Willingness to pay for the conservation of yew trees in vietnam

The subject of this research is to measure the existence value of yew trees using contingent valuation method CVM with single-bound dichotomous choice DC.. 28 Figure 4: Levels of educati

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES

VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

WILLINGNESS TO PAY FOR THE

CONSERVATION OF YEW TREES IN

VIETNAM

BY

NGUYEN THANH TUAN

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

HO CHI MINH CITY, SEPTEMBER 2013

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES

VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

WILLINGNESS TO PAY FOR THE

CONSERVATION OF YEW TREES IN

VIETNAM

A thesis submitted in partial fulfilment of the requirements for the degree of

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By

NGUYEN THANH TUAN

Academic Supervisor:

DR TRUONG DANG THUY

HO CHI MINH CITY, SEPTEMBER 2013

Yew tree has not only value in use of wood products but also in existence of itself which

provides valuable opportunities to other fields of research such as biology, chemistry,

pharmacology The number of Vietnamese yew trees, however, has reduced year after year

and today there are only approximately 250 natural individuals locating in Daklak, Vietnam.

According to the IUCN and Viet Nam Red Data Book, Vietnamese yew trees are critically endangered The subject of this research is to measure the existence value of yew trees using

contingent valuation method (CVM) with single-bound dichotomous choice (DC) The study

finds out that the mean WTP for conservation of Yew in Vietnam is approximately VND

73,000 per household; and household heads with different socio-economic characteristics

such as age, income, occupation, and education have significantly different levels of WTP.

I would like to thank my supervisor for his instruction and comments through my research Especially I am deeply impressed by his enthusiasm with all students working with him That

is one of the motivations to help me accomplishing the thesis.

I also want to say thanks to all of professors, lecturers, and other people in this program Without knowledge from their classes and tutorials, my thesis cannot be possible Eventually, I would like to express my gratitude to my family, my friends, and my company

who did support me during the time of studying and working on my thesis.

Nguyen Thanh Tuan

Table of Contents

Chapter 1: Introduction 1

Chapter 2: Literature Review 6

2.1 A brief history of CVM 8

2.2 Economic theory of CVM 10

2.3 Basic elements of CVM 12

2.4 Empirical applications 16

2.5 Empirical studies In Vietnam 17

Chapter 3: Methodology and Data 19

3.1 WTP estimation 19

3.2 Survey design 21

Chapter 4: Results and Discussions 26

Chapter 5: Conclusion 53

List of tables

Table 1: Survey mode 13

Table 2: Statements 33

Table 3: Response of WTP questions – at the first time 36

Table 4: Response of WTP questions – at the second time 36

Table 5: Calculated mean WTP – non-parametric estimate 43

Table 6: Definitions of variables included in the regression 44

Table 7: Results of simple regression with constant and BID 45

Table 8: Regression results 47

Table 9: Summary of parametric estimated WTPs for the case of dependent variable - Y22 51

Table 10: summary of estimated WTPs for the case of dependent variable – Y22 52

List of figures Figure 1: Distribution of respondents’ age 26

Figure 2: Cross - tabulation of marital status and group of age 27

Figure 3: Occupation by gender 28

Figure 4: Levels of education 29

Figure 5: Gender in levels of education 30

Figure 6: Distribution of reported household income 30

Figure 7: Country facing problems 31

Figure 8: Environmental issues 32

Figure 9: Ranks of proposal species 33

Figure 10: Attitude toward endangered species 34

Figure 11: Survivor function for the second time WTP question 37

Figure 12: Reasons of why respondents dislike the proposed payment vehicle – electricity surcharge 40

Figure 13: Discussion time to answer questionnaire 41

Figure 14: Survivor function after certainty adjustment for the first time WTP elicitation 42

Figure 15: Survivor function after certainty adjustment for the second time WTP elicitation 43

Population and habitats of yew tree in Daklak, Vietnam:

district; 31 individuals in Trap K’sor, Krong Nang district; and 5 old trees in Cu Ne,Krong Buk district.

The existence of yew has not only meaning to itself, but also to the whole area ofprimary forest with biodiversity in which they locate According to Bao Huy (2010),with the biological characteristic that they have just lived in the seasonal wetlands,yews only exist in some specific areas in Vietnam or in the world With thethousand-year existence, yews and biological system in the area of conservationhave been a very valuable place for researches If there is no action or interventionfrom the government from now, the risk of permanent loss of the thousand-yearprimitive forest is inevitable by the growing and strengthening effects of timberextraction and yew-wood trading activities That would be a large detriment forstudies have not been done as well as the discovery of biodiversity here

Figure 1C (in Appendix C) illustrates the current distribution of yew individuals inTrap Ksor (Krong Nang) Each individual has been numbered as shown in thefigure The distribution is dispersed widely in a large area In Trap Ksor (KrongNang, Daklak), on March 24, 1987 the local government of Daklak provinceestablished a Decision about scheming and forbidding Trap Ksor forest area, andidentified that this zone had become a protection area of yew trees’ gene The totalarea is about 98.6 hectares and under the control of 2 rangers and 3 contractualofficers The surrounding area is agricultural land, separated from the core zone bysimple barbed wire The current problems with this preservation area are that thereare not sufficient human resources for protection purpose, low budget (about 16million VND per year), and long distance from here to the managerial office (10kilometers) This explains why there are still a lot of timber extraction activitieshere Moreover, the agricultural activities of farmers in surrounding area havereduced the water resource that supports for growing and fire protecting of yew(Bao Huy, 2010)

