IVM Institute for Environmental Studies
7
The Economic Value of the Coral Reef
Ecosystems of the United States Virgin Islands
Final Report
Pieter van Beukering
Luke Brander
Boris van Zanten
Els Verbrugge
Karin Lems
Report number: R-11/06
31 August 2011
This report was commissioned by: National Oceanic and Atmospheric Administration
(NOAA) of the United States Department of Commerce
It was internally reviewed by: Roy Brouwer
IVM
Institute for Environmental Studies
VU University Amsterdam
De Boelelaan 1087
1081 HV Amsterdam
T +31-20-598 9555
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E info@ivm.vu.nl
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Contents
Summary
5
Abbreviations
6
Acknowledgements
7
1
Introduction
9
2
The US Virgin Islands and its Marine Habitat
11
2.1
2.2
2.3
General introduction of the US Virgin Islands
Marine Communities in the USVI
Stressors of Coral Reefs in the USVI
11
13
14
3
Methodology
17
3.1
3.2
3.3
3.4
3.5
3.6
Tourism
Recreational uses
Fisheries
Coastal Protection
Amenity value and property value
Research and education value
18
18
19
20
21
21
4
Recreation and culture
23
4.1
4.2
4.3
4.4
Introduction
Methodology
Data description
Preferences and willingness to pay
23
23
30
41
5
Real estate
49
5.1
5.2
5.3
5.4
5.5
5.6
Introduction
Methodology
Data analysis and results
Hedonic pricing function
Amenity value
Uncertainty analysis
49
49
50
52
54
55
6
Coastal protection
56
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
Introduction
Methodology
Vulnerable Areas to Floods
Coastal Protection by Coral Reefs
Vulnerable Areas Protected by Reefs
Value at Risk
Coastal Protection Value
Coral Disintegration and Reef Substrate Erosion
Conclusions & Recommendations
56
56
59
62
67
70
73
75
76
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
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Tourism
77
7.1
7.2
7.3
7.4
7.5
7.6
Introduction
Tourism trends
Methodology
Survey results
Tourism value
Conclusion
77
77
82
86
89
95
8
Fisheries
96
8.1
8.2
8.3
8.4
Introduction
Commercial fishery
Recreational fishery
Conclusions
96
96
97
99
9
Total Economic Value
100
9.1
9.2
9.3
Introduction
Composition of TEV
TEV over time
100
100
102
10
Value mapping
105
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Introduction
Methodology
Results
Tourism
Diving and Snorkeling
Coastal Protection
Amenity values
Aggregation
Conclusion
105
105
107
107
108
110
112
113
114
11
Discussion
116
11.1
11.2
Conclusions
Recommendations
116
116
References
119
Annex A
Choice model valuation method
127
Annex B
Questionnaire household survey
130
Annex C
Example Choice cards
140
Annex D
Example distribution sheet
141
Annex E
Interview protocol
142
Annex F
Background on Coral Reefs
146
Annex G
Dive sites map
147
Annex H
Fish card
148
Annex I
Questionnaire tourist exit survey
149
Annex J
Operator survey
157
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
5
Summary
Given the importance of the coral reefs to the United States Virgin Islands (USVI), and
in light of the increasing threats caused by human development potentially reducing
the services provided by this ecosystem, there is a need for quantitative information to
guide decision making regarding management of coral reefs. The coral reefs of the
USVI provide a wide range of ecosystem services including tourism services,
recreational uses, fisheries, coastal protection, amenity values, and education/research
services.
The objective of this study is to provide a quantitative measure of how important the
reefs are to the USVI in monetary terms, and generates a reference point with which to
compare possible alternative development/conservation plans. Information on the
Total Economic Value (TEV) of reefs provides a basis for advocating the preservation of
the coral reefs in USVI, establishing damage compensation, setting fees for permit
applications, or determining potential user fees for residents and tourists.
The study involved a wide range of research activities. These include the following:
1. An elaborate local resident survey aimed at estimating the local cultural and
recreation attachment to the marine environment;
2. An extensive tourist survey with the objective to get a comprehensive insight into
the importance of the marine environment for visitors to the USVI;
3. A thorough analysis of the coastal protection function of reefs thereby revealing
the role of coral reefs in avoiding storm damage to properties and infrastructure;
4. A hedonic pricing analysis based on real estate transactions which led to conclude
about the positive impact of healthy reefs on house prices;
5. A spatial analysis aimed at preparing value maps of the coral reefs of the USVI.
6. An aggregation exercise combined with a rapid scenario analysis leading to the
estimation of the TEV of coral reefs of the USVI.
