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Recreation demand and pricing policy for international tourists in developing countries : evidence from South Africa

Mukanjari, Samson LU orcid ; Muchapondwa, Edwin and Demeke, Eyoual (2021) In Journal of Environmental Economics and Policy 10(3). p.243-260
Abstract

National park agencies in Africa often lack incentives to maximize revenue, despite the decline in conservation subsidies from the State. We explore the potential of pricing policy to generate funds for extensive conservation. We estimate recreation demand by international tourists for a popular South African park, calculate the consumer surplus and find the revenue-maximizing entrance fee. Our results suggest substantial underpricing and therefore significant forgone income. By charging low fees at popular parks despite increasing conservation mandates and declining conservation subsidies, national parks in developing countries are forgoing substantial revenue crucial for combating widespread biodiversity losses.

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author
; and
publishing date
type
Contribution to journal
publication status
published
keywords
benefit sharing, Entrance fee, non-market valuation, optimal pricing, recreation demand
in
Journal of Environmental Economics and Policy
volume
10
issue
3
pages
18 pages
publisher
Routledge
external identifiers
  • scopus:85106067559
ISSN
2160-6544
DOI
10.1080/21606544.2020.1853609
language
English
LU publication?
no
additional info
Funding Information: This work was supported by Economic Research Southern Africa (ERSA); and the Swedish International Development Cooperation Agency (Sida) through the Environment for Development Initiative (EfD). We would like to thank Peter Berck, Gardner Brown, Jr., David F. Layton, Thomas Sterner, Inge van den Bijgaart and an anonymous referee, as well as participants at the Fourth Workshop on Non-Market Valuation in Bordeaux and the 22nd Annual European Association of Environmental and Resource Economists Conference for helpful comments and suggestions. The paper also benefited from numerous discussions with Martin Chegere, Johane Dikgang, Josephine Gatua, Richard Mulwa and Tewodros Tesemma. We thank Gerald Kibira, Stephen Kirama, Amanda Musandiwa, Realeboga Ngwanaeng and Nomsa Nkosi for assistance with the fieldwork. We are grateful to Joep Stevens of SANParks (South African National Parks) for assistance with data. An earlier version of this paper appears as ERSA Working Paper No. 743. Publisher Copyright: © 2021 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
id
2e8842b0-e38c-4add-a1c1-d1614e3e9cae
date added to LUP
2022-04-05 13:20:36
date last changed
2023-09-01 17:12:44
@article{2e8842b0-e38c-4add-a1c1-d1614e3e9cae,
  abstract     = {{<p>National park agencies in Africa often lack incentives to maximize revenue, despite the decline in conservation subsidies from the State. We explore the potential of pricing policy to generate funds for extensive conservation. We estimate recreation demand by international tourists for a popular South African park, calculate the consumer surplus and find the revenue-maximizing entrance fee. Our results suggest substantial underpricing and therefore significant forgone income. By charging low fees at popular parks despite increasing conservation mandates and declining conservation subsidies, national parks in developing countries are forgoing substantial revenue crucial for combating widespread biodiversity losses.</p>}},
  author       = {{Mukanjari, Samson and Muchapondwa, Edwin and Demeke, Eyoual}},
  issn         = {{2160-6544}},
  keywords     = {{benefit sharing; Entrance fee; non-market valuation; optimal pricing; recreation demand}},
  language     = {{eng}},
  number       = {{3}},
  pages        = {{243--260}},
  publisher    = {{Routledge}},
  series       = {{Journal of Environmental Economics and Policy}},
  title        = {{Recreation demand and pricing policy for international tourists in developing countries : evidence from South Africa}},
  url          = {{http://dx.doi.org/10.1080/21606544.2020.1853609}},
  doi          = {{10.1080/21606544.2020.1853609}},
  volume       = {{10}},
  year         = {{2021}},
}