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Figure 2C (in Appendix C) describes the current distribution of yew population in

Ea Ral (Ea H’leo) In comparison with population in Trap Ksor, the individuals’location is quite close This would be a good condition in planning this area forconservation program In Ea Ral (Ea Hleo), the Yew management station has beenestablished and under control of Ea Hleo forest protection unit (FPU) in 1994 Butaccording to the manager, there has been not an official decision for thisestablishment The number of rangers here is just five persons Similarly to TrapKsor, this lack of management gives more opportunities to illegal loggers Thestatistic number of FPU shows that during 2009 there have been 22 violating casescaught and prosecuted (Bao Huy, 2010)

The number of yew trees in Cu Ne (Krong Buk) is just five individuals In addition,these trees are very old and without top of trees All of them locate far away fromthe residential area, then, the officers face many considerably difficulties inprotecting activities (Bao Huy, 2010) According to scientists (Bao Huy, 2010;Tran, 2012 in Thai, 2012), the number of current yew trees is going to be reduced inthe near future due to the increasing illegal logging and trading

Current efforts of conserving yew tree in Daklak province: In 2011, the

government of Daklak province has approved the project of conserving habitat andyew trees in DakLak for period 2011 - 2015 The project was designed with fundingfrom the state budget and partly from the contributions of the people and theinternational donor organizations However, this project had not been implementeduntil August 2012, and at that time, only Ea Ral area was taken over by the projectmanagers The remaining areas in Krong Buk and Krong Nang have just beenhanded over in March 2013 This slow procedure is due to lack of personnel and

3

funding According to the project design, the Ea Ral area needs at least 7 people onpatrolling duty However, three of them are general staff, and handle concurrently

3

Mr Phuoc – current director of Yew conservation program – answered reporter of Da Nang Polices

Newspaper on May 20, 2013 Online version is available at

http://cadn.com.vn/new/65_10471_-tha-p-tu-ng-ba-u-va-t-thu-y-tu-ng.aspx.

jobs as official and patrolling staff in reality Infrastructure and equipment are notfully equipped This has made limited in ability to protect yew populations in EaRal, especially patrolling activities in protected areas With flooded and marshyproperties, the movement of patrol is very difficult In heavy rain conditions, thisproblem is even more difficult Another concerning problem is the area around thebelt has not been cleared; there are many individuals of yew being on the boundaryand adjacent areas of agricultural crops of the local residents Therefore, it is veryeasy for illegal loggers to intrude the reserves At the same time, farming operations,irrigation of the surrounding population directly affect water resources andecological conditions of the yew populations.

As mentioned above the number of yew individuals in Ea Ral area was counted as

219 at the time of conducting the project research by a group of researchers from theTay Nguyen University in 2010 However, until the project management wasofficially formed and accepted the transfer of management, this number is only 140yew trees The main reason is due to destruction of illegal loggers If the loss ofcontrol is continued, there will be more individuals of yew ruined annually Thereduced number of yew also means that the resource for research and breeding willdecrease Reducing the number of individuals and increasing of competing specieswhich have been dominated habitats, plus the impacts of unfavorable naturalelements from the surrounding agricultural activities will directly affect the habitat

of yew environment This increases the risk of loss of yew in the future

Research problems

In summary, the lack of resources for research and management has constrained theconservation of yew trees Moreover, the low ability and quantity of rangers makethis task limited One important thing should be considered is that during 35 yearsthe scientists who were tracking these areas did not recognize any regeneration ofyoung yew tree by seed, just only a few plants regenerated by buds Most individualyews in these areas are old, and have a very poor growth and sparse foliage

Annually plants still flower and fruit set, but the results are flat-seeds (Bao Huy,2010).

Research questions

The above problems raise a question of whether resources should be devoted toconserve yew trees A full cost-benefit analysis is required to answer this question.This study contributes by measuring the economic benefits of the conservation ofyew trees This research analyzes attitudes and preferences on the issue ofVietnamese yew trees through a public survey This paper’s aims are to (i) assessthe public awareness of yew trees; (ii) to answer the question “Are people willing topay for the conservation of Vietnamese Yew?” If yes, how much are they willing topay?; and (iii) to determine the impacts of socio-economic characteristics on therespondents’ WTP

In answering the above questions, this study is able to partially measure theeconomic value of conserving yew tree in Daklak, which will be helpful for policymakers to decide on the conservation of yew trees, especially in the funding for aproject if it would be conducted

Chapter 2: Literature Review

Most of goods and services from natural resources and environment are consideredpublic goods, such as the forest, breathable atmosphere, water, recreational sides,and wildlife Unlike marketed goods which have market prices, these public goodshave neither market nor price Public goods and services are not sold or bought inmarkets; and markets do not regulate any activities of supplying or changing them