The above activities resulted in the estimation of the main ecosystem services provided
by coral reefs in the USVI. The levels at an annual basis vary between ecosystem
services: reef related tourism ($96 million), recreation ($48 million), amenity ($35
million), coastal protection ($6 million) and support to commercial fisheries ($3
million). The TEV adds up to $187 million per year. In addition to estimating TEV, GIS
techniques are used to visualize and better understand the spatial distribution of
economic values for three services: tourism, coastal protection and amenity.
The study provides various insights that help to develop policy measures directly
contributing to a more sustainable management of coral reefs in the USVI. First, the
TEV of coral reefs is crucial in determining the financial claims in case of damage
events in reef areas. Second, the economic valuation study is crucial in 'capturing' the
estimated benefits for the purpose financing coral reef management. The TEV study
provides a clear perspective who is benefiting most from healthy coral reefs. These
beneficiaries may contribute to the preservation of the USVI coral reefs. Third, the
study shows that the second most important beneficiary of the coral reefs is the local
community, who benefits from the reef in various ways (e.g. recreation, culture, coastal
protection). Through stronger engagement of the local public in marine management,
decision makers may build more local support for conservation oriented measures
while at the same time enhancing the awareness of local communities.
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6 Abbreviations
Abbreviations
Abbreviation
Definition
CBA
CPUE
CE
CS
CVM
FY
GIS
HP
JNCC
MPA
N/A
NPV
PS
TC
TCM
TEV
USVI
VAT
WRI
WTP
Cost Benefit Analysis
Catch Per Unit Effort
Choice Experiment
Consumer Surplus
Contingent Valuation Method
Fiscal Year
Geographical Information System
Hedonic Pricing
Joint Nature Conservation Committee
Marine Protected Area
Not Applicable
Net Present Value
Producer Surplus
Travel Cost
Travel Cost Methods
Total Economic Value
United States Virgin Islands
Value-added tax
World Resources Institute
Willingness to Pay
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
7
Acknowledgements
This study would not have been possible without the enormous support of numerous
people and organisations in the USVI. First of all, we want to thank DPNR, especially to
Paige Rothenberger, for facilitating the study and for helping us overcome the many
hurdles that we encountered during the course of the study. Additionally, I would like
to thank NOAA for the funding of the project, and especially Christy Loper for her
valuable input and for introducing us to the right people, and Simon Pittman for
providing the opportunity to present and discuss the study. Other people that helped
us with the design of the survey were Sylvia Susnjic (Eastern Caribbean Center), Rafe
Boulon (Virgin Islands Natural Park), Chris Settar, T. Smith, M. Taylor, M. Brandt, A.
Dikou, R. Boulo and J. Murray (all UVI).
We are also very grateful to The Nature Conservancy, especially Aaron Hutchins and
Scott Atkinson, who provided us with a suitable location and equipment to train the
interviewers on St Croix, and to the Sandra Romano and Stephen Prostermann at the
UVI Marine Sciences department, as well as Christy Loper at EPSCOR, for providing us
with training locations on St Thomas. We are also grateful to Kevin Brown (Marine
Sciences Department, University of the Virgin Islands), Elena Drei-Horgan (Dewberry),
Stevie Henry (Eastern Caribbean Centre, University of the Virgin Islands), Alexis Lugo
Fernandez, Christy McManus (National Park Service), Pedro Nieves (Department of
Natural Resources and Planning of the USVI Government) and Simon Pittman (Marine
Sciences Department, University of the Virgin Islands). Also we want to thank Sofia
Saavedra Bruno (University of Netherlands Antilles) for taking the time to answer all
questions and sharing information and data, Steve Prostermann for some very
inspirational field trips and making us feel welcome at the Marine Sciences building,
Donnie Dorsett (USVI Bureau of Economic Research) for providing the requested data,
and the Virgin Islands Port Authority, West Indies Cooperation Limited and U.S.
Customs and Border Patrols for authorizing the surveying in the airports, marinas and
on cruise docks.
We would also like to express my gratitude towards all the interviewers who made this
study possible. Thanks to Blake Bennett, Diana Brooks, Karissa Cave, Julene Davis,
Patricia Fodoasse, Glora Francis, Shamoi Garcia, Jovanny Harrigan, Shane Hodge, Joel
James, Serah James, Shawna John, Janell John, Ayana Milligan, Kerez Phipps, Lemuel
Ryan, Alyssa Ryan, Tammy Smith, Indira Turney, Amanda Weber, Ernestine Wilson.
