International Conference   BUILDING INSIGHTS OF MANAGERIAL ECONOMICS AND ACCOUNTING TOWARDS SUSTAINABLE FOREST MANAGEMENT Ukrainian National Forestry University, Lviv, Ukraine May 17 � 19, 2007   IUFRO Unit 4.05.00 - Managerial Economics and Accounting IUFRO Unit 4.05.01 - Managerial, social and environmental accounting IUFRO Unit 4.05.02 - Managerial economics

Economic Valuation of Multidimensional Non-Market Forest Services: an Application of the Multi-Program Method to Recreation

Bénédicte Rulleau*/**, Jeoffrey Dehez*, Patrick Point**

* Cemagref de Bordeaux-Cestas

Unité ADER, Cestas cedex, France

Email: benedicte.rulleau@bordeaux.cemagref.fr

Email: jeoffrey.dehez@bordeaux.cemagref.fr

** GREΘA-EE, Université Montesquieu-Bordeaux IV, Pessac, France

 Email:  point@u-bordeaux4.fr

Outdoor recreation is certainly one of the greatest sources of social well-being provided by forests (Dickie and Rayment, 2001). Under particular conditions, these benefits can be converted into an economic value. Nevertheless, as this value cannot be observed on a market, it is rarely introduced into environmental accounting. This results in an imbalance that frequently favours market goods and services over nature preservation. According to many authors, the valuation of such non-market services can be seen as a way to enhance our perception of the natural capital (Costanza et al., 1997) and can in consequence help to the definition of sustainable forest management (Buttoud, 2000; Pearce, 2001).

Recreation special features however severely hinder the valuation process. In many occasions, recreation activities fit well K. Lancaster�s multi-attribute theory (1966; 1971), whereby individuals get satisfaction from some of their characteristics (scenery, trails density, water quality�) called �attributes�, by combining them with market inputs, such as miles driven and parking lots, and their own time. Household are thus, following household production function theory (Becker, 1965), assumed to produce recreational services (McConnell, 1985). In this context, the conventional valuation technique consists in estimating separately the value of each attribute and to aggregate them. But, according to J.P. Hoehn (1991), the introduction of a new characteristic has both a direct effect, which can be either positive or negative, and an income effect, always negative, on utility. The relative magnitudes of these two effects make attributes either substitutes, independent, or complements. Valuation methods had in consequence to be renewed to allow the identification of these links and to deal with the potential embedding effect.

While most studies dealing with recreation use the travel cost method, this paper relates to the multi-program valuation approach (Santos, 1998), which is an extension of the well-known contingent valuation method. Each scenario submitted during the survey consists in two programs, a zero-price status quo and a definite-price environmental policy affecting a combination of attributes. The number of scenarios to be presented then depends on the number of attributes. The respondent is asked to choose his preferred program, so revealing the trade-offs he makes between attributes of a policy and the price he would have to pay for its achievement. This dichotomous choice process makes it possible to apprehend substitution, independence or complementarity relations between attributes.

In this paper, we propose to apply the multi-program method to recreational activities of stated owned forests in the South-West of France. In fact, these forests are located on Atlantic shoreline and are in consequence used by walkers, cyclists� but also by beach recreationists who have to station their vehicle within forest area. Three natural assets (the ocean, the beach and the forest) are connected on one unique spot and the multi-program method enables to determine their relations. Our study is based on a survey carried out in July and August 2006. A sample of 385 usable responses was acquired.

This paper first sets out the theoretical basis of the multi-program method as well as its methodological issues. The second part is devoted to econometrics. We begin with a binomial probit. As a Vella�s (1992) test proves that a bivariate probit is more appropriated, we then turn to such a modelling. Among others, results show significant differences between �tourists� and �residents� (i.e. people living in the state or owning a second home there), for exclusion variables as much as for assets� relations. Especially, nor income nor motivation variables are significant in their willingness-to-pay equation. We can in consequence suppose that, once they are on holidays, time constraint is more important that budget one, which is not so surprising when you deal with recreation. The last step of the econometric findings consists in the estimation of visitors� willingness-to-pay. Finally we propose, by light of these results, to discuss the consequences in terms of policies implemented on the French South-West coast and by large in terms of management of such multidimensional natural assets.

Keywords: individual preferences, economic valuation, multi-attribute approach, multiprogram method, outdoor recreation.

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