ARTICLE IN PRESS

Tourism Management 29 (2008) 1122–1130

www.elsevier.com/locate/tourman

A contingent valuation study of scuba diving benefits: Case study in Mu

Ko Similan Marine National Park, Thailand
John Asafu-Adjayea,, Sorada Tapsuwanb
a
School of Economics, The University of Queensland, Brisbane, Queensland Q4072, Australia
b
Commonwealth Scientific and Industrial Research Organisation, Perth, Western Australia
Received 5 April 2007; accepted 3 February 2008

Abstract

Coral reefs, a major source of marine tourism, are under threat worldwide due to human activities. There is an urgent need for
information that could be used to promote efficient marine park management. In this study the economic benefits associated with scuba
diving in Mu Ko Similan Marine National Park, Thailand, is estimated using a single- and double-bounded dichotomous choice
contingent valuation survey design. The results indicate that divers are willing to pay about US$27.07–62.64 per person per annum on
average, resulting in aggregate benefits of between US$932,940 and US$2.1 million per annum. The present value of these aggregate
benefits ranges between US$31 and US$71 million, using a social discount rate of 3%. The policy implications for park management are
discussed.
r 2008 Elsevier Ltd. All rights reserved.

Keywords: Ecotourism; Marine protected areas; Scuba diving; Contingent valuation method; Dichotomous choice

1. Introduction pollution. Global warming, a direct result of human

Around the world today, tourism is emerging as a
growth industry. One aspect of tourism which is making a
significant contribution to the global economy is marine
tourism or ecotourism. Orams (1999) defines marine
tourism as recreational activities that involve travel away
from one’s place of residence and which have as their host
or focus the marine environment.1 Coral reefs are a major
source of attraction for marine-based activities such as
scuba diving and snorkeling. In addition to providing
aesthetic beauty and habitat for numerous marine species,
coral reefs provide valuable ecosystem services such as
coastal protection, provision of genetic resources, and
pharmaceuticals. Unfortunately, coral reefs around the
world now face considerable threats from human activities
such as mining, construction, over fishing, and water
Corresponding author. Tel.: +61 7 3365 6539; fax: +61 7 3365 7299.
E-mail address: j.asafu-adjaye@economics.uq.edu.au
(J. Asafu-Adjaye).
1 2
The marine environment can be defined as those waters which are
saline and tide-affected.
activities, also poses a significant threat. Globally, coastal
reefs are declining at an alarming rate. It is estimated that
about 10% of all coral reefs are degraded beyond recovery,
while about 30% are in critical condition and may die
within 10–20 years (CoRIS, 2005). Ecologists predict that
at the current rate of degradation, 60% of the world’s coral
reefs may die by 2050 (CoRIS, 2005). Coral reefs in
Southeast Asia, where the most species-rich ecosystems can
be found, face the most severe threats. It is estimated that
80% of these reefs are under high or medium risk (Bryant,
Burke, McManus, & Spalding, 1998).
Marine tourism presents a policy dilemma because it has
both positive and negative impacts on society. On the one
hand, it generates significant incomes for regional and
national economies. However, on the other hand, it
contributes to the destruction of valuable marine resources.
In the last three decades, a number of approaches for
managing marine resources have been proposed. One of
these is the creation of marine protected areas (MPAs).2
An MPA may be defined as any area of the marine environment that
has been given special status in order to provide lasting protection on part

0261-5177/$ - see front matter r 2008 Elsevier Ltd. All rights reserved.
doi:10.1016/j.tourman.2008.02.005
 ARTICLE IN PRESS
J. Asafu-Adjaye, S. Tapsuwan / Tourism Management 29 (2008) 1122–1130 1123

Table 1
A selection of marine park valuation studies

Author Methodology Willingness-to-pay Location Purpose of valuation

Sloan (1987) CVM US$27/person/day (total visitor Heron Island, Great Barrier Reef, WTP for recreation
nights ¼ 39,276) Australia
Dixon et al. CVM US$17.40/diver/year Bonaire Marine Park, Caribbean WTP to maintain dive quality
(1995)
Arin and Exploratory US$3.70/diver/day Anilo Marine Sanctuary, the WTP for entrance fees to
Kramer (2002) CVM Phillipines marine sanctuaries where
US$5.50/diver/day Mactan Island Marine Sanctuary, fishing was prohibited
the Phillipines
US$3.40/diver/day Alona Beach Marine Sanctuary,
the Phillipines
Park et al. (2002) Combined US$49.52/diver/yr Florida Keys WTP for snorkelling trip
revealed and
stated preference
White, Vogt and N/A U$2400–8000, 600–1000 persons Philippines WTP to visit coral reef
Arin (2000)
Seenprachawong CVM and TCM CVM: US$7.16/diver/yr Phi Phi Island Marine National CVM: WTP to a trust fund
(2003) Park, Thailand specifically to restore coral
reef condition from 75% to
100% abundance
TCM: $789.5/person/trip TCM: Consumer surplus per
trip

