UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS VALUATION OF RECREATIONAL SERVICE BY THE MANGROVE ECOSYSTEM IN THANH PHU NATURAL RESERVE BY NGUYEN THI DIEU THUY MASTER OF ARTS IN DEVELOPMENT ECONOMICS HO CHI MINH CITY, November 2015 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS VALUATION OF RECREATIONAL SERVICE BY THE MANGROVE ECOSYSTEM IN THANH PHU NATURAL RESERVE A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By NGUYEN THI DIEU THUY Academic Supervisor: PHAM KHANH NAM HO CHI MINH CITY, November 2015 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT This study is part of a research project conducted to estimate environmental service value of the mangroves in Thanh Phu ward, Ben Tre province, South Vietnam to inform policy makers in applying the Payment for Forest Environmental Services program. The study set out to measure recreational value of the forest through ecotourism activities using Contingent Valuation Method with double bounded dichotomous choice model. The result shows that willingness to pay is affected by income and whether respondent thinks that environmental issues in Vietnam are properly addressed. Mean WTP calculated using parametric and nonparametric method is US $15.61 respectively, which yields aggregate WTP at US $2,656,204 with a lower bound of US $2,146,273.
Keywords: mangroves, ecosystem service valuation, Contingent Valuation Method, double-bounded dichotomous choice model Abbreviations: CVM – Contingent Valuation Method, WTP – Willingness to pay, PFES – Payment for Forest Environmental Services i LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT My thanks goes to Dr Pham Khanh Nam for giving me the chance to participate in the study which this thesis is part of, for his constant supervising and for his invaluable advice in helping me finish this thesis I am also grateful to Dr Truong Dang Thuy for initiating my interest in the method used in this thesis and also for his advice I thank my mother for her support to make it possible for me to write this thesis. I thank everybody at VNP for creating an academic environment where I learn skills and knowledge to write my thesis. Specially, I would like to thank my classmate Nguyen Duy Chinh for giving me a lot of help and support when I work on the thesis. ii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS ABSTRACT.
ii TABLE OF CONTENTS. iii LIST OF FIGURES. vi LIST OF TABLES. SCOPE OF STUDY.
ECOSYSTEM SERVICES VALUES. MEASUREMENT OF WELFARE CHANGES. REVIEW OF EMPIRICAL STUDIES. Overall valuations of mangrove ecosystem services.
Valuations of recreational service for estuarine and marine ecosystems. Valuations of recreational services as environmental goods using CVM. Estimates of recreational services of mangroves in Vietnam and in other countries. 15 iii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.
CONTINGENT VALUATION METHOD. Steps in implementing CVM. Elicitation format for the WTP amount. SCENARIO AND PAYMENT VEHICLE.
MODEL OF WILLINGNESS TO PAY. ESTIMATION OF WILLINGNESS TO PAY. OVERVIEW OF THANH PHU AND THE NATURAL RESERVE. Thanh Phu district and tourism development.
Thanh Phu Natural Reserve. Correlation of coefficients. Willingness to pay by bid levels. NON-PARAMETRIC ESTIMATION.
DETERMINANTS OF WILLINGNESS TO PAY. AGGREGATE WILLINGNESS TO PAY. 48 iv LUAN VAN CHAT LUONG download : add luanvanchat@agmail. CONCLUSIONS AND SUGGESTIONS.
SUGGESTIONS FOR FURTHER RESEARCH. 62 v LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 1. Schematic representation of the ecosystem services. Extract of bid questions from questionnaire.
Administrative map of Ben Tre. Map of Thanh Phu Natural Reserve’s current situation. Shares of occupational groups in the sample. Respondents’ knowledge about the situation of mangrove area in Vietnam.
Graph of survivor function after the tenth iteration. Bootstrapping result for value of non-parametric WTP. 73 LIST OF TABLES Table 1. Classification of flora species in Thanh Phu Natural Reserve:.
Some rare and threatened species in Thanh Phu Natural Reserve. Description and summary of respondents’ socio-economic characteristics. Ranking of importance of social issues in Vietnam. Ranking of importance of ecotourism benefits to respondents.
Correlation of coefficients. Percent of ‘yes’ responses for different bid levels. Regression result of the bivariate probit function. Estimate of mean WTP and confidence interval.
The first iteration of calculating TSCA. The second iteration of calculating TSCA. 72 vi LUAN VAN CHAT LUONG download : add luanvanchat@agmail. PROBLEM STATEMENT Vietnam is one among the countries most vulnerable to climate change and the mangroves are one effective protection against sea level rise.
Mangroves also provide many other services including support for fishery and aquaculture, provision of food and raw material, carbon sequestration, water supply and regulation and recreational activities. However, the mangroves are reported to have declined rapidly due to deforestation, from 408,500 hectares in 1943 to 155,290 hectares in 2000 of which only about 21% is of high-quality natural forest (Sam, D. T Phuong, 2005) Funding is necessary to protect the mangroves, yet it is often lacking. Drawing on the concept of payments for environmental services, a solution to generate and distribute cash for conserving ecosystems, the government has developed the national program of Payment for Forest Environmental Services (PFES) (Hawkin, 2010).
