Estimating the existence value of north forests of Iran by using a contingent valuation method

Abstract

Forests play a significant role for human's well being. Economists' attention is mostly drawn on the market value of (certain) forest products. The trend, however, is changing as non-market values of forests are increasingly appreciated and measured. Recently, the ecosystem value of natural resources has been studied by natural resource economists and its role on human welfare is ensured. These studies had made a considerable progress in valuation of environmental and ecological services, which was offered by ecosystems. There are different methods assessing environmental economy based on revealed and stated preference for measure of environmental values. The subjects of this research are the determination of existence value of north forests of Iran (NFI), adjacent to Caspian Sea, and measure of individual's willingness to pay (WTP) based on contingent valuation (CV) and dichotomous choice (DC). The logit model was used for measuring individuals WTP. Estimation parameters of the model are based on the method of maximum likelihood (ML). Results showed that 65.8% individuals are willing to pay for the existence of NFI, while about 20% of these individuals have not yet visited, and 41% of them only visited the NFI once or twice. The mean of WTP for existence value of these forests is US$2.51 household/month or annual value of US$30.12 for a household.