Lexington, Virginia • July 27, 2010
How much value do beachgoers place on protecting the environment of the beaches they visit?
According to a new study published by Washington and Lee University economist James F. Casey, tourists visiting the Riviera Maya region of Mexico's Yucatan Peninsula indicate a willingness to pay as much as $55 per visit to a coral protection fund.
The study, published in the May 2010 edition of the Journal of Sustainable Tourism and co-authored by Christopher Brown ‘06, has implications not only for beaches in Mexico but elsewhere and, adds Casey, also points to issues involved in the BP oil spill as well.
"In environmental economics, we are dealing with non-market goods and services, which are not bought or sold directly. So the price associated with these goods and services is zero," said Casey. "What we attempt to figure out is how people value these goods and services and then ask if we could put a price tag on them."
Data for the new study was collected by Casey and Washington and Lee undergraduates who traveled to the village of Akumal on the Riviera Maya in May 2005 as part of a Spring Term course in applied environmental economics.
The eight students conducted face-to-face interviews with tourists who were using the beaches. Altogether, nearly 400 interviews were completed.
"We theorized that there would be some willingness to pay to protect the coral reef ecosystem," said Casey. "Not only do the coral reefs protect the beaches from tidal surges and provide habitat for all sorts of species, many tourists are there specifically to go scuba diving or snorkeling.
"We thought that a well-designed survey would elicit close to the amount that they would pay to keep the ecosystem healthy so that they - or their children - could continue to come there and enjoy the beaches."
Respondents to Casey's survey indicate that, on average, they would be willing to pay between $40 to $50 each time they visited. This is in addition to the payments they have already made for their vacation.
As Casey concluded in the paper, "With approximately five million visitors passing through Cancun International Airport each year, this suggests that it may be possible to collect between $100 and $400 million annually for coral reef management programs." He added that even a conservative estimate of willingness to pay a $20 fee could mean $50 million.
"If someone is spending $2,000 a week to vacation there, the extra $50 is not a large component," said Casey. "But the big thing is that people want to be guaranteed that the money is actually going to go directly to preserving the coral reef."
On the other hand, Casey noted that the introduction of such fees cannot be seen in isolation since people do make decisions based on price.
"We are doing a separate study in Barbados where the minister of tourism is interested in knowing how much they can collect to finance environmental conservation before tourists will decide to go someplace else," he said. "There are many places where you could go and if, for instance, Cancun's additional fees make it twice the price of Barbados, people will choose Barbados."
When offered choices of how the money would be collected, many indicated that they would prefer it be included in an airline fee so that they would never know it was there.
"That seemed a bit odd to me since you might expect that they would want the fee to be transparent," said Casey.
In terms of the study's relationship to the BP spill in beaches in Pensacola, Fla., Casey said that the general public tends to confuse economic impact and economic value. Economic impact is the direct loss of jobs or of entire industries such as shrimping, which were part of the economy.
"But that is only part of the entire value of the environment," he said. "We can look at the Gulf Coast and say that the industries were dependent upon the health of the Gulf. That's the economic impact.
"Beyond that, there are people all over the United States who feel that something has been lost because of the disaster and are affected emotionally. That is a real change in their well being. Some might argue with me over that, but in the realm of environmental economics, we would say that those are real costs that people are bearing - whether it's psychological or that they change their behavior by not vacationing on Pensacola beach."
Beyond that, Casey said the implications of having marine species harmed by the spill and the cleanup effort is a matter not only of morality but has real economic consequences in terms of the value people have for these species.
In particular, Casey pointed to sea turtles that tend to be highly valued. Research that he has conducted in Barbados has demonstrated that people, for whatever reason, place a very high value on sea turtles.
"Once this whole issue with the BP spill gets to court, the role of these non-market values that we have been attempting to determine through our study will be important," said Casey. "After the Exxon Valdes, it was accepted that these non-market values would be included in determining the natural resource damage assessments."