Recreational values of coral reefs at cu lao cham islands, vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM – THE NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS RECREATIONAL VALUES OF CORAL REEFS AT CU LAO CHAM ISLANDS, VIETNAM MASTER OF ARTS IN DEVELOPMENT ECONOMICS By NGUYEN HUU DANG TRINH Academic Supervisor PHAM KHANH NAM HCM city, January 2014 CERTIFICATION ―I certify that the substance of this thesis has not already been submitted for any degree and has not been currently submitted for any other degree I certify that to the best of my knowledge and help received in preparing this thesis and all used sources have acknowledged in this dissertation‖ NGUYEN HUU DANG TRINH Date: 5th January, 2015 i ACKNOWLEDGE Upon completing this thesis, I have received a great deal of encouragement and support from many people To complete this study, I am really happy to get a big encouragement and support from many people First of all, I am very grateful to Dr Pham Khanh Nam, my academic supervisor for his useful help, support and professional advice My gratefulness is also extended to all of my lecturers and staff of the VietnamNetherlands Program, particularly, Assoc Prof Nguyen Trong Hoai and Dr Pham Khanh Nam for their assistance during the first days when I started this program During the period of my study, family is a great encouragement that I would like to express my deep thank to them The last person who I also want to give a big thank is my close friend, Ms Huynh Thi Na She is a good companion giving me the ideas for my tendency Finally, I would like to thank all my friends and other people who have had any help and support for my study but are not above-mentioned ii ABSTRACT This thesis used the travel cost approach to estimate the recreational values of coral reefs at Cham islands, Vietnam Since the on-site data has addressed some problems such as non-negative integers, zero-truncated, endogenously stratified and overdispersion, two count models: the Poisson model and negative binomial model have been used in the study From the econometric results, we can clearly see that the negative binomial models produced better results than the corresponding Poisson models It is also indicated that the gross Consumer surplus of total visitors to Cham islands in 2013 is about VND 292.75 billion and the gross WTP of total visitors is about VND 7.12 billion Key words: coral reefs, recreational value, total economic value, travel cost method, count model iii CONTENTS CHAPTER 1: INTRODUCTION 1.1 Problem statements 1.2 Research objectives 1.3 Research questions 1.4 Scope of the study 1.5 Structure of the study CHAPTER 2: LITERATURE REVIEWS 2.1 Total economic value of the environmental resources 2.2 Environmental valuation methods 2.3 The Travel cost method 2.3.1 The concept of Consumer surplus 2.3.2 The Travel cost method 2.3.3 Theoretical framework 10 2.3.4 Problems with the Travel cost method 12 2.4 Empirical literature review 12 2.5 Conceptual framework 15 CHAPTER 3: DATA AND RESEARCH METHODOLOGY 16 3.1 Overview of Hoi An 16 3.1.1 Brief of forming history of Hoi An 16 3.1.2 Evaluation of Tourism resources of Hoi An: 18 3.2 Overview of Cham islands 19 3.2.1 Biodiversity in Cham islands 20 3.2.2 Cu Lao Cham marine protected area 22 3.3 Data