MPAs have been acknowledged in several international
agreements (e.g. Agenda 21, Convention on Biological
Diversity, 1992; United Nations Conference for Economic
Development (UNCED), 1993) as a priority mechanism
for the sustainable development of coastal and marine
resources.
A few studies have addressed the ‘user-pay’ issue by
proposing appropriate user fees for diving (Arin &
Kramer, 2002; Davis & Tisdell, 1997; Dixon, Scura, &
Hof, 1995; Sloan, 1987). These studies have valued marine
resources, with particular reference to coral reef quality
(except for Davis and Tisdell (1997), which valued dive
experience with whale sharks) using a number of non-
market valuation techniques. Table 1 presents a selection
of studies that have used diving fees or diving costs as a
proxy for the value of MPAs and other well-known dive
sites.
A recent study which is closely related to the current one
is that of Seenprachawong (2003) who used the contingent
valuation method (CVM) and TCM to estimate the
willingness-to-pay (WTP) for improved coral reef abun-
dance and consumer surplus for visits to Phi Phi Marine
National Park, Thailand. His estimates for mean WTP
were US$17.15 for overseas tourists and US$7.17 for Thai
tourists. The estimated economic value of visits to Phi Phi
Marine National Park was US$1.387 million.
Most MPAs charge an entrance fee for visits. However,
in most cases, the fee is nominal and does not reflect the
level of consumer surplus or benefits. The objective of this
(footnote continued)
or all of the natural and cultural resources therein (Dixon & Sherman,
1990).
paper is to estimate the WTP for scuba diving and the
economic benefits of scuba diving in Mu Ko Similan
Marine National Park in Thailand. This is done by means
of a contingent valuation study based on the single- and
double-bounded dichotomous choice survey design. The
information resulting from the study would be useful for
efficient park management and development of appro-
priate policies. For example, given that marine resources in
Thailand are now under increasing pressure from sustained
use, the results of this study could be used to determine an
appropriate level of entrance fees. This fee could be used as
a tool to control the number of visitors so as to minimize
coral reef damage. Furthermore, revenues generated from
the fees could be used to improve coral reef conservation
efforts.
The remainder of the paper is organized as follows.
Section 2 outlines the methodology used, including the
survey design and econometric model. The third section
provides a general discussion of the study’s results, and the
final section concludes with the summary and policy
implications.
2. Methodology
2.1. Survey site
Mu Ko Similan Marine National Park, or known by
tourists as the Similan Islands, is a group of nine tropical
islands located along the western coastline of the Andaman
Sea, approximately 80 km northwest of Phuket, in the
Indian Ocean (Fig. 1). This group of islands covers an area
of 128 km2, 14 km2 of which is land (Mu Ko Similan
Marine National Park, 2003). This site was chosen for this
 ARTICLE IN PRESS
1124 J. Asafu-Adjaye, S. Tapsuwan / Tourism Management 29 (2008) 1122–1130
Fig. 1. Map of Thailand and Mu Ko Similan Marine National Park. Source: Mu Ko Similan Marine National Park (2003).
study because it is the most popular marine national park
in Thailand.
Over 50,000 people visit the park each year (Mu Ko
Similan Marine National Park, 2003). The park generates
the highest revenue compared to other marine national
parks in Thailand (National Park, Wildlife and Plant
Conservation Department, (DNP), 2003). Park revenue
generally comes from three main sources: entrance fees,
service charges (such as snorkelling and scuba diving fees)
and accommodation charges. Thai tourists pay a cheaper
rate than overseas tourists. Overseas tourists are charged
up to five or 10 times higher for entrance fees. All revenue
raised by each park goes directly into the government’s
coffers. Each year, principal funding for each park is
appropriated from the government to finance protected
areas. The budget is normally allocated on the basis of
coverage area and management needs (Sethapun, 2000)
rather than the number of tourists or the actual revenue
generated by each park. This results in problems whereby
parks with heavy tourism activity do not obtain sufficient
funding for management and control.
Coral reefs in the Similan Islands are deep water coral as
they can grow 30 m below the ocean surface as visibility
allows enough sun light to reach that depth for algae
growth. Most other coral reefs in Thailand are medium
water coral which can only grow below 8–15 m in depth.
The hard corals found in the Similan Islands are deep water
species of mostly staghorn coral types (Acropora echinata)
and the smaller cauliflower shaped types (Seriatopora
histrix). Many other species of marine life co-exist within
the coral reef. Examples include Gorgonian sea fans,
flower-like soft coral, several species of crabs, spiny painted
lobster, squid, sponges, sea cucumbers and giant clams
(DNP, 2004).
Normally, the best months for tourism in the Similan
Islands are from early November to late April because of
the calmer weather conditions. Conditions are best for
scuba diving from December to January when under water
visibility often reaches up to 40 m or more. The number of
visitors usually peak in December and again in April due to
the Christmas holidays and the Thai New Year holiday in
April. During the peak season, the average number of
