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Economic valuation of Komodo Dragon (
Varanus komodoensis
, ouwens
1912) and its contribution to locally-generated revenue of West
Manggarai Regency, East Nusa Tenggara Province
To cite this article: A D Nurilma et al 2019 IOP Conf. Ser.: Earth Environ. Sci. 306 012001
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Conference on Sustainability Science 2018
IOP Conf. Series: Earth and Environmental Science 306 (2019) 012001
IOP Publishing
doi:10.1088/1755-1315/306/1/012001
1
Economic valuation of Komodo Dragon (Varanus
komodoensis, ouwens 1912) and its contribution to locally-
generated revenue of West Manggarai Regency, East Nusa
Tenggara Province
A D Nurilma1.a), A Sjarmidi1, Y Yustiana1
1Department of Biomanagement, School of Life Sciences and Technology, Institut
Teknologi Bandung, Indonesia
a) Corresponding author e-mail: nurilma.ad@gmail.com
Abstract. Komodo dragon (Varanus komodoensis) is one of the largest reptiles in the world.
Komodo dragons are listed in the Appendix I Convention on International Trade in Endangered
Species of Wild Fauna and Flora (CITES) and categorized as vulnerable by the International
Union for the Conservation of Nature and Natural Resources (IUCN) due to the limited
demographic demarcation and distribution. In achieving sustainable resource utilization,
knowledge of the value of natural resources as a whole is required, both tangible and intangible
values. Komodo dragon has intangible value in the form of existence value. Therefore, the value
of komodo dragon is necessary to know, because it shows the potential of these resources and to
be considered in making appropriate management/policy planning for the sustainability of
Komodo National Park tourism, as well as the instruments to preserve the species of Varanus
komodoensis in their natural habitat. The purposes of this study are to estimate the economic value
of Varanus komodoensis, which is the main attraction of Komodo National Park ecotourism, as
an instrument of conservation, and to calculate the contribution of Komodo National Park tourism
to Locally-Generated Revenue of West Manggarai Regency. Estimation of Varanus komodoensis
value was obtained by using Individual Travel Cost Method (TCM). The results of this research
is the value of Komodo National Park is Rp 5,995,232,147,515.00. If that value is divided by the
average of komodo dragon population from 2012 to 2016 that is 2,841 individuals, then the value
of each individual komodo dragon per year is Rp 2,110,254,188.00. Komodo National Park
tourism contributed 44% in the retribution of Locally-Generated Revenue and 5% in the Locally-
Generated Revenue of West Manggarai Regency.
Keywords: economic valuation, locally-generated revenue, Travel Cost Method (TCM), Varanus
komodoensis
1. Introduction
Komodo National Park (KNP) was formed in 1980 and declared as a World Heritage Site and Man and
Biosphere Reserve by UNESCO in 1986. Komodo National Park was originally formed to conserve the
unique animals of komodo dragon (Varanus komodoensis) and their habitat [1]. Komodo National Park
began to be famous in the world in early 2009 when this national park was nominated as one of The
Next Seven Wonders of Nature.
Conference on Sustainability Science 2018
IOP Conf. Series: Earth and Environmental Science 306 (2019) 012001
IOP Publishing
doi:10.1088/1755-1315/306/1/012001
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The existence of economic activities and welfare enhancement must be balanced with efforts to
maintain the environmental quality so the utilization of resources can be achieved optimally and
sustainably. Conventional economic systems that are separated from ecological approach cause new
problems, the economic activity continues to increase on the one side, but on the other side, the
environment continues to get some pressures until the environmental quality are in damaged. If Komodo
dragons and their habitat, which is the main tourist attraction of the Komodo National Park, are in
damaged or decreased in its quality, then the economic and social sectors will be affected especially for
people who depend primarily on tourism activities.
Currently, the ecosystem function does not get service fees because the ecosystem function does not
have a market system so it does not have a price [2]. It caused the environmental services don’t have
economic value. This is because the costs of environmental services have not been included in the
external cost system. Likewise with the benefits of environmental services, environmental benefits are
only accepted as normal so that they are outside the calculation of benefits (external benefits). In
achieving sustainable use of resources, knowledge is needed on the benefits of natural resources as a
whole, both tangible and benefits that cannot be clearly stated (intangible). Komodo dragon (Varanus
komodoensis) has an intangible benefit in the form of existence value. Therefore, extracting the value
of komodo dragons is needed to determine the potential of these resources and can be the basis for
making appropriate management/policy plans for the sustainability of Komodo National Park tourism,
and as an instrument to maintain the preservation of Varanus komodoensis in their natural habitat.