collection 25 3.3.1 Survey design 25 3.3.2 Sample design 26 iv 3.3.3 Variables and expected signs 27 3.4 Methodology 29 3.4.1 Computing total travel cost 29 3.4.2 Econometric models 32 CHAPTER 4: RESEARCH RESULTS AND DISCUSSION .37 4.1 Descriptive Statistics 37 4.2 Econometric results 41 4.3 Computation of consumer surplus (CS) estimates 44 4.4 Estimation and suggestion of an entrance fee 45 CHAPTER 5: CONCLUSION AND RECOMMENDATION .48 5.1 Main findings 48 5.2 Policy implications 49 5.3 Research limitations 49 5.4 Suggestions for future researches 50 REFERENCES 51 APPENDIXES 56 Appendix A: Literature reviews worksheet 56 Appendix B: Descriptive statistic 60 Appendix C: Econometric results 61 Appendix D: Multicollinearity test 63 Appendix E: Sample profile 63 Appendix F: Questionnaire 75 v LIST OF TABLES Table 1: Number of environmental valuation methods Table 2: Definition of variables in the data set 27 Table 3: Expected sign of the coefficients in the model 29 Table 4: Means of transportation to Cham islands 30 Table 5: Distribution of gender and marital status of respondents 37 Table 6: Distribution of age of respondents 38 Table 7: Education level of respondents 38 Table 8: Monthly income of respondents in million VND 39 Table 9: Number of visitors in a group 39 Table 10: Number of trips in years 40 Table 11: Visitor‘s total travel cost (million VND) 40 Table 12: Number of nights travel at Cham islands 41 Table 13: Empirical results of count models 42 Table 14: Estimated Consumer surplus 44 Table 15: WTP the fees to visit Cham islands 45 Table 16: WTP the fees to visit Cham islands 46 vi LIST OF FIGURES Figure 1: Total economic value of environmental assets Figure 2: Travel cost demand function and Consumer Surplus Figure 3: Conceptual framework 15 Figure 4: Cu Lao Cham MPA zoning plan map 25 Figure 5: Histogram of the number of trips in years to Cham islands 33 vii CHAPTER 1: INTRODUCTION 1.1 Problem statements According to Ceasar ed al (2000), coral reefs is one of the most productive, diverse, and attractive ecosystems Not only plays an important role for marine life, coral reefs also provides a valuable range of benefits for mankind such as: Physical structure services: by reducing the speed and strengthen of the currents and waves, coral reefs protect our coasts; biotic and economic services: many species of fish use coral reefs as their shelter and the places to have babies; biogeochemical services: the existence of coral control the amount of carbon dioxide in the ocean environment… Cu Lao Cham, is a small group of eight islands located, which is 19km offshore from Hoi An city, in the eastern part of Quang Nam Province, central Vietnam Cu Lao Cham Marine Protected Area was established in December 2005 with the support from the Danish Government and recognized as World Biosphere Reserve by UNESCO in 2009 Cu Lao Cham is famous by wonderful coral reefs that bring many benefits such as fish habitat, beach protection, fishery and recreation In recent years, the local economy that is supported by tourism to coral reefs has been greatly improved However, the threat to coral reefs is also accompanied by tourism growth According to Department of Commerce and Tourism of Hoi An, the number of tourists visiting Cu Lao Cham surpassed 190,000 in 