visitors can exceed 350 people per day. Tourism in the
Similan Islands has been increasing substantially, with a
near five-fold increase in the total number of visitors from
10,921 in 1999 to 50,049 in 2003 (Mu Ko Similan Marine
National Park, 2003). This is believed to be due to the
successful marketing campaigns by the Tourism Authority
of Thailand called Amazing Thailand, which ran from 1998
to 2003, along with the devaluation of the Thai Baht.3 The
rise in the number of international scuba divers was the
main contributing factor to this dramatic increase which
3
Personal communications from personal interviews with scuba diving
tour operators and park officials of Mu Ko Similan Marine National
Park.
 ARTICLE IN PRESS
J. Asafu-Adjaye, S. Tapsuwan / Tourism Management 29 (2008) 1122–1130
has resulted in more than a twenty-fold increase in revenue,
from US$22,144 to US$457,389, within that period.
The 2004 ‘Boxing Day Tsunami’ inflicted significant
damage on the marine park and caused a reduction in
the number of tourists visiting the Similan Islands.
However, there are indications of recovery and the
Tourism Authority of Thailand has embarked on a
domestic and international publicity campaign to increase
the number of tourists.
2.2. The valuation approach
The CVM was utilized in this study. In line with the
recommendations of the National Oceanic and Atmo-
spheric Administration’s panel of economic experts (Arrow
et al., 1993), we used the dichotomous choice CVM
(DCCVM) or referendum questionnaire format to elicit
respondents’ WTP for scuba diving. One of the merits of
this method is that the ‘take it or leave it’ scenario utilized
in this approach is quite similar to that encountered by
consumers in their usual market transactions. Further-
more, the referendum format used in the DCCVM is
realistic and is commonly used to assess community
attitudes to the provision of public goods. However, like
any other method, it also suffers from a number of biases.
Firstly, the method is still hypothetical in nature and
therefore subject to hypothetical bias common with the
CVM. Secondly, biases such as starting point bias, shift
effects, anchoring effects and framing effects are inherent
in the double-bounded dichotomous choice method.
Thirdly, the method is liable to ‘yea saying’ if a respondent
believes the interviewer favours a yes answer. Finally, a
large number of observations are typically required in
DCCVM studies in order to identify a distribution of
resource values with any degree of accuracy. Various
suggestions have been made for dealing with the weak-
nesses of the method. These include making efforts to
ensure that respondents take the questions seriously. It has
been recommended that the survey instrument must
include additional questions to verify that respondents
have done so. Also, it has been suggested that the survey
instruments should contain questions designed to test for
the presence of the various biases (Arrow et al., 1993).
The DCCVM involves offering respondents bid amounts
which respondents can either accept or refuse. In the single-
bounded DCCVM method, respondents are presented with
one bid value to which they can respond with either a ‘yes’
or a ‘no’. The probability of obtaining a ‘yes’ or ‘no’
response can be represented by
Probi ðnoÞ ¼ pn ¼ GðBID; yÞ,
Probi ðyesÞ ¼ py ¼ 1  GðBID; yÞ, (1)
where G(BID; y) is some statistical distribution function
with parameter vector y, which can be estimated using a
qualitative choice model such as the logit model. The logit
model can have two forms, the log-logistic cumulative
1125
density function
1
GðBID; yÞ ¼ , (2)
½1 þ eabðln BIDÞ 
or the logistic cumulative density function,
1
GðBID; yÞ ¼ , (3)
½1 þ eabðBIDÞ 
where y(a, b) and a and b are the intercept and slope
coefficients to be estimated, respectively. G(BID; y) is the
cumulative density function of the individual’s true
maximum WTP because utility maximization implies that
an individual will say ‘yes’ to BID only if BID is less than
or equal to their maximum WTP, and will say ‘no’ if BID
exceeds this value (Hanemann, 1984). The log-likelihood
function for this set of responses, following Hanemann,
Loomis, and Kanninen (1991), is
X
N
ln Ls ðyÞ ¼ fd yi ln py ðBIDi Þ þ d ni ln pn ðBIDi Þg
i¼1
X
N
¼ fd yi ln½1  GðBIDi ; yÞ þ d ni ln GðBIDi ; yÞg, (4)
i¼1
where d yi is unity if the ith response is ‘yes’ and zero
otherwise, whereas, d ni is unity if the ith response is ‘no’ and
zero otherwise.
In the double-bounded dichotomous choice format,
respondents are presented with a two-sequence bid offer.
First, they are asked whether they would ‘accept’ or ‘reject’
the first bid, after which the second bid amount is then
offered. The second bid may be higher or lower than the
initial bid depending on the respondent’s response to the
first bid. Therefore, the double-bounded DCCVM could
have four possible outcomes: both answers are ‘yes’; both
answers are ‘no’; a ‘yes’ followed by a ‘no’; or a ‘no’
followed by a ‘yes’. For formulas on the likelihoods of
these outcomes, readers are referred to Hanemann et al.
(1991).
2.3. Survey design
The target population for this study was scuba divers
visiting Mu Ko Similan Marine National Park. The main
survey was preceded by a pilot survey which was conducted
in January 2004. The information obtained was used to
modify the design of the bids and other aspects of the
questionnaire. As was the case in the pilot survey, the
sampling frame in the main survey comprised adult
certified scuba divers of any nationality aged between 18
and 60 years who had paid for the trip themselves. Scuba
