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To Develop or to Conserve? The Case of the Diyawanna Oya Wetlands in Sri Lanka

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The Diyawanna Oya wetland ecosystem has proven to be an important recreational site in the greater Colombo area in the face of the growing demand for urban recreational amenities. It provides a wide spectrum of use- and non-use benefits, including production, hydrological, and ecological values. However, the wetland suffers from both inadequate recognition of these benefits and poor representation in the national protected area network. This study evaluates the recreation related social welfare benefits that visitors derive from the Diyawanna Oya wetlands. The study employs the Individual Travel Cost Method in order to estimate the welfare gains from recreation as well as changes in consumer surplus if authorities were to convert parts of the wetland to other development uses. The study also assesses the present value of non-market benefits from preserving the site. The findings indicate that the Diyawanna Oya wetlands generate an annual consumer surplus of LKR 3,890 million (or USD 35 million) to people who use the area for recreation. The welfare loss from converting the natural wetland area to development projects is LKR.19.45 million (or USD 173,107) per hectare. Our study also shows that imposing an entry fee (the equivalent of LKR.50) will increase government revenue by LKR 5.4 million (or USD 48,055).
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No. 52 - 10
September 2010
Thusitha Dilhani Marawila
Manoj Thibbotuwawa
To Develop or to Conserve? The Case of the
Diyawanna Oya Wetlands in Sri Lanka
SANDEE
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Kathmandu, Nepal
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THE
WORLD
BANK
SANDEE Working Paper No. 52 - 10
September 2010
South Asian Network for Development and Environmental Economics (SANDEE)
PO Box 8975, EPC 1056
Kathmandu, Nepal
Thusitha Dilhani Marawila
Manoj Thibbotuwawa
To Develop or to Conserve? The Case of the
Diyawanna Oya Wetlands in Sri Lanka
Institute of Policy Studies of Sri Lanka (IPS),
Colombo, Sri Lanka
2SANDEE Working Paper No. 52-10
Published by the South Asian Network for Development and Environmental Economics
(SANDEE)
PO Box 8975, EPC 1056, Kathmandu, Nepal.
Telephone: 977-1-5003222 Fax: 977-1-5003299
SANDEE research reports are the output of research projects supported by the South
Asian Network for Development and Environmental Economics. The reports have been
peer reviewed and edited. A summary of the findings of SANDEE reports are also
available as SANDEE Policy Briefs.
National Library of Nepal Catalogue Service:
Thusitha Dilhani Marawila and Manoj Thibbotuwawa
To Develop or to Conserve? The Case of the Diyawanna Oya Wetlands in Sri Lanka
(SANDEE Working Papers, ISSN 1893-1891; 2010- WP 51)
ISBN: 978 - 9937 - 8376 - 1- 3
Key words:
1. Recreation
2. Travel cost
3. Non-market valuation
4. Consumer surplus
5. Count data models
6. Wetlands
II
The views expressed in this publication are those of the author and do not necessarily
represent those of the South Asian Network for Development and Environmental
Economics or its sponsors unless otherwise stated.
SANDEE Working Paper No. 52-10 3
III
Comments should be sent to Thusitha Dilhani Marawila, Institute of Policy Studies of Sri
Lanka (IPS), Colombo, Sri Lanka, Email:devsenara@yahoo.com.
The South Asian Network for Development and
Environmental Economics
The South Asian Network for Development and Environmental Economics (SANDEE) is a
regional network that brings together analysts from different countries in South Asia to address
environment-development problems. SANDEE’s activities include research support, training,
and information dissemination. Please see www.sandeeonline.org for further information about
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SANDEE is financially supported by International Development Research Center (IDRC),
The Ford Foundation, Swedish International Development Cooperation Agency (SIDA),
the World Bank and the Norwegian Agency for Development Cooperation (NORAD). The
opinions expressed in this paper are the author’s and do not necessarily represent those of
SANDEE’s donors.
The Working Paper series is based on research funded by SANDEE and supported with
technical assistance from network members, SANDEE staff and advisors.
Advisor
A.K. Enamul Haque
Technical Editor
Mani Nepal
English Editor
Carmen Wickragamage
4SANDEE Working Paper No. 52-10
IV
SANDEE Working Paper No. 52-10 5
V
TABLE OF CONTENTS
1. INTRODUCTION 1
2. RECREATIONAL VALUATION: EMPIRICAL EVIDENCE 2
3. STUDY AREA AND DATA 5
3.1 STUDY AREA 5
3.2 SAMPLING AND DATA COLLECTION METHODS 6
4. THE THEORETICAL MODEL 7
4.1 RESEARCH QUESTIONS 7
4.2 ESTIMATING ANNUAL RECREATIONAL VALUE OF
DIYAWANNA OYA SITE 7
4.3 THE EFFECT OF IMPOSING AN ENTRANCE FEE
(DISTRIBUTIONAL IMPACT) 12
4.4 WELFARE LOSS DUE TO ACREAGE LOSS FROM THE
NATURAL SITE FOR DEVELOPMENT PURPOSES 12
4.5 PRESENT VALUE OF NON-MARKET BENEFITS FROM
PRESERVING THE SITE 13
5. RESULTS AND DISCUSSION 13
5.1 DESCRIPTIVE STATISTICS 13
5.2 EMPIRICAL RESULTS 14
5.2.1 MODEL ESTIMATION RESULTS 14
5.2.2 ANNUAL RECREATIONAL VALUE OF DIYAWANNA OYA SITE 15
5.2.3 IMPACT OF IMPOSING AN ENTRY FEE/ PARKING FEE 16
5.2.4 WELFARE LOSS DUE TO ACREAGE LOSS 16
5.2.5 PRESENT VALUE OF NON-MARKET BENEFITS FROM
PRESERVING THE SITE 16
6. CONCLUSIONS AND POLICY RECOMMENDATIONS 17
7. ACKNOWLEDGEMENTS 18
REFERENCES 19
ANNEXURE 30
6SANDEE Working Paper No. 52-10
VI
LIST OF TABLES
Table 1: Main Recreational Activities and the Number of Visitors 23
Table 2: Sampling Plan 24
Table 3: Summary Statistics of Sample Respondents 25
Table 4: Socio-economic Statistics of Sample Respondents 25
Table 5: Attitudes about Recreational Quality and Development of the Site 26
Table 6: Estimated Results of Different Zero Truncated Negative Binomial Regression 27
Table 7: Consumer Surplus Calculation: With and Without Entrance Fee 28
Table 8: Welfare Loss due to Acreage Loss 28
Table 9: Present Value of Non-market Benefits 28
LIST OF FIGURES
Figure 1: Frequency of Visits to the Diyawanna Oya Site (per month) 29
Figure 2: Geographical Location of the Study Area 29
SANDEE Working Paper No. 52-10 7
VII
Abstract
The Diyawanna Oya wetland ecosystem has proven to be an important recreational site in the
greater Colombo area in the face of the growing demand for urban recreational amenities. It
provides a wide spectrum of use- and non-use benefits, including production, hydrological, and
ecological values. However, the wetland suffers from both inadequate recognition of these benefits
and poor representation in the national protected area network. This study evaluates the recreation
related social welfare benefits that visitors derive from the Diyawanna Oya wetlands. The study
employs the Individual Travel Cost Method in order to estimate the welfare gains from recreation
as well as changes in consumer surplus if authorities were to convert parts of the wetland to other
development uses. The study also assesses the present value of non-market benefits from
preserving the site. The findings indicate that the Diyawanna Oya wetlands generate an annual
consumer surplus of LKR 3,890 million (or USD 35 million) to people who use the area for
recreation. The welfare loss from converting the natural wetland area to development projects is
LKR.19.45 million (or USD 173,107) per hectare. Our study also shows that imposing an entry
fee (the equivalent of LKR.50) will increase government revenue by LKR 5.4 million (or USD
48,055).
Key words: Recreation, Travel cost, Non-market valuation, Consumer surplus, Count data
models, Wetlands.
8SANDEE Working Paper No. 52-10
SANDEE Working Paper No. 52-10 1
To Develop or to Conserve?
The Case of the Diyawanna Oya Wetlands in Sri Lanka
Thusitha Dilhani Marawila and Manoj Thibbotuwawa
1. Introduction
Not even the wide spectrum of ecosystem services generated have been successful in arresting
the rapid decrease in the coverage and quality of urban wetlands in Sri Lanka over the past few
decades. In recent years, the rapid conversions of wetlands for development purposes has become
a serious problem because such unplanned development in or around wetlands has a negative
effect on urban and sub-urban communities. The question of how to manage urban wetlands in
order to maximize social welfare benefits requires careful analysis because it entails a trade-off
between economic and environmental priorities.
According to the Directory of Asian Wetlands (1989), Sri Lanka contains 41 wetlands (covering
a total land area of 274,000 hectares) of varying importance out of a total of 947 identified
wetlands in the South and South East Asian region. The Directory further emphasizes that Sri
Lankan wetlands are only marginally protected while the continued ecological functioning of over
two-thirds of them is at present seriously threatened. Of these, the Diyawanna Oya wetland,
situated in close proximity to the city of Colombo, is one of the few remaining wetlands as well as
one of the most important marshlands in the region supporting various forms of life.
The value of the Diyawanna Oya wetlands is three fold. Firstly, they provide good recreational
grounds for exercise, sports and family outings. Secondly, inhabitants from the surrounding areas
use this wetland for purposes of income generation such as fishing and cattle grazing, and collecting
reeds, rushes and fuelwood. Finally, from an environmental point of view, the wetlands provide
important hydrological services as well as being a rich habitat of endogenous fauna and flora.
Thus it contributes significantly to the social wellbeing of the surrounding urban and sub-urban
communities. However, there is still little recognition of these values. Instead, clearance of land,
illegal reclamation and construction, dumping of garbage, and encroachments are taking place at
the site, which hamper the services provided by the wetland. IUCN Sri Lanka and Central
Environment Authority (2006) have come to identify the Diyawanna Oya wetlands, which are
also widely recognized as the Colombo flood retention area, as wetlands at a high level of risk.
The Diyawanna Oya wetlands currently serve as a major recreational venue for both residents
from the vicinity as well as visitors from a considerable distance because sites with ecological,
environmental and recreational properties are quite limited in the Colombo metropolitan area
and the nearby suburbs while the few recreational sites available are either costly or offer only
limited entertainment value. The Diyawanna Oya site is quite popular among people of all strata
from the surrounding urban and sub-urban communities due both to its varying attributes and
open access. Historical records provide evidence that Portuguese soldiers used this area as a
recreation and brawling spot in the Kotte era.
The state has transferred the management of certain parts of these wetlands to private agents
both because of the burgeoning demand for land and the inability of the state to manage urban
wetlands effectively as a public good. Chronic inefficiencies and resource scarcity among state
2SANDEE Working Paper No. 52-10
institutions are responsible for this situation. However, the market allocation of a public good can
result in sub-optimal solutions unless those responsible take measures to ensure efficiency and
equity as well as sustainability. While there has been much debate in the recent past over the issue
of the conversion of urban wetlands in Sri Lanka to other uses, there has been little attempt to
date to evaluate the economic aspects of the recreational or other uses of the Diyawanna Oya
wetlands. However, while a study measuring both the use and non-use values of the site within
the urban region would make a valuable contribution to scholarship, due both to the expense and
the complexity associated with measuring these values, we confine our attempt at economic
valuation in the present study to only its recreational value.
