An Examination Of The Economic Value And Recreation Demand Of The Belum-Temengor Rainforest Complex
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Date
2015-08
Authors
Gwee, Sai Ling
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Abstract
The Belum-Temengor Rainforest Complex (BTRC) is one of the largest forest reserves in the world. It is rich in biodiversity and has great potential for ecotourism in Malaysia. However, the ecotourism industry at BTRC is currently facing serious challenges arising from poaching and logging activities. To date, no research has been conducted to estimate the economic values of ecotourism at BTRC. This is relevant in order to guide policymakers in developing policies towards the protection of the forest reserve. This study highlights the economic benefits that can be derived from protecting BTRC in comparison to the returns from poaching and logging activities. Data is obtained from a primary on-site survey of 367 visitors to the recreational site. The direct non-consumptive use value of ecotourism visitors is estimated based on a modified individual Travel Cost Method (TCM). These values are estimated using the Truncated Poisson (TPOIS) count data model as the dependent variable used to measure recreation demand is the non-negative integer of number of nights spent at the location. The hyperbolic discounting method is also used to estimate future values of ecotourism based on 30-, 50-, and 100-years projection into the future. Additionally, the various price, cross-price, and income elasticities of demand are enumerated, along with identification of the socio-demographic factors associated with ecotourism demand at BTRC. Results from the study indicate that the average nightly opportunity time cost of visitors who incur and do not incur income losses during the BTRC visit is RM427.92 and RM60.64,respectively. The willingness to pay (WTP) and consumer surplus per visit to BTRC are RM586.49 and RM652.58, respectively. This yields an annual direct non-consumptive use value of RM14.67 million among BTRC ecotourism visitors. The future cash flow of ecotourism at BTRC is estimated to be RM0.61 billion, RM0.97 billion and RM1.86 billion for the next 30-, 50-, and 100-years, respectively. The price, cross-price, and income elasticities of demand are computed as –0.60, 0.42, and 0.07, respectively, thus suggesting that BTRC ecotourism is price inelastic, a weak substitute, and a normal good. Last, the variables visitors’ on-site travel cost, alternative-site travel cost, average daily income, ethnicity (Malay), and gender (Male) are significantly associated with recreation demand at BTRC. Policy recommendations arising from results of this study include an immediate halt to the poaching and logging activities to prevent vast losses in annual income to the ecotourism industry and changes in pricing strategies of related products at the recreational site. Other suggested guidelines include specific market penetration/expansion strategies targeted at non-Malay, and non-single visitors.
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Social sciences