A system of decentralized market is not believable to conduce to the optimization ofusing natural resources (Freeman, 2003, chapter 1, p.6) Meanwhile, the measures ofwelfare from these providing or changing of environmental goods and services interm of money are very crucial for efficient use of natural resources Up to now,there are many methods that have been developed to monetize the welfare generated

by these goods and services

One of the primary elements to reach the efficient uses of natural resources is toassure that the valuation of environmental assets is appropriate Asheim (2000) inAmirnejad et al., (2005) states that the concept of environmental valuation brings onquestions about the ability to account for the environmental value in terms offinance According to Howard and Farber (2002), efforts to assess the monetaryvalue of ecosystem services act as various roles in management of the links betweennatural systems and human At the macro level, there is the contribution ofecosystem valuation into the construction of indicators of human welfare andsustainability At the micro level, the studies of valuation are based on both thestructure and function, and the varied and complex roles of ecosystem in supportinghuman welfare to reveal information

The total economic value of a natural resource consists of use and non-use values.Use value includes actual value (for instance, relaxing in a national recreationalarea) and option value (value that is not planned to use at the present but preservedthe existence to use in the future as an option) Non-use value relates to the WTP tomaintain existence of some goods even though they have no actual or option uses

Non-use value includes altruistic value, existence value, and bequest value.Altruistic value is welfare generated from the fact that a good or service is available

to other people in the society Bequest value is the welfare from knowing that goodsand services are available to the future generation The existence value reflects thevalue that an individual is willing to pay to maintain existence of goods, given thatindividual knowing there is no value of actual use or planned use for anyone(Bateman et al., 2002).This study aims to measure the existence value of yew tree inVietnam by estimating the WTP of yew tree conservation

Several techniques have been developed to elicit the attitudes and preferences for,and thus monetize the total economic value of public goods such as environmentalservices, forest, and recreation These techniques are usually classified into revealedpreference method and stated preference method However, the most populartechnique to measure existence value is the stated preference (SP) Researcherscould apply this method to ask people about their WTP for public goods, or theirwillingness to accept (WTA) a decrease in public goods, or to suffer the badservices, based on a hypothetical setting Among stated preference methods,contingent valuation method (CVM) and choice modeling (CM) are popular toanalysts In CVM, respondents are asked to give their WTP or WTA for a change insupplying or quality improving of natural and environmental resources In CM,respondents will face a series of choice sets In each set, they have to choose thepreferred alternative among several alternative goods, or rank the alternatives(Mogas, Riera & Bennett, 2006) Bateman et al (2002) suggests that if it is requiredthe WTP for the total values of environmental good or service, then the contingentvaluation method (CVM) should be chosen, instead of choice modeling (CM),because the latter is more suitable for measuring the WTP for one or some attributes

of that good

The following parts of this section will provide a brief history of CVM, economictheory of CVM, and basic elements of CVM

2.1 A brief history of CVM

Among the stated preference techniques, this paper applies the contingent valuationmethod CVM has been accepted by both academics and policy makers for thepurpose of valuation of resources, environmental goods and services (Han, 2011).CVM has become the method to be used most widely for environmental valuationwith stated preference information, with the value estimates obtained are contingent

on the information which has been early provided to interviewees in the survey.CVM was firstly introduced by Bowen (1943) and Ciriacy-Wantrup (1947), butDavis in 1963, was the first person who used CVM in an empirical study; in which

he conducted a survey within hunters’ sample and estimated the goose hunting’sbenefits The two important components in the total economic values were gainedafter that in the environmental economics literature: option and existence values.These values are not able to be estimated by the revealed preference methods such

as travel cost method (Smith, 1993); only the CVM or CM could capture theestimation of these values (Desvousges et al., 1993) In this line of thought,Hanemann (1994) states that this method is one of the methods that provide thestandardization and flexibility to measure the economic values CV method is based

on questionnaire to estimate non-market goods’ economic values In the survey,people will be asked to give out monetary bids for hypothetical goods with theprovided information of products However researchers in doing CVM need toconsider its possible shortcomings Problems of CVM pointed out and criticized byDiamond and Hausman (Hanemann, 1994) are validity of surveys, surveys’vulnerability to response effects, creating the values of survey process, respondents’prior experience or training for valuing the environment, and unable verification ofsurvey responses Hanemann (1994) argues that it is theoretically possible toestablish experiments of CV scenario which avert problems in terms of economicmodels commonly occurred with observed data

There are some ways assuring the reliability of survey that are avoiding conveniencesampling and self-administered surveys; confronting subjects with situation that isspecific and realistic, instead of abstraction; applying closed-ended question; adding

an interrogating section at the bottom of questionnaire to check whether respondentsunderstand and accept the important parts of the scenario; and applying appropriatestatistical procedures in data analyzing

Survey responses could be significantly influenced by some small changes in theorder or words used in the survey instrument (Schuman and Presser, 1981 cited inHanemann, 1994) But in some cases, the effects such as order, shifting meaning,and framing effects can be controlled For example, one choses the sequence tocreate a cautious result or randomizes items’ order across interviews to deal with thesequence effects Or by using stringent tests with techniques of cognition,researchers can understand what the meaning of instrument to people is, and whatthe responses mean

