forest Recreational Facilities of Liguria Region of Italy

Background timber and chestnuts, forest abandonment, emigration, overcrowding of coastal areas

Appropriate Land Use Policies Needed—Recreation Element Market Prices do not exist

Travel Cost Method &Contingent Valuation Method Studies seven forest areas selected based upon:

1)Suitability of area for tourism2)Actual flow of tourism3)Regional plans for creation of new parks

Italy

Contingent Valuation Method—Liguria Region

Survey Instrument considerations:What to value: Purpose of survey was to place monetary

value on hypothetical change of forest’s recreational services

How to value : Estimation of personal preferences of direct use and option values

Which measure of Value: -Willingness to Pay to maintain a given service-Marginal Value of a visit-Equivalent variation approach

Strengths and Weaknesses of Contingent Value Method

Strengths-Even though it is an estimate, one can build a demand picture-Willingness to Pay & Willingness to Accept is an expressed value

Weaknesses-Dealing with non-market factors-Biases and Problems-Shaky numbers; but better then nothing

Variables addressed in Survey included :

(used for both Contingent and Travel Costs methods)

-Demographics—age, education, profession, sex, income levels etc.

-Trip Information—duration, hours/day spent, multiple sites or not, visit purpose, recreational activities, travel information (distance, time, mileage)

Travel Cost Method

Survey illustrates how far visitors traveled to reach the site, giving an estimate of the amount they have spent (gas, tolls, fares, entry fees and the value of the time spent traveling).

Data is used to simulate a demand curve—indicates how many people are willing to visit the park at different total costs for the trip.

Area under the demand curve indicates the total value of site to its visitors.

$

Q demanded

Strengths and Weakness of Travel Cost Methods Strengths

-Mimics market price-Based on actual data-Easy to understand-Easy to apply

Weaknesses-Inherent weaknesses to a survey tool (errors)-Multiple destinations are a problem-Value of the journey itself is not measured-Non-use values are not included

Comparison of the WTP obtained with TCM and CVM

CVM (11,795) is slightly higher than WTP with the TMC (9,071)Why?

-Option values and existence values included since only users were surveyed-Respondents have little perception of non-use values

Conclusions

Development of forest recreational activities could contribute to solving unemployment, abandonment of internal areas, and excessive pressure of tourism in coastal areas.

The value of recreational services, in Liguria, is second to soil protection and much greater than timber production income

Forest recreational income could contribute significantly to regional GDP if it was accounted for.