divers who were on the trip and working in capacities such
as dive leaders, dive masters, and dive instructors, were
excluded from the survey because their expenses had been
paid for by the tour operators. Certified scuba divers taking
scuba diving lessons to increase their qualifications were
also excluded from the survey. The sample consisted of 500
respondents. According to recent park statistics from 2001
 ARTICLE IN PRESS
1126 J. Asafu-Adjaye, S. Tapsuwan / Tourism Management 29 (2008) 1122–1130
Table 2
Alternative bid levels for the double bounded dichotomous choice CVM
survey instrument (US dollars)
First bid Lower bid Upper bid
5 2.5 10
15 10 30
25 15 50
37.5 20 62.5
50 37.5 75
to 2003, the ratio of Thai scuba divers to overseas scuba
divers has been approximately 34:66. Therefore, 34% of
the respondents chosen to participate were Thai and the
remaining 66% were from overseas. The quota sampling
technique was used to select the respondents from each
stratum. This sampling technique was chosen because of its
simplicity and efficiency compared to simple random
sampling.
The survey questionnaire contained questions regarding
the respondent’s social, economic and demographic char-
acteristics such as age, gender, income, level of education
and country of residence. Other questions sought to
ascertain the respondents’ scuba diving experience and
their personal motivations for visiting Mu Ko Similan
Marine National Park.4 The final part contained questions
on WTP. Respondents were asked to accept or reject
several proposed scuba diving fee or bid levels shown in
Table 2.
Before the survey, respondents were reminded that the
proposed fee or bid levels were hypothetical and that their
responses would not affect the fee structure currently charged
by the park.5 This was designed to eliminate the problem of
‘strategic bias’ in which the respondent deliberately over-
states or understates his or her true bid in order to influence
the outcome. Once the interviewer was certain that the
respondent understood the hypothetical scenario, he/she
presented the first bid to the respondent as follows:
According to Thai regulations, you will be charged a
diving fee to dive in Similan Islands. Are you willing to
pay US$ 5/day to dive in Similan Islands?
The respondents were reminded that this amount was on
top of all other diving costs. If the respondent accepted the
bid, he or she was then offered a higher amount. However,
if the bid was rejected, a lower amount was offered. If the
respondent was unwilling to accept both the initial and
the lower bid, the next question was to enquire about the
reasons for the rejection. The respondents were asked to
choose from the following: (1) I don’t think I should have
to pay; (2) They don’t charge diving fees anywhere else;
4
The detailed survey questionnaire is available from the authors upon
request.
5
It has been argued that telling respondents that the WTP question is
hypothetical could cause them to not take the scenarios seriously.
However, in this case, 84% of the sample was determined to be non-
protest bidders. Therefore this may not be a major problem:
(3) I’m only willing to pay a small amount; (4) I need more
information before I decide to pay; and (4) other reasons
(please state). This was to make sure that their refusal to
accept any bid level was not a result of ‘protest’ behaviour.
Respondents who selected reasons (1) and (2) were
considered as protest bidders and were excluded from the
sample. The final sample size was 421 scuba divers, which is
an 84% response rate.
2.4. Model specification
It is assumed that the scuba diver will accept a proposed
bid level and still maximize his/her utility under the
following condition,
vð1; Y  BID; SÞ þ 1 Xvð0; Y ; SÞ þ 0 , (5)
and will reject it if otherwise. In the equation above, v is the
indirect utility function, Y is the average annual income
after tax and other expenses in thousand dollars, BID is the
bid offer, S represents other socio-economic characteristics
affecting individual preferences including their personal
motivations, while e0 and e1 are the identically, indepen-
dently distributed (i.i.d.) random variables with zero
means.
The utility difference between a ‘yes’ and a ‘no’ response
(DZ) can be defined as
DZ ¼ vð1; Y  B; SÞ  vð0; Y ; SÞ þ ð1  0 Þ. (6)
When faced with binary choice situations, the logit
model is preferred to the probit model because the former
is based on the cumulative distribution whereas the latter is
based on the normal distribution and is numerically more
complicated to estimate (Hill, Griffiths, & Judge, 2001).
For this reason, the logit model was used in the study.
For an individual who is faced with the choice of
whether to ‘accept’ or ‘reject’ a hypothetical bid level, the
probability (Pi) that he/she will accept a bid offer (BID) for
the single-bounded model can be expressed in logarithmic
or log-logistic form as
ProbðyesÞ ¼ F ZDv
¼ ð1 þ eDv Þ1
1
¼ (7)
1 þ eðaþb1 ln Bidþb2 ln Sþb3 ln PMÞ
and the double-bounded model expressed in the linear or
logistic form as
ProbðyesÞ ¼ F ZDv
¼ ð1 þ eDv Þ1
1
¼ (8)
1þe ðaþb 1 Bidþb 2 Sþb3 PMÞ
where FZ is a cumulative distribution function, bi
represents the coefficients of the bid (BID), socio-economic
variables (S), and personal motivation (PM) variables,
respectively, and a is the intercept. It is expected on à priori
grounds that the probability of accepting a bid level would
 ARTICLE IN PRESS
J. Asafu-Adjaye, S. Tapsuwan / Tourism Management 29 (2008) 1122–1130
Table 3
Dichotomous choice contingent valuation model variables
