Abstract

Assessing the economic value of natural resources is always challenging and depends on various perspectives. Specifically, this study seeks to identify the determining factors of recreation demand regarding the Kongar Lake of South Sumatera. The data was obtained from a survey of 150 individuals who visited the lake. The approach used descriptive statistics and an individual travel cost method (ITCM) to conduct the investigation of distributional effects across variables on the number of visitors by using a linear multiple regression approach with a natural logarithm model. The findings suggest that (i) joint recreation demand is influenced by travel costs, income, distance, education, age, and work hours per day; (ii) in part the results of this study show that determining factors of recreation demand are based on travel cost, distance, and education; (iii) the consumer surplus was IDR.16,912 per visit and the annual recreational value included 1,720 people who visited the lake annually over an area of 5,298,288 per ha. The results of this study reveal that Kongar Lake has a considerable recreational value that, from this point of view, can help policymakers to make the case for preservation planning and sustainable utilization of natural resources.

Highlights

  • One of the increasingly popular alternatives for encouraging regional economic growth is to develop the tourism sector

  • This study investigates the effects of explanatory variables including economic and social variables on the number of visits to estimate the recreational value from a conservation area lake, and the linear model is used as follows: Nvi = f [(Tci + P), Inci, Disti, Edui, Agei, Whi]

  • The conclusion of this study shows that taken together, all independent variables had a significant effect on recreation demand, which reflects variables of travel costs, distance, and education level, and which overall has a significant role in attracting visitors to Kongar Lake

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Summary

Introduction

One of the increasingly popular alternatives for encouraging regional economic growth is to develop the tourism sector. Indonesia’s tourism growth in recent years has begun to take on greater prominence. The current tourism sector in Indonesia occupies the fifth position as a producer of foreign exchange in the world (Tourism Ministry, 2016). The role of tourism in Indonesia has mainly been measured through foreign exchange earned from the expenditure of inbound tourists. Indonesia has placed more attention on domestic tourism, which has proved to be a major source of tourism expenditures (Ferland, 2011). The tourism targets in 2019 include 20 million foreign tourist visits, and in the future it is foreseeable that the tourism sector replaces oil and gas as the main source of foreign exchange in Indonesia. Based on data from the Central Bureau of Statistics (BPS), tourism contributions to national GDP increased from around 9% in 2014 and is targeted to reach 15% by the end of 2019 (Tourism Ministry, 2016)

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