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
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9
Introduction
Given the importance of the coral reefs to the United States Virgin Islands (USVI), and
to the global marine ecosystem, and in light of the increasing threats caused by human
development potentially reducing the services provided by this ecosystem, there is a
need for quantitative information to guide decision making regarding management
and conservation of the area. Coral reefs in the USVI territory are formed around the
main islands St. Croix, St. John, and St. Thomas and several smaller islands. The
spatial extent of the coral reef ecosystems in the USVI is according to the most recent
estimations approximately 344 km2 (to 18m depth) or 2,126 km2 (183m depth)
(Rothenburger et al. 2008). The coral reefs of the USVI provide a wide range of
ecosystem services including tourism services, recreational uses, fisheries, coastal
protection, amenity value and property value, non-use services and education and
research services.
Many of the activities that damage coral reefs—including overfishing, dredging, or
discharge of sewage near reefs—occur because an individual or group seizes an
immediate benefit, without considering the long-term consequences. Often, the party
that gains is not the one that bears the cost. A new development may pollute and
degrade an offshore reef, but those who suffer are the fishers or the divers who use
that reef. Shortcomings in management practices often stem from inadequate
information on the economic and social impacts of different activities, and a focus on
short- rather than long-term benefits. When the benefits coral reefs provide to the
economy of the island are under appreciated by policy-makers, decisions remain
business driven for the short-term, and long-term sustainability of the services
provided to the Community is jeopardized.
The economic valuation of ecosystem goods and services is increasingly used
worldwide, gaining popularity because it offers a useful means of inserting the concept
of ecosystem value into policy discussions and decision-making (Van Beukering and
Slootweg, 2010). By quantifying—even imperfectly—the value of an array of
environmental goods and services under different development scenarios or policy
options, the total costs and benefits (as well as the “winners and losers”) are made
explicit. It is hoped that an increased awareness of the economic values of ecosystems
will lead to more sensible, far-sighted decision-making than is currently the case in
coastal areas around Bermuda.
The main objective of this study is to determine the Total Economic Value (TEV)
of the coral reefs of the USVI. The economic valuation of these ecosystem services
provides a quantitative measure of how important the reefs are to USVI in monetary
terms, and provides a reference point with which to compare possible alternative
development/conservation plans. In light of the lack of integration of environmental
values in policy and/or decision-making in USVI, this project provides a step towards
incorporating environmental economic values in future decision making. For this
reason, an additional objective of the project is to develop capacity in economic
valuation in the USVI and to provide a strategy for the promotion of the integration of
environmental economics in policy and/or decision-making.
Estimating the economic value of coral reefs in supporting the well-being (including
both social and financial benefits) of local people is neither easy nor straightforward.
The methodology used for determining the Total Economic Value (TEV) is diverse
among studies, and makes comparisons among sites difficult. The TEV framework
divides the value of ecosystem goods and services into use and non-use values. Use
IVM Institute for Environmental Studies
10 Introduction
values are further broken into direct use, indirect use and option values. Direct use
values include consumptive uses – such as fish for food- and non-consumptive uses,
such as tourism and recreation. Indirect use values include ecosystem services such as
shoreline protection. Non-use and option values are the most controversial elements of
TEV; they are the most difficult to measure quantitatively and have the greatest
uncertainty attached to them.
The greatest part of the TEV obtained for coral reefs of the USVI refers to the more
tangible direct and indirect use values. The study focused on these values in order to
deliver a TEV which is understood by all, widely accepted throughout the community
and the government, and ultimately used in future policy and decision-making. The
approach used here focuses on six key ecosystem goods and services: (1) Coral reefassociated tourism, (2) Reef-associated fisheries, (3) Amenity or reef-associated
surplus value on real estate, (4) Physical coastal protection, (5) Reef-associated
recreational and cultural values, and (6) Research and education value.
The proposed total economic valuation of services from USVI’s reefs will provide a
basis for future economic valuation studies on specific impacts as they arise. In turn,
results will provide the tools for assistance in decision-making towards a sustainable
environment. Moreover, information on the total economic value (TEV) of reefs can be
used for advocating the preservation of the coral reefs in USVI, establishing damage
compensation, setting fees for permit applications, , or determining potential user fees
for residents and tourists. The purpose of this document is to describe the planned
research to be undertaken within the USVI Coral Reef Economic Valuation Project.
The report is structured as follows. Chapter 2 describes the USVI and its Marine
Habitat. Chapter 3 addresses the methodology applied in this study. Chapter 4
presents the results of the household survey conducted among citizens of the USVI
aiming to determine the local recreation and cultural value of coral reefs. Chapter 5
estimates the real estate value of coral reefs in the USVI. The coastal protection
function of coral reefs in the USVI is valued in Chapter 6. Chapter 7 concentrates on
importance of coral reefs for the tourist industry of the USVI. Chapter 8 describes the
fishery value. The Total Economic Value is estimated in Chapter 9 and spatially
allocated and presented in value maps in Chapter 10. Chapter 11 draws conclusions
and formulates recommendations.