CV has been asserted that its respondents place an unreal value on item, and theinterview process generates the values that it is looking for to measure Hanemann(1994) stated that it is theoretically possible by debriefing section to identify thatwhether one had inattention or no focus and stated “hasty or ill-consideredresponses”, and researchers can discard them if desire

By eliciting the suggestion of NOAA Panel, Hanemann (1994) confirmed that priorexperience or training is not relevant if the purpose of CV survey is to draw outpreferences of people

To defend the idea that survey responses cannot be verified, Hanemann (1994)listed a lot of studies and concluded that “replication, comparison with estimatesfrom other sources, and comparison with actual behavior where this is possible” arethe ways to make validation of CV results

2.2 Economic theory of CVM

In term of welfare economics, there should be a public intervention when the totalbenefits of this intervention are greater than its costs However, the problem here isthat how can we measure this overall benefits? The starting point is the estimation

of individual benefit which then will be used to aggregate to the relevant population

to come up with the social benefits The net change in income associated with thechange of public goods provided in terms of quality or quantity is the accuratemeasure in the estimating procedure of an individual’s benefits The informationobserved from the CV survey will be employed to discover the willingness to pay(WTP) distribution for a change in hypothesized provision of environmental goods

A combination of the utility function in the economic theory and the error term ineconometric theory is the framework of CV method In a discrete-choice CV survey,respondents are asked to vote for or reject a program that provides an environmentalgood or services, associated with a given monetary cost (T) Respondents areassumed to have a utility function, U, which is a function of income (A), and a set ofconditioning factors (S): U (A; S) This means respondents know which factors areimportant to their utility levels But the true utility function may be unknown to theresearchers; therefore, they have to build up a simplified model of real one Ofcourse, it also captures important factors that are in establishing their welfarechanges The analyst’s model is given by u(a; s; ɛ) The lower cases a, s are used toreflect the fact that including factors by analyst will not be exactly the same asconsidered respondent’s ones To take into account the differences, the researchers’model contains a random element ɛ, which analyst cannot observe in the real utilityfunction of respondents We can write the utility function as:

Uij(qi; Aj; Sj) = uij(qi; aj; sj) + ɛij (1)

Where i=1 (q1) is the condition that the environmental good or service, or animprovement in its quality, is supplied; and i=0 (q0) is the status quo Eachindividual will decide whether to contribute for the continued existence of the

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environmental good (yew trees in this study) with a payment of specified monetaryamount, T People will accept the suggested amount if

uj(q1, aj-T j ; sj) + ɛ1j ≥ uj(q0, aj; sj) + ɛ0j (2)

and reject otherwise (Hanemann, 1984; Lee and Han, 2002)

However, the unobservable component ɛj is captured in this function Which meansthat analyst cannot observe it and is unable to predict the value taken by ɛ, but canonly estimate the probability of it taking any specific value Therefore, theprobability of a “yes” response could be estimated by the followings:

k=1

Pr(yesj) = Pr (ɛj < ∑m αk

sjk

− þT j ) (9)

where ɛj ≡ ɛ1 − ɛO The model can be estimated by assuming a distribution for

ɛj When a logistic distribution is assumed, the model can be estimated by alogit model

2.3 Basic elements of CVM

As described earlier, CV method is based on the information observed from asurvey It measures value of a scenario, compared to status quo Therefore, it isbasic but very important to the survey design including sampling, survey mode,scenario, elicitation format, and questionnaire structure Beside this, surveyadministration is also a crucial part in CVM

Once identifying the target population achieved, there will be a need to obtain arelevant sample represented for this population A sample is defined as therepresentative group for target population and a subject that survey will beimplemented By sampling, instead of entire population, time and expenses aresignificantly saved Designing sample includes both the types and the number ofinterviewees The principle of sampling is that the target subset must berepresentative for the entire population and sufficiently large to produce unbiasedand precise estimations Otherwise, there could be errors in sampling such assampling error or sample selection bias To minimize the sources of these errors, anappropriate approach of sampling must be taken There are two main techniques ofdesigning sample: non-probabilistic design and probabilistic design The formerreflects that the probability of being chosen of interviewees is not fixed and decided

by the researchers, meanwhile in the latter, individuals have a fixed and non-zeroprobability of being chosen (Bateman, et al., 2002) Due to the importance of this,sampling is a crucial part of CV study

Another part of survey structure in CVM is choosing the survey mode There aregenerally three main survey modes including mail surveys, telephone interviews,

k=1

and face-to-face interviews which could be taken place in respondents’ homes oroutside the home of respondents (Bateman, et al., 2002) The first has advantage incost among these modes Due to the travel to respondents’ home, face-to-face modehas the highest expense and time consuming The mediate one, telephoneinterviews, is more expensive than mail surveys, but with the normally short calls itscost is still lower than face-to-face interviews However, the response rates areinverse to the cost-based ranking, which means that the face-to-face survey modecan touch the response rate at 70 per cent or even higher; while the rates oftelephone and mail survey modes are normally at 60-75 per cent, and 25-50 percent, respectively.