The purpose of this study was to determine the economic value of Varanus komodoensis from the
demand side approach as an indirect estimation of the existence value of komodo dragons which is the
main icon of Komodo National Park tourism.
2. Materials and Methods
The study was conducted in two locations in the Komodo National Park, Loh Liang (Komodo Island)
and Loh Buaya (Rinca Island), that located in Zona Pemanfaatan Wisata Daratan (the tourist use zone)
of Komodo National Park, West Manggarai Regency, East Nusa Tenggara Province.
Figure 1. Map of research locations [3]
In this study, the determination of the sample was done by purposive sampling. Determination of
sample size for the number of visitors of Komodo National Park tourism is sought by using the Slovin
formula [4]. To determine the sample size, the formula that used is:
(1)
Loh Liang
Loh Buaya
Conference on Sustainability Science 2018
IOP Conf. Series: Earth and Environmental Science 306 (2019) 012001
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doi:10.1088/1755-1315/306/1/012001
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Note:
N :Sample size
N :Population size (the average number of visitors to Komodo National Park in one year from
2013 to 2015)
d :Estimated Error (10%)
The identified value of Varanus komodoensis is the Existence Value. The economic value of Komodo
dragon is obtained by make a proxy from the economic value of the Komodo National Park tourism. To
find out the Willingness to Pay (WTP) of this existence value is by using the individual Travel Cost
Method that is the amount of costs spent during a visit to a tourist attraction [5].
In determining the tourism demand function for Komodo National Park, the travel cost approach uses
econometric techniques by using multiple linear regression [5]. The equation model of Komodo
National Park tourism demand analyzed in the classical assumption test to correctioness test of the
model. To determine the relationship between the rate of visit (y) and the value of Komodo National
Park attractions (x) used the individual Travel Cost Method can be arranged in an equation and then the
demand curve is made. The equation is:
Y = f (X1, X2, X3, X4, X5, X6, X7) (2)
Note:
Y : Number of visits per year
X1 : Travel costs (include transportation costs, consumption costs, entrance fees, lodging costs,
and others)
X2 : Visitor’s revenue every month
X3 : Travel time from the tourist's place of origin to Komodo National Park
X4 : Duration of Education
X5 : Age
X6 : Number of dependents in family
X7 : Time spent in one visit
In linear form, the demand function is as follows:
Y=α0+α1X1+ α2X2+ α3X3+ α4X4+ α5X5+ α6X6+ α7X7 (3)
After knowing the demand function, the consumer surplus which is a proxy of the WTP value can
be measured by the formula:
(4)
3. Results and Discussion
The amount of costs that incurred by tourists during a visit to the Komodo National Park is considered
to represent the nominal they are willing to spend to see Komodo dragons directly in their natural habitat.
3.1 Modeling Using Multiple Linear Regression with Dummy Variables
This study uses multiple linear regression because it involves more than one predictor variable when the
response variable is quantitative data. These are the description of variables:
Conference on Sustainability Science 2018
IOP Conf. Series: Earth and Environmental Science 306 (2019) 012001
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doi:10.1088/1755-1315/306/1/012001
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Table 1. Description and scale of research variables.
No.
Variables
Description
Scale
1
Y (Response)
Frequency of visits
Interval
2
X1
Travel costs
Interval
3
X2
Revenue per month
Ordinal (Categorical)
4
X3
Length of travel time
Ordinal (Categorical)
5
X4
Duration of education
Interval
6
X5
Age
Interval
7
X6
Dependent number in family
Interval
8
X7
Time spent (duration) in one visit
Interval
Source: Primary data (2018)
Among the used variables in this study, there are two categorical variables namely X2 and X3.
Therefore, it is necessary to use a dummy variable to represent the two variables.
3.2 Simultaneous Test
Simultaneous test is used to determine the presence or absence of predictor variables that has a
significant effect on the response variable. The hypothesis that used is:
H0 : There are no predictor variables in the model that influence the response variable
significantly.
H1 : There is at least one predictor variable in the model that influences the response variable
significantly.
Test Statistics : F
Alpha : 5%
Critical Area : Reject H0 if the significance is less than alpha (0,05)
Test Results : Table 2. Concurrent Test Results
ANOVAb
Model
Sum of
Squares
Df
Mean Square
F
Sig.
