1
Raising funds for protected area finance:
Using donations and/or entrance fees*
Francisco Alpízar, EfD CATIE, Costa RicaA
Peter Martinsson, University of Gothenburg, SwedenB
Anna Nordén, EfD CATIE, Costa Rica, and University of Gothenburg, SwedenC
Abstract
We use stated preferences to explore whether entrance fees and donations are alternative or
complementary strategies for raising funds for conservation. Results from a protected area in
Costa Rica show that establishing a small entrance fee does not reduce daily visits, and it is
rather a complementary strategy to allow for the possibility to donate. Still, although a mixed
system could increase funding for conservation, the key issue is the calibration of the mix, as
high entrance fees could lead to reduced income not only by lowering visitation rates but also by
crowding out voluntary donations.
JEL Classification: Q26, Q28.
Keywords: entrance fee; voluntary contribution; stated preferences; protected areas; Costa Rica.
* Acknowledgments: We gratefully acknowledge the financial support from Sida to the Environmental Economics Unit at the University of Gothenburg and to CATIE via the Environment for Development Initiative, the Swedish Research Council (Vetenskapsrådet), and the Jan Wallander and Tom Hedelius Foundation. A (Corresponding author) Environment for Development Center for Central America, CATIE, 7170 Turrialba, Costa Rica; Ph +506 2558-2215; Fax +506 2558-2625; E-mail [email protected] B Department of Economics, University of Gothenburg, Box 640, 405 30 Gothenburg, Sweden; Ph +46 31 786 52 55; Fax +46 31 786 10 43; E-mail [email protected] C Environment for Development Center for Central America, CATIE, 7170 Turrialba, Costa Rica, and Department of Economics, University of Gothenburg; Ph +506 2558-2379; Fax +506 2558-2625; E-mail [email protected]
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1. Introduction
All too frequently, important public goods such as national parks and cultural institutions (e.g.,
museums, opera houses) find themselves under financial pressure, making the search for an
optimal funding strategy a key component of management and policy decisions (e.g., Ferraro et
al. 2007, Gjertsen and Barrett 2004, and Pannell 2008). In the case of environmental
conservation, far too many protected areas around the globe are under financial pressure and lack
funding to cover even basic management and protection. The boom in tourism in general (World
Tourism Organization, UNWTO, 2011) and in ecotourism in particular (The International
Ecotourism Society, TIES, 2006) brings new challenges and opportunities for management of
protected areas. As far as threats, increased demand for visitation to protected areas means that
both human and financial resources are being increasingly diverted from maintenance, protection
and control to tourism management. As far as opportunities, increased visitation means new
opportunities to raise funds from visitors.
Entrance fees have been promoted as a successful strategy to raise money from tourism. It keeps
conservation from becoming a burden on public finances and also helps avoid the budgetary ups
and downs associated with government budgets. Based on standard price theory, entrance fees
are expected to have a directly negative effect on visitation. Assuming that tourists buy only
recreation when they visit a park, the size of this effect depends solely on the price elasticity of
recreation. Although estimated price elasticities of recreation are typically low (see Rosenberg
and Stanley 2010 for US and Canada, and Alpízar 2006, Chase et al. 1998, and Lindberg and
Aylward 1999 for Costa Rica), it is not surprising to find that local communities tend to prefer as
low of an entrance fee as possible, or none at all, as its been shown that they may gain indirect
economic benefits from high visitation rates. For example in developing countries, protected
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areas open to recreation have been shown to increase off-farm wages, boost average
consumption, and alleviate poverty in nearby locations (Robalino and Villalobos-Fiatt 2010,
Andam et al. 2010, Sims 2010, Mullan et al. 2010). This positive spillover on local community
has to be considered when looking for the optimal pricing of recreation in protected areas.
In this paper we use a stated preference approach to investigate people’s preferences for a mixed
funding strategy involving donations and entrance fees collected to raise funds for a protected
area. Within the stated preference framework, we also explore the potential effect of these
fundraising mechanisms on visitation rates. We use Cahuita National Park in Costa Rica as our
case study.
From a conceptual perspective, the introduction of a mixed payment system comprising
donations and a fixed entrance fee requires a better understanding of how those components
work together in affecting people’s behavior. In contradiction to neoclassical theory, people are
willing to make voluntary contributions to the provision of public goods. In the behavioral
economics literature, motives like altruism, warm-glow, self-image, and fairness, among others,
have been put forward as explanations (Andreoni 1995, 1989, Ellingsen and Johannesson 2008,
Fehr and Schmidt 2006). The behavioral economics literature provides support to the idea that
voluntary donations do not necessarily lead to reductions in utility, but can the same be said
about entrance fees? In the present study, this question entails exploring whether the net
marginal utilities from paying an entrance fee and from making a donation, both estimated in a
stated preference study, are negative when the money is used for on-site conservation.