Specifically, the Prime Minister has issued decree 99/2010 to guide the application of PFES to five groups of services provided by forests: soil related, water supply related, carbon sequestration, recreation based on natural landscape and finally, aquaculture-related. In order to decide the levels of payment and also to make informed decisions of socio- economics planning, it is important that policy makers know of the value of the services provided by mangrove forest. This study is part of an assignment that arises from that need, seeking to gauge the economic value of the mangrove ecosystem in Ben Tre province. Every day hundreds of tourists go to the beaches in the coastal district of Thanh Phu, Ben Tre (Quoc Vinh, 2015).
Among the attractions are the clean beaches, cheap 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com seafood and learning to do the work on shrimp farms (Le Luong, 2015). These are supported by the presence of the mangroves besides its own green lush, which can interest tourists to pay to spend time in, learn from and support. That way, Thanh Phu could follow Can Gio and capitalize on the current crowds of tourists to develop eco- tourism centering on the mangroves. Also, the mangrove ecosystem in Thanh Phu is officially recognized as a natural reserve and put under care of the authority.
The combination of mangrove forest presence, stewardship and available crowd of tourists makes Thanh Phu Natural Reserve an ideal place for carrying out evaluation of the recreational service using Contingent Valuation Method 2. RESEARCH OBJECTIVES Firstly, the study will estimate the monetary value that tourists coming to Thanh Phu are willing to pay for the tourism service of the mangroves in Thanh Phu Natural Reserve, Ben Tre. Secondly, the author will attempt to identify factors affecting this willingness to pay. RESEARCH QUESTIONS The study seeks to answer the following questions: - How much the tourists coming to Thanh Phu are willing to pay for the tourism value of the mangroves in Thanh Phu Natural Reserve? - What are the determinants of this willingness to pay? 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.
SCOPE OF STUDY The study is conducted for the mangroves in and tourist population coming to Thanh Phu District, Ben Tre Province, South Vietnam. The sample population comprises of individuals among beach goers in Thanh Hai commune. The services provided by the mangroves to human are many and can be categorized under the main four groups of provisioning, regulating, supporting and cultural. The study only set out to measure the category of tourism service, which belong to the cultural group.
Willingness to pay is calculated for 2014 and used for the next several years as report shows that the number of tourists coming to Thanh Phu keeps increasing with improvements in infrastructure and unfolding services (Quoc Vinh, 2015) 5. THESIS STRUCTURE The thesis remains in four chapters. Chapter 2 reviews literature about how tourism fits in the framework of ecosystem services values, how economists measure welfare brought about by environmental goods and previous related studies. Chapter 3 discusses the methodology employed in the study: the steps of contingent valuation and elicitation format, hypothetical scenario and payment methods, construction of willingness to pay function, nonparametric and parametric methods for estimation of willingness to pay and finally, elements of data collection.
Chapter 4 discusses the findings of the study from knowledge about the situation of mangroves as tourist attraction to the statistics of data to results of nonparametric and parametric estimation. Chapter 5 presents the conclusions of the study, comments about the methodology used in the study, suggestions to policy makers and possible directions for future study. 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. CHAPTER SUMMARY The chapter first discuss the benefits of and threats to mangrove ecosystems and counteraction by the government, which eventually leads to the study.
Reason for choosing the site were also discussed. After that, the research objectives and research questions are outlined. Next the scope of the study is specified. Finally, part 5 lays out the structure of the thesis.
4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. ECOSYSTEM SERVICES VALUES Ecosystems are “dynamic complexes of communities of animals, plants and microorganisms and the inorganic environment interacting as a functional unit, with human being an integral part” (UNEP, n.) Among the Millennium Ecosystem Assessment categories, the mangroves belong to the Coastal Ecosystems group, being within an “area between 50 meters below mean sea level and 50 meters above the high tide level or extending landward to a distance 100 kilometers from shore” (UNEP, n.) According to the UK NEA (n.), ecosystem services are “the benefits provided by ecosystems that contribute to making human life both possible and worth living”. Examples includes benefits such as provision of material and food, regulation of water, shoreline protection and carbon sequestration, and non-material ones such as cultural heritage and aesthetic experience. The term ‘services’ is often meant to include both the tangible and intangible benefits that humans obtain from ecosystems.
These service are categorized into four groups: provisioning services, regulating services, cultural services and supporting services. Tourism and recreation, which in this case are the same, are cultural services (UK NEA, n.) This study is interested in measuring value of one form of tourism, ecotourism. This is the service that the local government intends to extract from the mangroves and can be defined as "responsible travel to natural areas that conserves the environment, sustains the well-being of the local people and involves interpretation and education" (TIES, 2015) 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Schematic representation of the ecosystem services Source: http://www.
MEASUREMENT OF WELFARE CHANGES This study uses contingent valuation method to estimate the economic value of an ecosystem service. According to Bockstael and Freeman (2005), CVM has theoretical foundation in the neo-classical welfare economics. It presumes that economic activity is to promote the welfare of the individuals, and each individual is the best judge of their own well-being. Therefore, economic values of goods and services, whether market or nonmarket, should be based on their effect on human welfare.
The theory has been developed to measure change in individual’s wellbeing to estimate the welfare effect of change of goods and services, be it a change of price or quantity. 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.