Estimating the recreational value of Pakistan's largest freshwater lake to support sustainable tourism management using a travel cost model
Faculty / School
Faculty of Business Administration (FBA)
Department of Economics
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Journal of Sustainable Tourism
Keenjhar Lake, Pakistan's largest freshwater lake and an important Ramsar site, provides habitat for internationally important water birds. Annually, 385,000 people visit the lake. The lake is threatened by a variety of causes, including industrial and agricultural pollution. To support its sustainable management and conservation, the lake's recreational value is estimated using an individual travel cost model. Randomly selected visitors are interviewed during peak season about their recreational travel behavior and perception of lake conditions. Key issues in travel cost modeling are addressed, including the opportunity cost of time, group travel, substitution and income effects, and endogenous stratification and truncation due to on-site sampling. Poisson and negative binomial regression models produce similar results. We find significant over-dispersion, and therefore, use the more conservative truncated negative binomial model results to estimate consumer surplus. The value of this assessment method for resource managers is illustrated by comparing the consumer surplus with existing pricing and budgeting mechanisms. The annual flow of benefits from lake recreation appears to be almost 50 times higher than the average entrance fee paid by the predominantly higher-income segments visiting the lake, suggesting scope for increasing fees and reallocating government budgets to finance the necessary lake protection measures.
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Mangan, T., Brouwer, R., Lohano, H. D., & Nangraj, G. M. (2013). Estimating the recreational value of Pakistan's largest freshwater lake to support sustainable tourism management using a travel cost model. Journal of Sustainable Tourism, 21 (3), 473-486. Retrieved from https://ir.iba.edu.pk/faculty-research-articles/70