Cahuita National Park is located on the southern Caribbean coast of Costa Rica, at the doorstep
to the town of Cahuita. It makes a good case study for at least three main reasons. First, entry to
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the protected area is free of charge and the park relies solely on donations. Hence the whole
relevant population of those interested in visiting the park, at all fee levels, is available when
sampling at the park. This avoids the potential sample selection bias that results from exploring
behavior for recreational activities that already charge a fee, in which case those not willing to
pay the current fee would be absent from the study population. By conducting our study in
Cahuita National Park, we are able to explore tourists’ preferences for entrance fees and
donations, as well as how length of stay is affected by increased entrance fees for the whole
population of potential visitors. Second, Cahuita National Park is co-managed with local
community members, who fear the establishment of a fee would lower visitation and hence
spending in the local town. This has resulted in permanent tension between the government
authority, who favors an entrance fee of 6 USD1, and the community, who wants no entrance
fees. Third, Cahuita National Park receives large amounts of international tourists (mostly from
Europe and USA), which allows us to generalize our results to the behavior of tourists in
general.2 These factors make Cahuita National Park not only appealing in terms of research
design, but also interesting from a policy perspective.
The rest of the paper is organized as follows. In the next section we describe our case study of
Cahuita National Park, which is followed by a section describing our survey and methods. In
Section 4 we present our results, and in the last section we summarize and conclude the paper.
2. Our case study
Cahuita National Park is one of the most frequently visited parks in Costa Rica with around
50,000 visitors per year from all over the world. The park has two entrances: the remote Sector
Puerto Vargas, which is administrated by the Costa Rican park authority (i.e., SINAC3) and
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where international visitors face a fixed entrance fee of 6 USD, and Sector Playa Blanca, which
is located at the doorstep to the town of Cahuita and receives 95% of all visitors, who pay no
entrance fee but are kindly invited to make a voluntary donation upon arrival and compulsory
registration. The economy of the town of Cahuita has today moved from one based on extractive
activities to one based fully on services supplied to tourists. In the 1990s, the park authority tried
to increase entrance fees for all parks in the country by up to 1,100% (Chase et al. 1998), a
remarkable number that is explained by the very low initial entrance fees. The suggested increase
in entrance fees was met with civil unrest that led to conflicts between the park authority and the
local communities. In the case of Cahuita, the local protests finally resulted in the community
taking control of the park, and government officials eventually left the area and reluctantly
accepted a co-management system funded by donations, which is maintained until this day
(Weitzner and Borrás 1999). However, tensions still remain, and the park authority has not
abandoned its hope of charging an entrance fee similar to all other parks. The local community,
on the other hand, is more interested in keeping the donation system to facilitate increased
visitation, thereby contributing to local revenues from lodging and dining in the area.
3. Design of study and method
Our research approach is based on the collection of personal interviews of visitors to Cahuita
National Park. The survey, including a stated preference study, consisted of several parts. First
there was a battery of socio-economic questions such as age and education, followed by a
number of questions related to the length of their visit and how much money they had spent in
the town of Cahuita. The stated preference part of the study started with a contingent behavior-
style question asking what their reaction would be in terms of length of stay in the town of
Cahuita and number of visits to Cahuita National Park if the entrance fee were 6 USD, which at
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the time of the study was the most common entrance fee for international visitors to other
national parks in Costa Rica. This was followed by a choice experiment exploring visitors’
preferences for a mixed payment system involving an entrance fee and a donation upon entering.
We also included attributes related to proposed improvements in the park, as planned by the park
authority for the future. A final section of the survey included several attitudinal questions,
including reasons for visiting the park and for donating or not donating upon entry.
In our choice experiment, each respondent made four repeated choices between two different
alternatives of how Cahuita National Park could look next time they visited the park. The
alternatives were described by four attributes: use of the revenues from recreation in Cahuita
National Park, information signs available, entrance fee, and donation. As mentioned above,
since we aim to obtain generally applicable results, the focus of this study is on international
visitors to Cahuita National Park. Moreover, since international visitors tend to stay more days
and spend more money in the town of Cahuita, they are also the primary focus of concern for the
co-management board.
Two key elements in any choice experiment are credibility and saliency of all attributes,
particularly for the price attribute. In our case, we faced a strong focal point in the value of the
entrance fee that most parks charged international visitors in Costa Rica: 6 USD. Focus groups
and discussions with the park authority made it clear that any claim of charging an entrance fee
higher than 6 USD would not be credible unless all other parks also increased their fees. In any
case, our task is not to estimate a demand equation for visits to Cahuita National Park, but rather
to explore the marginal utility of entrance fees and donations for the relevant range of both
attributes, which is then set from zero up to 6 USD. Table 1 summarizes the attributes and their
levels, and an example of a choice set is presented in Figure 1.
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Figure 1. Example of a choice set.
Characteristics Alternative 1 Alternative 2
Funds will be used for the overall maintenance of the park, community projects…
… and improved picnic huts and
tables for visitors
...and the construction of elevated trails to
allow access into the forest and towers to
observe wildlife
Information signs will be available…
...by the entrance there will be a
large sign board with a map
describing the park’s facilities
...by the entrance there will be a large sign board with a map
describing the park’s facilities, and
information signs about wildlife along the trail
Entrance fee of… 3 USD 1 USD
Your donation is… 1 USD 2 USD
Which alternative would you prefer?
