Application of Nested Logitech Model for Ecosystem Services Valuation (Case study: Gavkhony Wetland, Isfahan Province, Iran)

Abstract

Wetlands as a situ for the growth of native plants, as a habitat for certain species of fish and aquatic birds, and because of their potential economic, cultural and recreational services, are valuable heritage so their protection and conservation is very essential. Mostly due to the absence of wetlands services’ valuation, lack of special regulations, and lack of guarantee for these properties, resources and services of wetlands are not utilized appropriately, and destructed and evacuated in a free and unrestricted fashion, leading to inefficiency in use. The purpose of this study is the economic valuation of Gavkhony wetland ecosystem attributes, estimation of implicit price for attributes, impact assessment of socioeconomic variables such as age, marriage, indigenous, family size and education on willingness to pay (WTP), and analyzing welfare and compensation variation due to variation of hypothetical policy. The approach being used is choice experiment that is a subset of choice modeling procedure and stated preference method. Data were collected from six different choice experiments provided in the questionnaires, which were filled out by 500 randomly selected households in Isfahan and Varzaneh cities in the spring and summer of 2013. Each questionnaire contained 72 hypothetical policies, 36 choice sets, 2442 observations and 7327 rows of data. Nested Logitech models and Hausman-MacFadden test were used in order to estimate the visitors’ WTP for improving attribute levels for Gavkhony wetland. This procedure was used on the basis of multinomial discrete choice analysis of preferences, Lancaster’s theory of value and the theory of random utility function. The Hausman-MacFadden test results showed that cross-elasticity between the first and third options was the same. Thus, these two options were placed in the second nest. The results further showed that the visitors had WTP for preserving forest diversity and vegetation of wetland and its surrounding; preserve of natural habitats and organisms life of wetland (bird, fish and animals); wetland hygiene (preventing industrial and domestic effluent, and water salinity); and increasing the water surface (increasing wetland water inlet). The values estimated for these four aspects correspondingly were 8636, 12584, 11553 and 4740 Rials. Some socio-economic variables such as gender, marriage, age, family expenditure, education and being native had a positive impact on the visitors’ WTP. The surplus welfareresults showed that in 72 hypothetical policies, option 1 had the most positive welfare, and option 5 had the most negative welfare for the users of Govkhony wetland. The surplus welfare results based on WTP estimation provide important tools for policy making. *Corresponding author: Assistant Professor in Economics, Humane science Faculty, University of Ayatollah Borujerdy, Iran, Tel: +98 918 500 3597, E-mail: parviz.jalili@abru.ac.ir, parviz.jalili@gmail.com S. P. Jalili Kamjo et al. ______________________________________________ ECOPERSIA (2016) Vol. 4(1) 1252