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
2
The US Virgin Islands and its Marine Habitat
2.1
General introduction of the US Virgin Islands
The United States Virgin Islands are located at the eastern tip of the Greater Antilles,
approximately 65 km east of Puerto Rico, at a latitude of 18o 20’N and a longitude of
64o 50’W. The four main islands are St. Croix, St. John, Water Island and St. Thomas.
The four main islands of the territory are surrounded by more than 90 other islands,
cays and rocks (Thomas and Devine, 2005). The location of the USVI in the world is
displayed in Figure 2.1. Before Columbus discovered the Virgin Islands for the
Europeans on his second trip to the new world, they were inhabited by Ciboney,
Arawak and Carib peoples. After the Spanish ruined the labor market on Hispaniola
(the island which comprises of Haiti and the Dominican Republic today) in their lust for
gold, they turned to inhabitants of other Caribbean islands, and have probably
depopulated the Virgin Islands as well in the early 16th century. In the following
century, before the Danish arrived, the islands attracted Dutch, British and French
settlers and pirates. For a few decades the islands were under pirate rule. The Danish
West India Company occupied St. Thomas from 1672 onwards and St. John from 1718.
In 1734, the Danish bought St. Croix from the French. The islands remained Danish
until the sale to the United States in 1916 (Dookhan, 1974). Under Danish rule St.
Thomas became a centre of trade in all kinds of “merchandise”, including slaves. St.
Croix, and to a lesser extend St. John, specialized in primarily sugar cane and some
cotton production. After the abolishment of slavery in 1848, most of the sugar cane
plantations went out of business. Today, the territory of the US Virgin Islands consists
of three counties: St Thomas, St John and St. Croix. The total population is 111,991,
which equals 162 people per square km.
Figure 2.1
The USVI on the world map
11
12 The US Virgin Islands and its Marine Habitat
St. Croix
This island is the most southern and eastern located Virgin Island. It is also the island
with the most agricultural development. More gentle slopes combined with a fertile
climate; make St. Croix more suitable for agriculture than the other Virgin Islands.
From east to west, St Croix is about 34 km long and 9.6 km wide at its widest point,
making it the largest Virgin island (216,4 km2). The highest point on the island occurs
at Mr. Eagle, this hill has an elevation of 322 m above mean sea level. St. Croix is
surrounded by a gradually descending narrow shelf around the island. These
circumstances allowed the growth of a fringing reef around much of the coastline
(Thomas and Devine, 2005).
St. Croix contains 49% percent of the USVI population. According to 2008 population
estimates, the island has 54,876 inhabitants, which equals a population density of 98
persons per square km. important economic assets for the islands economy and
employment are the Hovensa oil refinery and the presence of the US National Guard.
St. John
St. John is the least populated county in absolute and relative (per square km)
numbers. Only 4% of the total USVI population lives on St. John, which has a total
population of approximately 4480. However, the island experiences the fastest relative
population growth of the territory. Three decades ago, only about 400 people were
living on St. John. The population is projected to increase 11% until 2015 (NOAA,
2005).
The island is about 13 km long and is about 4 km wide and has a total land area of
48,6 km2. The highest elevation on the island is Bordeaux Mountain; with an elevation
of 392 m. St. John is characterized by steeply sloped volcanic mountains, with some
patches of moist forests. The Virgin Islands National Park and Biosphere Reserve
encompasses more than half (56%) of the total land area on St. John (Thomas and
Devine, 2005). The National Park including the waters surrounding the island and
attracts over a million visitors every year.
St. Thomas
This island is the second largest island in the territory, but is not even half the size of
St. Croix. The total land area is 76,9 km2. The island is about 19 km long and 5 km
wide. The highest peak on the island is also the highest peak of the USVI; Crown
Mountain reaches an elevation of 474 m. Like on St. John, the landscape is dominated
by steep volcanic mountains. Because of the steep topography reef growth along the
coastline is limited to shallow areas. This is why there is not a lot of fringing reef
surrounding the islands of St. Thomas and St. John, as it is the case in St. Croix
(Thomas and Devine, 2005).
St. Thomas is the most densely populated county (St. Thomas County comprises of St.
Thomas and Water Island); in 2008 the population density was estimated at 162
people per square km. The total population of the island was estimated at 52,636
(NOAA, 2005). St. Thomas is a main tourism center, as it is the main cruise ship
destination in the region and a center of resort hotels. In the period 2000-2005,
1,916,223 cruise ship tourists visited the USVI annually. A vast majority of the cruise
ships visits St. Thomas (NOAA, 2005).
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Water Island
Water Island is the smallest of the four main islands. It is the largest cay surrounding
the main islands and has a land area of 2 square km. Only recently, the US federal
government transferred Water Island to the territorial government of the USVI. Water
Island is located about one km south west of the town of Charlotte Amalie on St.