In term of bias, the mail surveys can make self-selection bias when the large ratio ofreturned mails implies that they are interested in the survey’s topic Meanwhile theattendance of interviewers can also generate both negative and positive effects Forexample, respondents could feel uncomfortable to answer the sensitive questionsrelated to income or political attitudes with the appearance of interviewers Orinterviewees could react with the answers that make them nice to interviewers.The telephone survey mode can quickly get the results with calls but they are alsoeasily refused There are some characteristics of these modes summarized in thefollowing table

Table 1: Survey mode

Lack of interviewer biasEasier to answer sensitive questions

Can be completed at respondent’s own pace

Low response rates 25- 50%

Self-selection bias consuming

Time-Little control over who fills the questionnaire

Fixed question order

No clarification or probing possible

Restricts the use of visual aids

Respondent can alter earlier responsesTelephone interviews Complex questionnaire

structures are possibleCheaper than personal interviews

Permits probing and clarification

Relatively quick to administer

Easy to monitor60-75% response rates

No use of visual aidsRestricts use of lengthy scales

Respondent may get tiredRespondent may not answer sensitive questionsNon-telephone or non- listed respondents not sampled

Face-to-face interviews Highly flexible

Complex questions andquestionnaire structuresare possible

Permits probing and clarification

Larger quantity of data can be collected

Potential for extensive use

of visual and

Relatively expensive Interviewer biasIntercept surveys: samplesnormally not

representative and self- selection bias

Intercept surveys;

questionnaires have to be short

demonstration aidsHigh response rates 70% +Greatest sample controlSource: Bateman et al., (2002, p.106)Each of them has both advantages and disadvantages that researchers shouldconsider to select in order to come up with a qualitative data collection.

In constructing questionnaire, the scenario and elicitation format are considerablyimportant As any survey, CV survey also depends on the contexts, which meansthat with different prospects of the provided scenario and questions, the estimatedvalues are contingent Bateman et al (2002) suggests that three main describingelements should be included in a valuation scenario: the policy (or program, orproject) change of interest; the constructed market; and the payment method Moredetails will be introduced in the section of survey design

After being provided with information about the goods and the scenario,respondents will be asked questions to decide the value of goods if they face thechances to reach it under some certain conditions In other words, that is the purpose

of measuring monetary values In principle, elicitation method could be performed

in various ways: the open-ended format, the bidding game, the payment card, thesingle-bounded dichotomous choice, and double-bounded dichotomous choice(Bateman, et al., 2002) The open-ended format is the most straightforward to applyfor discovering values Respondents decide the values by themselves, thus themaximum WTP can be directly elicited from responses However, this methodcould lead to some problems, for instance, large number of non-responses, protestand zero answers, and outliers Moreover, this format is able to bring on unsoundresponses as argument of Mitchell and Carson (1989) in Bateman et al (2002) Inthe bidding game format, respondents will be repetitively asked whether they arewilling to pay a certain amount Raising or lowering the amounts is based on

whether respondents have accepted the previous offers or not This iterative processwill stop when a convergence of estimated WTP is achieved Payment cards present

to individuals a list of values (the values could be point estimate or a range ofestimates) to make choice In a dichotomous or discrete choice CV format,respondents are asked to make decision of “yes” or “no” for voting a hypothesizedchange of goods provision

Therefore, a good design of scenario and an appropriate payment mechanism areimportant parts that will crucially contribute to the reliability and accuracy ofresponses

Because the CV method is based on survey, then the questionnaire structure or theordering of questions is also an important stage in designing questionnaire Bateman

et al (2002) argues that the reasons of this importance are the effect of earlierquestions on the answers of the later stage, and the encouragement to answer therest questions

Beside the main and crucial parts above of survey designing, survey administrationthat consists of tasks from survey designing, pretest, to conducting survey needscrucially paying attention from the researchers, especially in the stages of pre-testand conducting main survey where the tasks are conducted by a group of people.This allows the research to be on the right way as designed

2.4 Empirical applications

As mentioned above, this paper explores the attitudes and preferences towards theVietnamese yew tree, and measures the WTP for the conservation of yew treesusing CVM

To the best of my knowledge, there is no study valuing yew tree during last decade

by using CVM There are several studies applying CVM to measure the welfarechanges of conservation of forest or avoiding deforestation Chopra (1993) statedthat existence value of tropical forests is about 91% of total use and option values

By using contingent valuation approach, Echeverria et al (1995) reported that theestimated WTP of existence value of cloud forest in Costa Rica is U.S.