1
Regression
24.381
10
2.438
36.810
.000a
Residual
4.173
63
.066
Total
28.554
73
a. Predictors: (Constant), lj3, education, dependents, time, revenue1, age, lj2, costs, revenue2, lj1
b. Dependent Variable: Visits
Based on simultaneous test, it can be seen that the significance value of F is 0.00 (smaller than 0.05)
so that the H0 is rejected and concluded that there is at least one predictor variable in the model that
significantly influences the response variable.
3.3 Partial Test
Partial test was sequel of the simultaneous test to determine which predictor variables that affected the
response significantly. The hypothesis that used is:
H0: Predictor variables do not significantly influence the response variable
H1: There is a significant influence by the predictor variable on the response variable
Conference on Sustainability Science 2018
IOP Conf. Series: Earth and Environmental Science 306 (2019) 012001
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doi:10.1088/1755-1315/306/1/012001
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Table 3. Partial test results
No.
Predictor Variable
t-statistics
Sig.
Conclusion
1
X1 (Travel costs)
-2.773
.007
Significant Influence
2
X2 (Revenue per month)_1
.159
.874
Insignificant Influence
3
X2 (Revenue per month)_2
-.551
.583
Insignificant Influence
4
X3 (Length of travel time)_1
-1.633
.107
Insignificant Influence
5
X3 (Length of travel time)_2
-2.267
.027
Significant Influence
6
X3 (Length of travel time)_3
-4.983
.000
Significant Influence
7
X4 (Duration of education)
1.174
.245
Insignificant Influence
8
X5 (Age)
.156
.876
Insignificant Influence
9
X6 (The number of dependents)
.220
.827
Insignificant Influence
10
X7 (Time spent in one visit)
.321
.750
Insignificant Influence
Source: Primary data (2018)
Based on the table, it shows that the cost variable (X1) and length of journey (X3) significantly
influence the response variable. Thus further modeling only involves these two variables.
3.4 Multiple Regression Modeling
Regression modeling uses the Cost predictor variable (X1) and length of journey (X3) that represented
by dummy variables (lj1, lj2 and lj3).
Table 4. Multiple regression modeling results
Model
Unstandardized
Coefficients
Standardized
Coefficients
T
Sig.
B
Std. Error
Beta
1
(Constant)
3.036
.253
12.003
.000
Costs
-1.347E-8
.000
-.215
-3.025
.003
lj1
-.546
.270
-.301
-2.025
.047
lj2
-.774
.269
-.407
-2.876
.005
lj3
-1.651
.280
-1.180
-5.900
.000
a. Dependent Variable: Visits
Source: Primary data (2018)
Based on the above coefficient table, the regression model is as follows:
Y (visits) = 3,036 – 0,00000001347X1 – 0,546lj1 – 0,774lj2 – 1,651lj3
3.5 Model Interpretation
The number of respondent is significantly influenced by the costs variable that must be incurred by the
respondent (X1) and length of travel time from the respondent's place of origin to the tourist location
(X3) and the coefficient of the two variables is negative so that it can be said that the relationship
between the two variables with the response variable is negative (opposite). The greater the costs that
need to be incurred by respondents tends to reduce the interest of respondents to visit. This is in
accordance with economic theory, that if prices are increasing then consumers will reduce the amount
of goods consumed [6]. In other words, if the travel costs that needed to get to a tourist place are greater,
it will reduce the chance of an average visiting the location. Likewise, the travel time variable, the longer
the required travel time tends to reduce the interest of respondents to visit. This is consistent with the
hypothesis that the mileage influences negatively because the farther the distance must be traveled by
tourists, the more costs must be incurred.
Conference on Sustainability Science 2018
IOP Conf. Series: Earth and Environmental Science 306 (2019) 012001
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doi:10.1088/1755-1315/306/1/012001
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The variables that have no significant effect on the frequency of tourist visits to Komodo National
Park are revenue/income per month (X2), duration of education (X4), age (X5), number of dependents
(X6) and time spent in one visit (X7). The income of tourists can affect the financial ability of tourists
to visit a tourism destination. But in this study, the income variable (X2) has a significance of 0.874 and
0.583 (greater than 0.05) so that it is considered to have no significant effect in influencing the frequency
of tourist visits to Komodo National Park. Many tourist respondents have different income, but 77% of
respondents have the same frequency of visits, that is once in a year. This is thought to cause the income
variable to not significantly influence the frequency of visits to the Komodo National Park.