Thomas. The island is about 4km long and 1,5 km wide and the maximum elevation is
about 300 m. Water Island is well known for its fresh water sources and natural
diversity (Thomas and Devine, 2005).
2.2
Marine Communities in the USVI
The marine communities in the shallow waters surrounding the US Virgin Islands are
very diverse. The coastal waters support many different coral reef and marine plant
communities (Thomas and Devine, 2005). Present conditions that allow the growth of
coral reefs around the Virgin Islands are nutrient-poor waters, which allow under water
photosynthesis, and a permanent water gradient. Figure 2.2 displays the marine
communities around the USVI, as mapped by National Oceanic and Atmospheric
Administration (NOAA) in 2005.
Figure 2.2 Marine Communities in the USVI (Source: NOAA)
13
14 The US Virgin Islands and its Marine Habitat
There is no generally accepted classification for marine communities around world.
Especially in tropical regions many different classifications are in use. The University of
the Virgin Islands and NOAA use a comparable classification, which is also applied in
Figure 2.2. The red areas in Figure 2.2 are coral reefs. “A coral reef is a hardened
substrate of mounded relief formed by the deposition of calcium carbonate by the
reef-building corals and other organisms…” (Thomas and Devine, 2005 p. 164).
Parts of this category are fringing, bank, barrier, patch and linear reefs. Patch reefs are
relatively small isolated reef systems and formed on sand or hard bottom
environments. Other coral reefs, generally consists of three main areas: the reef crest,
the fore reef and the back reef. The reef crest is the “top” of the reef. It is the shallow
part where the waves brake and thus it is the high wave energy area. Therefore, the
crest is colonized by wave-resistant invertebrates such as fire coral. The back reef is
located on the land side of the crest. Sometimes lagoons are formed behind the back
reef. Fore reef areas stretch from just outside the reef crest (upper fore reef) towards
the edges of coral reef ecosystems into deeper water (lower fore reef).
The marine communities of colonized and uncolonized pavement are represented by
the dark grey areas on the map. In these areas the sea floor is formed by a hard, flat
carbonate bottom. When it is colonized pavement, a low percentage (5-10%) of the
bottom is covered with live corals and other invertebrates (Thomas and Devine, 2005).
Colonized/uncolonized bedrock is a type of community that is usually fringed around
the steep and rocky coastlines of the USVI. In Figure 2.2, these marine communities
are represented by the grey areas. Colonized bedrock is usually found in waters up to
3 meters of depth. In case of colonization, the bedrock is covered with macroalgae,
hard corals and other invertebrates (Thomas and Devine, 2005).
In Figure 2.2 seagrass beds are the green and dark green areas. The dark green areas
represent continuous seagrass communities and the green areas patchy seagrass
communities. Seagrass beds occur on a water depth up to 10 meters and are among
the most productive natural systems in the world (Thomas and Devine, 2005). These
communities provide plant biomass and habitat for fish as well important grazing
areas for sea turtles.
Mud, in Figure 2.2 displayed as orange, are sediments of land-based origin. The most
extensive mud-covered area is the natural harbor of Charlotte Amalie on St. Thomas,
where the sediments are sheltered from waves and currents and thus stay in place.
Rubble, represented by the light grey areas, is comprised of dead and unstable coral
patches which are often colonized macro algae. Areas dominated by sand (yellow in
Figure 2.2), are generally areas that are exposed to strong currents or wave energy.
Because of the lack of habitat complexity, there are not many fish species living in
these habitats. Exceptions are rays and small detritivores (Thomas and Devine, 2005).
The shaded areas in Figure 2.2 represent the areas dominated by macro algae. These
are the deeper areas on the insular shelf. Algal plains are generally found at depths
exceeding 20 meters. There is a large algal plain south of St. Thomas as well as some
areas south of St. Croix.
2.3
Stressors of Coral Reefs in the USVI
The coral reef ecosystem is affected by many anthropogenic and natural stressors. The
most significant threat to the USVI reefs is coral bleaching or thermal stress. Coral
bleaching occurs when sea surface temperatures (SST’s) are higher than normal for a
longer period. The coral bleaching event of 2005 is the most severe in USVI history.
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
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12-15 weeks SST’s were over 30 degrees Celsius. The result was the 90% of the coral
around the USVI was bleached (Wilkinson and Souter, 2008). Furthermore, according to
a bi-annual reef monitoring program at Buck Island Reef National Monument (BIRNM)
and East and Marine Park (EEMP) (both at St. Croix), performed by NOAA and the
National Park Services’ South Florida Caribbean Network (NPS SFCN), 25 out 30 coral
species were affected and here 51% of the coral was bleached (Rothenburger, 2008).
