Estimating the value of coral reefs in Kume Island,Japan, using a contingent behavior method:A Poisson-Inverse Gaussian approach with on-site correction

Katsuhito Nohara, Masaki Narukawa and Akira Hibiki

No 103, DSSR Discussion Papers from Graduate School of Economics and Management, Tohoku University

Abstract: Coral reefs face a critical crisis because of rising ocean temperature, human resource use, run-off of red soil, among others. Since the recreational and tourism value of reef, in particular, have great potential, the degradation of reef quality may have a great effect on the tourism industry of Okinawa Prefecture, which largely depends on it. This study employs a contingent behavior approach to estimate the effect of reef extinction on recreational demand for Kume Island, Okinawa, Japan. Moreover, the Poisson-Inverse Gaussian model with correction for on-site sampling issues proposed in this study can potentially derive more accurate estimates of consumer surplus. The results show that the CS losses in the case of coral reef extinction become about 627.78 million yen per year.

Pages: 21 pages
Date: 2019-10
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Persistent link: https://EconPapers.repec.org/RePEc:toh:dssraa:103

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