This study employs a basic non-market valuation technique, viz., the Individual Travel Cost
Method, to estimate: a) the welfare gains from recreation in the wetlands; and b) the change in consumer
surplus/welfare due to the implementation of development projects. We estimate the demand for
recreation using a count data model that accounts for truncation, over-dispersion and endogenous
stratification that result from on-site sampling. The study moreover examines the impact of imposing an
entry fee on regular visitors to the site and assesses the present value of non-market benefits provided
to users if the authorities preserve the site as a natural recreational area.
We have organized the paper as follows: Section 2 reviews existing literature on the application
of the Travel Cost Method to evaluate recreational benefits. Section 3 describes the study area,
sampling and data collection strategy. We deal with economic and estimation issues in Section 4
while Section 5 discusses the results and limitations of the analysis. Section 6 offers conclusions
and policy recommendations on the sustainable utilization and conservation of the Diyawanna
Oya wetland.
2. Recreational Valuation: Empirical Evidence
Scholars have generally estimated the recreational value associated with wetlands using non-
market valuation techniques, which can be broadly categorized under two methods, direct and
indirect. While indirect methods rely on the behavior of consumers in related markets to reveal
their valuation of non-market goods, direct methods use surveys to ask an individual’s valuation
of these goods in a hypothetical market (Smith et al., 1986).
Haab and McConnell (2002) categorize methods to estimate recreational value under three
basic approaches: single site demand (Travel Cost) method, site choice (Random Utility) method,
and stated preference (Contingent Valuation) method. Researchers have widely used the revealed
preference and stated preference methods, either individually or in combination, in order to
estimate the welfare changes resulting from quality changes in recreational sites (see Whitehead
et al., 1999; Seenprachawong, 2003). Yoshiaki et al. (1995) has suggested a similar classification
of the measures of welfare change, one being the effect of the quality variation on the number of
trips taken using a household production framework and the other being a random utility model
to describe how the quality influences individual decisions. Hedonic wage models and hedonic
travel cost methods are the other methods, and they involve variation in quality across a number
of sites (Gunatilake, 2003).
The Travel Cost Method (TCM), proposed by Hotelling (1947), is one of the oldest methods in
environmental valuation. It is a revealed preference method based on observed behavior reflecting
utility maximization subject to a constraint (Freeman, 1993). TCM estimates the Marshallian
SANDEE Working Paper No. 52-10 3
consumer surplus, which approximates, and is bounded by, the compensating variation (CV)
and equivalent variation (EV) welfare measures (Brander et al., 2006). According to TCM, if a
consumer visits a recreational site, the benefits he receives should be less than or equal to the
cost incurred although he does not pay a market-determined price. As such, this method uses the
travel cost as a proxy for the price of recreation assuming rational behavior on the part of the
consumer. The sole decision variable is the number of visits paid by the consumer to a certain
recreation site within a particular time period. Since the travel cost varies with distance from the
recreational site, it is possible to derive a surrogate demand curve from the varying cost information.
Based on the demand curve, it is possible to estimate the consumer surplus as a measure of
welfare (Gunatilake, 2003). Since there is little consensus in the literature about the correct
method to estimate the travel cost, some scholars have taken the perceived costs as reported by
recreation users (Rolfe and Prayaga, 2007).
TCM has two basic variants depending on the definition of the dependent variable: Individual
Travel Cost Method (ITCM) which is appropriate for sites with high individual visitation rates
and the Zonal Travel Cost Method (ZTCM) which is applicable for sites with very low individual
visitation patterns (Rolfe and Prayaga, 2007). ITCM has distinct advantages over ZTCM because
it takes into account the inherent variation in the data compared to the aggregation and can be
estimated using a smaller number of observations. Furthermore, ITCM is more flexible and can
be applied to a wide range of sites (Khan, 2004) while eliciting rich information on visitors’
characteristics, preferences and behavior. Bowker and Leeworthy (1998) argue that researchers
prefer ITCM over ZTCM for reasons such as statistical efficiency, theoretical consistency in
modeling individual behavior, the ability to avoid arbitrary zone definitions, and increasing
heterogeneity among populations within zones. However, the application of the correct TCM
depends on the identification of the dependent variable. Therefore, some studies use both methods
(see Rolfe and Prayaga, 2007; Nam et al., 2005).
Scholars have extensively used TCM in natural resources related recreation research in order to
value site access as well as changes in site quality in developed countries (Kealy et al., 1986;
Hellerstein, 1991; Englin and Shonkwiler, 1995; Whitehead, 1992; Grigalunas et al., 2004;
Poor and Smith, 2004) whereas only a handful of valuation studies have used this method in
developing countries, particularly in South Asia. While Gunatilake and Vieth (1998) applied
ZTCM to estimate the recreational value of the Pinnawela Elephant Orphanage of Sri Lanka,
Khan (2004) used ITCM to estimate the recreational benefits from the Margalla Hills National
Park in Northern Pakistan where he estimated a hypothetical demand curve to assess the change
in visitors’ perceptions of improvements in the quality of amenities in the park. A number of
studies have used the travel cost analysis with numerous modifications to the original methodology.
Recreational demand studies traditionally utilized a two-step valuation method, first estimating
the conditional recreation participation probabilities and then the intensity of use decisions. In
contrast, Whitehead (1992) has introduced a one-step resource valuation method based solely
on the recreation participation decision, which has the added benefits of reduced data requirement
and effort. Basically, TCMs use cross-sectional data in the analysis. However, the use of panel
data is also possible (Siderelis et al., 2000). Generally, travel cost models have estimated short
run demand, mostly over a season or within a year but there has been the occasional study
observing long run recreational demand using the method (Englin and Shonkwiler, 1995).
It has also been the practice to employ the Ordinary Least Squared (OLS) estimation in order to
estimate the parameters of the recreational demand equation. However, for the purpose of analyzing
4SANDEE Working Paper No. 52-10
truncated samples, scholars have found the maximum likelihood method more appealing since
recreation demand behavior is only defined for non-negative values and the trips occur in integer
values (Creel and Loomis, 1990). Since the ordinary regression methods require the dependent
variable to take on values over the full range of real numbers, it leads to biased coefficient
estimates in the analysis of recreational demand curves. Thus, researchers now apply the truncated
count data models in single-site recreational demand models (Creel and Loomis, 1990; Hellerstein,
1991; Englin and Shonkwiler ,1995; Shrestha et al. 2002; Martinez-Espineira and Amoako-
Tuffour, 2005).
In the case of ITCM, Dobbs (1993) has looked at several potential problems and causes of
bias, for example, sample selection and multi-site bias, truncation and censoring, trip duration
and sensitivity to error, and functional forms specifications. A frequently adopted sampling method
in travel cost analysis is on-site sampling of the visitors to a recreational site. However, there is
a growing consensus on the use of off-site sampling techniques to avoid possible biases. Parsons
(2003) shows, for instance, that researchers need to address a number of issues when using an
intercept survey,1 such as the possibility of truncation of data on one trip, the difficulty in obtaining
a random sample, election bias, endogenous stratification, over-dispersion, etc. Scholars have
identified sample truncation, resulting from on-site sampling that overlooks non-visitors, as a
main limitation, which is often overcome by applying methods relying on off-site sampling (i.e.,
the hedonic travel cost model) or else by correcting econometrically. Endogenous stratification
refers to the possibility of sampling avid visitors rather than occasional visitors because of choice-
based sampling or sample-size limitations. Endogenous stratification occurs when the systematic
variation in the sampling proportion is dependent on the characteristics of the individuals in the
sample. In such cases, the sample average number of trips is likely to be higher than the population
mean (Haab and McConnel, 2002).
There is also a need to correct econometrically the issue of the tendency in data to exhibit over-
dispersion, which means that the variance is greater than the mean resulting from the phenomenon
of a few frequent visitors and more occasional visitors (Martinez-Espineira and Amoako-Tuffour,
2005). Devkota et al. (2006) employed a bootstrapping technique to overcome the problem of
over-dispersion and to determine the statistical accuracy of the procedures used. All of the
above-mentioned studies, in general, agree that the Poisson and Negative binomial distributions
increase the estimation efficiency and that count data estimation is consistent with utility maximization
models with repeated choice.
Multi-destination and multi-purpose visits biases are the other limitations encountered in travel
cost analysis. Some studies show that treating multi-destination and single-destination trips alike
leads to an over-estimation in the consumer surplus (Loomis et al. 2000, Martinez-Espineira
and Amoako-Tuffour, 2005). However, Kousmanen (2004) has shown that treating multi-
destination trips as single-destination trips does not involve any systematic upward or downward
bias in consumer surplus because the direct negative effect of a price increase (that is, treating a
multi-destination trip as a single-destination trip) is offset by a shift in the estimated demand
curve. It is common to address the problem by identifying multiple-trip visitors and dropping
them from the sample (Smith and Kopp, 1980). Others disaggregate travel costs and time and
take a certain proportion for the analysis (Gum and Martin, 1975). A recent approach to deal
with multi-destination trips treats the incidental visits to other recreation sites as complements to
the study site, and include multi-destination trips in the demand estimation (Parsons and Wilson,
1997).
1It is the practice to refer to intercept surveys as field surveys undertaken using on-site interviews.
SANDEE Working Paper No. 52-10 5
Assessing the opportunity cost of time is a major issue in recreation demand analysis. Measuring
the value of recreation while ignoring the time cost can generate significant bias in the analysis
(Clawson, 1959; Knetsch, 1963). Although researchers recognize the importance of the
opportunity cost of time for welfare implications, they are forced to make strong assumptions
due to the unavailability of a direct methodology to address it (Larson et al., 2004). Thus the
most commonly used strategy is to use an arbitrarily selected fraction of wage ranging from one
quarter to half to evaluate time costs (see Hellerstein, 1991; Bowker et al., 1996; Parsons and
Hauber, 1998; Phaneuf, 1999; Martinez-Espineira and Amoako-Tuffour, 2005). However, recent
strategies to assess the time cost include using behavioural relationships in auxiliary travel mode
choice models (Hausman et al., 1995) and labor supply models (Feather and Shaw, 1999).
Larson et al. (2004), for example, rely on stated preference data to assess the marginal value of
time.
Scholars have extended recreational demand studies to compute the welfare loss due to
disintegration of natural sites as well as the non-market benefits from preserving them. For example,
Farber (1996) estimated the discounted annual losses in recreational benefits due to wetlands
disintegration in Louisiana. Grigalunas et al. (2004), on the other hand, estimated the benefits of
preserving estuarine watershed open space through restrictions on development, where they
quantified three main categories of benefits using different levels of discount rates. Similarly,
Mcgrath (2006) estimated the non-market benefits of an environment center and determined the
short-term value of public investment. All the above studies, however, presumed a perfectly
linear relationship between recreational demand and acreage, which may not be theoretically
sound.Furthermore, only a few studies have attempted to assess the distributional impacts of
imposing an entrance fee on a freely enjoyed public good (Huszar, 1974) or to estimate an
optimal entrance fee or user fee for recreational sites (Khan, 2004; Nam et al., 2005).
3. Study Area and Data
3.1 Study Area
The Diyawanna Oya wetlands include the recreational site comprising the Diwayanna Oya wetland
and its surrounding wide open and green expanse. The wetlands are located 11 km away from
the city of Colombo in Sri Jayewardenepura, Kotte, which is the administrative capital of Sri
Lanka. The Parliament is located in a small island in Diyawanna Oya, which is an ancient water
way, while the surroundings consist of the wetlands which have become a major recreational site
in recent years. The Diyawanna Oya wetland comprises vast marshlands, wooded areas and a
flowing Diyawanna Oya and this network of waterways and marshlands contribute significantly
towards water retention and flood protection in the Colombo Metropolitan area. The Diyawanna
Oya wetlands are inland fresh-water marshes and are one of the three interconnected marshes
which form the Colombo marshes. The three marshes - Kollonnawa marsh, Kotte marsh and
Heen marshes (covering approximately 400 ha), and a low lying area named the Green Belt
wetlands (surrounding the Parliament complex of 200 ha), together form the Colombo Flood
Retention area. It moreover has a high faunal and floral diversity and is home to many invertebrates
and vertebrates including many endemic birds, fish, amphibians, reptiles and mammals such as
the endangered fishing cat (Prionailurus Viverrinus).