Duration of education (X4) is the time the respondent has spent for formal education. Education is
related to the insight and knowledge of tourists so that it is suspected that it influences a person's decision
making on a trip, for example the choice of place, frequency of travel, and others. However, in this study
the education duration variable was considered not to have a significant effect on the rate of tourist visits
to Komodo National Park because it had a significance of 0.245 (greater than 0.05). This is due to the
fact that although the background of the long-term education of tourists varies, but has the same
frequency of visits.
In this study, the tourist age variable (X5) was considered to have no significant effect on the
frequency of tourist visits to Komodo National Park because it had a significance of 0.876 (greater than
0.005). This means that the more mature a person does not always increase the frequency of visits to
Komodo National Park. This is because even though the age of tourists varies, they has the same
frequency of visits. In addition, tourism activities in Komodo National Park also require good physical
and good stamina, so most respondents are aged 18-35 years with a percentage of 64%.
According to [6], the number of dependents in a family (X6) is closely related to the travel costs that
must be incurred. If the number of visitor’s dependents are greater, so the costs of travel that must be
spent are higher. Conversely, if the number of dependents is less, the costs that must be incurred will be
reduced so that it will increase the frequency of a person's visit to a place of recreation. In addition, if
the number of dependents in the family increases, then it can contribute to influencing the amount of
budget allocated in the tour, and the cost factor influences the frequency of tourist visits. In this study,
the number of dependents (X6) has a significance of 0.827 so it is considered not to have a significant
effect on the frequency of tourist visits to Komodo National Park because the value is greater than 0.05.
This is because even though the respondents have a different number of dependents in families, but they
have the same frequency of visits to Komodo National Park.
In this study, the duration of the trip (X7) has a significance of 0.750 so it is considered not to have
a significant effect on the frequency of visits to Komodo National Park because the value is greater than
0.05. The longer time a tourist spends in one visit will affect the cost of the trip. But directly, the duration
of this trip has no significant effect on the frequency of tourist visits to Komodo National Park. This is
because even though the respondents have different trip duration, mostly of them have the same
frequency of visits.
3.6 Model Correctioness Test
Correctioness test of the model is used to determine the extent of predictor variables that contained in
the model can explain the response variable. A correctioness test of the model can be done by looking
at the value of R-Square/Adjusted R-Square. The higher the R-square value, then it can be said that the
model is better because it is able to explain the variance of the response variable well.
Table 5. Test results of model correctioness test.
Model Summary
Model
R
R Square
Adjusted R Square
Std. Error of the Estimate
1
.920a
.846
.837
.25266
a. Predictors: (Constant), lj3, lj2, costs, lj1
Conference on Sustainability Science 2018
IOP Conf. Series: Earth and Environmental Science 306 (2019) 012001
IOP Publishing
doi:10.1088/1755-1315/306/1/012001
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Based on the test results, it is known that the R-square value is 0.846 (R-square adj 0.837). It shows
that the model that has been obtained is able to explain at least 84% of the variance of the response
variable. While the other 16% is explained by other variables that not included in this model/research.
This value is good so it can be said that the obtained model has explained the factors that influence the
number of tourists visits to Komodo National Park.
3.7 Consumer Surplus and Economic Value of Komodo National Park Tourism
Consumer surplus is the excess or difference between total satisfaction or total utility (which is valued
by money) that consumers enjoy from consuming a certain amount of goods with their total sacrifice
(which is valued by money) to obtain or consume the amount of goods [7]. According to [5], consumer
surplus can be obtained by the number of squared visits divided by the coefficient of travel costs that
multiplied by two. Referring to the concept of the WTP being built, the visitor's WTP value is equal to
the value of the consumer surplus [6]. Based on the analysis using multiple linear regression, the WTP
value of Komodo National Park visitors is Rp 48,656,674.00 per individual per visit. This value is
obtained by multiplying the WTP value by the number of visitors from September 2016 to August 2017
as many as 123,215 people. From the extraction, the economic value of Komodo National Park tourism
is Rp. 5,995,232,147,515.00 in 2017. If the economic value of komodo dragons is drawn from the
economic value of Komodo National Park tourism, then the value of Komodo dragons in 2017 is equal
to the economic value of Komodo National Park tourism, which is Rp 5,995,232,147,515.00. If the total
value is divided by the average number of komodo dragons during 2012 to 2016 as many as 2,841
individuals, then each individual komodo dragon has an economic value of Rp 2,110,254,188.00 per
individual in 2017.