Variable Label
RESP Dependent variable, takes the value 1 if respondent is WTP the
proposed bid amount, 0 if they refuse to pay.
BID Hypothetical amounts of scuba diving fee proposed to each
respondent.
Socio-economic
INC Average annual income after tax and other expenses in US
dollars
GEND Gender, 1, if respondent is male, 0 otherwise
EDU Formal education in years
AGE Age in years
CONSER 1, if respondent belongs to or has financially supported any
conservation groups, 0 otherwise
DIVE Number of dives logged in the past 5 years
THA 1, if respondent is a Thai national, 0 otherwise
Personal motivations
REA1 1, if the trip is motivated by the site being near to where the
respondent lives, 0 otherwise
REA2 1, if the trip is motivated by the competitive pricing of diving at
this site, 0 otherwise
REA3 1, if the trip is motivated by the recommendation of others
(word of mouth), 0 otherwise
REA4 1, if the trip is motivated by the beauty of the site, 0 otherwise
REA5 1, if the trip is motivated by the respondent’s interest in trying
out new scuba diving sites, 0 otherwise
decline with an increase in the bid level. The definitions of
the variables used in the model are provided in Table 3.
The variables income (INC), gender (GEND), age
(AGE) and the level of formal education (EDUC) are
included to capture the scuba diver’s socio-economic
background. Income (INC) is measured as average annual
income after deduction of tax and other expenses,
measured in thousands of US dollars. The variable
CONSER is a dummy variable to indicate whether the
scuba diver is active in environmental conservation
activities. The number of dives the scuba diver has logged
in the past 5 years (DIVE) is designed to capture whether
divers who have more diving experience or dive more
frequently are likely to be willing to pay more. Personal
motivation dummy variables (REA1–REA5) are included
to capture respondents’ motivations for visiting the site.
3. Empirical results
Six statistical models were estimated in this study, of
which three were single-bounded DCCVMs, and the other
three double-bounded DCCVMs. The study is interested in
capturing the level of WTP of the combined group of scuba
divers and the separate WTPs (i.e. Thai and overseas
divers), as well as comparing the WTP estimates of the
single- and double-bounded DCCVMs. The six models are
Model 1: Single-bounded DCCVM: Combined group
Model 2: Single-bounded DCCVM: Overseas respon-
dents only
1127
Model 2: Single-bounded DCCVM: Thai respondents
only
Model 4: Double-bounded DCCVM: Combined group
Model 5: Double-bounded DCCVM: Overseas respon-
dents only
Model 6: Double-bounded DCCVM: Thai respondents
only
The log-logistic functional form was fitted to the single-
bounded DCCVM because it provides a better fit; whereas,
a linear logistic functional form provides a better fit for the
double-bounded DCCVM. Therefore, models 1–3 are
logarithmic and 4–6 are linear. The stepwise regression
approach was used to delete insignificant variables.
However, economic theory was used to guide the overall
variable selection. Thus, some variables were kept in the
model for comparison. The final models selected for the
three single- and three double-bounded DCCVM are
presented in Tables 4 and 5, respectively.
It can be seen from Table 4 that the variable ln BID for
models 1–3 and BID for models 4–6 are all statistically
significant at the 1% level. In addition to the high level of
significance, all of the respective coefficients have the
expected negative signs indicating a negative relationship
with the dependent variable RESP. In other words, the
higher the scuba diving fee, the less likely respondents
would be willing to pay. The coefficient on AGE is negative
and significant at the 5% level only in model 6 for Thai
divers. This indicates that for Thai respondents, the
probability of accepting the bid will decrease as the age
of the respondent increases. This may be explained by
the fact that older scuba divers have been accustomed to
scuba diving without having to pay a fee, hence, are less
willing to accept new fee regulations.
The variable THA is significant at the 5% level in both
the single- and double-bounded model. THA is designed to
capture the effects on the probability of the respondents’
accepting a proposed fee level if they were Thai. Since the
coefficient of this variable is significant, the analysis
indicates that Thai and overseas divers have different
probabilities of accepting a proposed fee and may have
different levels of WTP. CONSER is significant at the 5%
level for models 3 and 6, and is positive for all six models.
The positive relationship indicates that a respondent who
has financially supported or belonged to a conservation
group will have a higher probability of accepting a higher
fee level. The income variable has the expected positive sign
in all six models but is only significant in models 3 and 6
(i.e. models for Thai divers only), implying that income is a
significant factor affecting the WTP of local divers but not
necessarily that of foreign divers.
In all of the models, it can be seen that a diver with more
dive experience has a lower probability of accepting a given
bid level than a diver with less experience. This result can
be explained using the concept of diminishing marginal
utility. That is, divers with less experience are more likely
to pay more because they still have a high utility for diving
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1128 J. Asafu-Adjaye, S. Tapsuwan / Tourism Management 29 (2008) 1122–1130