$121.05/respondent Kramer and Mercer (1997) applied the contingent valuationmethod to estimate the WTP valuation of U.S citizen on the world tropicalrainforests On average, respondents presented a one-time of WTP around $21-31per household to protect an additional 5% of tropical rainforests In recent years,there were studies about forest of Amirnejad et al (2005) and Andrea et al (2010)

By using CVM, Amirnejad and partners found that the estimated WTP for forests’existence value was $2.51 per household/ month in Iran In the paper of Andrea etal., the mean WTP value of Swiss citizen for conservation of tropical forests wasapproximately CHF (Swiss franc) 110 per year

2.5 Empirical studies In Vietnam

In recent years, there are more and more researches applied stated preferencetechniques in Vietnam, especially in health care and environmental field Dang &Chennat (2010) applied the CVM to estimate the loss of value water resourcescausing by pesticide pollution They employed payment cards as elicitation method,

4

in-person interview, and payment fees as payment vehicle The results showed thatthe WTP for improving water quality is VND 98,520/year/household Pham, Le,Petrie, Adams & Doran (2008) conducted a research about the households’ WTP for

a motorcycle helmet in Hanoi, Vietnam with changes in price of a helmet Theauthors used CV survey with both discrete-choice and open-ended questions to elicitthe WTP Their finding was that the estimated WTP in average for a helmet is VND163,794 By using both CVM and choice modelling (CM) methods, Tran & Navrud(2007) estimated the social benefits of restoration and preservation programmes forthe My Son (a world cultural heritage site) in Vietnam In the application of CVM,they employed dichotomous choice questions with four bid levels for both

4

This is not correct in term of definition of payment vehicle (PV) PV is the channel through which the money is collected, for example: income tax, property tax, electricity bill.

subsamples of residents and foreigners They found out that the two methodsproduce almost the same estimate Instead of using WTP, Navrud, Tran, & Bui(2012) used willingness to contribute (WTC) labour to a flood prevention program

in a CV study The face-to-face survey was conducted in Quang Nam province,Vietnam with sample size of 706 households They suggested that this CV approach

of WTC labor is applicable to the estimation of total welfare loss of naturaldisasters Truong (2005) studied about the WTP for conservation of Vietnameserhinoceros by employing CVM In the drop-off survey, the author employed thesingle - bounded questions in eliciting the WTP, and electricity bill as paymentvehicle The estimated WTP is approximately VND 40,000 per household

In health care segment, CV is also applied to find out the demand for some types ofvaccines Do, Whittington, Le, Utomo, Nguyen, Poulos, Dang, Kim, Nyamete, &Acosta (2006) aimed to discover the demand function for typhoid fever vaccines byusing CVM with a sample size of 1065 households in Hue, Vietnam The authorsgave evidence that estimated mean WTP for a single vaccine varies from US$2.30

to US$4.80 In another healthy study, Kim, Do, Poulos, Le, Cook, Nguyen,Nyamete, Deen, Clemens, Vu, Dang, & Whittington (2008) conducted a survey on

800 randomly selected respondents for purchasing an oral cholera vaccine in Hue,Vietnam Their finding was that the estimated median WTP for 50% effective for 3years vaccine is approximately US$5

Chapter 3: Methodology and Data

This chapter introduces the methodology that this paper applied, especially themethod to estimate the WTP including non-parametric and parametric estimation,and the data collected from the CV survey

3.1 WTP estimation

This section describes the procedure to estimate the non-parametric and parametricWTP that will be employed to estimate the WTP based on single-bounded CVquestions

For the linear random utility model defined in equations (8) and (9), the willingness

to pay (WTP) can be identified as:

The left hand side of equation (12) is the utility of respondent j-th with the CVprogram and net of the required payment - Tj The right hand side is the utility ofthe status quo of that respondent In general, the WTP is the amount of moneythat makes respondents indifferent between the proposed CV scenario and thestatus quo.

–1 y j

–1 1–y j L(α, þ|a, s, T) =

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o

j=1

J

positive because respondents with higher educational level and positive attitude areexpected to be more willing to pay Meanwhile, the sign ofþ3, and þ4 could benegative or positive.

3.2 Survey design

As mentioned in chapter 2, a well design of scenario and payment mechanism isreally important to elicit precise and reliable responses (Bateman et al., 2002).According to Bateman et al (2002), there are three fundamental elements in avaluation scenario The first is to describe the policy change of interest Singleimpact policies and multidimensional policy are what researchers may be attracted

in valuing policy change If a policy has a single impact, the description of itschange which is valued consists of several steps: attributes of the investigated goodsuch as characteristics, benefits related to use or non-use, extent of geography, beingrights of property should be introduced by a way that makes respondents easy tounderstand or conceive the meanings; it is recommended to describe the availablesubstitutions for interest, and alternative possibility of expenditures that may

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influence the elicited values; and, of course, it is needed to state the proposedchange of policy and the according change of the attributes of interested good.

For a multidimensional policy, when the total value of the policy is required, thescenario should introduce information about each component and all of itscongruous elements, and also provide the relative changes to the status quo What if

it is only a specified change needed valuation, and it is just part of including policywhich encompasses various simultaneous occurrences? If that is the case, it isneeded to present that single change as part of wider package Then respondents getchances to consider all possible effects including substitution, complementary, andincome effects between elements of that package In another situation, when thechange being valued is part of sequent changes of a policy, the point at which itappears in the sequence will affect its value And this value becomes little by littlesmaller when its place is deeper and deeper in the sequence of valuation (Hoehn andRandall, 1989 cited in Bateman et al., 2002)