3.8 Komodo National Park Tourism Contribution to the Local Revenue of West Manggarai Regency
Along with the development of Komodo National Park tourism, there was a significant increase in the
number of visitors and it showed a positive trend. The number of Komodo National Park tourist from
2012 to 2017 showed at below:
Figure 2. The number of Komodo National Park visitors during 2012-2017 (BTNK, 2018).
According to [8], Locally-Generated Revenue is a representation of the revenue that generated by the
region. Local governments must further optimize their local revenues so that they can finance regional
expenditures and do not hamper economic activities in the area concerned. One of the source of local
revenue comes from retribution, for example from the tourism sector.
In the Komodo National Park tourism management, there are two types of retribution that have to
paid by tourists, to Komodo National Park management as Pendapatan Nasional Bukan Pajak (Non-
Tax State Revenues) and to Dinas Pariwisata dan Kebudayaan (Department of Tourism and Culture)
that representing the local government of West Manggarai Regency. The amount of fees that tourists
2012 2013 2014 2015 2016 2017
foreign tourists 41972 54147 67089 76195 78617 75650
domestic tourists 8010 9654 13537 19215 29094 43949
0
20000
40000
60000
80000
100000
120000
140000
Number of Tourists
Year
Conference on Sustainability Science 2018
IOP Conf. Series: Earth and Environmental Science 306 (2019) 012001
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doi:10.1088/1755-1315/306/1/012001
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have to pay to the local government is Rp. 20,000.00/person for domestic tourists and Rp.
50,000.00/person for foreign tourists. The tourism contribution of the Komodo National Park to the
Locally-Generated Revenue of Manggarai Regency is showed below:
Table 6. Komodo National Park tourism contribution to Locally-Generated Revenue of West
Manggarai Regency.
Year
Retribution from
KNP Tourism (Rp)
Number of
Total
Retribution
(Rp)
Percentage of
KNP
Retribution To
Total
Retribution
Locally-
Generated
Revenue (Rp)
Percentage Of
KNP
Retribution to
Locally-
Generated
Revenue
2012
2,258,800,000
7,539,401,000
30%
25,751,468,000
9%
2013
2,900,430,000
9,855,020,000
29%
34,193,804,000
8%
2014
3,625,190,000
11,879,554,000
31%
51,499,162,000
7%
2015
4,194,050,000
8,232,921,000
51%
64,742,881,000
6%
2016
4,512,730,000
10,200,097,000
44%
91,068,686,000
5%
Source: Processed data (2018)
Komodo National Park tourism has a relatively large contribution to the original income of the West
Manggarai Regency. But the potency that calculated from the economic valuation of Komodo National
Park tourism is still far greater than the value that has been produced at this time. This means that there
is still a lot of potency that must be explored deeper and developed from Komodo National Park tourism
to achieve sustainable tourism utilization, especially by using an ecotourism approach. Managing
Komodo National Park with a mass tourism approach is indeed tempting and impressed to produce more
profits. But in mass tourism, the impact has never been calculated, including the future losses.
4. Conclusion
Based on the results and discussion, it can be concluded that: 1) The frequency of tourists visits (Y) is
significantly influenced by the costs that must be incurred by the respondent (X1) and the length of
travel time from the origin place of respondents to the tourism destination (X3), 2) The economic value
of Komodo National Park is Rp 5,995,232,147,515.00 in 2017. If it is divided by the average population
of komodo dragons from 2012 to 2016 (as many as 2,841 individuals), then the economic value of each
individual Komodo dragon is Rp 2,110,254,188.00 per individual in 2017, and 3) Komodo National
Park tourism has a relatively large contribution to the Locally-Generated Revenue of West Manggarai
Regency. Komodo National Park tourism contributed 44% in the retribution of Locally-Generated
Revenue and 5% in the Locally-Generated Revenue of West Manggarai Regency.
Acknowledgement
The author would like to thanks to Daning as my field partner and other friends to be share knowledge
without giving a distance. Dr. Achmad Sjarmidi and Dr. Yooce Yustiana as supervisor team who has
given a lot of guidance and advice. Dr. Angga Dwiartama and Dr. Ichsan as examiner team for many
corrections. Many thanks to Balai Taman Nasional Komodo and Badan Pusat Statistik (BPS) West
Manggarai Regency for the data and all help. And the last, lots of thanks to Biomanagement Department
of Institut Teknologi Bandung for provide recommendations and permission to conduct this research.
Conference on Sustainability Science 2018
IOP Conf. Series: Earth and Environmental Science 306 (2019) 012001
IOP Publishing
doi:10.1088/1755-1315/306/1/012001
9
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