The Diyawanna Oya wetlands are surrounded by both suburban middleclass neighborhoods as
well as low-income neighborhoods, the occupants of which use the wetlands for purposes of
6SANDEE Working Paper No. 52-10
income generation such as fishing and cattle grazing, and collecting reeds, rushes and fuelwood.
However, due to poor planning when it comes to both garbage collection and disposal in and
around the city of Colombo, city dwellers have been using some parts of the site for garbage
disposal purposes for some time. Moreover, the authorities have given permission to reclaim a
considerable extent of land for development purposes including the building of the Parliament
complex, luxury condominiums, urban amenities, and state and private institutions. For the
construction of the Parliament alone, the authorities permitted the reclamation of a marsh area
272 ha in extent while the area under wetlands has declined by 50 percent over the last three
decades due in part to encroachments by people from the surrounding neighborhoods.
Nevertheless, over the past decade or so, people have also started using the wetlands for
recreational activities making it the most popular recreational ground in the Colombo Metropolitan
region today. However, the area available for recreation has decreased greatly over the past few
years owing to reclamation and development with some recreation activities such as boating and
motor racing reaching almost a standstill due to these reasons. But a large number of people,
irrespective of their social or economic status, still enjoy the recreational benefits provided by the
wetlands, including family outings, exercise, cycling, cricket and other games. The Diyawanna
Oya wetlands lie over four Divisional Secretary Divisions (DSD), namely, Nugegoda, Colombo,
Kaduwela and Kollonnawa. Hence, the recreational sites are also dispersed. The focus of this
study is the popular recreational site, which is approximately 200 ha in extent, that surrounds the
Parliament complex and is located within the greenbelt wetland.
3.2 Sampling and Data Collection Methods
We obtained the data for the present study from primary sources as well as secondary sources.
We collected primary data from an on-site survey of visitors and stakeholders. Prior to the main
survey, we carried out a census on visitors in order to collect information regarding the use of the
recreational site so as to design an appropriate sampling plan and to develop the questionnaire.
In addition to the census, we pre-tested the questionnaire. We also collected secondary data on
the change in land use and acreage. We collected aerial maps for this purpose from the Urban
Development Authority (UDA), the Central Environment Authority (CEA), and the IUCN office,
Sri Lanka.
We carried out the census for a period of one week in February 2008. We found the recreational
area to be dispersed over and activities concentrated mainly in 3 locations. Hence, we placed the
enumerators at the entry points to each location in order to capture the number of visitors to the
3 locations. The enumerators noted the number of visitors in terms of the activity performed
during the different times of the day for a week continuously. They recorded 9687 visitors during
the week under survey. Table 1 shows the number of visitors and their main recreational activities
based on the census.
The census data further shows that the number of visitors during weekends is substantially higher
compared to weekdays. Moreover, the data recorded a slight difference in visits for Friday in
comparison with the other weekdays. Out of the many recreational activities taking place at the
site, outings by family and friends ranked the highest followed by exercise/jogging. Next in
importance were small groups playing cricket while the public children’s park which goes
underwater during heavy rains also seemed to attract a sizeable fraction of the visitors. The
census also captured visitors who were out to enjoy cycling and games such as volley ball,
badminton, etc., while among the occasional visitors were those interested in photography and in
SANDEE Working Paper No. 52-10 7
training for racing events, for instance, motor bike and motor car racing, although these were
fewer in number.
We carried out the main survey for a period of 2 months during the October-November period
of 2008. We carried out the survey at the entry points to the recreational area and at a series of
popular sites among visitors within the wetland. In the survey, we asked visitors questions regarding
their travel costs, traveling behavior to the site and other substitute sites, demographic information,
and their opinion on how to develop the recreational site (see Annexure for the questionnaire).
Before the survey team started on the survey, we briefed them on the importance of the survey
and gave them a thorough training on administering the questionnaire and the survey procedure.
The interviewers were under instruction to interview only those who were over the age of 16
and, in the case of groups, to interview only one member per group.
We weighted the sample of 500 visitors, depending on the census to capture the variation in
recreational activity and the temporal variation in visitation behavior, as a means of obtaining a
representative sample of the population to the site (see Table 2). Although quota sampling captures
variation within a population by giving appropriate weights for different attributes, it may not
necessarily be representative of the population. Therefore, we gathered data throughout the
week including rainy days and public holidays. Furthermore, considering the fact of variation in
visits during any particular day, we conducted the survey from 6 am to 9 pm.
It is now generally accepted that a sample obtained through systemic sampling is more uniformly
spread over the entire population and more informative about the population than simple random
sampling (Schaeffer et al., 1996; Kahn, 2004). Hence, the study used systematic random sampling
where we interviewed every 10th visitor. In cases where the visitors refused to respond, we
interviewed the next available visitor. The survey response rate was approximately 70 percent.
4. The Theoretical Model
4.1 Research Questions
Our study attempted to elicit answers to the following research questions:
i. What is the annual recreational value and which factors influence the recreational demand
for the Diyawanna Oya recreation site?
ii. What would be the impact on the annual recreational value of imposing an entry fee?
iii. What was the welfare loss due to the loss in acreage from the natural site for development
purposes and what would be the benefits of preserving it?
iv. What is the present value of the non-market benefits from preserving the site?
4.2 Estimating Annual Recreational Value of Diyawanna Oya Site
In the study, we employed ITCM to estimate the annual recreational value of the site taking into
consideration the fact that the majority of the visitors were frequent visitors from surrounding
suburbs. Since there were few close substitutes available for regular visitors to the Diyawanna
Oya site, we considered a single site demand model to be more appropriate for the purposes of
our study.
8SANDEE Working Paper No. 52-10
In order to model the travel cost function, we follow McConnell (1992) and assume that the
individual’s utility depends on the total number of visits to the site, the quality of the site, and a
bundle of other goods. The underlying assumption is that the utility is additively separable in the
recreation activity, all other income and all other leisure time (Kealy et al., 1986).
We represent the utility maximizing problem of the consumer as:
Max U (X, r, q) (1)
subject to two budget constraints (money and time):
M + pw tw = X +cr (2)
t* = tw + (t1 + t2)r (3)
where, U: utility function of the consumer/household,
X: bundle of other commodities,
r: number of visits to the site,
q: an index of quality of the site,
M: exogenous income or non-wage income,
pw: wage rate,
tw: hours of work,
c: monetary cost of a trip,
t*: total discretionary time,
t1: round-trip travel time, and
t2: time spent at the site.
Here, equation (2) is income constraint and equation (3) is time constraint. Substituting the term
tw from equation (3) into equation (2), we obtain the following combined constraint,
M + Pw .t* = X +c.r + pw (tw + (t1 + t2)r) (4)
The number of visits will be an increasing function of the site’s environmental quality and r and q
are assumed to be (weak) complements in the utility function. The time constraint reflects that
there is an opportunity cost to the time spent in the recreation activity, which is the wage rate.
The price of recreation, pr includes the monetary cost of travel to the site, the time cost of travel
and the cost of time spent at the site, i.e., pr = c + pw (t1+t2). The monetary cost of a trip to the
site is the monetary cost of travel since the entry fee f is zero in the case of Diyawanna Oya,
which is a public property with open access. The cost of travel (two-way) is pd.d, where pd is
the per-kilometer cost of travel and d is the total distance to the site (two-way) as shown in
equation (5).
pr = c + Pw(t1 + t2 ) = f + pd.d + pw (t1 + t2)(5)
From equation (4) and equation (5),
M + pw .t* = X + r. f + pd.d + pw (t1 + t2 )(6)
Maximizing (1) subject to (6) will yield the individual’s demand functions for visits:
r = r(pr, M, q) (7)
The economic valuation of a recreational site involves the estimation of the demand for recreation
(equation 7) and the calculation of the associated consumer surplus, i.e., the area under the
SANDEE Working Paper No. 52-10 9
demand curve. We therefore surveyed individuals to find out the number of visits they actually
made to the site during a specified period of time, the travel cost, time costs and individual
characteristics in order to be used in the estimation of the ITCM function.
The ITCM function that relates an individual’s monthly visits to his/her travel cost is as follows:
ri = f(TCi, Ii, Ai, Di, Si, Ei, Mi ) (8)
where ri: the number of visits made by individual i in a month (visitation rate),
TCi : per trip travel cost of individual I,
Ii : monthly household income,
Ai : age (years),
Si : cost of visiting the closest substitute site,
D1: gender (=1 if male, =0 if female),
D2- D3: education level (primary, secondary, tertiary),
D4- D8: type of occupation (regular employee, casual employee, contractual
employee, employer, no employment, retired),
D9: marital status (=1 if married, =0 otherwise),
D10- D12: desired attribute (scenic beauty, games, relaxing, exercise, etc.).
We took the number of trips taken by an individual to the recreational site during a month, which
was the average of two months, as the dependent variable in the recreational demand model
depicted by equation (8). The explanatory variables include the travel cost per individual to the
site, age of the respondent, and average cost of visiting the closest substitute sites based on the
distance from the visitor’s house to the substitute site. We included dummy variables for the
monthly income bracket of the household, sex of the respondent, desired recreational activity,
educational level, type of occupation and marital status.
We calculated the travel cost as the summation of the round trip travel cost to the site plus the
opportunity cost of the time. We used the product of total time (round trip time + onsite time)
multiplied by a fixed fraction of the wage rate as proxy to the opportunity cost of time. Considering
the fact that a majority of visitors would be unlikely to forego wage-earning work to visit the site,
and not forgetting that limited hours of paid overtime work are also available to most workers,
we used a wage fraction of 0.3 which studies similar to ours have often used. Moreover, in order
to test for the sensitivity of the wage fraction, we estimated a travel cost model using a wage
fraction of 0.25. Treating multi-destination trips was not a serious problem since only ten visitors
of the total sample were on multi-destination trips. They were automatically eliminated from the
sample when we removed outliers who were visiting the site from more than 30km distance.
The regression equation (8) gives the demand function for the ‘average’ visitor to the site, and the
area below the observable Marshallian demand curve gives the average consumer surplus, based
implicitly on the assumption that the demand is known with certainty. In general, the consumer
surplus or access value is the area under the demand curve between an individual’s current price
and the choke price. The choke price is the price at which trips (i.e., the quantity demanded) fall
to zero in the model (Parsons, 2003).
Mathematically, we can express an individual’s consumer surplus (ICSi) as,
10 SANDEE Working Paper No. 52-10
where, CP: choke price
TCi : individual travel cost
X: other explanatory variables as in equation (8) above.
We multiply this by the total yearly population of visitors to the recreational site2 in order to
estimate the total annual consumer surplus for the site. Since the dependent variable, i.e., the
number of trips, takes the form of a non-negative integer, count models seem more appealing in
estimating recreational demand functions. Count models specify the quantity demanded, i.e.,
trips, as a non-negative integer with a mean that is dependent on exogenous regressors (Haab
and McConell, 2002).