2013, and to transport those visitors required about 13,000 turns of high-speed canoe, equivalent to 480.000 liters of gasoline consumed and exhausted directly into the sea In addition, the coral reefs are also destroyed by tourism activities such as swimming, diving, scuba and garbage of visitors as well as residents Therefore, the local government needs to keep the balance between tourism development and coral reefs conservation There were some researches showing relation between tourism development and coral reefs conservation at Bolinao Philippine (Ahmed et al, 2007), Great Barrier Reef1 Australia (Carr and Mendelsohn, 2003), or Hon Mun MPA – Vietnam (Nam et al, 2005)… Ahmed et al (2007) showed that making sure healthy coral reefs can create potential revenues for a sustained period of time Carr and Mendelsohn (2003) emphasized the importance of conservation policies to protect coral reef systems when these resources were worth from USD 18 to 40 billion for Australia In Vietnam, the study of Nam et al (2005) concluded that a management of coral reefs could provide higher benefits than a ―no management‖ scenario Among the benefits to local economy as well as threats to coral reefs from tourism, there is a need for research on estimating the recreational value of coral reefs at Cu Lao Cham islands so that policymakers could figure out the damage if the coral reefs disappear And in order to avoid that worst case happen, the conservation policies to protect coral reefs at Cu Lao Cham islands need to be warranted and should be supported Valuation all economic benefits provided by the coral reefs is very difficult because they have a wide range of value uses and most economic values associated with the coral reefs must be estimated using non-market methods Therefore, this study just focuses on measuring the recreational value of coral reefs at Cu Lao Cham islands by using travel cost approach 1.2 Research objectives The goals of this study are to measure the annual recreational value of the coral reefs at Cu Lao Cham islands for the purpose of improving the awareness of local communities and governments in exploitation and protection of coral reefs ecosystem 1.3 Research questions The study tries to address the following questions: - What are the key determinants of recreational demand for the coral reefs at Cham islands? 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 1 1 1 1 1 2.399 1.662 0.118 1.202 1.461 1.07 1.062 2.197 1.088 1.212 1.21 1.615 2.289 0.24 1.418 2.276 0.677 1.015 0.989 1.427 1.069 1.346 2.28 0.915 1.2 0.6 0.3 0.6 0.5 1.1 1.5 0.55 2.2 0.55 0.7 2 0.9 0.55 0.8 0.7 0.6 0.8 3.4695 0.9195 1.3 10.536 0.795 1.542 3.37 0.7 0.49 1.9755 0.133 2.316 0.51 0.388 0.975 0.1275 3.2925 0.975 0.53 0.6705 0.798 0.1455 5.268 0.194 21 50 30 10 15 5 15 30 15 22 10 30 30 27 18 18 42 26 27 25 43 24 24 25 30 25 25 45 28 19 22 29 23 30 21 43 66 10 0.6 4.5 15 4.5 10 4 3 4 4 4 4 4 3 3 1 0 1 1 1 0 0 1 1 0 0 0 0 0 1 0 0 1 1 1 1 1 1 1 1 0 1 1 50,000 30,000 50,000 100,000 50,000 100,000 50,000 30,000 100,000 40,000 80,000 50,000 40,000 100,000 100,000 50,000 30,000 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 1 1 4 1 1 3 0.129 0.338 2.905 1.744 0.802 1.529 0.512 0.088 1.033 0.437 1.683 0.1 0.083 0.497 0.356 0.642 0.873 0.291 0.771 0.317 0.427 