When the SST’s started to decrease in the winter of 2005, some coral recovered.
However, bleaching makes corals more susceptible to diseases and a lot of coral was
hit by white plague disease. Eventually, this led to decline in coral cover of 34,1-61,8%
(Wilkinson, C., Souter, D., 2008; Rothenburger et al., 2008). It is most likely that the
unprecedented high SST’s that cause coral bleaching are the result of modern climate
change (Donner et al., 2007; Rothenburger et al., 2008).
Another future climate change related threat is ocean acidification induced coral reef
erosion. Approximately 25% of the CO2 emitted annually by anthropogenic sources
enters the ocean, which results in higher levels of carbonic acid in the oceans.
Indirectly, this change in chemical composition of ocean waters results in a reduction
of the rate calcification of reef building corals (Hoegh-Guldberg et al., 2007).
Increasing pressures of development and poor planning and regulations are a threat to
the reefs as well. The extent of impervious surfaces in watersheds increases, this leads
to more runoff and sedimentation. Monitoring programs show reefs suffer from runoff
and sedimentation: near shore reefs most and during rainy season coral mortality is
higher (Rothenburger et al., 2008).
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
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17
Methodology
For the economic valuation, the different coral reef ecosystem services need to be
quantified and expressed in monetary terms. A host of valuation techniques is
available to value the goods and services provided by coral reef ecosystems. Standard
techniques in microeconomics and welfare economics rely on market information to
estimate values. However, for most externalities inherent to environmental issues,
standard techniques such as using market prices cannot be employed. Three general
categories of valuation approach are identified: (i) generally applicable techniques that
use the market directly to obtain information about the value of the affected goods
and services or of direct expenditures; (ii) revealed preference methods that calculate
external benefits indirectly by using the relationships between environmental goods
and expenditures on market goods; (iii) stated preference methods which ask
individuals about their willingness to pay (WTP) for the environmental good directly (by
using structured questionnaires). Table 3.1 lists the most common techniques used for
valuing the goods and services of coral reef ecosystems. For more elaborate texts on
these techniques, see Van Beukering et al (2007).
Table 3.1
Valuation techniques for goods and services of coral reefs
Technique
Directly applicable market techniques
- Loss of earnings / Human capital approach (HC)
- Change in Productivity / Effect of production (EoP)
- Stock (houses, infrastructure, land) at Risk (SaR)
- Preventive expenditures (PE)
- Damage Costs (DC)
- Replacement costs (RC)
Goods and services
Tourism/recreation
Fisheries/ornamental use/tourism
Coastal protection
Coastal protection
Coastal protection
Coastal protection
Revealed preference techniques
- Travel-cost approaches (TC)
- Hedonic pricing method (HP)
Stated preference techniques
- Contingent valuation methods (CVM)
- Choice Experiment (CE)
Tourism/recreation
Amenity value
Cultural services, etc. biodiversity
Cultural services, etc. biodiversity
Source: Adapted and shortened from Dixon (1990), Barton (1994).
The approach for this study is to focus on valuing the six main uses of coral reefs and
adjacent habitats in selected sites on the USVI: (1) Fishery value; (2) Tourism value; (3)
Recreational and cultural value; (4) Real estate value; (5) Shoreline protection; and (6)
Education/research values. The proposed valuation approach for each of these services
are described in detail in the following sections. For each value an indication will be
provided of the confidence of the estimate. Where appropriate, values for coral reef
services will be estimated separately for the three large islands comprising the USVI in
order to clarify differences in resource uses, threats and potential conservation
strategies. This process of economic valuation will assist in understanding the
economic importance of coral reefs and help guide the management of the marine
environment in the USVI.
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18 Methodology
3.1
Tourism
Tourism is an important sector for USVI. Although not all tourism depends directly on
coral reefs, coral reefs often form an important marketing tool to attract foreign
visitors. Therefore, much coastal tourism depends to an extent on the quality and
quantity of the coral reefs in the USVI. While beneficial in sustaining the economy,
tourism can also pose a threat to coral reef ecosystems. Typical tourist damage
includes degradation from solid and human wastes, boat anchoring and coral breaking
(inexperienced divers and reef walkers). The stepwise approach proposed to value
coral reef related tourism is as follows:
Step 1: Value the commercial side of recreation and tourism. In order to value the
commercial side of recreation and tourism, the 'change in productivity approach' will
be used to estimate gross economic values for the various recreational activities that
use the reefs directly or indirectly. The statistics of the Department of Tourism will be
used to obtain gross value data. Input-output modelling results and national accounts
will be used to calculate these into net values. If insufficient data for this calculation
are available for USVI, input-output results from other studies may be used. This will
allow us to calculate the 'economic rent' of the tourism sector.