The basic count data model that satisfies discrete probability distribution and non-negative integers
is Poisson regression. We assume the number of trips that a person takes to a site in a given
season (ri) to be generated by a Poisson process (Creel and Loomis, 1990). Following Haab
and McConnel (2002) and Parsons (2003), we write the basic count data model as,
pr(ri = n) = f(r, Xi,
β
) r = 0, 1, 2, ..,n (10)
We can express the probability of observing an individual taking n trips in a season (probability
density function) by
where
λ
i is both the mean and the variance of the distribution of the expected number of trips and
is assumed to be a function of the vector of the explanatory variables, X, and parameter
β
and
takes strictly positive values. However, it is not unusual to find this assumption violated with
recreational data due to the presence of over-dispersion so that the variance is often greater than
the mean. Since it is necessary that
λ
i >0, researchers generally specify the probability function
as an exponential function,
To ensure non-negative probabilities,
λ
usually takes a log linear form. Hence, we may write the
Poisson form of the recreation demand for individual as,
Equation (12) shows the probability of observing the number of trips taken by an individual and
it is possible to estimate the parameters by maximum likelihood estimates.
The Poisson likelihood function for the sample in terms of parameter
β
then takes the form of,
Equation (13) gives the actual pattern of the visits which is the product of the individual probabilities
where we denote individuals by i=1…T.
2We estimate the visitor population to the recreational site based on a head count of the census carried
out before the sample survey.
SANDEE Working Paper No. 52-10 11
We adopt on-site random sampling in the study and, when corrected for truncation at one trip
and over sampling of frequent users (endogenous stratification), the probability equation takes
the form of,
Once we account for over-dispersion, which is also common in on-site sampling, the probability
distribution takes the form of a negative binomial. We depict the function in equation (15) (Creel
and Loomis, 1990):
where 0 (.) indicates the gamma function, a discrete probability function defined for r with
parameters
λ
with α being strictly positive.
Once we have accounted for over-dispersion, truncation and endogenous stratification, the
conditional negative binomial density function takes the form of,
The mean of the random variable r = E(r) =
λ
and variance =
λ
+ α
λ
2 and when α→0, the
gamma distribution converges to Poisson distribution.
For a basic Poisson probability function, we can write the consumer surplus Sn or access value
per year for individual n as in equation (17) (Parsons, 2002):
Sn =
λ
n / -
β
tcr(17)
where
λ
is the expected number of trips from equation (12). We express the estimated access
value for the nth individual in the sample for the period as,
When estimating with an on-site sample, the mean access value is a biased estimate3 of the
population mean. The corrected sample mean will then be
where
3On-site sampling over samples the more frequent visitors to the site relative to occasional visitors, thus
leading to biased estimates of the population mean.
12 SANDEE Working Paper No. 52-10
nj: the number of persons in the sample taking j trips;
R: the largest number of trips taken by a person in the sample.
We can aggregate this surplus value for an individual over the population of users in order to
obtain the total access value, which we can depict as,
AS = S .population (20)
where population is the total number of participants or visitors to the site for the period.
4.3 The Effect of Imposing an Entrance Fee (Distributional Impact)
At present, visitors enjoy the recreational benefits provided by the site free of charge. Hence, the
imposition of a fee (i.e., an entry fee, a parking fee, etc.) is likely to affect visitors of different
income strata to varying degrees. We estimated the impact of an entrance fee (f) on the visitors’
consumer surplus using the following equations.
We used an entrance fee of LKR 50, based on the WTP question of the questionnaire, in the
above estimation. We calculated the consumer surplus based on this. We indicate the effect of
imposing an entrance fee by giving the difference between the consumer surpluses with and
without the entrance fee.
NewCS = TC/
β
i(23)
4.4 Welfare Loss due to Acreage Loss from the Natural Site for Development
Purposes
The implementation of new development projects in natural recreational areas is likely to affect
the social welfare of the present visitors to the site. We calculated the consumer surplus per unit
area of land by dividing the total annual consumer surplus by the total area used for recreational
activities at present. In this instance, a better estimate would be relating consumer surplus with
the areas used. However, it was not possible to find a marginal value for changes in the area since
visitors to the site used the same area for all of their activities. Given this fact, we used an average
value of the consumer surplus to find the welfare loss due to changes in acreage.
We show this in Equation (24):
SANDEE Working Paper No. 52-10 13
4.5 Present Value of Non-market Benefits from Preserving the Site
Land that is under preservation can provide a flow of annual benefits over a very long period and
the sum of aggregate consumer surplus estimated provides an insight into the ‘social value’ of
preservation (Grigalunas et al., 2004). While there are a number of use and non-use values
derived from the Diyawanna Oya wetlands, this study focuses only on the recreational benefits
provided by the site. Moreover, the study estimates only the benefits4 of preserving the recreational
use value of the site ignoring the cost of doing so.
The consumer surplus refers to the difference between the maximum that a user is willing to pay5
in order to engage in recreational activities or to maintain amenities and the cost they incur in
order to do so (Grigalunas et al., 2004). Hence, it is possible to obtain the yearly benefits (i.e.,
the consumer surplus accruing to users) from enjoying the amenities at the natural recreational
site by:
where Y is the annual consumer surplus in Rupees, and v is a discount rate. In the case of a
constant annual benefit of LKR Y received in perpetuity, we can simply depict the present value
formula as,
Present Value Benefits (PVB) = LKR Y/v (26)
In calculating the PVB, we took a discount rate of 10 percent as proposed by the National
Planning Department of Sri Lanka. We further carried out a sensitivity analysis using discount
rates of 8 and 12 percent.
5. Results and Discussion
5.1 Descriptive Statistics
Table 3 provides a summary of the descriptive statistics of the recreational behavior, the
demographic characteristics, and travel cost information of the sample of visitors to the Diyawanna
Oya site. On average, the respondents in the sample had visited nature-based recreational sites
within the region 9 times during the month out of which 7 were to the Diyawanna Oya site while
the number of trips to the closest substitute sites was around 2. The average age of the sample
respondents was 31 years with a minimum of 16 years, a maximum of 76 years and a standard
deviation of 12 years. The monthly wage of the respondents varied considerably with a standard
deviation of LKR 24,000. The mean monthly wage of the respondents was LKR 21,000 while
the maximum was LKR 300, 000.
Most of the visitors to the Diyawanna Oya site were from the surrounding area with a mean
distance of 7 km while the maximum distance reported in the sample was 130 km. It was also
4Estimating the cost of preserving the recreational area is complicated. Hence, in the study, we will
consider only the benefits of preserving the lands for policy purposes.
5In the case of use values, WTP is the compensating variation.
14 SANDEE Working Paper No. 52-10
evident that most visitors come to the site in large groups to enjoy recreational activities. The
average group size in the sample was around 4 while the maximum group size was 25. The
average travel cost per visit was around LKR 238 while some frequent visitors had spent an
amount exceeding LKR 4,000 per month.
In the sample, nearly three fourths of the visitors were male while approximately 50 percent of
the visitors were married (see Table 4). More than 75 percent of the respondents had had a
secondary education while the less educated or literate percentage was comparatively low. In
terms of occupation, almost half of the respondents had regular employment while one fourth of
the respondents were unemployed, among whom were students and unpaid family workers.
Moreover, a majority of the respondents were earning LKR 30,000-50,000. Only a few visitors
(a mere 1 percent) ranked below the national urban minimum monthly income of LKR 10,000,
implying that members of the middle and higher income brackets enjoy and spend more time at
the recreational site compared to those from the lower income brackets.
A high percentage of visitors (88 percent) in the sample visited the site with the sole intention of
enjoying the recreational benefits it had to offer. However, 11 percent enjoyed the recreational
benefits of the site while visiting their friends or relatives resident in the area (see Table 5). More
than 80 percent of the visitors were satisfied with the present condition of the recreational site
while a little over 10 percent were not happy and suggested improvements to the site. Depending
on the type of activity that they were involved in, almost 60 percent of the visitors were also of
the opinion that they had at least one substitute site in which to enjoy the particular activity that
they enjoyed at the present site. Although most respondents were happy with the present situation
of the site, more than 40 percent were happy to pay an entry fee in order to maintain the quality
of the site. When we asked visitors for their opinion on how to finance site improvements, a
majority (65 percent) stated that it was the responsibility of the government. Of the rest, 14
percent proposed charging an entry fee while 16 percent favored private donations. Only a few
visitors were interested in charging a vehicle fee. The findings show that nearly half of the visitors
in the sample were willing to pay for an improvement in recreational facilities. These findings are
of importance in arriving at policy decisions on the management of the Diyawanna wetland which
is undermanaged owing to limited public funding.
As shown in Figure 1, a majority of the visitors (63 percent) visited the site for less than 5 days
per month while nearly 19 percent visited the site 6-10 days per month. Although the sample
monthly mean number of visits was 7, there was a considerable number of visitors who visited
the site almost daily (4.2 percent).
5.2 Empirical Results
5.2.1 Model Estimation Results
We estimated the recreational demand model using a truncated negative binomial specification.
We estimated four different models taking into account the distance to the recreational site (that
is, visitors within a 30km and 17km radius) and wage fractions of 0.25 and 0.30 (see Table 6).
The different models appeared highly robust and there were no sign changes across specifications.
Statistical significance and goodness of fits slightly differ across models. The significant over-
SANDEE Working Paper No. 52-10 15
dispersion parameter
α
in all the models indicated that the data set was significantly influenced
by the over-dispersion problem. Hence, we considered a negative binomial estimation more
appropriate over the Poisson estimation. Furthermore, the likelihood ratio test with highly significant
α
in all the four models suggests the use of the negative binomial over a Poisson regression.
Among the four specifications, we chose the model which accounted for visitors living within a
radius equal to or less than 30 km and a wage fraction of 0.30 based on the log likelihood values
and the Pseudo R-squared for calculating the Consumer Surplus. Moreover, we preferred the
30 km distance over 17 km since it included a higher fraction of respondents, excluding only a
few outliers.
The overall signs and significance of estimated coefficients were consistent with both economic
theory and the existing literature on this subject. The negative sign and the significance of the
travel cost variable suggest a downward sloping demand curve. It is consistent with the previous
recreation demand studies of Creel and Loomis (1990) and Shrestha et al. (2002) and indicates
that the visitation rate decreases as the travel cost increases. All the occupational categories
show a significant positive impact on the visitation rate with contractual employees, retired people
and employers showing the highest impact. The effect of income, though not significant in the
model, is clearly reflected in the occupational categories. Contractual employees and employers
were among the highest income earners in the sample. The significance of these variables leads to
the conclusion that a higher income and the availability of more leisure time produce a higher
visitation rate.
The significant positive sign on the travel cost to substitute sites suggests that with an increase in
distance to alternative recreational sites visitors tend to visit Diyawanna Oya more frequently,
which is in accordance with the theoretical expectation. The coefficient for age is positive and
significant implying that participation in recreational activities increases with age. One explanation
might be a current trend where, with age, people become more preoccupied with health and
nature-based recreation in comparison with their more youthful counterparts who prefer more
‘modern’ avenues of recreation. The positive and significant coefficient on the attribute exercise
implies that many visitors value the site for the facilities it offers for exercise and jogging. The
explanatory variables income and education were highly correlated with occupational category.
Hence, we excluded them from the model.
5.2.2 Annual Recreational Value of Diyawanna Oya Site
Consumer surplus presents the difference between the individual willingness to pay and the actual
expenditure for a good or service. It is a widely accepted measure of net social benefit (Zawacki
et al., 2000). Based on the estimated models and following Parsons (2002) and Creel and
Loomis (1990), we calculated the predicted annual consumer surplus per visitor which is LKR
36,022 (or USD 315) (see Table 7). We estimated the social welfare value of the recreation,
which is the aggregate consumer surplus, using the total annual visits by the population of visitors
to the site. Since there was no official estimate of the annual population of visitors to the site, we
estimated the population of visitors as 108,000 based on the census carried out in the study and
unofficial UDA sources.6 Hence, we estimated the total social welfare for the population of
visitors as LKR 3,890 million (or USD 35 million7).