1.736 0.223 0.175 0.7 0.05 0.3 0.5 0.5 0.55 0.5 0.6 1.1 0.5 0.45 0.3 0.6 0.8 0.6 0.45 0.5 0.75 0.45 0.45 0.097 0.97 0.196 0.422 0.1455 3.738 1.124 0.26 1.9755 2.41 6.096 0.7275 0.1455 1.334 3.115 0.097 1.365 0.187 2.116 0.7275 3.26 3.57 4.79 3.13 30 42 40 16 7 2 5 1 48 4 21 28 32 42 30 24 20 21 41 22 26 30 20 20 48 24 25 22 22 30 23 33 24 28 67 5 12 1.5 15 3.5 4.5 2.5 3.5 4 4 4 3 3 3 4 4 3 1 0 0 1 1 0 1 0 1 0 1 0 0 1 0 0 0 1 1 1 1 0 1 0 1 1 1 40,000 100,000 50,000 50,000 100,000 30,000 100,000 80,000 50,000 50,000 30,000 50,000 60,000 30,000 50,000 60,000 30,000 50,000 20,000 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 1 3 2 1 1 1.011 2.183 4.169 1.44 0.23 0.296 0.448 0.202 0.13 0.13 0.408 0.609 1.247 0.164 0.733 1.117 0.404 0.058 0.515 0.307 1.226 1.857 1.424 0.94 0.6 1 0.85 0.7 0.7 0.6 0.3 1.5 0.8 0.7 0.55 0.6 0.3 0.5 0.75 1.5 0.5 0.5 1.2 0.294 1.9275 0.45 1.878 1.3 0.776 1.33 0.776 1.587 0.585 2.645 9.4 0.623 0.582 15.64 0.195 0.194 0.388 2.116 0.788 7.71 1.95 1.396 10 30 50 5 5 40 20 12 21 30 33 30 24 30 25 20 26 26 20 23 23 25 19 28 19 20 22 24 27 55 27 21 68 2.5 20 50 3.5 10 1.5 2.8 1.5 10 1.8 1.5 3.5 17 1.5 5 4 4 4 3 3 3 4 5 1 1 0 1 1 1 1 1 1 0 1 0 0 0 0 0 0 0 1 0 1 1 1 1 0 0 0 1 1 100,000 30,000 80,000 50,000 40,000 100,000 100,000 20,000 80,000 30,000 50,000 100,000 10,000 10,000 60,000 100,000 100,000 20,000 - 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 3 2 1 2 1 0.13 1.327 0.978 0.118 0.282 0.334 0.657 3.28 1.64 0.953 2.03 1.088 0.14 0.13 0.677 0.117 0.052 1.117 2.65 0.33 0.2 0.715 0.583 0.667 0.5 0.8 0.5 0.45 0.5 0.75 0.5 0.5 0.5 0.6 0.5 0.5 0.5 0.85 0.5 0.75 0.55 0.6 0.6 0.7 0.45 1.5 0.6 0.388 1.788 0.975 0.6 0.7275 5.4 1.1565 3.2925 1.9755 13.17 5.7825 1.1565 0.2425 0.7275 1.317 0.582 0.374 1.9755 1.4625 3.174 2.704 3.174 0.97 2.6 20 36 41 14 3 30 18 34 3 20 31 10 16 26 30 25 21 25 27 22 24 35 24 30 20 22 21 28 53 23 23 35 23 28 28 21 28 69 10 3 4 10 5 10 2.5 1.5 3.5 10 5 4 4 4 4 3 3 4 5 3 1 0 0 1 1 1 1 1 1 1 0 0 1 0 0 1 0 1 1 1 1 0 1 1 1 1 50,000 10,000 20,000 30,000 70,000 50,000 50,000 80,000 50,000 30,000 60,000 100,000 - 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 2 1 2 1 1 1 0.118 0.118 0.881 1.015 0.368 1.163 1.175 1.175 0.332 0.615 0.712 0.933 1.148 0.254 0.13 1.007 0.323 0.148 0.365 1.709 0.14 0.13 1.266 0.464 0.8 0.85 0.5 0.8 0.5 0.45 0.5 0.8 0.7 0.55 0.9 0.5 0.8 0.6 0.85 0.9 0.55 0.5 0.6 0.6 0.15 2.116 0.771 7.902 2.116 2.313 1.4625 0.392 1.246 3.174 1.055 1.317 3.9 2.645 0.1455 1.9275 3.9 0.975 0.85 0.975 6.5 0.776 2.286 1.246 32 23 2 10 31 13 24 30 15 36 29 20 10 23 25 21 28 24 30 21 25 25 24 29 25 27 24 21 28 24 21 26 30 42 22 39 21 70 1.5 2.5 10 2.5 4 15 2.5 4 4 4 4 4 4 4 1 1 1 0 0 1 1 1 0 0 0 1 1 0 0 0 1 0 1 1 1 1 1 1 1 1 20,000 50,000 30,000 80,000 30,000 40,000 30,000 60,000 40,000 30,000 60,000 50,000 60,000 50,000 70,000 100,000 50,000 40,000 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 3 1 1 1 2 1.131 0.201 0.128 0.963 0.677 1.29 0.713 1.49 0.904 0.115 0.871 0.273 0.692 0.586 1.048 1.418 0.234 1.015 0.581 1.85 1.117 0.115 0.936 1.142 0.6 0.8 0.8 0.5 0.6 0.6 3.5 0.8 0.55 0.5 0.6 0.8 0.5 0.6 1.7 0.6 0.8 0.55 0.8 0.6 0.8 0.55 0.5 0.5 5.85 0.975 0.7935 0.291 0.771 1.534 1.341 0.975 3.625 0.7275 2.0475 0.788 1.315 1.317 5.2 1.8 0.582 0.483 1.539 1.9755 2.4375 0.388 1.916 