Step 2: Estimate the non-market value of recreation / tourism. For the non-market
side, we propose to use the 'travel cost method' to estimate consumer surplus for
foreign tourists (so-called individual travel cost model). Existing tourist exit surveys
from the Department of Tourism will be used as data input for this exercise. For local
recreation, a 'choice modelling' survey will be carried out. This survey is combined with
the fisheries/traditional/cultural uses as one overall survey (see description below).
Step 3: Estimate the value of future tourism scenarios and threats. In order to estimate
the economic value of recreational and tourism uses under alternative
development/conservation scenarios, potential changes in recreational uses need to be
assessed. Key informant interviews will be used to determine the likely potential
changes in recreational uses over time. We propose to use different future tourism
scenarios (e.g. 'high volume low value added' and 'low volume high value added') for
these estimates of the economic value.
3.2
Recreational uses
The recreational use of coral reefs comprises reef-related activities, such as diving and
snorkelling, enjoyed by both tourists and residents as well as beach activities, which
are also partly dependent on coral reefs. Moreover, recreational fishing is an important
means of establishing and maintaining cultural and familial ties. A survey based on the
'choice modelling' approach is proposed to value the recreational uses. This technique
is basically a refinement of traditional contingent valuation method (CVM) but it avoids
direct questions on people's willingness-to-pay for certain activities that is central in
CVM. Instead, a small set of choices are given with different attributes. In this way,
choice modelling tends to capture non-market lifestyle values better than traditional
contingent valuation. The attributes could for example include: (a) Coral reef integrity
(e.g. diversity, reef health); (b) Recreation (e.g. diving, snorkelling potential); (c)
Fisheries (e.g. openness for recreational fishermen); (d) Water quality (e.g. level of
pollution); and (e) Payment vehicle (e.g. property tax, fuel tax, user fees, VAT).
Moreover, the survey will solicit information about cultural and ethnic background,
age, gender, education and income of the interviewee, allowing for an analysis of
differences in value across different ethnic groups and across and socio-economic
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
19
background. The age of the respondent together with the other questions can give an
insight how these values and perceptions of coral reefs are changing over time. Key
informant interviews and focus group discussions will also be carried out to get a
better understanding of the local values and of trends over time.
Step 1. Design of the survey: Designing the survey involves determining the choice sets
and attributes that survey respondents will be asked to choose between. In order to
keep the questionnaire short, easy to understand, and to reduce the complexity of the
analysis, the number of attributes included will be limited to four or five.
Step 2. Pretesting of the questionnaire/design: Pretesting the questionnaire will involve
surveying a small sample of respondents (15-20) to check that they understand and
respond to the questions in a meaningful way. The questionnaire will be adjusted if
any problems arise. This process will be repeated a number of times until we are
satisfied that the questionnaire can be properly interpreted by almost all respondents.
Step 3. Implementation of the survey: The full survey will be implemented with the
assistance of students from UVI. The target number of respondents is between 400
and 500. The respondents will be sampled randomly from the USVI population.
Specific sub-samples of interest in this study are: locals, foreign residents, fishermen,
and divers. Data entry can also be completed with the help of local students using an
Excel template prepared by the economic consultant. Data cleaning will be completed
by the economic consultant.
Step 4. Analysis and write-up of the survey: The analysis of the data will be conducted
with the software programme LIMDEP 9.0. Members of the local team will be included
in the process so that knowledge of all steps in the valuation is shared.
3.3
Fisheries
Commercial and recreational fishing are important for USVI’s residents and tourists.
Traditionally, fishing has been a central activity within local communities, with an
important social function. Fishing is not only of financial importance for USVI, but is
also a social activity. Many local group outings are structured around reef-related
fishing activities. It is important that the value of fishing as a pivotal cultural point is
assessed during this project. Ideally, the fishery value of reefs is valued using the
production function approach. However, the data requirements of this method are
high. In case of data unavailability, the net factor income approach can be used
instead.
Step 1: Assess the market value of coral reef fisheries. For commercial fisheries, gross
value estimates will be used based on fisheries statistics and seafood market reports,
which are possibly available from Department of Fisheries. For
recreational/subsistence fisheries, household surveys and secondary literature will be
used to estimate catch. The team will work with local biologists in order to obtain
accurate estimates for these fisheries. Assessment of gross value of sport-fishing
charters will be based on estimates of sold and consumed catch, following the
approaches for commercial and subsistence fisheries described above. Internationally
published conversion factors are proposed to transform these gross value figures into
net terms.