Table 4 Table 6
Parameter estimates of the single-bound dichotomous choice CVM Expressions for median and mean WTP for the single- and double-
bounded dichotomous choice CVM
Variables Model 1 Model 2 Model 3
combined sample overseas divers Thai divers Model Single-bounded (log- Double-bounded
logistic) (logistic)
ln BID 1.3721** 1.4191** 1.3509**
 =b 
(0.1627) (0.1963) (0.3196) Constrained mean ea  ðp=bÞ=ðsinðp=bÞÞ lnð1 þ ea Þ=b
THA 0.7303** – – WTP
 =b  =b
(0.2968) Median WTP ea ea
CONSER 0.2467 0.0559 1.2094**
(0.2367) (0.2827) (0.5060) a* is the adjusted intercept.
ln INC 0.2687* 0.0609 0.9500** b is the slope coefficient.
(0.1431) (0.1755) (0.3160) Parameter estimates taken from Tables 3 and 4.
ln DIVE 0.5803** 0.3065 1.5811**
(0.2118) (0.2455) (0.5132)
REA1 1.3427** 1.2689* 1.2528** personal motivation variable is REA1. This variable
(0.4023) (0.7240) (0.5686) attempts to explain the relationship between the respon-
CONSTANT 2.3705** 3.1070** 0.2181 dents’ WTP and one of the characteristics of the site, which
(0.5979) (0.7404) (1.008)
is whether the site is near where the respondent lives. It is
McFadden R2 0.20293 0.1850 0.30343 positive for all models, indicating that people who live
Log L 234.1192 169.3889 57.9763 closer to the site are more likely to accept the bid offer.
w2 (goodness- 119.2108* 76.89813* 50.50996*
of-fit)
N ¼ 424 3.1. Estimation of WTP and economic benefits
Standard errors in parentheses.
This study has assumed WTP to be a non-negative
*Significant at pp10%.
**Significant at pp5%. random variable and this assumption is satisfied by the
condition in (1). The constrained mean WTP for both the
single-bounded log-logistic DCCVM and double-bounded
Table 5 logistic DCCVM were calculated using methods proposed
Parameter estimates of the double-bounded dichotomous choice CVM
by Hanemann (1989) and Hanemann et al. (1991).6 The
Model 4 Model 5 Model 6 expressions for the constrained mean and median WTPs
Variables are presented in Table 6.
combined sample overseas divers Thai divers
Table 7 presents results for the mean and median WTP
BID 0.0854** 0.0985** 0.0572**
estimates for both the single- and double-bounded models.
(0.0113) (0.0136) (0.0221)
AGE 0.0059 0.0040 0.0458** The average WTP for the combined sample using the
(0.0090) (0.0102) (0.0227) single-bounded model is THB2,606 (US$62.64) while that
THA 0.5755** – – for the double-bound model is about half at THB1,126
(0.1885) (US$27.07). This difference is consistent with the findings
CONSER 0.1610 0.0589 0.6184**
(0.1535) (0.1844) (0.3077)
of Hanemann et al. (1991). Looking at the results for the
INC 0.0043 0.0004 0.0241** two groups of divers, it can be seen that in general overseas
(0.0028) (0.0031) (0.0076) divers are willing to pay more than Thai divers. For
DIVE 0.0848** 0.0796* 0.1249* example, in the single-bounded DCCVM model, WTP for
(0.0382) (0.0454) (0.0734) overseas divers is THB2,670 (US$64.18) whereas that of
REA1 0.8078** 0.6388 0.4505
Thai divers is THB1,831 (US$44.02). In the double-
(0.2537) (0.4347) (0.3507)
CONSTANT 0.6429 0.6243 0.5583 bounded DCCVM model, the difference was found to be
(0.3270) (0.3679) (0.7589) statistically not significant. We used the bootstrap method
FCCC 0.4245 0.3808 0.5410
to test for any difference between WTP for the two groups.
Log L 529.2683 379.8066 140.8338 The 90% confidence intervals for Thai and overseas scuba
w2 (goodness- 85.9020 66.5416 29.86740* divers (in US$) were (9.54, 64.16) and (23.58, 30.79),
of-fit) respectively. The overlap of the two confidence intervals
N ¼ 424 suggests that there is no statistically significant difference
between the two groups.
Standard errors in parentheses.
*Significant at pp10%. 6
Hanemann et al. (1991) argued that the double-bounded DCCVM has