0.879 2 12 18 20 15 21 15 37 20 12 41 10 20 26 22 20 33 28 27 30 26 22 21 32 26 22 28 23 33 21 45 25 25 26 21 26 50 71 1.5 20 2.5 2.5 2.5 5 2.5 5 3 4 3 4 4 4 4 4 1 1 1 0 0 1 0 1 1 1 0 0 0 0 1 1 0 1 0 1 1 0 1 1 1 1 1 40,000 80,000 40,000 50,000 100,000 50,000 30,000 50,000 40,000 50,000 60,000 70,000 40,000 50,000 30,000 20,000 50,000 40,000 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 1 1 4 3 0.13 0.932 1.057 0.307 0.064 0.115 1.032 1.156 0.433 0.887 0.725 0.63 0.898 1.316 0.759 0.919 1.758 1.216 0.317 0.598 0.345 0.258 1.07 0.751 0.6 0.55 0.5 0.8 0.5 0.8 0.5 0.55 0.8 0.6 0.5 0.8 0.5 0.5 0.6 0.8 0.75 0.6 0.55 0.3 1.1 0.6 1.058 0.954 2.0475 5.2 4.984 0.097 0.771 1.77 4.842 0.9175 3.9 5.1 1.869 2.46 1.87 1.2825 3.2925 3.064 0.291 1.878 0.72 0.975 0.771 0.908 18 22 18 37 20 25 40 20 19 47 5 22 27 21 30 26 22 21 36 26 24 23 38 34 25 30 21 27 25 26 30 27 21 20 26 32 72 4 2.5 5 2.5 15 2.5 4.5 1.5 4.5 4 3 4 4 4 4 3 4 0 1 1 1 1 1 1 0 1 0 0 0 1 0 1 0 1 1 0 1 1 1 1 1 1 0 1 80,000 70,000 80,000 40,000 30,000 30,000 100,000 100,000 40,000 50,000 80,000 50,000 60,000 50,000 30,000 20,000 100,000 - 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 1 3 10 2 10 1 0.418 1.452 1.899 0.725 1.285 0.43 0.853 1.024 0.26 1.78 0.175 0.823 0.953 1.015 1.124 0.265 0.715 0.726 1.501 0.218 2.03 1.302 0.165 1.713 0.5 0.5 0.6 0.8 0.5 0.55 0.6 0.5 0.55 0.8 0.6 0.5 0.8 0.8 0.6 0.8 0.5 0.5 0.85 0.5 0.6 0.8475 0.49 1.542 3.951 3.4125 0.97 0.545 3.4695 0.788 1.276 2.3475 3.54 5.268 7.8 5.9265 1.614 1.541 1.41 2.4375 1.3 0.196 2.41 0.291 5.9265 42 24 14 20 10 40 27 18 17 42 29 23 32 29 47 25 26 21 20 22 31 28 47 24 30 26 19 24 21 32 20 51 24 21 30 73 10 10 2 5 10 2.5 1.5 1.5 10 4 4 3 4 4 3 4 4 0 1 0 1 0 1 1 1 1 1 1 0 0 1 1 0 1 1 1 1 1 0 1 1 1 1 1 40,000 50,000 80,000 30,000 50,000 30,000 10,000 20,000 20,000 50,000 50,000 50,000 50,000 30,000 30,000 10,000 50,000 30,000 40,000 100,000 236 237 238 239 240 241 2 0.218 1.403 0.118 1.015 1.232 0.115 0.55 0.55 0.5 0.5 0.8 0.55 1.3 2.925 0.13 2.634 1.8 2.91 32 34 21 22 42 21 28 25 25 74 1.5 1.5 3.5 5 4 4 1 1 0 0 1 1 10,000 50,000 No:…… Appendix E: Questionnaire The survey is conducted to assess the recreation value and matters related to tourism activities of Cu Lao Cham World Biosphere Reserve Based on the results from the questionnaire, solutions to protect environment and to improve tourism activities following sustainable tourist development are proposed Please provide us information by answering the following questions We guarantee that your information will be kept the secret and only used for the objectives of the study Where are you come from? Province (or City): How did you get to Hoi An from your home? (Please tick one or more)  Airplane  Train  Tour bus  Hired car  Motorbike  Others How many times have you visited these islands in years, including this trip? ……time(s) How many times have you visited these islands this year? ……… time(s) Whom you travel with?  Alone  Family, friends  Tour  Others How many people are in the group you are traveling with in Cu Lao Cham? 75 How long is your trip? ……Night(s) How long are you going to visit to Cham islands?