ECONOMIC VALUATION OF THE CONSERVATION OF THE BANAUE RICE TERRACES: A COMPARATIVE ANALYSIS OF SURVEY METHODS
RICELDA GRACE BONADOR DONOR
SUBMITTED TO THE FACULTY OF THE DEPARTMENT OF ECONOMICS COLLEGE OF ECONOMICS AND MANAGEMENT
UNIVERSITY OF THE PHILIPPINES LOS BAÑOS IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF
BACHELOR OF SCIENCE IN ECONOMICS
APRIL 2009
University of the Philippines Los Baños
COLLEGE OF ECONOMICS AND MANAGEMENT College, Laguna
THESIS MANUSCRIPT ECONOMICS 200
Thesis of : RICELDA GRACE BONADOR DONOR For the Degree : BACHELOR OF SCIENCE IN ECONOMICS
Title : ECONOMIC VALUATION OF THE CONSERVATION OF THE BANAUE RICE TERRACES: A COMPARATIVE ANALYSIS OF SURVEY METHODS
APPROVED: ASA JOSE U. SAJISE Reader _____, 2009
APPROVED: PAUL JOSEPH B. RAMIREZ Adviser _____, 2009
Department
APPROVED: AMELIA L. BELLO Chair _____, 2009
APPROVED: LIBORIO S. CABANILLA Dean _____, 2009
ABSTRACT
DONOR, RICELDA GRACE B. 2009. Economic Valuation of the Conservation of the Banaue Rice Terraces: A Comparative Analysis of Survey Methods. College of Economics and Management, University of the Philippines Los Baños (Undergraduate Thesis).
Thesis Adviser: Professor Paul Joseph B. Ramirez
The study focused on the comparison of two survey methods namely: the face-to- face interview survey and the questionnaire survey. These surveys were done with the help of the Contingent Valuation Method in the valuation of the Banaue Rice Terraces. In the process of comparing the two survey methods, this study also determined the factors that influenced the respondents’ willingness-to-pay for the conservation of the terraces.
The study used Closed-Ended Iterative Bidding Method to elicit WTP of the respondents and Ordinary Least Squares Regression (OLS) in identifying the significant factors for the interview and questionnaire surveys. The OLS regression was also used in the combined regression run of the interview and questionnaire data with the addition of type of survey method as a dummy variable. A two-sample mean comparison test was used to determine whether there exists significant difference between the mean WTPs of the two survey methods.
After the regression run, significant factor that affected the respondents’ WTP for the interview survey was monthly income and the significant factor for the questionnaire survey was the household size. The combined regression run for both surveys showed that monthly income and the type of survey method were significant in eliciting the WTP.
Results showed that face-to-face interview increased the WTP by PhP334.84 as compared to questionnaire survey method. The result of the t-test showed that there exists a significant difference of PhP308.95 between the mean WTP of the two survey methods and it also showed that the mean WTP estimate of the interview survey is higher compared to the mean WTP estimate of the questionnaire survey.
TABLE OF CONTENTS
Page
Biographical Sketch iii
Acknowledgements iv
Abstract v
Table of Contents vi
List of Tables viii
List of Figures ix
Chapter 1. Introduction 1
Background of the Study 1
Statement of the Problem 3
Significance of the Study 4
Objectives of the Study 5
Chapter 2. Review of Related Literature 6
Economic Valuation Methods 6
Contingent Valuation Method 9
Major Contingent Valuation Methods 10
General Survey Issues Faced by CVM 13
Comparative CVM Studies 17
Chapter 3. Theoretical Framework 20
Total Economic Valuation Principle 20
Economic Valuation of Environmental Goods 21
Contingent Valuation Method (CVM) 22
Chapter 4. Methodology 25
Study Area 25
Data and Sources 25
Analytical Procedure 28
Chapter 5. Results and Discussion 31
Characteristics of the Respondents 31
Knowledge and Opinions of the Respondents 33 Valuation for the Conservation of the Banaue Rice Terraces 34
Comparison of Willingness-to-Pay Estimates 37 Combined Regression Analysis for Both Survey Methods 37
Chapter 6. Summary and Conclusions 39
Chapter 7. Limitations and Recommendations 41
References 42
Appendix
Questionnaire 44
LIST OF TABLES
NUMBER TITLE PAGE
1 Summary of Major Strengths and Weaknesses of CV Elicitation Methods
16
2 Socio-economic characteristics of respondents 32
3 Knowledge and opinions of the respondents 33
4 Mean WTP estimates of interview and questionnaire survey methods
34
5 Results of OLS regression for interview survey method 35 6 Results of OLS regression for questionnaire survey method 36 7 T-test for WTP mean estimates of interview and questionnaire
survey methods
37
8 Results of OLS regression for combined data of both survey methods
38
LIST OF FIGURES
NUMBER TITLE PAGE
1 Total Economic Valuation Framework 21
2 Measures of Maximum WTP and Minimum WTA for Prices and Quality Changes
24