6We based this figure on the census carried out per week after adjusting for double counting and mon-
soonal rainy months.
71 USD=112.37 LKR (2008).
16 SANDEE Working Paper No. 52-10
5.2.3 Impact of Imposing an Entry Fee/ Parking Fee
We examined the impact of imposing an entry fee on the visitation rate in the study (see Table 7).
We selected an entrance fee of LKR 50 as it was the willingness to pay (WTP) to enjoy the
recreational benefits expressed by the highest number of respondents in the sample. The results
indicate that there would be an annual loss of LKR 337 million (or USD 3 million) of consumer
surplus if an entrance fee (LKR 50) is imposed on the visitors to the wetland. This result suggests
that any financing method adopted to improve and maintain the recreational area should be
carefully designed in order to avoid possible negative distributional implications. However, we
could not assess the distributional impact of imposing an entry fee.
With an entrance fee of LKR 50, the government would be able to earn a revenue of LKR 5.4
million rupees per year based on the number of annual visitors to the site which is approximately
108,000. It would in turn enable the government to increase its budget for the development of
the environmental sector in Sri Lanka. However, the total social welfare of LKR 3,890 million,
which is more or less equal to the total budget allocation by the government for the environment
sector in Sri Lanka, provides an indication of the revenue generation possibilities from the
Diyawanna Oya wetland. It was evident from the sample that nearly 80 percent of the visitors
come to the site by vehicle. Hence imposing a vehicle parking fee may be more effective compared
to an entry fee given the location of multiple recreational sites across the wetlands. This is likely
to provide the added benefit of reducing the congestion and pollution due to vehicles in the
recreational area.
5.2.4 Welfare Loss due to Acreage Loss
Taking into account the approximate land area for recreational use, we estimate the loss of
welfare per hectare of land as LKR 19.45 million which is equal to LKR 49,246 per perch of
land8 (see Table 8). The land value in the area ranges from LKR 1 million to LKR 1.5 million per
perch. However, in order to compare land value and per perch social welfare, we need to
estimate the net present value of benefits provided by the wetland over a period of time.
5.2.5 Present Value of Non-market Benefits from Preserving the Site
We estimate the present value of the benefits from recreational activities at the Diyawanna Oya
wetland site as LKR 38,900 million at a discount rate of 10 percent. This is equal to LKR 0.4
million (or USD 3560) per perch, which is approximately one third of the land value of the area
(at LKR.1-1.5 million per perch) (see Table 9). We measure benefits in perpetuity assuming that
the wetlands will be preserved in their natural state indefinitely. It is worthy of note that the
recreational benefit is just one of numerous benefits provided by the wetlands and that we have
not included the other use- or non-use values in the analysis. Including these benefits would
undoubtedly increase the present value of the wetlands and strengthen the case for preservation
over development.
We were also unable to calculate the cost of open space, which is the value of services foregone
by not allocating recreational land to other alternative land uses (i.e., commercial, residential,
8‘Perch’ is a popular measure of relatively small land areas and equals 0.00625 acres (25.3 m2).
SANDEE Working Paper No. 52-10 17
etc.). Although the restrictions on development involve no out-of-pocket public expenditure, it
may entail a private cost, in particular to adjacent property owners.
6. Conclusions and Policy Recommendations
In order to obtain an estimate of the welfare that visitors derive from recreational activities in the
Diyawanna Oya wetlands, we used a travel cost model to estimate recreational demand. The
basic finding of the study is that visitors derive an annual consumer surplus of LKR 38,900
million from the recreational benefits at the site. The total consumer surplus generated from the
wetland would be far higher than this estimate if we were to incorporate other use- and non-use
values into it.
The socio-economic variables used in the empirical analysis reveal important information that
should be of interest to resource managers and planners. For example, considering the positive
impact of attributes on visiting, urban planners could aim at improving different attributes of the
site. The present recreational site carries high potential for development into an important urban
recreational site while both concern and criticism are growing regarding the implementation of
development projects in the area. Taking into consideration both the preference of visitors for
quality enhancement as well as the willingness to pay for benefits by a majority of visitors, authorities
could design recreational projects which pose the least disturbance to the natural environment.
These may include eco-friendly restaurants on stilts, water-front snack bars, nature trails, board
walks and decks on stilts, and viewing decks/towers, especially for bird watching.
This study measured the impact of a direct entry fee. The findings indicate that there will be a
reduction in social welfare with such a fee. However, considering the estimated revenues from
such an entry fee, the government could think of possible alternative fund-generating strategies.
Moreover, the imposition of an entry fee is not practical given the multiple recreational sites
(without exact boundaries) throughout the wetland. Hence, imposing a reasonable parking fee
would be more appropriate while providing the added benefits of reduced congestion and pollution.
It is a fact that the Diyawanna Oya wetland has been deteriorating in quality as a recreational site
owing to under-management during recent years. Hence, it is timely that the management gives
serious thought both to revenue generation and to providing funds to maintain the wetland.
This analysis, as mentioned earlier, has excluded many important use- and non-use values provided
by the site. Hence, the actual consumer surplus generated by the wetland area is likely to be far
higher than the estimate arrived at in this paper. Furthermore, we base our consumer surplus
calculations on travel cost only. Therefore, there is likely to be an underestimation of recreational
values. In the sample, a considerable number of visitors lived within a radius of 5 km and their
actual cost of enjoying the wetlands may not be accurately reflected in their minimal travel cost.
In the case of those who walk to the site, we account for only the opportunity cost of time in the
calculation whereas, for nearby residents, property values capitalize the recreational benefits
offered by the site. In fact, they may have already paid a higher property value compared to
distant residents, which information is not captured in our analysis. Another drawback to the
study is that the results are sensitive to the fraction of the wage rate which we have used to
account for the opportunity cost of time. Moreover, it is possible that the corrective econometric
measures that we have applied in order to account for on-site sampling have left out important
information about occasional visitors and non-participants.
18 SANDEE Working Paper No. 52-10
Despite these drawbacks to the study, the high present value of benefits from recreation suggests
that every effort should be made to maintain, and perhaps enhance, the Diyawanna Oya wetlands.
Finally, it is time to include the most sensitive areas of the Diyawanna Oya wetlands in the national
protected area network and to declare it a wetland sanctuary.
7. Acknowledgements
We gratefully acknowledge the financial support provided by the South Asian Network for
Development and Environmental Economics (SANDEE) and the technical support of SANDEE
advisors during the Research and Training Workshops including Enamul Haque, Priya
Shyamsundar, Jeff Vincent, Subhrendu Pattanayak, E. Somanathan, Karl Goran-Mler, M.N.
Murty, Jean Marie Baland, Pranab Mukhopadhyay and Mani Nepal. We wish to thank Kavitha
Shreshta, Krisha Shresta and Anuradha Kafle too for their support throughout the grant period.
Our special thanks go to Parakrama Samaratunga and our colleagues for their valuable comments
during the in-house seminar at IPS.
SANDEE Working Paper No. 52-10 19
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SANDEE Working Paper No. 52-10 23
LIST of TABLES
Table 1: Main Recreational Activities and the Number of Visitors
Activity Number of Visitors
1. Jogging and exercise 2239 (23 percent)
2. Family/ friends outing 2815 (29 percent)
3. Playing cricket 2191 (23 percent)
4. Playing other games (Volleyball, Rugby,
Badminton) 439 (5 percent)
5. Visits to the public children's park 1705 (18 percent)
6. Cycling 297 (3 percent)
Total 9687
Source: Field survey, 2008
24 SANDEE Working Paper No. 52-10
Table 2: Sampling Plan
Activity Day Time
6-9 am 9 -12 am 12 -3 pm 3-6 pm 6pm onwards Total
Jogging Mon -Thurs 33 0 0 13 12 58
Friday 9 0 0 4 3 16
Saturday 11 1 0 4 4 20
Sunday 13 1 0 4 6 24
Children's Park Mon -Thurs 0 3 1 12 13 29
Friday 010449
Saturday 1 1 1 9 11 23
Sunday 0 1 1 14 12 28
Cricket Mon -Thurs 0 4 4 13 8 29
Friday 0 2 1 4 4 11
Saturday 2 3 3 9 5 22
Sunday 4 7 8 16 16 51
Other games Mon -Thurs 0 0 1 4 4 9
Friday 001113
Saturday 1103 27
Sunday 0 1 1 2 1 5
Cycling Mon - Thurs 0 0 0 0 2 2
Friday 0 0 0 0 1 1
Saturday 0 0 0 1 1 2
Sunday 110226
Family outing Mon -Thurs 2 0 0 17 21 40
Friday 1 1 1 5 6 14
Saturday 1 2 3 23 15 44
Sunday 1 4 10 20 12 47
Total 80 34 36 184 166 500
SANDEE Working Paper No. 52-10 25
Table 3: Summary Statistics of Sample Respondents
Variable Mean Std. Dev. Min Max
Age 31 12 16 76
Monthly wage 20,545 23,658 0.00 300,000
Travel distance (km) 7 11 0 130
Number of recreational visits per month 9 8 1 30
Travel cost per visit w/o time cost (LKR) 68 263 0 4,200
Travel cost per visit with time cost (LKR) 238 310 52 4,408
Monthly visits 7 8 1 30
Monthly visits to the closest substitute sites 1 1.5 0 10
Group size 4 4 1 25
Table 4: Socio-economic Statistics of Sample Respondents
Gender
Male 367 73.4
Female 133 26.6
Marital status
Single 228 45.6
Married 272 54.4
Education level
Primary 13 2.6
Junior secondary (GCE OL) 107 21.4
Secondary (GCE AL) 303 60.6
Degree and above 77 15.4
Employment
Regular 243 48.6
Casual 19 3.8
Contractual 11 2.2
Employer 8 1.6
Self-employed 59 11.8
Unpaid family worker 38 7.6
Students 92 18.4
Retired 30 6
HH income
< 10,000 5 1
10,000-20,000 43 8.6
20,000-30,000 128 25.6
30,000-50,000 175 35
50,000-100,000 128 25.6
> 100,000 21 4.2
Frequency Percent
26 SANDEE Working Paper No. 52-10
Table 5: Attitudes about the Recreational Quality and Development of the Site
Freq. Percent
Purpose of the visits
Business 2 0.4
Visiting friends/relatives 56 11.2
To enjoy recreational benefits 442 88.4
Most valued attributes
Scenic beauty 153 30.6
Playing games 178 35.6
Boating 2 0.4
Family outing 12 2.4
Relaxing 90 18
Exercising/jogging 65 13
Quality of the recreational benefits
Very poor 9 1.8
Poor 20 4
Fair 65 13
Good 366 73.2
Very good 40 8
Whether you are satisfied with the present benefits
Yes 439 87.8
No 61 12.2
Whether you would like to have improved recreational services
Yes 349 69.8
No 151 30.2
Availability of substitute sites
Yes 293 58.6
No 207 41.4
Method of financing
Charge an entry fee 68 13.6
Charge a vehicle parking fee 27 5.4
Private donations 80 16
Through the government budget 325 65
Willingness to pay an entry fee
Yes 2 15 4 3
No 285 57
Willingness to pay for projects
Yes 250 50
No 250 50
SANDEE Working Paper No. 52-10 27
0.30 wage fraction
and 30km distance 0.30 wage fraction
and 17km distance 0.25 wage fraction and
30km distance 0.25 wage fraction
and 17km distance
Variables Monthly visits Monthly visits Monthly visits Monthly visits
Travel cost -0.002* -0.002* -0.002* -0.002*
(0.000) (0.000) (0.000) (0.001)
Age 0.023* 0.021* 0.023* 0.021*
(0.004) (0.004) (0.004) (0.004)
Regular employees 0.972* 0.860* 0.976* 0.865*
(0.288) (0.308) (0.289) (0.309)
1.268* 0.749* 1.270* 0.740*
(0.406) (0.444) (0.408) (0.446)
Employer 1.063* 0.956* 1.053* 0.943*
(0.305) (0.323) (0.306) (0.325)
No employment 0.996* 0.869* 0.979* 0.854*
(0.291) (0.311) (0.292) (0.312)
Retired employees 1.064* 0.963* 1.060* 0.960*
(0.339) (0.354) (0.340) (0.356)
Exercise 0.551* 0.541* 0.540* 0.534*
(0.135) (0.133) (0.134) (0.133)
0.0002* 0.0002* 0.0002* 0.0002*
(0.000) (0.000) (0.000) (0.000)
Constant 0.253* 0.470 0.176* 0.380*
(0.307) (0.326) (0.305) (0.324)
alpha 0.747* 0.711 * .755* 0.720*
Pseudo R2 0.0444 0.0404 0.0438 0.0395
Log likelihood -1351.72 -1284.67 -1364.98 -1298.29
chibar2(01) 1197.14 1118.21 1226.11 1148.12
Different Models
Table 6: Estimated Results of Different Zero Truncated Negative Binomial Regression
Contractual
employees
Travel cost to
substitute
* Significant at 0.05 level.