…….Night(s) Why you visit Cham islands? (Please tick)  Entertainment  Business  Scientific research  Other reason 10 What activities have you participated in at the islands? (Please tick all that apply)  Using beaches/Sunbathing  Swimming  Snorkeling  Scuba-diving  Eating seafood  Visiting fishing villages  Camping  Seafood shopping 11 Please estimate your total travel cost for the whole journey as list below: Individual or Group Round trip cost …………… …………… VND Entrance fees …………… …………… VND Eating expense …………… …………… VND Hotel fees …………… …………… VND Entertainment …………… …………… VND Shopping …………… …………… VND Other costs …………… …………… VND Total …………… …………… VND 76 12 Please estimate your spending at Cham islands Individual or Group Round trip cost …………… …………… VND Entrance fees …………… …………… VND Eating expense …………… …………… VND Hotel fees …………… …………… VND Entertainment …………… …………… VND Shopping …………… …………… VND Other costs …………… …………… VND Total …………… …………… VND 13 In this journey, how many places (included Cham islands) you have intention to visit? place(s) 14 What will you instead of visiting Cham islands?  Work  Go shopping  Be at home  Others 15 In Vietnam, which places did you visit or are you going to visit, apart from Cham islands? (Please specify the name of the places) 16 Do you have attention to visit Cham islands again?  Yes  No  Not sure 77 Willingness to Pay for the Marine Protected Area: The next questions concern your willingness to pay the fees to visit the islands and use the Marine Protected Area 17 Would you like to be willing to pay more fees (Apart from paid fees) in order to protect and improve the environment quality of tourism area?  Yes and go to question 19  No and go to question 18 18 If you answered No to question 17, what is the main reason that you said no:  I not care about the Marine Protected Area  The Marine Protected Area is not needed  It costs too much already to visit the islands  The money would be wasted  Other people and business that pollute should pay  Not enough information 19 The reason why you are willing to pay the fees to visit Cham islands is (are) :  For operation of Cham MPA  For next generations  Social meaning  Others …… 78 20 What is the highest level of contribution if you are willing to pay?  10,000 VND  20,000 VND  30,000 VND  40,000 VND  50,000 VND  60,000 VND  70,000 VND  80,000 VND  90,000 VND  100,000 VND Questions about you: 21 Are you male or female?  Male  Female 22 How old are you? _ years 23 Are you married?  Yes  No 24 What is your job?  Officer  Businessman  Freelance work  Unskilled worker  Student  Retired  Jobless  Other 79 25 What is the highest grade you completed in school?  Primary school  Secondary school  High school  College/University  Masters or higher graduate degree  Other 26 What is your approximate MONTHLY income? …………………VND Thank you very much! 80 ... questions: - What are the key determinants of recreational demand for the coral reefs at Cham islands? - How much is the annual recreational value of the coral reefs at Cham islands? 1.4 Scope of the... estimate the recreational values of coral reefs at Cham islands, Vietnam Since the on-site data has addressed some problems such as non-negative integers, zero-truncated, endogenously stratified... local economy as well as threats to coral reefs from tourism, there is a need for research on estimating the recreational value of coral reefs at Cu Lao Cham islands so that policymakers could figure