Paper Title :Estimating Willingness to Pay for Reservoir Quality Improvement using Binary Choice Model

Author :Endah Saptutyningsih, Salma Salimatul Fauziyah

Article Citation :Endah Saptutyningsih ,Salma Salimatul Fauziyah , (2018 ) " Estimating Willingness to Pay for Reservoir Quality Improvement using Binary Choice Model " , International Journal of Management and Applied Science (IJMAS) , pp. 31-37, Volume-4,Issue-6

Abstract : The values of reservoir services has been neglected for many years. The reservoir services important for sustained water flow and steady supply of ecosystem services for societal needs. Sermo Reservoir is the only reservoir in the province of Yogyakarta Special Region which has a double function as a source of irrigation water and raw water of Company Regional Water Supply (PDAM) Kulonprogo district as well as a tourist attraction. The high number of tourists leads to an increase in the volume of waste due to limited facilities and bad habit of tourists. This study aims at determining tourists' willingness to pay (WTP) for improved reservoir conditions and identifying the factors affecting WTP for improved reservoir conditions. A contingent valuation method was employed to elicit the willingness to pay for improved reservoir condition. A logistic model was used to determine tourists’ respons to WTP and factors conditioning the maximum amount of their WTP. Findings indicates that majority of tourists are willing to pay more for improved reservoir condition. Similarly, result reveals that income and the number of visits positively influence WTP for improved reservoir condition. The results therefore, indicate that the high willingness to pay for improved reservoir condition support the argument that Sermo reservoir are likely to be attractive for potential tourists in Kulon Progo district. Keywords - Contingent valuation; reservoir; willingness to pay; binary choice; logistic model JEL Classification - Q51, Q56

Type : Research paper

Published : Volume-4,Issue-6

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