**Significant at pp5%. an advantage over the single-bounded model because even though an
initial bid may not be correctly specified, the higher bid (BIDH) will help
to recoup against too low a choice of the initial bid, and the lower bid
whereas divers with more experience are unlikely to agree (BIDL) will recoup against too high a choice. This, in turn, can solve the
to pay additional charges due to diminishing marginal problem of biases, including starting point bias, anchoring effects and yea-
returns from scuba diving. The only statistically significant saying, which have been associated with the CVM.
 ARTICLE IN PRESS
J. Asafu-Adjaye, S. Tapsuwan / Tourism Management 29 (2008) 1122–1130
Table 7
Estimates of willingness to pay (WTP) (Thai Baht (‘00)/year) from the single- and double-bound dichotomous choice CVM
WTP Single-bounded DCCVM
Model 1 Model 2
combined sample overseas divers
Mean 26.06 26.70
Median 8.57 9.65
The present study has estimated the average WTP for
scuba diving in Mu Ko Similan Marine National Park to
range between US$27.07 and US$62.64 per driver per
annum, which is generally within the ball park compared to
similar studies. The differences in the WTP estimates may
be explained in terms of differences in the CVM scenarios
and the bid elicitation mechanisms. Dixon et al. (1995)
estimated the WTP to maintain dive quality in the Bonaire
Marine Park in the Caribbean to be US$17.40 per diver per
year (in 1991 dollars). They used the payment card
elicitation method with values ranging from US$20 to
US$100. In a study of snorkelling in the Florida Keys,
Park, Bowker, and Leeworthy (2002) obtained WTP
estimates of US$49.52 per diver per year, using a
combination of the CVM and TCM. In a more closely
related study to the present one in terms of location,
Seenprachawong (2003) estimated average WTP to restore
coral reef condition for Phi Phi Islands, a popular scuba
diving site in Thailand with similar characteristics to Mu
Ko Similan Marine National Park. Seenprachawong’s
estimates for mean WTP by Thais and overseas divers
were US$7.17 and 7.15 per annum, respectively. The
relatively lower estimates in his study could be due to a
number of factors. Although the single-bounded DCCVM
was used, the study’s aim was to elicit WTP to restore coral
reef condition therefore it is not clear whether it captures
the full consumer surplus for scuba diving. Second, there
does not appear to be any significant difference between
Thai and overseas divers’ WTP although the latter tend to
have significantly higher incomes. This suggests that
overseas divers could have reported other vicarious values
associated with coral reef. Third, use of the double-
bounded DCCVM could have yielded higher estimates.
Although the DCCVM approach is highly recommended
over other elicitation methods, the future of non-market
valuation appears to lie in a combination of stated
preference (CVM) and revealed preference (TCM) meth-
ods. It has been shown (e.g., see Cameron, 1992; Kling,
1997) that the combined approach provides gains in
precision and minimizes biases.
To compute the aggregate benefit of scuba diving in Mu
Ko Similan Marine National Park, we used the estimated
WTP from the double-bounded model as a lower bound
estimate and that of the single-bounded model as an upper
bound estimate. To estimate the total number of visitors to
the park each year, we averaged the number of park
1129
Double-bounded DCCVM
Model 3 Model 4 Model 5 Model 6
Thai divers combined sample overseas divers Thai divers
18.31 11.26 11.46 10.72
5.73 5.61 7.49 2.89
visitors over five years (1999–2003), resulting in a figure of
34,464 persons (Mu Ko Similan Marine National Park,
2003). Multiplying the mean WTP for the double-bounded
DCCVM (model 4) of US$27.07 with the above park
visitation rate, provides a lower bound benefit estimate of
US$932,940 per annum. Using the WTP of US$62.64 for