Alternative 1 Alternative 2
Before the respondents were asked to answer the choice experiment, the enumerator read a
scenario (see Appendix 1). The survey and attributes were developed in cooperation with the
community and the park authority, and were then refined through several pilot studies. After
careful selection of the attributes and levels, we used a linear D-optimal design to create our
desired forty choice sets. The forty choice sets were blocked into ten groups, which were then
randomly allocated to the respondents. Moreover, each subject faced the four choice sets in the
block in random order to reduce potential order effects.
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The survey was given to international visitors who were walking along the only trail in the park
or were on the beach on a Tuesday-Saturday.4 The enumerators5 were carefully instructed to
select without following a discernible pattern, and we regularly controlled the representativeness
of the sample by comparing the sample (and subsamples by enumerators) to the population as
registered in the park’s registration book, which all visitors entering the park had to fill out (see
Table 2 Descriptive statistics). Moreover, the field supervisors were present in the park at all
times, and the quality of the field work was controlled through daily debriefings and frequent
monitoring.
Table 1. Attributes and attribute levels of the choice experiment.
Attributes Levels
Financing maintenance and community projects…
… and environmental education for the population of Cahuita
…. and improved picnic huts and tables for visitors
….and the construction of elevated trails to access the forest, including wildlife observation towers
Information signs available…
…by the entrance on a large poster (map) describing the park’s facilities
…by the entrance on a large poster (map) describing the park’s facilities, and information signs about wildlife along the trail
…by the entrance on a large poster (map) describing the park’s facilities, and in a free leaflet about wildlife
Entrance fee
0,1,2,3,4, and 6 USD
Donation 0,1,2,3,4, and 6 USD
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Discrete-Choice Analysis
We use a standard random utility approach, where individuals’ choices depend on the observed
variables in the survey as well as the unobserved variables, which are captured in the error term.
The respondents are assumed to consider the two alternatives offered in choice situation t and
then choose the park alternative that would give them the highest utility next time they visit the
park. At each choice situation t, we can express the utility of individual q from alternative i as
iqtiqtqiqt xU ,
where iqtx is the vector of observable variables including the attributes describing alternative i,
namely different uses of the revenues from recreation in Cahuita National Park, availability of
information signs, different levels of entrance fees and donations (including no fees and no
donations), and the socio-economic characteristic of the respondent. The vector of taste
parameters, q , will be the focus of our estimation and iqt is an error term representing the
unobservable factors or measurement errors. We apply a random parameter logit model in our
estimations since we expect heterogeneity in preferences among respondents (McFadden and
Train 2000). In this model, we do not know q and can hence not use the probability
conditional upon q . The unconditional probability that an individual q chooses any given
alternative in any given choice set is instead given by the integrals of the standard logit
probabilities over all possible values of
dfLP qq )()( ,
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where )(f is a density function allowing the parameter vector q to vary across individuals,
and )(qL is the conditional probability evaluated for any parameter . Since this integral in
general does not have closed forms, the probabilities are usually estimated through simulations.
By using Halton draws, a q was drawn from its distribution and the logit formula was
calculated from this draw. This procedure was repeated 500 times and the average of the result is
presented as the parameters of each attribute.
Since we expect visitors’ marginal (dis)utility of paying to enter the park to be heterogeneous,
we let both entrance fees and donations be random.6 Regarding the distribution, we argue for a
normal distribution. Following the discussion in the introduction, we believe that none of the
price attributes necessarily has an unequivocal sign: some people might not mind donating
money, and some people might not mind paying an entrance fee as they are presumably paying
for a good cause. Consequently, we use a normal distribution for both donations and entrance
fees.
Moreover, application of the random parameter logit model allows us to retrieve the individual
parameters of each respondent by using Bayes Theorem (e.g., Train 2003). To get a better
picture of the heterogeneity in the coefficients, i.e., of which types of utility are more and less
affected by donations and entrance fees, we also estimated an Ordinary Least Squares (OLS) on
the individual-specific estimated parameters, against attitudinal and socioeconomic
characteristics.
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4. Results
We interviewed 771 adults from a total population of 8,420 international visitors coming to
Cahuita National Park from the 3rd to the 20th of December 2007 and from the 8th of January to
the 15th of March 2008. Table 2 shows the descriptive statistics of all international visitors
visiting the park during the study period and of our selected sample. While the majority of the
interviewed visitors are Europeans and, in general, highly educated, there are visitors from all
over the world. A total of 74% of all international visitors entering the park through Sector Playa
Blanca made a donation (compared to 77% in our sample who stated that they gave a donation).
The average donation for the total population is 1.70 USD per person. We observed a slightly
higher stated average donation of 2.29 USD, which might be a result of some respondents stating
a group donation rather than a per person donation as entered in the registration book.
Conditional on a positive donation, the population mean is 2.22 USD per person. The average
daily expenditure in the town of Cahuita is 24 USD per person excluding accommodation and
donations to the park. Most of the international visitors (52%) planned to visit Cahuita National
Park more than once during their stay. As tourism is the main source of income, this pattern of
multiple visits by a single visitor is important for the development of the community.
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Table 2. Descriptive statistics on the population of international visitors and on our sample in Cahuita National Park.
