Measuring Economic Value of TIS Abay Waterfalls: Comparison of Contingent Valuation and Travel Cost Methods
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Date
2000-06
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A.A.U
Abstract
One aspect of sustainable development is the need to retain an "acceptable" level of
environmental quality and to conserve nature's assets. Environmental economics
literature has therefore developed to encompass a range of monetary valuation methods
and techniques de Signed to value the spectrum of environmental goods and services.
The task of monetary valuation of the environment is made more complex by a number of
problems. These include the fact that often environmental effects will have no natural
units of measurement, and even where physical indices are available these must be
related to individual perceptions. Be Sides, due to their externality and public good
characteristics environmental effects do not often directly show up in markets.
Extensive use of monetary valuation methods combined with technical improvements in
techniques have resulted a large literature that consists a wide range of valuation case
studies. There is now a wide range of application of the contingent valuation method
(CVM) in developing Countries. Most of the studies are concerned with fresh water
investments and sanitation. However, there are fewer studies that look at forest values,
outdoor recreation, sanctuaries and parks. Of course, few limited studies have applied
different techniques in valuing different environmental resources. This indicates that
both in developed and developing countries more emphasis has been given to the
reliability of contingent valuation method (CVM) . This study has attempted to estimate
recreation value of Tis Abay Water Falls which is considered nature based tourist
attraction area by applying contingent valuation method (CVM) and the travel cost
approach(TCM) and evaluated the extent whether different techniques for valuing a
given environmental charge will produce similar results.
The conflicting interest around Tis Abay Water Falls resource is the background for this
study. Tis Abay II Hydro Power Project is being implemented with the objective of
increasing the supply of energy, where as the Tourism Master Plan proposed
establishment of Tis Abay national park to enhance tourism industry. However, there is a
trade-off between these two proposals, because the implementation of Hydro - electric
power project will necessarily involve a significant reduction in the flow of water falls
and that may not sustain their aquatic diversity and value of tourism.
Though, there is significant difference, both methods have come with substantial
consumers' surplus of Tis Abay Wate Falls Park which shows high potential tourism
value of the resource. This might help to consider environmental policy issues and the
need for the simultaneous pursuit of multifarious development objectives which are often
in conflict with each other.
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Keywords
Economic Value of Tis bay Waterfalls, Travel Cost Methods, Measuring Economic