28 SANDEE Working Paper No. 52-10
Table 7: Consumer Surplus Calculation: With and Without Entrance Fee
Description Without EF With EF Change
CS/person/month (LKR) 3001.86 (US$26.7) 2742.15 (US$ 24.4) 259.71 (US$ 2.3)
CS/person/year (LKR) 36022.36 (US$ 320.6) 32905.79 (US$ 292.8) 3116.57 (US$ 27.7)
Total annual CS (LKR mil) 3,890 (US$ mill 34.6) 3,554 (US$ mill 31.6) 336.59 (US$ mill 3)
Table 8: Welfare Loss due to Acreage Loss
Note: 1USD=112.37 LKR
Description Value
Total annual CS (LKR mil) 3,890 (US$ mil. 34.6)
Approximate recreational land extent (hectare) 200
Per hectare social welfare (LKR mil) 19.45 (US$ 173,107)
Per perch social welfare (LKR) 49,246 (US$ 438)
Table 9: Present Value of Non-market Benefits
Note: 1USD=112.37 LKR
LKR/perches
Total annual CS 49,246 (USD 438)
PVB (10 percent) 492,460 (USD 14,595)
PVB (8 percent) 615,575 (USD 18,243)
PVB (12 percent) 410,383 (USD 12,162)
Note: 1USD=112.37 LKR
SANDEE Working Paper No. 52-10 29
LIST of FIGURES
Figure 1: Frequency of Visits to the Diyawanna Oya Site (per month)
Figure 2: Geographical Location of the Study Area
30 SANDEE Working Paper No. 52-10
Title of the Project: The Recreational Use Value of the Diyawanna Oya Wetland Eco-
System: An Application of the Travel Cost Method
(A research project funded by the South Asian Network for Development and Environmental
Economics [SANDEE], Nepal)
Diyawanna Oya wetland has already proven to be an important recreational site
in the Greater Colombo area and this study attempts to value the recreational
benefits provided by the site as perceived by the visitors. The findings of the study
will provide suggestions on effective allocation and management of the recreational
area of Diyawanna Oya wetlands.
This research is undertaken by the Institute of Policy Studies of Sri Lanka (IPS),
an independent research institute coming under the purview of the Presidential
Secretariat of Sri Lanka.
Principal Investigator: Dilhani Marawila
Institute of Policy Studies of Sri Lanka
No. 99, St. Michael’s Road,
Colombo 03, Sri Lanka.
Tel: (094) 11 2431368
Email: dilhani@ips.lk
Name of Interviewer:………………………………………………………
Date of interview: ……………………… Day of the week:…………………..
Time started:………………. Time finished: ……………….
Visitor No:………………….
Divisional Secretary Division:………………………………………
Recreational activity currently involved:…………………………………….
Preferably, this questionnaire can be filled by the visitor, with any necessary
help from the investigator.
The information collected by this questionnaire will be used exclusively for the
SANDEE project -2008. The confidentiality of the supplied information will be
duly maintained.
ANNEXURE
QUESTIONNAIRE
SANDEE Working Paper No. 52-10 31
A. General Information about the Visitor
A.1 Gender of the respondent9: A.2 Age at last birthday (in years):
A.3 Marital Status: A.4 Highest Level of Education:
A.5 Employment:
A.6 Household Size:
A.7 Monthly wage of the respondent (LKR) ……………………..
A.8 Income of the household
9Respondent should be an individual who is involved in a recreational activity at the time of the interview.
Not more than one respondent from a single family/group should be interviewed.
B. Visitor’s Recreational Behavior
B.9 How often do you visit nature-based recreation in the Western Province of Sri Lanka for
recreation purpose?
1. No. of times………….. /year 2. No. of times……………./month
B.10 If you were not on this trip today, what would you most likely be doing?
B.11 How many times did you visit the Diyawanna Oya recreational site within the last
month for recreation purposes?
No. of times: …………../month
A.5.Employment
1. Regular employee
2. Casual employee
3. Contractual employee
4. Employer
5. Self-employed
6. Unpaid family worker
7. Student
A.8. Income
1. 0-5000 LKR
2. 5000-10000 LKR.
3. 10,000-20,000 LKR.
4. 20,000-30,000 LKR
5. 30,000-50,000 LKR
6. 50,000 -100,000 LKR
7. More than 100,000 LKR
A.1 Gender
1. Male
2. Female
A.3 Marital status
1.Never married
2. Married
3.Widowed/divorced/separated
A.4 Education
1. None
2 Primary- up to Grade 5
3 Junior secondary - Grade 5-9
4 GCE O/L –if done the exam
5 GCE A/L –if done the exam
6. Degree and above
7 Other (specify) …………….
32 SANDEE Working Paper No. 52-10
B.12 How many times do you expect to visit Diyawanna Oya recreational site for recreation
purposes during the next month?
No. of times: …….……../month
B.13 Do you know any other natural recreational site that you would like to visit instead of
Diyawanna Oya?
Yes No
B.14 If Yes, which other sites do you visit frequently? During the last month/year how many
times did you visit those sites and what was the main recreational activity you were involved
in there?
Site Visits/month or
Visits/year Distance to the
site Main recreational
activity
1 Galle Face Beach
2 Viharamahadevi Park
3 Others
B.10.Activities
1. Working at job
2- Watching TV
3- Housework
4- Shopping
5. Meeting friends
5- Other (specify) ……
B.14 Main recreational activity
1. Jogging/exercise
2. Family/friends outing
3. Playing cricket
4. Playing other games
5. Children’s park
6. Cycling
7. Other…………
B.15 Out of the other recreational sites available what is the most preferred site?
B.16 How many hours were you (or will you) be at the recreational site today? ……...hrs.
B.17 If you came with a group,
a. what is the size of the group? ……………………..
b. male female
B.18 What is the purpose of your visit to the Diyawanna oya area today?
B.19 What is the approximate time and distance it takes you to get to this recreational site from
your home? (One way)
…….. …………..hours …………………..km
B.20 How did you come to the site today?
SANDEE Working Paper No. 52-10 33
B.21 How much did you/your group spend on your trip?
1 Transportation…………………….LKR (in case of public transport)
2. Fuel………………………………LKR (if private/own vehicle)
3. Food ……………………. ………LKR
4 Accommodation………………….LKR
5 Other ……………………. ………LKR
6 Total ……………………...............LKR
B.22 What is the tenure of your house?
B.18. Purpose
1 Business
2 Attend meeting/ conference
3 Visiting friends/ relatives
4 Recreation
5 Other (specify)……………
B.20. Mode of transport1- By public Bus
2. By taxi
3. By private car
4. By tour bus
5. By motorcycle
6. By bicycle
7. By foot
8. Other(specify)……………
B.22.Tenure of house
Own house
Rented house
Free quarters
B.23 If you are living in a rented house, what is the monthly payment? …………...............
(at current market price)
B.24 If you are living in own house/free quarters, what is the monthly rentable value?.....................
(at current market price)
B.25 Have you chosen your current residence partly to enjoy the recreational benefits provided
by the Diyawanna oya site?
Yes No
B.26 If yes, do you think that you are paying extra in terms of monthly rent to enjoy the site?
Yes No
B.27 If yes, how much are you paying extra? ..................................
B.28 If you could have worked at this time (during recreational hours), what is the income you
have foregone due to the visit?
…………..................
B.29 How would you describe the quality of recreational benefits at the Diyawanna Oya
recreational site?
1Very poor
2 Poor
3 Fair
4 Good
5 Very good
34 SANDEE Working Paper No. 52-10
C. Visitor’s view of new projects and WTP for improvements
C.35 If this recreational site requires more income to provide better services for visitors, such as
more recreational activities, improved cleanliness, greater public safety and infrastructural
facilities, how should these recreational services be financed?
C-36 Suppose there were no other avenues to pay for improvement except through imposing an
entry fee, would you be willing to pay it?
Yes No
B.30 Are you satisfied with the present recreational benefits provided by the site?
Yes No
B.31 What attributes of the Diyawanna oya recreation site would you value most?
1. Scenic beauty 5 Fishing
2. Playgrounds 6 Relaxing
3. Boating 7 Exercising/Jogging facility
4. Family outing 8 Other (Specify) ---------
B.32 Would you like to have improved recreational services provided by the Diyawanna Oya
recreational site?
Yes N o
B.33 If No, what is the reason?
1. Satisfied with the existing recreational benefits/ services
2. Other (Specify)….
B.34 If yes, what types of recreational and other improvements would you like to see here?
1 Sight-seeing 7 Road conditions
2 Bird- butterfly watching sites 8 Food services
3 Relaxation 9 Lavatory
4 Walking tracks/Exercising 10 More items at Children's Park
5 Boat riding 11. Improved play grounds
6.Waste disposal 12- Other (Specify) ……………..
SANDEE Working Paper No. 52-10 35
C-37 (a) Suppose an entry fee of LKR 50 is charged for enjoying recreational benefits of the
site, would you be willing to pay? Yes No
If yes, how often will you be visiting the site?
………………times/month …………………..times/year
(If yes, go to C-46(b), if no, go to Q. C-46 (e))
C-37 (b) Suppose that instead of LKR 50, the entry fee was LKR 100, would you be willing to
pay? Yes No
If yes, how often will you be visiting the site?
………………times/month …………………..times/year
(If yes go to C-46 (c), if no, finish)
C-37 (c) Suppose that instead of LKR 100, the entry fee was LKR 500, would you be willing to
pay? Yes No
If yes, how often will you be visiting the site?
………………times/month …………………..times/year
(If yes, go to C-46 (d), if no, finish)
C-37 (d) Suppose that instead of LKR 500, the entry fee was LKR 1000, would you be willing
to pay? Yes No
If yes, how often will you be visiting the site?
………………times/month …………………..times/year
(If yes, finished, If no, finish)
C-37 (e) Suppose that instead of LKR 50, the entry fee was LKR 20, would you be willing to
pay? Yes No
If yes, how often will you be visiting the site?