International visitors
Information from registration book
Information from our survey
Observations/Respondents 8, 420 obs. 771 resp.
Country
USA/Canada 33% 33.5%
Latin America/Caribbean 8% 6.5%
Europe 57% 58%
Others 2% 2%
Male 48% 46%
Gave donation when entering the park 74% 77%
Average donation per person 1.70 USD 2.29 USD*
Average conditional donation per person 2.22 USD 3.08 USD*
Average age - 38 years
Education
University (with or without degree) - 78.5%
Main reason for visiting Cahuita National Park
Only beach - 28%
Only nature - 40%
Mix of both 32%
Average daily spending on other activities in Cahuita per person (not including accommodation)
- 24 USD
Plan to visit the park again - 52% * The donation as registered in the registration book was controlled to be a per person donation. The stated donation in the survey could be subject to some respondents not stating a per person donation (even though the survey asked for per person donation), which might be one valid explanation to the differences between average donations.
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In our econometric analyses of the choice experiment, we code the levels of each attribute using
a dummy variable approach, which allows us to describe utility changes at all levels of donations
and entrance fees without assuming a particular functional form. Our results from the random
parameter logit model, presented in Table 3,7 show that none of the donation levels appear to
enter the utility function as costs, i.e., no donation level actually reduces utility, supporting the
consistent finding that people do make voluntary contributions to public goods. Clearly for 4
USD or more, visitors derive no further utility from donating, given the insignificant results. In
practice then, one should not expect average donations in excess of 3 USD, which is not far from
the true observed average conditional donation of 2.22 USD observed at the time of the study.
Low entrance fees also seem to have a positive effect on the visitors’ utility of the park. The
coefficient for the dummy of an entrance fee at 1 USD is significantly positive, meaning that
compared to not paying at all, international visitors seem to gain utility from paying an entrance
fee of 1 USD. From 2 USD up to 4 USD we find negative but insignificant coefficients, meaning
that visitors do not seem to mind an entrance fee in that range. For our highest entrance fee of 6
USD, which is equal to the most common entrance fee at the time of the study (2007/2008) in
other national parks in Costa Rica, we find a significantly negative effect on utility.
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Table 3. Random parameter logit estimations (p-values in parentheses)
Mean Coefficient Coeff. Std.
Baseline Environmental Education
Dummy Financing picnic huts -2.012 (0.00) 2.044 (0.00)
Dummy Financing elevated trails - 0.538 (0.00) 1.432 (0.00)
Baseline Information at Entrance
Dummy Information at entrance and along trail 0.364 (0.00) 0.536 (0.00)
Dummy Information at entrance and free leaflet 0.052 (0.34) 0.584 (0.00)
Baseline No Donation
Dummy for donation of 1 USD 0.182 (0.05) 0.255 (0.01)
Dummy for donation of 2 USD 0.309 (0.00) 0.414 (0.00)
Dummy for donation of 3 USD 0.163 (0.07) 0.051 (0.59)
Dummy for donation of 4 USD 0.023 (0.81) 0.091 (0.37)
Dummy for donation of 6 USD 0.063 (0.51) 1.139 (0.00)
Baseline No Entrance Fee
Dummy for fee of 1 USD 0.157 (0.07) 1.316 (0.00)
Dummy for fee of 2 USD 0.065 (0.44) 0.514 (0.00)
Dummy for fee of 3 USD - 0.087 (0.35) 1.601 (0.00)
Dummy for fee of 4 USD -0.049 (0.58) 0.689 (0.00)
Dummy for fee of 6 USD - 0.550 (0.00) 0.603 (0.00)
Number of observations 3084
Number of respondents 771
Clearly these results require further explanations. A common assumption in microeconomic
theory is to assume non-satiation, i.e., that a consumer prefers more to less for all levels of the
good. This means that indifference curves must be thin, as thick indifference curves would
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violate local non-satiation. Translated into our context, this means that an individual should not
be indifferent between the levels of the fee attribute as that would imply thick indifference
curves. Although aware of this standard neoclassical prediction, we argue that previous findings
in the behavioral economics literature provide credibility to our result.8 As mentioned in the
introduction, substantial lab and field experimental evidence supports the idea that economic
agents do like to sacrifice own financial gains for the provision of public goods. This has been
found in the context of voluntary donations (see for example Alpizar et al. 2008). A preference
for cooperative behavior could also provide an explanation for the positive or indifferent
preferences for entrance fees of 4 USD or lower. In our survey, when asked about their motives
for donating upon entering the park, 61% of the visitors stated that they happily donated for
conserving nature.
A further explanation is based on the idea that humans have a preference for fairness, and the
context strongly shapes our evaluation of what is fair and what is not. A total of 64% of the
respondents had visited other national parks in Costa Rica and had paid an entrance fee of 6 USD
before coming to Cahuita National Park. The fact that a majority of the respondents are used to
paying entrance fees of 6 USD to enter national parks in Costa Rica might make them feel that
paying less than 6 USD is both good for them and fair to a park that currently charges no fee at
all. In a way, they are striking a good deal by paying an entrance fee below that level.9 To
explore this argument we ran the random parameter logit model dividing the sample into two
groups: those with and without previous experience of paying an entrance fee for entering a
national park in Costa Rica. The results, presented in Appendix 2, show that those who indicated
that Cahuita National Park was their first experience of national parks in Costa Rica are
generally less positive to donations and entrance fees.
