Category FAQs Search : Coral Reef Preservation
Question: Assessing the economic sustainability of managing protected areas using the CVM and CBA approaches
Answer: Purpose
The purpose of this paper is to design a preservation policy aimed at safeguarding the Ehden Natural Reserve, a reserve providing shelter to a substantial number of endangered species.
Design/methodology/approach
The current paper, offers an approach which merges contingent valuation and cost-benefit analysis (CBA) to design a preservation policy aimed at safeguarding the reserve. Contingent valuation is used to estimate the expected benefits from the reserve for both local residents and tourists visiting Ehden, while using a certainty analysis approach to explore the problem of hypothetical bias. A CBA is then applied to the findings to evaluate a ten year plan to preserve the protected area through a non-profit foundation.
Findings
Findings from the analysis support the feasibility of a project of this nature, which shows a positive NPV within the studied period and at an acceptable social discount rate (SDR). The balance between benefit and cost is thus always positive, except in some pessimistic cases when analyzing the sensitivity of the model’s critical variables, particularly the number of visitors, the different WTPs for visitors and locals and the different SDRs.
Originality/value
The paper adds to the scarce research available on the sustainability of protected areas in the Middle East region.
(Source: , 08 Jul 2021)
Source Link: https://doi-org.onlinedatabase.librarynet.com.my/10.1108/MEQ-04-2015-0069