Using factor analysis to identify consumer preferences for the protection of a natural area in Portugal

Abstract

This paper focuses on the application of factor analysis so as to identify consumer preferences for the protection of a Natural Area. We combine the use of factor analysis with the valuation data obtained by contingent valuation survey. The survey, conducted via in-person questionnaires in 1997, is targeted at the economic valuation of the protection benefits of the Parque Natural Alentejano e Costa Vicentina, a natural protected area along the southwest coastline of Portugal. Factor analysis results show that the consumer is characterized by a three-factor motivational structure: use, warm glow and non-use motivation factor, respectively. We introduce these motivation factors, together with the respondent's socio-economic characteristics, in the economic valuation function of such natural protected area. Estimation results show that consumer motivation factors have an econometrically robust role. Therefore, consumer motivations are interpreted as crucial information for accurate social cost-benefit analysis of alternative protection scenarios, and thus serve as an important cornerstone in designing an effective and broadly accepted management policy for the Parque Natural Alentejano e Costa Vicentina.