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To check for heterogeneity, Table 3 also reports the coefficients of the standard deviations from
the mean coefficients. The results suggest that there is considerable heterogeneity in
respondents’ preferences for both entrance fees and donations, supporting our choice of the
random parameter logit model. The standard deviations of the coefficients of entrance fees are
highly significant at all levels while the same is only true for donations of 1, 2 and 6 USD. These
results open up for targeting of those who want to donate, without hurting those who do not, and
also for differentiated entrance fees. Nevertheless, such targeting requires a better understanding
of which socioeconomic characteristics actually explain the heterogeneity. To gain more
information we ran an Ordinary Least Squares (OLS) on the individual-specific estimates, which
were obtained from the random parameter logit estimates, against attitudinal and socioeconomic
characteristics. We find that for the donation coefficients, only the highly educated visitors are
significantly more positive to high donations, which is good news as the majority of visitors are
highly educated. We find no significant coefficients for country of origin, gender, age, or
purpose of visiting the park, making targeting on these variables not advisable. For entrance fees,
though, we find support for targeting at higher fee levels; see results for an entrance fee of 6
USD in Table 4 and for the other levels of both entrance fee and donation in Appendix 3.
Targeting depending on the purpose of visiting the park appears to be a good strategy, with
nature lovers being significantly happier to pay an entrance fee of 6 USD compared to beach
goers (who make up 28% of those visiting the park). We also find that visitors from Latin
American and the Caribbean tend to be more positive to a higher entrance fee than visitors from
USA and Canada, and more negative to a lower entrance fee (i.e., 2 USD), although building a
case for price discrimination based on this information seems difficult.
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Table 4. Ordinary Least Squares (OLS) of individual parameters for 6 USD entrance fee (p-values in parentheses)
Coefficient
Dependent Variable
Individual parameters for 6 USD entrance fee
Explanatory Variables
Region of origin (baseline USA & Canada)
Latin America & Caribbean 0.028 (0.09)
Europe 0.007 (0.39)
Other (Asia/Africa/Oceania) 0.036 (0.22)
Male -0.013 (0.10)
Age -0.000 (0.99)
Education
University education (with or without degree) 0.007 (0.44)
Main reason for visiting Cahuita National Park (baseline only nature)
Only beach -0.030 (0.00)
Mix of both -0.013 (0.16)
Constant -0.772 (0.00)
Number of observations 750
R-Squared 0.02
To facilitate further information about the effect on utility derived from a visit to the park, we
predicted the effect of introducing an entrance fee on the level of utility for different levels of
donations and keeping the levels of all other attributes fixed at their status quo. The key question
is whether a possible mix of entrance fee and donation is associated with disutility (i.e., a
negative numeraire value in the vertical axis). If a given mix leads to disutility, we should be
worried about reductions in visits, although our model does not allows us to directly predict the
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size of such an effect. In Figure 2, the continuous line shows the status quo level of utility, i.e.,
the level of utility according to our estimated model, in the absence of entrance fees. Utility
increases with higher donations and peaks at 2 USD, remaining positive even for larger
donations. Further, our simulations show that entrance fees of 3 USD or higher are associated
with lower utility and even disutility over part of the range of realistic donations compared to
status quo. Notably, entrance fees bring significant disutility only for 6 USD. On the contrary,
entrance fees of 1 and 2 USD marginally increase utility at all donation levels. This means that
visitors will derive little or no additional utility, nor will they suffer utility losses from
establishing a mixed system of entrance fees equal to or smaller than 2 USD and voluntary
donations. According to our results, the concern of the local community in our study case of an
entrance fee having a negative effect on donations and accordingly on visitation rates only seems
to be valid for entrance fees of 3 USD and beyond.
Figure 2. Predicted utility of a mixed payment system and different donation levels.
Finally, we turn to the question of the effect of entrance fees on visitation. As mentioned in
Section 3, our survey included questions regarding the visitor’s expected behavior in the
‐4
‐3,5
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‐2,5
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Donation in USD
Entrance fee 0 USD
Entrance fee 1 USD
Entrance fee 2 USD
Entrance fee 3 USD
Entrance fee 4 USD
Entrance fee 6 USD
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presence of an entrance fee of 6 USD. We believe that this fee level merited further attention
because of the alleged intention of the park authority to raise the entrance fee to this level. As
stated by the respondents, a fixed entrance fee of 6 USD would lower the number of days spent
in the town of Cahuita for 23% of the interviewees, and 52% would visit the park fewer times.
An entrance fee of 6 USD for international visitors not only decreases the probability of
choosing an alternative in the choice experiment, but might also reduce the number of days spent
in the town of Cahuita and the number of visits to the park.