………………times/month …………………..times/year
(If yes finished, if no, go to Q. C-46 (f))
36 SANDEE Working Paper No. 52-10
C-37 (f) Suppose that instead of LKR 20, the entry fee was LKR 10, would you be willing to
pay? Yes No
If yes, how often will you be visiting the site?
………………times/month …………………..times/year
(finished)
C-38 What is the reason for you wanting to pay to conserve/improve this recreational site?
C-39 Would you prefer
1. to keep the recreational site as a natural site or
2. to have several development projects to provide more recreational activities at the
site, i.e., Diyawanna Uyana Development Project?
C-40 If you prefer to keep it as a natural site (a), what is the reason?
C.35.Financing method
1. charge an entry fee
2. charge a vehicle parking fee
3. private donations
4. through the govt. budget
5. Other (Specify)…………
C.38. Need to pay
1. for my own benefit, so that I can
enjoy more
2. for the benefit of the society, that
every one can enjoy it
3. for future generations
4. Other (specify) .………..
C.40. Reasons to keep it as a
natural site
1. Importance of the site as a
rich natural ecological
system
2. Will attract more visitors
since it is less costly
3. Other (specify)……….
C-41 If you prefer to have several projects (b), what is the reason?
1. It will provide more entertainment
2. Will be able to maintain the quality of the recreational
site with limited number of visitors
3. Other (specify)…………………………
C-42 In Diyawanna Uyana Development Project what attributes would you like most?
1. Leisure centre 5. Boating
2. Golf course 6 Nature park
3. Apartment blocks 7 Other (specify)
4. Dry weather cricket and football grounds
(*Rank choices up to 3)
SANDEE Working Paper No. 52-10 37
C-43 If a project similar in nature to Diyawanna Uyana Development Project (DUDP) is
implemented in this area, how often will you be visiting the site for recreational purposes?
……………times/month …………………..times/year
C-44 Are you willing to pay for the recreational benefits provided by the above new
development project?
Yes No
C-45 With new development projects coming up in the wetland area, do you expect the
recreational benefits provided by the site to increase?
Yes No
C-46 If No, what prevents you from enjoying the recreational benefits?
1 Congestion 4 Exorbitant entry fee
2 Environmental pollution 5 Loss of freedom
3 Loss of recreational activities 7 Other (specify)
(*Rank choices up to 3)
38 SANDEE Working Paper No. 52-10
No. 52 - 10
September 2010
Thusitha Dilhani Marawila
Manoj Thibbotuwawa
To Develop or to Conserve? The Case of the
Diyawanna Oya Wetlands in Sri Lanka
SANDEE
PO Box 8975 EPC 1056
Kathmandu, Nepal
Tel: 977-1-5003222
Fax:977-1-5003299
E-mail: info@sandeeonline.org
Website: www.sandeeonline.org
THE
WORLD
BANK
... The unique advantage of TCM compared to other valuation approaches is that, the method is based on actual behaviour. Applications of TCM to value recreational resources is abundant in Sri Lanka for wild life parks (Rathnayake and Gunawardena, 2002;Rathnayake and Gunawardena, 2011) viewing leopards (Wickramarachchi and Gunawardena, 2012), botanical gardens (Jayaratne andGunawardena, 2004 andMadhuwanthika andGunawardena, 2017) and for urban recreational sites (Marawila and Thibbotuwawa, 2010). This research enhances the knowledge on environmental valuation in the urban park context. ...
... The estimated individual annual consumer surplus (LKR 33,250.37) is comparable with a value of Diyawanna Oya wetlands individual CS value of LKR 36,022.35 and the annual consumer surplus of LKR 3,890 million (Marawila and Thibbotuwawa, 2010). Similar studies related to other urban recreational sites indicate much lower values compared to the present study. ...
Article
Full-text available
Urban green spaces could bring cities and their inhabitants with vitality in terms of ecological, social, and economic benefits. Recognising and estimation of economic values of parks is important for their sound management and for justification of the current use over various alternative uses. Non recognition of values of the services of such green spaces may lead to unsound management and degradation resulting in depriving urban communities of those benefits. Viharamahadevi Urban Park is the oldest and largest park in Colombo which offers recreation and green space to the inhabitants and visitors of the city. The purpose of this study is to estimate the recreational value of the Park using Individual Travel Cost Method (ITCM). Visitors of Viharamahadevi Urban Park selected using purposive sampling method were interviewed with a structured questionnaire. Data on visitation frequencies, preferences for park characteristics and socio economic parameters were collected using face-to-face interviews. In order to cater for the data issues of the ITCM, a zero truncated negative binomial regression analysis was performed in estimating the demand function. Results indicate that household income and the enjoyment of the visitors significantly and positively determine the number of visits made by the people. The annual social welfare generated from the recreational value of the Viharamahadevi Park is LKR 55.7 billion. The estimated value will be able to provide significant guidance towards future park management decisions.
... Both of these methods have been applied to several environmental valuation case studies around the world, and are gaining popularity in Asian countries as well. For instance, the TCM for valuing recreational potential was used by Khan (2006), Badola et al. (2010), Marawila and Thibbotuwawa (2010); the WTP for entry fee by Khan (2006), Samdin (2008), Han et al. (2011), Wang and Jia (2012), and Baral and Dhungana (2014). ...
... Based on this analysis, we recommend an imposition of an entry fee of NPR 34 per visitor to the GLC. This figure is consistent with that of Khan (2006) for Margara Hills National Park of Pakistan and Marawila and Thibbotuwawa (2010) for Diyawanna Oya Wetland in Sri Lanka. If we extrapolate it with the 7,000 projected visitors per year, then the likely revenue would be NPR 0.21 million (US $3,000). ...
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This study investigated the need and applicability of wetland tourism for resource conservation, using the case of Ghodaghodi Lake Complex, a Ramsar Site in western Nepal. The travel cost method (TCM) was used to determine the recreation potential of the lake complex, while the contingent valuation method (CVM) was used to calculate willingness of visitors to pay an entry fee as a payment vehicle for conservation. The per capita travel cost was found to be NPR 540 (US $7.71), while the mean willingness to pay an entry fee was NPR 34 (US $0.48) per visitor per entry. In addition, factors affecting wetland visitation rates and maximum willingness to pay were identified. Policy implications include the establishment of an entry fee system to offset conservation budgetary constraints, government investment in social benefits equating to at least per capita travel cost identified, and public-private partnerships, with community participation in tourism promotion and wetland conservation.
... Diyawann oya area has below characteristics to promote ecotourism services and facilities as declared by Dilhani & Manoj (2010). ...
... According to Groot et al., 2012 TCM has extensively used in natural recreation research (19%) but not very often in South Asian continent. There are only few evidences from Sri Lanka (Gunatilake and Vieth, 1998;Marawila et al., 2010) and many more conceptual, theoretical and methodological aspects not being explored yet. ...
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Recreation and tourism represent a major opportunity and nexus for managing the interaction between ecosystems and people, including particularly to urban ecosystems, where people living in an environment, that its' contact with natural or semi natural ecosystems is often limited. The Negombo lagoon has proven to be an important recreational site in a greater urban area in the face of the growing demand for urban recreational amenities. This study evaluates the recreation demand for Negombo lagoon while Specifically, identifies the current status of recreational activities in Negombo lagoon to motivate and sustain public support for lagoon protection and conservation through monetary signals. The study employs both Individual Travel Cost Method and Zonal Travel Cost Method in order to estimate the welfare gains from recreation. The social welfare derived for both local (USD 4.7 Million) and foreign visitors (USD 911 Million) demonstrates the trade-off and synergies of sharing lagoon for recreational activities.
... The wetland is excessively used by the people in the vicinity for income generation such as for fishing, cattle grazing, and collecting firewood and for the purpose of garbage disposal. Another significant risk to the wetland is land reclamation and recreational activities (Marawila & Thibbotuwawa, 2010). Degradation of the marsh has resulted in the reduction of flood detention capacity and increased flood incidents in the Colombo District. ...
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A majority of the Sri Lankan wetlands is under threat of degradation mainly due to urbanization, population pressure and industrialization. This study was conducted to detect the changes and to assess and map the degradation risk of the Kolonnawa marsh located in the Western Province of Sri Lanka by analyzing the data collected through field surveys, remote sensing and GIS techniques. A questionnaire survey was conducted within 11 Grama Niladhari (GN) Divisions around the marsh to obtain information on household characteristics, interactions with the marsh, awareness on marsh degradation and marsh conservation. According to the temporal change assessment performed with Landsat TM (1992), Landsat ETM+ (2002) satellite images, 32 % of the marsh area has been reduced in 1992 - 2002 period. According to Worldview 2 image, the total marsh area including the associated waterways in 2010 was 144.56 ha. A risk index was formulated considering the risk factors prevailing in the study area. Risk mapping, which was carried out based on the risk index resulted in three risk classes; moderate, high and very high. Mapping based on the risk index was helpful to identify the severity of the degradation risk of the marsh at GN Division level. The study identified that all surrounding GN Divisions pose risk on degradation of the marsh while the highest impact was reported from the Obesekarapura GN Division. The risk matrix was identified as an important tool in prioritizing the areas for conservation.
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Wetlands offer a range of recreational activities and hence, they have great potentials to attract tourists. The aquatourism in wetlands is an upcoming avenue for resource generation. Assam, being the hub of floodplain wetlands has the great opportunity to use these resources as attractive tourist spots. Deepor beel near the Guwahai city harbours one of the largest concentration of aquatic birds in Assam. The neighbouring hills and forests are the home of many endangered and rare species of animals and insects. All these factors could make the beel an important tourist destination. Fishermen can be involved in the enterprise which can supplement their livelihood. Primary survey showed that fisheries is the major occupation of most of the fishers households of the beel. Majority of them don't possess agricultural land and livestock. On the other hand primary survey also indicated that at present the students, Govt. employees, Businessmen, Pensioner, Auto rickshaw driver/owner were the major group of visitors of the beel.Travel Cost Method was used to estimate the economic use values associated with Deepor beel ecosystems that are used for recreation. Family size and monthly income were found to be highly significant factors in explaining the variances of number of visits.The estimated consumer surplus was found to be Rs.160/visitor and the tourism value was estimated to be Rs. 16 lakh. However, this value could go up substantially if proper infrastructure put in place.Visitors suggested a couple of measures to enhance the tourism value. Fishers can be employed in various sectors of aquatourism like boating, managing parking lots, transporting visitors from city by non-polluting vehicles like e-rickshaws, establishing eateries, input and service providers for angling etc. The arrangement can considerably reduce the fishing pressure on the beel and enhance their livelihood status.The authority is trying to develop the core area of the beel as wild life sanctuary which is a welcome step towards enhancing tourism value. The fishing pressure from the core areas can be lessen by employing the fishermen in this potential sector of aqua-tourism.
