ESTIMATION OF EXISTENCE VALUES SOME EMPIRICAL ISSUES

Abstract

Existence values (EVs) are the values derived from the knowledge that certain species ornatural environments exist. Existence values arc pure public goods and hence lack marketvalues. As income rise and natural environment suffer greater degradation, demand forexistence values is likely to increase. This paper presents results of a contingent valuationsurvey designed to elicit existence values of a tropical rain forest and several issues relatedto estimation of existence values of a global resource.

A contingent valuation survey was carried out in order to derive EVs for the Sinharaja RainForest Reserve in Sri Lanka. An open ended question format was used with a neutral trustfund as a payment vehicle. Three samples from Sri Lanka (urban and rural areas distant tothe forest and peripheral villages to the forest) and one remote sample (from UK) were usedin the study. The existence values for different types of users such as educational users.recreational users and non users were derived from the survey.

When expressed as percentage of income, willingness to pay values showed cleardifferences among different user types in different samples. On average, local ruraleducational users stated the highest values while remote non-users stated the lowest values.These existence value estimates, notwithstanding the theoretical validity, clearly illustratethe empirical problems related to estimation of existence values.

It could be assumed that existence values stated by non-users provide the nearestapproximation for the 'true' existence value of a resource. However, this relates with theprovision of information and the knowledge of the respondent since people derive benefitsdirectly and indirectly and they may be aware or unaware of such benefits emanating fromtropical rain forests.

Implications of these findings in designing future existence value estimations and the role ofinformation in survey design are highlighted. Implications for policy at global level,specifically, how mechanisms for appropriation of such values could be developed are alsodiscussed.