In order to explore which type of visitor is expected to answer that they would reduce the
number of days spent in the town of Cahuita if faced with an entrance fee of 6 USD (a key
concern to the town´s service industry), we run a logit model (0=I would stay fewer days; 1= I
would stay the same number of days). The more salient features of the econometric model
(included in Appendix 410) are related to the main reason for visiting the park. Those interested
in visiting the park to do hiking and bird watching (we call them nature lovers) are less likely to
reduce their stay in the town of Cahuita. Yet those interested in visiting the park for the beach
and the attractions in the sun are more prone to leaving the town earlier if faced with high
entrance fees. This result is expected as there are more substitutes for the beach activities nearby.
4. Conclusions and policy advice
Securing sustainable funding sources for protected areas has high priority in both global and
national conservation agendas, and the establishment of entrance fees for recreation is regarded
as a key component of any successful strategy aimed at reducing the burden of conservation
efforts on public funds. On the other hand, local communities that are highly dependent on the
tourism service sector have raised concerns about the potentially negative effect of entrance fees
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on visitation. In the park studied here, Cahuita National Park in Costa Rica, this concern resulted
in the abandonment of entrance fees in favor of voluntary donations.
In this paper we showed that small entrance fees, when suitably designed to fit the context in
which they will be implemented, rather serve as a fair outlet for peoples willingness to
contribute, and hence do have a potential to raise revenues for conservation without jeopardizing
visitation rates. In the case of Cahuita National Park, entrance fees lower than or equal to 2 USD
are apparently perceived as a contribution to the funding of nature conservation, or maybe as a
good deal from which utility is derived, given that entrance fees are lower than previous
experiences in other parks.
We are certainly aware that the positive or insignificant estimated coefficients associated with
lower levels of entrance fees are in contradiction to the standard neoclassical prediction that
monetary disbursements lead to reduced utility. Substantial evidence in the behavioral economics
literature points to the fact that people do like to contribute to the provision of public goods,
meaning that money contributed to a good cause is not necessarily associated, in the net, with
disutility. The motives for prosocial behavior11 are still widely discussed, but most authors agree
on a combination of intrinsic motivations (e.g., if utility is obtained from the success of a good
cause) and the search for improved social status and self-image (Andreoni 1995, 1989, Ellingsen
and Johannesson 2008, Charness and Dufwenberg 2006).
A second relevant finding in the behavioral economics literature is a preference for fairness.
Using very different research strategies (e.g., public goods experiments, dictator games, revealed
behavior), authors have shown that economic agents are willing to forgo private financial gains if
these are the product of an unfair situation or an unequal allocation of initial endowments (e.g.,
21
Fehr and Schmidt 2006). Following these findings, the question is whether 1 or 2 or 3 USD is a
fair price for a full day of spectacular sceneries when considering similar recreational facilities
that require an entrance fee (say national parks in Europe or the U.S., amusement parks, and art
exhibitions).
Finally, another important result in behavioral economics is that context matters. Going back to
fairness for example, authors have shown that the perception of what is fair depends a lot on the
context. In our context, since a majority of the respondents are used to paying entrance fees of 6
USD to enter national parks in Costa Rica, paying a much smaller entrance fee to enter Cahuita
National Park could make them gain utility from striking a good deal (for an example from the
housing market see Simonsohn and Loewenstein 2006).
Our aim is not to produce a definite explanation for our findings; whatever the explanation
though, it is clear that for the case of Cahuita National Park, neither the park authority nor the
local community should object to the establishment of low entrance fees since their effect on
visitation rates seems minor. Future studies should look deeper into the triggering factors
associated with deriving positive or non-negative utility from paying small fees to enjoy
activities associated with a good cause.
Our argument in favor of a mixed fundraising system is also based on the strong observed
heterogeneity in preferences for entrance fees, meaning that it makes sense to establish low
entrance fees to deal with potential free-riders, and allowing for voluntary donations from those
who are more prosocially oriented. Further, our estimations even provide inputs for
differentiating entrance fees, for example based on reasons for visiting the park.
Despite the small donations per visitor discussed here, it is important to stress that on average,
22
Cahuita National Park receives approximately 50,000 visitors per year, who on average donate
1.70 USD. Hence, each year the park has a budget of approximately 85,000 USD. An entrance
fee of for example 1 USD, which according to our results is predicted to leave visitation
unaffected, means an almost 60% increase in the park´s budget, a large increase from every
perspective. Small budgets for appropriate management and protection are the rule for most
conservation projects worldwide, and our study calls for exploration of these potentially “low
hanging fruit” sources of funding.
Still, the key to these “low hanging fruit” opportunities is in the detail. This is a particularly
sensitive issue since success depends on the motivations for prosocial behavior among visitors to
the park. Introducing a mixed payment system would demand a rigorous study of what is an
appropriate entrance fee, so as not to risk a negative effect on visitation rates and/or crowding
out donations.
23
APPENDIX 1 - Scenario
Thank you. Let’s continue with the next part. In order to make sure that we can provide you with the best experience in Cahuita, I will ask you to do four evaluations. Here is an example of one such evaluation.
(GIVE THE RESPONDENT THE EXAMPLE CARD. PLEASE POINT AT THE EXAMPLE WHEN YOU DESCRIBE THE FOLLOWING.)
