Valuing Botanic Collections: A Combined Travel-Cost and

Contingent Valuation Approach

Paul Mwebaze

Jeff Bennett

Paper presented at EEN-2010

Presentation Outline

• Background

• Research Questions

• Methodology

• Preliminary Results

• Summary

• Acknowledgements

Background • Botanic gardens (and plant collections therein)

provoke travel behaviour. • Relatively huge numbers of visitors annually,

despite spending little on advertising costs. The second most popular cultural venue visited in

Australia (after cinemas). • About 40% of Australian population aged over 15

visits at least one botanic garden each year! • Recent visitor statistics (in 2009):

1. RBG Sydney-3,500,000 2. RBG Melbourne-1,619,950 3. ANBG Canberra-395,559

Research Questions 1. Since most botanic gardens charge no entry

fees, a question arises as to the magnitude of benefits derived from free public access?

2. Need to provide a convincing argument for the expenditure of large sums of public money needed to maintain botanic collections?

3. To gauge willingness to pay (WTP) of users for a change in the provision of biological collections...overall aim of this project

Methodology Outline

1. Travel-Cost (TC) exercise to estimate the values visitors place on botanic collections. This will address the question of what value visits

to the botanic gardens are generating?

2. Contingent Valuation (CV) exercise to query visitors for their willingness to pay (WTP) for entry fees and or higher parking charges to gain access to botanic sites. A combined TC/CV approach is efficient and

provides a check on convergent validity.

Methodology (cont)

MOTIVATION Why have you travelled here?

TRAVEL-COSTS How much it costs to get here?

WTP IN PRINCIPLE Are you willing to pay entry/parking fees to gain access to botanic site?

YES NO

WTP AMOUNTS Are you willing to pay $X?

TCM

CVM

Source: Garrod et al. (1993)

Individual TC Model

)1(),,,( iijijijij eXSSTCfV

Vij is the number of visits by individual i to botanic site j in past 12 months, Tcij is travel cost by individual i to gain access to botanic site j, SSij is the dummy variable to capture substitute site j, Xij is a vector of socio-economic variables of individual i, Eij is the error term assumed to be normally distributed.

)2(....ln 332210 nnij XBXXTCV

)3(1

1CS

Survey Design • TC/CV questionnaire using DC format with 7

bid levels ($1 to $10).

• Open-ended WTP follow up question.

• Follow up questions to detect problems.

• 2 pilot surveys.

• Full on-site surveys at 3 major botanic sites.

1. ANBG Canberra (700)

2. RBG Sydney (700)

3. RBG Melbourne (300)

Preliminary Results: What was the reason for your visit to ANBG?

BOTANIC EXPEDITION 0%

TWILIGHT FOREST 2%

GARDENS CLASSROOM

0% RECREATION

3%

SCENIC VIEW 31%

UNIQUE PLANTS 25%

EDUCATION 3%

BUSINESS 0%

CAFE 1%

MEETING FRIENDS 12%

NATURE WALK 20%

OTHER 3% WEIGHTED SCORE

Source: ANBG survey (2010)

Reason for your visit to RBGS?

GUIDED TOURS 0%

RECREATION 11%

SCENIC VIEWS 41% UNIQUE PLANTS

22%

EDUCATION 1%

BUSINESS 0%

CAFE 1%

MEETING FRIENDS 4%

NATURE WALK 14%

OTHER 6%

WEIGHTED SCORES

Source: RBGS survey (2010)

Estimated TC Models RBGS ANBG

parameters Coefficients (t-ratio) Coefficients (t-ratio)

Travel-cost -0.0058 (-2.99)** -0.0119 (-2.92)**

Time -0.1483 (-3.94)*** -0.0463 (-2.15)**

Income 0.0046 (3.59)*** 0.0024 (2.53)***

Age 0.0018 (2.63)*** 0.0144 (2.47)***

Gender 0.0079 (1.2) 0.0792 (2.52)***

Substitute sites -0.2894 1(-2.83)** -0.2069 (-1.96)**

Constant 1.154 (14.04)** 0.9193 (2.91)***

CS/visit $174 $84

TC Results • Travel cost and travel time are negative and

highly significant (p<0.05) in line with theory.

• Income and age also highly significant (p<0.05)

• The CS per visit to ANBG and RBGS are $84 (CI: 41.4-370.2) and $174 (CI:72.7-448.85) resp.

• Using mean length (1.85&2.25) of the visit in hours, we obtain a CS estimate per hour of $45 and $77 for ANBG and RBGS, respectively.

Aggregate Consumer Surplus

• Based on total number of visitors per year, and the proportion of travel costs that is attributed to each site (0.64&0.45), the total social welfare estimate works out to $21.4 & $272.2 million per year, for ANBG and RBGS, respectively.

• How do our estimates compare with others?

• Recreational value of botanic gardens in the UK was £0.26-£2.24 per visit: Garrod et al. (1993)

• Total consumer surplus of visitors to 4 botanic gardens in the UK works out to £41,700 per year.

CV highlights: Payment Principle Question

• Would you be willing to pay higher parking fees of $X to access the ANBG?

YES: 54%,

NO: 46%.

• Would you be willing to pay entry fees of $X to access the RBGS?

YES: 53%,

NO: 47%.

Reasons for ‘opting out of the market’

NOT ABLE TO AFFORD IT 8% DONT WANT

ADDITIONAL BURDEN

5%

DONT HAVE TO PAY ELSEWHERE

14%

GOVERNMENT SHOULD SUPPORT IT

29%

CONSERVATION IS GOVT RESPONSIBILITY

11%

TOO EXPENSIVE 8%

NO NEED FOR ENTRY FEES 12%

DONT KNOW 1% OTHER

12%

Source: RBGS survey (2010)

Open-ended WTP question: Max. WTP for entry fees to access RBGS?

Max WTP for higher parking fees to access ANBG? Current rate is $1.80

Summary: Open-ended WTP

Parameters RBGS (Entry Fees)

ANBG (Parking Fees)

Mean ($) 4.14 3.12

Maximum ($) 40.00 20.00

Minimum ($) 0 0.00

Std. dev. 4.51 2.78

Skewness 4.13 2.438

Kurtosis 30.65 11.081

Sample (N) 150 130

The skewness and kurtosis statistics reveal that WTP open-ended distribution is skewed Positively and leptokurtic

Summary

• Work in progress …. Still entering data

• Visitors place a relatively high price tag for recreation in botanic gardens.

• Positive WTP for entry fees ($4) at RBGS and higher parking fees ($3.0) at ANBG.

• Average consumer surplus of $84-174 per visit is large compared to other estimates.

• But inline with value of recreational fishing in Australia ($167/angler: Prayaga et al. (2010)).

Acknowledgements

• Judy West

• Jim Croft

• Lucy Sutherland

• Janelle Hatherly

• Steve Speerman

• Tertius Greyling

• Lucy Chaplain

• Marie-Carolyn