the single-bounded DCCVM (model 1) gives an upper
bound benefit estimate of US$2.1 million per annum. To
translate these annual benefits into the present values of the
asset, we discounted the benefits accruing using an estimate
of the social discount rate. A social discount rate is
appropriate here because the park is a public good. Social
discount rates are known to be lower than market interest
rates. Given a market interest rate of 6% for Thailand in
2003–04 (World Bank, 2006), an estimate of 3% was used
for the social discount rate. Using this rate, the present
value of scuba diving benefits in Mu Ko Similan Marine
National Park is estimated to be between US$31 and
US$71 million.
4. Conclusions and policy implications
The aim of this study was to estimate the WTP for scuba
diving and the economic benefits of scuba diving in Mu Ko
Similan Marine National Park in Thailand. Given concerns
about increasing coral reef damage by park visitors, the
results of the study could be useful to park management in
setting appropriate entrance fees. The results indicate that
divers are willing to pay about US$27.07–62.64 per person
per annum, resulting in aggregate benefits of between
US$932,940 to US$2.1 million per annum. The present
value of these aggregate benefits is between US$31–71
million, using a social discount rate of 3%.
The WTP estimates indicate that overseas divers are
willing to pay more than Thai divers. The park manage-
ment could use discriminatory pricing to capture the
consumer surplus for both Thai and overseas divers. On
the other hand, because the difference in WTP of the two
groups is minimal, the Park may be able to apply a uniform
pricing fee of US$27.55 (the WTP level of overseas divers)
for convenience. Additionally, the estimated WTP level
from the study is significantly higher than the current scuba
diving fee level of THB200 (US$4.8) per day. Mu Ko
Similan Marine National Park management could increase
scuba diving fees more than fivefold. If scuba diving fee
charges were increased to THB 1125 (US$27.04), the mean
 ARTICLE IN PRESS
1130 J. Asafu-Adjaye, S. Tapsuwan / Tourism Management 29 (2008) 1122–1130
WTP found in the study, Mu Ko Similan Marine National
Park would have an economic gain of THB 38,793,592
(US$932,520) per year. This demonstrates that the park
could obtain a significant revenue gain through changes in
tourism charges alone without having to increase the
pressure on the environment by increasing the number of
visitors to meet the costs of running and maintaining the
park. Also, the fee could be used as a tool to control the
number of visitors in order to minimize coral reef damage.
Funding for sustainable marine-tourism management
programs would also be financially feasible if the current
scuba diving fee were to be increased. This would help
solve issues of financial constraints that many national
parks experience when budgeting for environmental con-
servation programs such as monitoring of illegal activities.
In terms of possible biases and various effects associated
with the dichotomous choice double-bounded format, this
study has found that using follow-up questions can indicate
to what effect some of these effects have been minimized.
However, as indicated earlier, the DCCVM is unlikely to
completely eliminate the biases associated with the CVM.
Future work is likely to concentrate on combining the
CVM and TCM to obtain more efficient estimates and to
further minimize the biases of the CVM.
Acknowledgement
The second author gratefully acknowledges the Uni-
versity of Queensland Graduate School Travel Awards for
financing the field trip for this study, and the Mu Ko
Similan Marine National Park and the Princess Chulab-
horn Research Institute for in-kind support.
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