Each card will have two different alternatives. Each alternative describes how Cahuita National Park could look the next time you visit. For each card, your task is to choose the alternative that you prefer. Either alternative one or alternative
two. The alternatives are described by four different characteristics. (POINT AT THE EXAMPLE CARD) The characteristics and the different levels are explained on this card. (TURN THE EXAMPLE CARD) On each card you will always find these four characteristics, but you will only find one of these levels in an
alternative (POINT AT THE LEVELS). So, only the levels will change. The alternatives will not differ in any other aspect than those shown on the card Please read them carefully.(GIVE THEM TIME TO READ)
Do you have any questions?
Let´s go back to the example card. As you can see here (POINT AT THE EXAMPLE):
Alternative one will fund improved picnic huts and tables for visitors while Alternative two will fund the construction of elevated trails to allow access into the forest and towers to observe wildlife.
In Alternative one there will be a large sign board with a map by the entrance describing the park’s facilities, while in Alternative two there will also be information signs about wildlife along the trail.
In Alternative one the entrance fee is 3USD and your donation is assumed to be 1 USD, and Alternative two has an entrance fee of 1 USD and your donation is assumed to be 2 USD.
Imagine that each alternative describes how Cahuita national park could look the next time you visit. Please look at each alternative and tell me which one you prefer. Take your time!
(MARK THE ALTERNATIVE THAT THE RESPONDENT PREFERRED ON THE EXAMPLE CARD)
ALTERNATIVE 1
ALTERNATIVE 2
Please turn back to the explanation of characteristics and let’s continue.
(SHOW ONE CHOICE-SET CARD AT A TIME)
24
APPENDIX 2
Table A. Random parameter logit estimations for those who indicated that Cahuita National Park was their first experience of national parks in Costa Rica (p-values in parentheses)
Mean Coefficient Coeff. Std.
Baseline Environmental Education
Dummy Financing picnic huts - 2.004 (0.00) 1.925 (0.00)
Dummy Financing elevated trails - 0.458 (0.00) 1.500 (0.00)
Baseline Information at Entrance
Dummy Information at entrance and along trail 0.337 (0.00) 0.597 (0.00)
Dummy Information at entrance and free leaflet - 0.002 (0.98) 0.879 (0.00)
Baseline No Donation
Dummy for donation of 1 USD 0.029 (0.86) 0.516 (0.00)
Dummy for donation of 2 USD - 0.122 (0.46) 0.235 (0.16)
Dummy for donation of 3 USD 0.134 (0.41) 1.091 (0.00)
Dummy for donation of 4 USD - 0.300 (0.09) 0.059 (0.75)
Dummy for donation of 6 USD - 0.180 (0.29) 0.061 (0.72)
Baseline No Entrance Fee
Dummy for fee of 1 USD - 0.026 (0.86) 1.375 (0.00)
Dummy for fee of 2 USD 0.059 (0.68) 1.588 (0.00)
Dummy for fee of 3 USD - 0.278 (0.08) 1.917 (0.00)
Dummy for fee of 4 USD - 0.073 (0.64) 0.380 (0.04)
Dummy for fee of 6 USD - 0.664 (0.00) 1.306 (0.00)
Number of observations 1100 obs.
Number of respondents 275 resp.
25
APPENDIX 3
Table B1. Ordinary Least Squares (OLS) of individual parameters at each entrance fee level (entrance fee of 6 USD is also presented in Table 4 in the paper) (p-values in parentheses)
Coefficients
Dependent Variable Entrance fee 1 USD Entrance fee 2 USD Entrance fee 3 USD Entrance fee 4 USD Entrance fee 6 USD
Explanatory Variables
Region of origin (baseline USA & Canada)
Latin America & Caribbean -0.062 (0.404) -0.042 (0.003) 0.137 (0.192) -0.015 (0.494) 0.028 (0.091)
Europe 0.019 (0.610) -0.015 (0.037) 0.063 (0.230) -0.005 (0.636) 0.007 (0.391)
Other (Asia/Africa/Oceania) -0.046 (0.728) -0.063 (0.013) 0.195 (0.297) 0.047 (0.243) 0.036 (0.217)
Male 0.060 (0.083) 0.003 (0.607) -0.080 (0.102) 0.002 (0.830) -0.013 (0.102)
Age -0.000 (0.721) -0.000 (0.844) -0.003 (0.141) -0.000 (0.605) -0.000 (0.989)
Education
University education (with or without degree) 0.051 (0.216) 0.000 (0.979) -0.075 (0.197) 0.017 (0.175) 0.007 (0.440)
Main reason for visiting Cahuita National Park (baseline only nature)
Only beach 0.070 (0.102) -0.005 (0.545) 0.040 (0.499) 0.009 (0.491) -0.030 (0.002)
Mix of both 0.000 (0.993) -0.003 (0.695) 0.019 (0.746) 0.020 (0.111) -0.013 (0.163)
Constant 0.142 (0.056) 0.109 (0.000) 0.001 (0.990) -0.083 (0.000) -0.772 (0.000)
Number of observations 750 750 750 750 750
R-Squared 0.012 0.020 0.016 0.009 0.024
26
Table B2. Ordinary Least Squares (OLS) of individual parameters at each donation level (p-values in parentheses)
Coefficients
Dependent Variable Donation 1 USD Donation 2 USD Donation 3 USD Donation 4 USD Donation 6 USD
Explanatory Variables
Region of origin (baseline USA & Canada)
Latin America & Caribbean 0.003 (0.445) 0.003 (0.738) 0.001 (0.293) 0.000 (0.746) -0.074 (0.186)
Europe -0.002 (0.336) 0.005 (0.284) -0.000 (0.386) -0.000 (0.941) 0.033 (0.232)
Other (Asia/Africa/Oceania) -0.005 (0.454) -0.002 (0.896) 0.001 (0.226) 0.002 (0.264) 0.067 (0.499)
