Measuring Environmental Benefit of a Recreation Site: An Economic Estimate of Sodere Recration Area

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In this study, an attempt was made to attach quantitative estimates to the on-site recreational benefit of Soldered Recreation area so as to demonstrate how the respective authorities can extract revenue out of the excess benefits to improve qualities and expand the types and varieties of their services. Furthermore, welfare effects of two of the major drawbacks of recreational qualities on the site were estimated. In doing so, the study applied two standard procedures in Environmental Economics, i.e. Travel cost and contingent Valuation methods, using primary data collected from a survey of 232 visitors at Sodere Recreation Area. The Travel Cost Method used the amount of money and time people spend getting to the site to derive the demand function for the site, which in turn was used to calculate recreational benefits associated with the site. On the other hand, the contingent Valuation method used hypothetical elicitation techniques to evaluate people's Willingness-to-Pay (WTP) in exchange for access to an improved recreational qualities, which in turn was used to estimate the welfare effects of the existing problems on the site. Like other similar studies, travel costs, visitor's income, mode of transport, and experience on other substitute sites were identified as major determinants of visits to the site. On the other hand, visitor's income, visitor's attitude towards the problems, and visitor's position and responsibility in the household were found to be important determinants of the WTP responses. Using Maximum Likelihood estimators of truncated models, the annual on-site recreational benefit of the site was estimated to be Birr 9,824,094.80 (US $1,403,442.10) per year, in which the site authorities collect only 9 percent of this sum, i. e. an average of Birr 856,680 (US $122,382) per year, from gate fees. This shows that much can be done to generate revenue for the support of quality improvement and expansion projects at the site. On the other hand, using the same models, the welfare effects of congestion and malaria problems were valued as Birr 1.37 (US $0.20) and Birr 4. 39(US $0.63) per visit respectively, showing the relative depth and seriousness 'of malaria problems on the site.



Economic estimate, Measuring environmental benefit, Sodere Recration Area