At the beginning, focus group discussions (FGDs) were applied to explore theproblem The participants were rangers or who has good knowledge about this field.The first FGD was to identify the current situation of yew, and opinion ofparticipants about how to develop the current program of conservation of yew tree

In the second FGD, the participants were ordinary people This task provided somesuggestion about the bid levels would be used to elicit the respondent’s WTP

The most important thing in CV method is the scenario that provides informationabout the good being valued A brief introduction of Yew is presented in the firstparagraph which also includes its use and non-use values Then it is the currentsituation of Yew and its conservation plan conducted by the local government Thelimitations of the current program are the basics of proposed program used in this

CV survey Respondents then will be asked to vote for this proposed program ofYew conservation with a specified amount of money; and it is a one-time payment

The questionnaire is constructed in 4 parts The first is the general problems facingthe country; the second is the attitude toward conservation program and knowledgeabout selected endangered species; the third part describes the conservation plan foryews; a scenario will be described in this part to explain the problem more clearlyand to take the answers about the willingness to pay; the final part consists of aseries of questions about the socio-economic situation of respondents Beforeconducting the final survey, the questionnaire was pretested several times in order tocheck their availability and validity After revising, survey would be conducted asplanned.

The single-bounded questions were employed in the questionnaire to identify theamount of voting WTP from interviewees According to Freeman (2003), there are

at least three advantages of discrete choice (DC) format relative to the biddinggame, and open-ended question: firstly, people feel as in real life when they decide

to buy or not a product in a supermarket given offered price Secondly, because thatthey just answer yes or no to the proposed question And it is simple to makedecision, not like in an open-ended question that they could feel uncomfortable orrefusal to give an answer Thirdly, this format could lead respondents to answertruthfully in survey, called the incentive compatibility The reason of choosingsingle-bounded DC instead of double-bounded DC is that the design of latter ismore complicated and could lead to downward bias of estimated WTP due to thelow designed range (Freeman, 2003) Follow-up questions would also be included

to find out the reasons of against WTP (including zero WTP) and of supportingprogram Respondents were asked these questions (DC and follow-questions) twotimes, the first was right after the scenario part, and the second took place at the end

of the third part of the questionnaire

The next step is to choose sample This paper employed the two-stage randomly

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sampling The sample size is 360 respondents with six bid levels The survey is

5

VND 5,000; VND 15,000; VND 30,000; VND 60,000; VND 250,000; and VND 500,000

conducted in Ho Chi Minh City There were five districts randomly selectedincluding District 4, District 7, District 10, District 12, and Tan Binh District Then,

6

in each district five streets were randomly chosen On each street, interviewerstarted with a random address to implement the survey The rule is that each fivehouseholds, takes one, and in case of building, office, apartment it is automaticallyskipped This process would be finished when interviewers have got enough number

of participated respondents on each street

The survey mode was applied is the drop-off mode, including some freeconversation with respondents at the initial contact to introduce briefly the purpose

of survey, and at the time of picking questionnaire up to explain what respondentsstill misunderstand The drop-off method has been proved to increase the responserate relative to mail survey (Douglas et al., 1970; Stover and Stone, 1974; Lovelock

et al., 1976; Mangione et al., 1982; Olsen et al., 1998; Melevin et al., 1999; Steele etal., 2001; Riley and Kiger, 2002; Clark and Finley, 2007 in Allred and Ross-Davis,2011) The questionnaire will be delivered to the respondents and picked up a fewdays after when respondents completed questionnaire This method combinescharacteristics of mail survey and personal interviews (Bateman et al., 2002) Thereare several advantages of drop-off in comparison with mail survey: potentialpersonal contacts, verbal communication, and the ease of returning questionnaire.The researcher has the chance to have personal contacts when he/ she deliver thequestionnaire to respondents at their home (face-to-face contact) The purpose ofstudy and the important participation of respondents are able to be explained at thattime With the verbal communication, researchers have the opportunities to checkwhether chosen respondent are suitable or not in terms of criteria, for instance, age,owner relationship, etc Another noticed advantage of drop-off mode is the ease toreturn the completed questionnaire, because it will be picked up by researchers atdesigned time Even though there are still several disadvantages such as highconducting costs, possible inability to complete the questionnaire of respondents at

6

More details are available in Appendix D.

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home due to respondents’ health, busy time, ability of literacy, this method has beencontinued to be applied in current researches of natural resources To make

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incentive to interviewees’ responses, there will be some gifts in cash According toDillman et al (2009) in Allred and Ross-Davis (2011), respondents commonlyfinish questionnaire to gain rewards now or in the future Gifts in cash will giveincentives to respondents in answering questionnaire This could reduce the bias insome cases that respondents have no incentive to complete questions, for example,they do not like the subject, to participate in the survey, or just recognize that there

is no benefit for them

The payment method if respondents vote for the conservation is the electricity bills.This method is suitable because most households in Vietnam use payable electricity.Meanwhile, other methods like water bill, tax are not appropriate Becausehouseholds in country side do not buy water, they use own well for example; orpeople feel not comfortable in paying tax due to the difference in income whichmeans that higher income people may pay more than lower income people.Moreover, at this time people are encouraged to consume more by the government’spolicy such as the exemption and reduction of personal income tax, so that it isimpossible to get acceptance from people in voting for increasing their own tax.Beside the questionnaire, this research planned to apply a series of discussion withmanagers of the two Yew Reservations, and interviewing key informants (rangers)

7

Respondents have two options: receiving 20,000 VND or choosing a gif like pen or candy The latter is what questionnaire-completed respondents suggest.