Male 0.001 (0.622) 0.001 (0.846) -0.000 (0.666) 0.000 (0.832) 0.040 (0.122)
Age 0.000 (0.870) 0.000 (0.573) 0.000 (0.458) 0.000 (0.340) -0.000 (0.720)
Education
University education (with or without degree) -0.003 (0.213) -0.003 (0.557) 0.000 (0.108) 0.000 (0.779) 0.067 (0.032)
Main reason for visiting Cahuita National Park (baseline only nature)
Only beach -0.003 (0.254) 0.009 (0.075) -0.000 (0.146) -0.000 (0.700) -0.013 (0.677)
Mix of both -0.001 (0.676) 0.005 (0.289) 0.000 (0.337) 0.000 (0.635) 0.002 (0.948)
Constant 0.261 (0.000) 0.427 (0.000) 0.231 (0.000) 0.031 (0.000) 0.022 (0.686)
Number of observations 750 750 750 750 750
R-Squared 0.007 0.007 0.019 0.004 0.016
27
APPENDIX 4
Table C. Logit estimated on which types of visitors are expected to answer that they would stay the same number of days in the town of Cahuita if faced with an entrance fee of 6 USD (p-values in parentheses).
Coefficient
Dependent Variable
Dummy for reaction to an entrance fee of 6 USD (1=I would stay the same number of days; 0= I would stay fewer days)
Explanatory Variables
Region of origin (baseline USA & Canada)
Latin America & Caribbean 0.066 (0.87)
Europe 0.305 (0.13)
Other (Asia/Africa/Oceania) -0.564 (0.40)
Male -0.035 (0.86)
Age -0.009 (0.23)
Education
University education (with or without degree) 0.226 (0.32)
Spending on other activities in Cahuita per day per person (not including accommodation) 0.010 (0.13)
Previously visited other national parks in Costa Rica before Cahuita National Park -0.087 (0.66)
Main reason for visiting Cahuita National Park (baseline Only nature)
Only beach -1.066 (0.00)
Beach and nature -0.788 (0.00)
Constant 1.614 (0.00)
Number of observations 662 obs.
Pseudo R2 0.042
28
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1 6 USD was the most common entrance fee for international visitors to national parks in Costa Rica in 2007/2008 when the study was conducted. 2 For this reason, we chose to focus on international visitors to Cahuita National Park only. Moreover, previous studies (e.g., Hearne and Salinas 2002 and Chase et al. 1998) show that resident and international visitors have very different preferences for recreation in protected areas, and should be treated as separate populations. 3 The National System of Conservation Areas of Costa Rica (SINAC; Sistema Nacional de Areas de Conservación) branching from the Ministry of Environment, Energy and Telecommunication (MINAET). 4 We excluded Sundays from the sample since a large fraction of visitors on this day are local residents living in the town of Cahuita. Mondays was a low visitation day which was then used for preparation of materials and data coding. 5 In order to ensure the quality of the field work, we implemented a highly ambitious training and supervision program (see excellent advice on this topic in Whittington 2002). Enumerators went through a thorough two-week training program, where they were instructed and guided on how to conduct interviews. The training also included understanding of the method of choice experiment and the importance of their role as enumerators in the research process. 6 An argument in favor of keeping the price parameters fixed is to facilitate calculation of marginal substitution rates and marginal willingness to pay, which is not of interest in our case. 7 Table 3 also shows the coefficients of the attributes describing different improvements to the park. In general, visitors are significantly positive to the provision of information along the trails. The insignificant result for distributing a leaflet indicates that visitors can not be rationally expected to voluntarily pay for the additional cost connected with printing the leaflet since they do not seem to derive any additional utility from it. Further, international visitors derive disutility from financing improvements such as picnic huts and elevated trails inside the park, and instead favor financing environmental education projects in the community. 8 At this stage it is important to stress again that our intention is not to estimate a demand curve for Cahuita National Park, in which case we could be accused of having too small fees in our monetary attributes. Instead, our aim is to explore whether the fees in the relevant range of 0 to 6 USD are regarded as true costs or not. 9 This idea is also related to the concept of transaction utility (Thaler 1985, 1999), where individuals are not only assumed to gain utility from consumption but also from striking a good deal. 10 Included variables are region of origin, gender, age, education level, spending on other activities, experience, and main reason for visiting the park. The number of observations is 662 and the model´s pseudo is R2 = 0.042. 11 In this paper we use the term prosocial behavior to denote individual actions that favor social outcomes, and that in doing so go beyond selfish financial interests.