2020 Working Paper (2020-10)

Working Paper No. 2020-10 
Capturing Urban Households’ Benefits for Preserving Natural and Cultural Resources in a Neighboring Rural Area: A CVM Approach
Rosalina Palanca-Tan

Abstract 

Koronadal households benefit from Lake Sebu’s natural and cultural resources in terms of recreation, tourism income generation, supply of high quality tilapia, agricultural products supply, potential hydroelectric power source, cultural heritage, biodiversity, and climate change mitigation. These benefits encompass both use and non-use values which are integrated in a single estimate using the contingent valuation method. In the study, Koronadal households are asked for their willingness to pay (WTP) or contribute to natural and cultural resources rehabilitation and preservation efforts in the form of a lump-sum monthly amount collected together with their electricity bill payment. Household’s mean WTP is estimated to be between PhP52.42 (US$1.04) and PhP64.39 (US$1.27) per month. Multiplying the annualized WTP by the number of households in Koronadal, total potential annual contributions from Koronadal City would range from PhP29,244,533 (US$577,841) to PhP35,863,170 (US$708,618).  Even just a fraction of this potential collection can support essential conservation efforts in Lake Sebu which up to the present have been inadequate due to financial constraints. Moreover, results of the regression analysis reveals that households are more likely to support the preservation program if the amount of required contribution  is smaller and household income is higher. Older and more educated respondents are likewise more likely to support the program.

Key words: benefit valuation, contingent valuation method, cultural heritage, natural environment, willingness to pay