Chapter 4: Results and Discussions

In this section, the results of descriptive statistics and WTP estimation will bepresented respectively The former part describes the descriptive statistics of thesample, including the analyze of WTP questions The latter consists of both non-parametric and parametric estimation of WTP

Figure 1: Distribution of respondents’ age

%

Group of age by marital status

in comparison to single and other marital status, except the first two groups under

20 and from 20 to 30 years old The married rate is 77% (Figure 2)

<20 20-30 31-40 41-50 51-60 61-70 >70

Figure 2: Cross - tabulation of marital status and group of age

From the Figure 3, approximately 31% of respondents reported that their major job

is doing own business (self-employment), and about 24% of them are privateemployment The rate of people working as laborer, mechanic, tailor, and skilledworker takes the third place with 15.87% of respondents The rate of peopleworking for government is 12.7%

Figure 3 also shows that there is a huge difference between male and female ratio inthis main occupation (32% and 18% respectively) However, the rate of male

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Willi ngne ss to P ay for t he Co ns erv a tio n of Ye w - tr ees in Vi et na

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No schoolPrimary High school Vocational College UniversityAfer university

Figure 4: Levels of educationThe results in the Figure 5 show that the difference between male and female isstrongly significant in both these levels There is more female than male in highschool, but it is reversely in university level Across the rest the difference is notmuch significant

%

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Distribution of reported income

Average household size is 4.5 persons, this is higher than the overall level of

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Vietnam in 2010 (3.89 persons/household) In average, the number of incomeearner of each household is 2.48 persons Average household income is 9.27 millionVND per month And monthly average income per capita is 2.05 million VND

9

which is higher than that of the country in 2010 (1.387 million VND/month)

Figure 6: Distribution of reported household income16% of respondents stated that they have a better economic situation than others,and 80% of respondents reported that they are at average or lower than average level

Attitude toward general problems and issues in Vietnam

Figure 7 gives the statistical result of problems that country has been facing.Economic issues are ranked as the most important among the problems that Vietnam

is facing (36%) Followings are government and governance problems, andeducation

Figure 7: Country facing problemsEnvironment is ranked at the fourth place, more important than other issues such ashealth, foreign relations, violation and crime, or infrastructure However, thedifference between the forth and the two previous ranks is not considerable (11%,14%, and 15% respectively rank for environment, education, and government &governance) There are 66% of answerers reporting that the problems of theenvironment and natural resources are not properly addressed in Vietnam

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Figure 8: Environmental issues

Knowledge and attitude toward endangered species

Among six presented species, Dalbergia Tonkinensis Prain (Sua) is ranked as themost crucial species (31%) that need to be protected (Figure 9) This might beexplained that the information about this kind of tree has been widely informedthrough public media in Vietnam during previous time Yew and Dalbergia (Cam)are the next two (25% and 17% respectively) The rank of Yew could be biased due

to the introduction of questionnaire Moreover, the number of respondents that haveseen Yew is very low, about 18%; but the correct answer for question about the type

of Yew is just 9% of respondents In other words, most of respondents have not seen

Fokienia hodginsii Dalbergia Tonkinensis Prain Pinus Yew Calocedrus Dalbergia

the Yew and have not much knowledge about the Yew, but they still rank it as animportant species that highly requires protection The plausible reason here is thatpeople perceive the importance of Yew in the introduction part of questionnaire orthe initial contact with interviewers

Figure 9: Ranks of proposal speciesTable 2: Statements

Statement 1 There are more considerable environmental problems than conservations of endangered species

Statement 2 Poaching, exploiting, and trading endangered species should be punished by lawsStatement 3 The conservation of endangered species should be a priority concern of the government

Statement 4 The endangered species are important even though we do not see or have an interaction with them

Statement 5 Everybody has duty to guarantee for existence together with mankind in the future of current known plants and animalsStatement 6 The government should increase more monetary resource to resolve the environmental programs in Vietnam

Statement 7 The government should increase taxes to pay more for endangered species

Statement 8 The government should pay attention to helping people before spending money on endangered species conservationStatement 9 High-income household should be taxed more to pay for conservation of endangered

40% 67% 69% 73%

63%

Agree 50%

Figure 10 shows that people feel free and are generous when stating the generalstatements concerned to endangered species without any relation to government’sactivities or monetary contribution In general, more than 60% of respondents agree

to the first 5 The common characteristics of these statements are that in generalthey describe the common attitude toward the environmental problems which could

be accepted by a large proportion of population; they do not relate to any specifiedcontribution of individual or to governmental activities that may affect people’sbenefits or obligations

Figure 10: Attitude toward endangered speciesBut with the statements related to government or themselves as in statements from 7

to 10, people react cautiously The actions like increasing taxes or contributing bycash payment from the government are not strongly supported Because respondents