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It is my great pleasure to present before you the volume 50 (Golden Jubilee Volume) of the Journal of the Inland Fisheries Society of India (JIFSI). Golden Jubilee Volume is a milestone in the publication history of any journal and it is indeed a proud moment for Inland Fisheries Society of India (IFSI) reach this milestone and to bring out its Golden Jubilee Volume. We have made certain changes starting from this volume. We have changed the manuscript style and format starting from this issue, details of which can be seen from http://ifsi.org.in. There is a different colour scheme for the cover page and the journal is now published in colour, in both online and hardcopy formats. We have more eminent researchers who have joined the journal in different capacities. Dr. S. A. M. Martin, Professor Fish Physiology from the Institute of Biological and enviornmental Science, University of Aberdeen, Scotland, U.K. and Dr. Vipul Bansal, Professor Nanotechnology, RMIT University, Melbourne, Australia have joined as Member, Editorial Board. Besides, Dr. N. R. Nayak, Wayne State University School of Medicine, Detroit, Michigan, U.S.A.; Dr. George John, formerly Senior Advisor, DBT, Ministry of Science & Technology, Government of India and Vice Chancellor, Birsa Agricultural University (BAU), Ranchi as well as Dr. A. S. Ninawe, formerly Advisor, Department of Biotechnology and Vice Chancellor, Maharashtra Animal and Fisheries Sciences University (MAFSU), Nagpur have also joined as Member, Editorial Board. Dr. S. D. Singh, former Assistant Director General (Inland Fisheries), Indian Council of Agricultural Research has joined as Councillor. Joining by such eminent researchers, professors and science administrators in JIFSI is definitely encouraging and would help in enhancing the quality and visibility of the journal. Let's have a look on the contents of the present issue. We have introduced a new "Opinion Section" and have got two articles under this section both on Dry Fish, which is under global attention as a tool towards achieving food and nutritional security through fighting protein hunger. We have regular research papers, which are from different areas of Inland fisheries like diet components, dietary habits of coexisting catfish species, cross-reactive sacroplasmic peptides responsible for food allergy and hyper sensitivity, recirulatory aquaculture system (RAS); element finger printing in carps from the East Kolkata Wetland (EKW) with focus on food safety; nutritional composition of SIF (Xenentodon cancila) prescribed as a dietary supplement to control nocturnal enuresis; biodiversity of SIFs and their vulnerability in the beels in different districts of West Bengal; roadmap for inland fisheries development in the state of Odisha; climate change and mitigation measures in freshwater aquaculture; aquatourism as a potential alternative livelihood option. There are articles on formalin adulteration in fish as a public health concern and CIFRI- GI Model Cage as a commercialized product aiming enhancement of fish production from inland waters. There are meeting and training reports and regular items like IFSI news, awards and honour received by IFSI fellows and life members. To celebrate the Golden Jubilee of JIFSI in a befitting manner, it has been decided to bring out a "Special Golden Jubilee Supplement" in addition to the regular numbers i.e. volume 50, numbers 1 and 2. The Golden Jubilee Supplement will be brought out with solicited research papers covering different aspects of Inland Fisheries from eminent researchers from India and abroad. It has also been decided to publish solicited and unsolicited review articles in regular issues of the Journal staring from this volume. We are working towards publishing the journal through Springer from 2019. We solicit your help, cooperation and research contributions in form of quality research papers for enhancing the quality and impact of JIFSI. Let Science progress. Jai Vigyan! Editor-in-Chief, JIFSI
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‘Sea bathing’ is the main recreational activity at the Paraviwella Beach Park in Sri Lanka. However, there is a proposal by the Government of Sri Lanka to convert the Beach Park into an area that could be used for the expansion of the fisheries harbour. Our study examines the possibility of the proposal against maintaining the Park by using the Zonal Travel Cost Method to estimate the welfare benefits (in terms of Consumer Surplus). The study shows that the welfare benefits of Paraviwella Beach Park to be LKR 6.39 million per year for local visitors. Our results suggest that for maximum revenue from the park to be derived, the fresh water bathing fee should be raised to LKR 100.45 from the present fee of LKR 20 since those who sea-bathe requires a fresh water bath thereafter. Though it would reduce the visitor numbers to the Park by 34%, it would increase the total revenue of the Park by 231.18%. These values demonstrate that the Park can be preserved for sea-bathing while making the site more financially viable.
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Although recreational planning in national parks has long taken visitor characteristics and perceptions into consideration, economic valuation to date has not been part of such planning. Our study applies economic valuation for recreational planning in the Horton Plains National Park (HPNP) in Sri Lanka. The study, using a pretested questionnaire, interviewed 188 respondents in order to identify existing visitor satisfaction levels as well as visitor perceptions on available facilities. The existing visitor satisfaction at HPNP was 54%. Two alternative recreational scenarios were, therefore, developed based on visitor perceptions on how to enhance visitor satisfaction at the park. A hypothetical travel cost method and contingent valuation method (CVM) were used to estimate (1) the welfare benefits in terms of consumer surplus and (2) the demand in terms of willingness to pay (WTP) for the proposed recreational scenarios. The sample size for the economic study was 352 respondents. The per-visitor welfare benefits were financially valued at Sri Lanka Rupees (SLR) 3794 (USD 1 = SLR 130) and SLR 7045 for scenarios 1 and 2, respectively. These values show a 15 to 30 times increase from the existing value of the welfare benefits. The net present value of benefits also increased from SLR 516.8 million to SLR 5296.92 million and SLR 9835.73 million under scenarios 1 and 2, respectively. Under CVM, the estimated mean WTP values were SLR 132.00 and SLR 190.32 under scenarios 1 and 2, respectively. These values can be used as a tool for revising pricing policies at HPNP. Visitors' response to the proposed recreational scenarios suggests the need for planners to institute proper recreational schemes to enhance the welfare benefits of visitors. The study underscores the role economic valuation can play in policy decisions relating to recreational planning in national parks.
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The role of economics in managing the natural resources, and the environment in which they are found, has been gaining increased recognition and acceptance among policy makers. The development of environmental valuation techniques is one of the key factors which promoted the acceptance of the role of neo-classical economics in better management of the environment. However, developing countries are somewhat behind in using economic principles for environmental management compared to developed countries. Building the capacity to conduct environmental valuation studies in developing countries is a key step when it comes to using economic principles for environmental management. The lack of affordable textbooks in environmental valuation, with a developing country orientation, is one of the major constraints faced by developing countries. This book is intended to fill this gap for Sri Lankan students. The targeted audience of the book is advanced Masters and beginning Ph.D students. Practitioners of environmental valuation will also find this book useful in conducting state of the art valuation studies. The book is recommended for Masters or beginning Ph.D. courses offered in the South Asian region. In the past, many economists have viewed valuation studies with skepticism. This is especially the case when it comes to stated preference techniques. One of the reasons for this skepticism is bad practice. Understanding the welfare economics foundation and application of rigorous quantitative analysis are two important ways of improving the credibility of valuation studies. The book emphasizes these two aspects. It contains all the valuation techniques as well as a number of case studies. The case studies are intended to provide hands-on experience in the use of valuation studies. One of the original objectives of the book was to assess the suitability of different valuation techniques for developing countries. This objective has been only partially achieved due to imperfect knowledge on the subject. There is a lack of environmental valuation textbooks, targeted for advanced Maters students, in the international market. This book, however, is not yet ready for the international market. My intention is to revise the book with a complete set of case studies and then publish it for the international market. Until the next edition of the book is released, this edition will serve as a textbook mainly for local students and, to a limited extents, for students in the South Asian region.
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We examine ethnicity and individual trip taking behavior associated with natural resource based recreation in the Florida Keys. We estimate trip demand using the travel cost method. We then extend this model with a varying parameter adaptation to test the congruency of demand and economic value across white and Hispanic user subgroups. Our findings indicate significant differences in price response leading to divergent per-trip consumer surplus and price elasticity between these two groups. These differences raise important distribution and equity concerns with respect to the possible future use of pricing policies like user fees.
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Elephants are a unique biological and cultural resource for Sri Lanka. Conservation of Sri Lankan elephants is a felt need since t h e elephant population h a s declined to a very low level. However, elephant conse~vation has hecome a resource use conflict as it competes for scarce natural and public resources. An extended henefit cost analysis on elephant conservation is necessary to determine the efficient allocation of resources for elephant conservation. This study generates part of the economic informa-tion required for such an anal.ysis. Using a travel cost model this study estimates t h e scenic value of elephants a t Pinnawela orphanage. Results show t h a t local visitors derive Rs. 12.2 million worth scenic benefits per a n n u m from t h e Pinnawela orphanage. A preliminary assessment on t h e scenic value by foreign visitors indicates t h a t their recreational benefits from viewing elephant;^ is much higher. Therefore, policies should be designed to capture part of tlle scenic benefits of foreign visitors by increasing producer surpluses that acciue locally.
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Truncated Poisson and truncated negative binomial count data models, as well as standard count data models, OLS, nonlinear normal, and truncated nonlinear normal MLE were used to estimate demand for deer hunting in California. The truncated count data estimators and their properties are reviewed. A large sample (N = 2223) allowed random segmenting of the data into specification, estimation, and out-of-sample prediction portions. Statistics of interest are therefore unbiased by the specification search, and the prediction results allow comparison of the statistical models' robustness. The new estimators are found to be more appropriate for estimating and predicting demand and social benefits than the alternative estimators based on a variety of criteria. -Authors
Article
The travel cost method is used to analyze the recreation demand for North Carolina trails. Incorporated in the demand model are users' perceptions of trail quality and their stated number of annual trips. Trail demand is specified with panel data that consists of two separate observations per respondent. Users' behaviors are analyzed by combining both data on the observed trip counts and stated trips. Stated trips are the number of trips a user would have taken to the last trail used had the site quality been ideal. Since both users and non users of trails during the past 12 months were asked their stated trips if quality improved, the non-participation effect was incorporated into the estimates of trail demand. Study findings showed users' ratings of trail quality can be successfully incorporated into a demand model to evaluate a hypothetical improvement in trail conditions. The estimated $15 increase in consumer surplus per trip is of practical importance to policy analyses aimed at improving social and environmental conditions averse to trail users.
Article
This study, which is among the first in Pakistan to value recreational benefits, estimates the benefits of establishing and managing the Margalla Hills National Park near Islamabad. The study examines how much park visitors are willing to pay to visit and enjoy the park. Annual benefits from the Park are considerable-the total annual consumer surplus or economic benefit obtained from recreation in the Park is approximately Rs. 23 million (US$ 0.4 million). Various factors influence the value visitors obtain from the park - these include travel cost, household income, and the quality of the park. Improvements in the quality of the park are likely to increase recreational benefits by a significant 39%. The study recommends that a Park entrance fee of Rs. 20 per person be introduced,which could be utilized for park management. This would generate nearly Rs. 11 million in revenues annually, a sizable amount of money that represents about 4% of the annual budget allocated to the Environment Sector in Pakistan.
Article
Benefit transfer is the process by which researchers take recreational demand models or other models which are estimated for one site or region and apply them to another site or region. Model estimation is frequently viewed as a simple exercise in classical statistics. Here it is argued that, while standard hypothesis testing plays a role in model estimation, it may be less important than the researcher's judgment about how the model ought to work. The power of economics lies principally with the logic of theory, and then with the strength of empirical evidence. These arguments are illustrated using the travel cost approach to estimating the demand for recreation. There are several major research issues (for example, the role of substitute prices) which influence the final estimates of benefits but which must be determined at least in part by the researcher. The implication for benefit transfer is that this is also within the realm of judgment for the researcher, but that it will be more acceptable when judgment is recognized. That is, the original benefit estimates are tailored for a specific application. They cannot be treated as if they came from a strictly random process. Recognizing this tailoring process will put the researcher in a better position for transferring model results.
Article
The trip/visit variable in the individual travel cost method is often regarded as discrete. Furthermore, it is often reported in surveys as a grouped variable (the number of visits reported falling into one of several classes). This paper develops a travel cost model which takes account of discreteness and grouping in both demand and benefit estimation. A case study and associated simulations are then reported which indicate the potential extent of bias that may arise from ignoring discreteness/grouping in demand and benefit estimation. The information loss involved in varying the size of visit classes is also examined.