College Papers

The from the status quo option to the

The three attributes (Endangered Species, National
Park Area, and Research & Education) have the expected positive signs and
are statistically significant at 1% or less. The positive signs of the
coefficients mean an improvement of these attributes can increase the utility
of the respondents. In other words, estimated coefficients with a positive sign
imply that a change from the status quo option to the corresponding attribute
increases the probability of choosing improvement plans over the status quo. In
particular, respondents gave value for park improvement plans which result in
enhancement of endangered species, new plantation of trees around the degraded
areas of the park and improvement in research and education opportunities at
the park. In other words, ceteris paribus, an improvement in any single
attribute increases the probability of choosing the improved plan. The monetary
attribute one-time payment has the expected negative sign, which is in
agreement with the hypothesis that cheaper plans are preferred to more
expensive plans after other characteristics are held constant. The negative
coefficient of price, means that the respondent’s utility was lower for an
option having a higher price and also it is statistically significant at 1%
level. Moreover, we may note that since the given attributes have not fully
captured (explain) all variations in choice observations, the coefficient of
ASC became positive.

The coefficient of the Endangered
species  attribute is greater than that
of National Park Area and research and education attributes which indicates
that respondents give relatively greater emphasis to endangered species; their
population levels, the number of different habitats and their size than others.

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5.4.6. Estimation of the Marginal Willingness to Pay

The rate at which respondents are willing to
trade off price for changes in any of the other attributes were calculated from
the parameter estimates, i.e., the implicit price. Implicit price is the
marginal rate of substitution between each attribute and the monetary attribute
(Bennett and Blamey, 2001). It shows the amounts of money respondents are
willing to pay for an improvement in the environmental attribute. The implicit
prices can also be used to identify which attribute is more important to the
respondents, which can be used by policy makers to assign more resources in
favour of the attributes which have higher implicit prices. Using the
coefficient of the attributes from the results of the CL model, the marginal
willingness to pay (MWTP) which is calculated as the ratio of the coefficients
for the attribute of interest and that of the monetary attribute, is estimated
by using equation (55) and the results are reported in Table 5.4.6.1 for
respondents.

Table 5.4.6.1 : WTP for park ecosystem restoration
programme

Attributes

Ecosystem services

Rs/Annum
CL Model

Endangered Species

Biodiversity

123.98

National Park Area

Water quality Improvement

65.45

Research and Education

Culture/Social

84.28

 

From
table 5.4.6.1, we observe that the implicit prices for all attributes are
positive and significant, implying that respondents have a positive WTP for an
increase in the quality or quantity of each attribute. The implicit prices
suggest that respondents are willing to pay about Rs. 123.98 per annum for an
increase in the level of endangered species, other things being constant. That
is, respondents were willing to pay this amount for each increase in the level
of endangered species from the status quo level. As well, respondents are
willing to pay Rs. 65.45 per annum for National Park Area and Rs. 84.28 per
annum for an increase in the level of improved research and education
opportunities the park withholds. The MWTP is higher for endangered
species attribute compared to the National Park Area and research and education
i.e., respondents gave more value for endangered species population attribute
than other attributes.

Conditional Logit Model: Rural vs. Urban Households

In
order to investigate whether there is any heterogeneity in the preferences of
the sample, the sample is divided into two samples according to households’
background (rural vs. urban). Separate CLM were estimated for each subsample,
and the results are reported in Table 5.4.7.1. Hence, urban and rural
households have distinct preferences for park management programme attributes.
The signs and significance of the attributes do not differ much across the two
sub-samples; however there are significant differences in the coefficients’
relative magnitude within each subsample, which becomes more obvious when WTP
values are estimated.

 

Table 5.4.7.1:
Results from Conditional Logit Model (Rural vs. Urban Households)

 

Rural Households

Urban Households

Variable

Coef.

Std. Err.

 
p-value

Coef.

Std. Err.

 
p-value

Endangered Species

0.611394***

0.061174

0.000

0.96662***

0.07026

0.000

National Park Area

0.429757***

0.070457

0.000

0.3901***

0.08343

0.000

Research & Education

0.517595***

0.07108

0.000

0.54924***

0.08445

0.000

One Time Payment

-0.0085***

0.001612

0.000

-0.0032**

0.00184

0.080

ASC

2.231984***

0.190629

0.000

2.31638***

0.26254

0.000

Model Summary

Model Summary

N

1433

N

1151

LR chi2
(5)

1081.05

LR chi2
(5)

1067.87

Prob> chi2

0.0000

Prob> chi2

0.0000

Pseudo R2

-1033.3826

Pseudo R2

-730.56545

Log likelihood

0.3434

Log likelihood

0.4223

 

Note:***and
** denotes statistical significant coefficients at a 1% level or
less and 5% respectively

 

5.4.8. Willingness to pay across groups:

Willingness to pay was computed separately for
people with different background shown in table 5.4.8.1 below. The estimations
show that people with urban background were willing to pay more as compared to
people with rural background.

Table 5.4.8.1: Willingness to
pay across groups with different background

WTP for park ecosystem restoration programme (Background = 1)

WTP for park ecosystem restoration programme (Background = 0)

Attributes

Ecosystem services

Rs/Annum
CL Model

Attributes

Ecosystem services

Rs/Annum
CL Model

Endangered Species

Biodiversity

302
 

Endangered Species

Biodiversity

72

National Park Area

Water quality Improvement

121
 

National Park Area

Water quality Improvement

51

Research and Education

Culture/Social

171
 

Research and Education

Culture/Social

61

 

The
table shows that urban populace was willing to pay Rs. 302 per annum for
enhancing the population and increase in the habitat size of endangered species
compared to rural people who were willing to pay Rs. 72 per annum. Similarly
for increasing the forest area and vegetation within and around the park the
urban and rural people were willing to pay Rs. 121 and Rs. 51 per annum
respectively. Willingness to pay for fostering research and education
opportunities the park withholds, the urban people were willing to pay Rs. 171
per annum which is higher than rural people who were willing to pay Rs. 61 per
annum. Therefore, estimations derived from above clearly indicate that
willingness to pay varies among people with different background. It shows that
urban people are willing to pay higher amounts than rural people.