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Presentation TCM

The document assesses the recreation use value of Wondo Genet, a prominent nature-based recreation site in Ethiopia, highlighting its attractions and the ecological impacts from land conversion and illegal activities. Using the travel cost method, the study estimates the site's total economic benefit at approximately $63,240 per year, suggesting that development is economically viable if investment costs are lower than this value. The analysis includes detailed calculations of travel costs and visitor data to construct a demand curve for the site.

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Kassahun Solomon
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86 views17 pages

Presentation TCM

The document assesses the recreation use value of Wondo Genet, a prominent nature-based recreation site in Ethiopia, highlighting its attractions and the ecological impacts from land conversion and illegal activities. Using the travel cost method, the study estimates the site's total economic benefit at approximately $63,240 per year, suggesting that development is economically viable if investment costs are lower than this value. The analysis includes detailed calculations of travel costs and visitor data to construct a demand curve for the site.

Uploaded by

Kassahun Solomon
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Recreation Use Value of WondoGenet-Ethiopia

By: Solomon and Negasi

INTRODUCTION
Wondo Genet is one of the most well-known naturebased recreation sites in Ethiopia. The main attractions of the site includes: the hot spring water for bathing and swimming; the forested landscape, streams, birds and other wildlife in the surrounding and the cafeteria, bar and bedroom services

Cont Over the past decades, considerable conversion of the natural ecosystem into other land uses mainly: to agriculture, settlement and plantation has occurred and recurrent occurrences of fire and illegal overexploitation of timber has been going on in the sub-catchment, where the recreation site is part of the area suffered by the impacts.

Objective

The primary objective of this study was to estimate the recreation use value of the site

Method of Estimation

vTo estimate the economic value of the recreation site, travel cost method (TCM) is applied. vThere are several ways to approach the problem, but we used a simple zonal travel cost approach.

Cont vThe basic premise of the travel cost method is that the time and travel cost expenses that people incur to visit a site represent the price of access to the site We need to calculate the cost of
Traveling to the park (explicit cost) Time spent traveling (implicit cost) Then we estimate a demand function and determine the benefits associated with the area

Cont
vHow can we calculate the cost of traveling to the site? Determine how far people must travel Determine an average cost per km Travel Cost = Cost ($) /km * Distance (km)

Cont vHow do we determine the cost of time spent traveling?

Individuals opportunity cost of time is approximately equal to their wage Cost of time spent traveling = travel time * wage

Zonal Travel Cost Method)


Assume that we have records of the number of visitors from each zip code:

Cont

Assume travel cost is $0.50/km and average wages are $0.2/min


Zone Round Trip Travel Round Trip Travel Distance(km) Time (minute) Cost of Travel Distance ($) Cost of Travel Time ($) Total Travel Cost ($)

A B C D E

0 20 40 60 80

0 30 60 90 120

0 10 20 30 40

0 6 12 18 24

0 16 32 48 64

Cont Regressing the number of visits as a function of the cost (proxy for price) we get: V = -3.468 * C + 248 Using our cost data and adding different values for an entrance fee, we can construct a demand curve

The Area under the curve can be calculated by various methods. We have tried to fit the curve using logarithmic function and integrated over the range.

Cont

Therefore, total economic benefit of the site is, $63240 /year.

ALTERNATIVE METHOD OF AREA CALCULATION

Total Visitors/year, X 3000 2480 2046 1699 1352 1047 839 631 433 329 225 121 80 45 5 0

Entrance fee, F ($) 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 Total

A=[Xn- Xn+1 ]* [ Fn+Fn+1 ]/2 1300.00 3255.00 4337.50 6064.66 6872.58 5720.00 6760.00 7425.00 4420.00 4940.00 5460.00 2357.50 2187.50 2700.00 362.50 0.00 $64,162.24

Conclusion
If we assume the investment cost is less than $63240 per year, then it is economical to develop the site. If not we have to decide whether other factors make them worthwhile.

Thankyouforyour Attention

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