Step 2: Estimate the “non-market” value of coral reef fisheries. As mentioned earlier,
the proposed estimation method for consumer surplus calculations of non-fish
benefits, such as lifestyle and recreation, is 'choice modelling'. We propose to combine
the choice modelling survey for non-fish benefits of USVI residents with the local socio-
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20 Methodology
cultural and recreational use estimates discussed earlier into one survey. We further
have the option to use the welfare estimate of charter sportfishing by foreign tourists
based on benefit transfer from surveys in Florida [e.g. Leeworthy et al., 1997], as a
specific survey for non-market values just for charter sportfishing by foreign tourists
would be beyond the budget of the study. In the case of benefit transfer, key
informant interviews on the USVI will be carried out to confirm the relevance of the
Florida data for the USVI situation.
Step 3: Assess the numbers and demographics of individuals involved. Beside the
economic valuation of fishing, numbers and demographics of individuals involved with
each of the main fisheries will be estimated. Also, fisheries uses by the large guest
worker population of the USVI will be analyzed.
3.4
Coastal Protection
Coral reefs are able to dissipate wave energy, thereby fulfilling an essential protective
function in coastal ecosystems. The USVI are subject to tropical storms and hurricanes
and as a result substantial damage was caused by various extreme weather events.
Intact reefs can prevent damage to expensive coastal infrastructure during typhoons
and tropical storms. The valuation of this protection function crucially depends on the
infrastructure and economic activity along the coastline. Government agencies and
hotel operators in USVI have spent significant amounts of money on shoreline
protection in areas where reef degradation has led to erosion.
The estimation of the value of shoreline and infrastructure protection through coral
reefs depends on: (a) the value of the 'stock at risk' (houses, land, infrastructure, ports,
beaches) in the absence of healthy reefs; and (b) the value of structures to prevent
damage to shoreline and infrastructure to replace damaged reefs, such as wavebreakers, revetments, etc. The Government wants to keep views of the natural
coastline intact. Several steps are proposed in determining the coastal protection
value.
Step 1: Assess real estate, property and infrastructure value. We propose to use the
'damage costs (avoided)' approach by estimating the value of the 'stock at risk' and
assessing the risk with intact reefs and with damaged reefs. The value of the 'stock at
risk' will be based on local estimates by realtors and government agencies.
Step 2: Assess cost of wavebreakers, etc. Cost of wavebreakers, revetments and other
coastal protection structures breaking the 'force of nature' will be obtained using
engineering calculations and local cost data for such structures. These structures
would replace healthy reefs and therefore form the 'replacement cost' or 'cost avoided’
estimates. In this context, they can also be referred to as 'preventative expenditures'
(e.g. Emerton, 1994) although this term is sometimes used exclusively for
expenditures by individuals to avoid negative impacts.
Step 3: Determine the value of the coastal/infrastructure protection function: In order
to determine this value, the risk differential between intact and damage reefs need to
be assessed first. This will be done through literature review/research and from
government agencies and other key informant interviews. If the damage costs based
on this risk differential are lower than the replacement costs, then these damage costs
form a good proxy for the value of the coastal/infrastructure protection function. In
the opposite case, investments in these defensive structures would be economically
justified and such investments form a good proxy for the value of this protection
function. Through GIS-based estimates of the various coastal areas on the USVI, the
overall coastal/infrastructure protection function of reefs in USVI will be determined.
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
3.5
21
Amenity value and property value
The beautiful views of shallow coastal waters from beachfront properties suggest that
part of the amenity value of these properties can be attributed to the presence of coral
reefs. Degradation of the reefs makes beachfront properties less attractive, reduces
occupancy rates in hotels, etc. (Gustavson et al., 2000). The view of a clean beach and
a healthy coral reef is perceived to be a benefit to those who can enjoy it every day.
Therefore, beachfront houses along a beautiful coast with clean beaches and healthy
coral reefs generally sell for higher prices. Likewise, condos and hotel rooms adjacent
to healthy marine systems generally operate at higher room and occupancy rates.
To accurately capture this amenity-associated value, a hedonic pricing valuation using
house prices is proposed. Through this method, the surplus value of houses in the
vicinity of healthy marine systems can be measured. Combining this with the number
of the residential houses provides an estimate of the positive amenity value
attributable to a healthy coral reef. The basic steps in applying the hedonic pricing
method to value environmental amenities using house price information include:
Step 1: Identify the ecosystems and services under consideration and collect data on
residential property sales in the region of the coral reef being valued. The required
data include house prices and locations; and structural, neighbourhood, accessibility
and environmental characteristics.
Step 3: Statistically estimate a function that relates house prices to property
characteristics, including the distance to the coral reef. The function indicates how
much more a property close to the coral reef is valued compared to a similar property
that is located further away.
The feasibility of a hedonic pricing study depends on the data available from various
agencies in the USVI as well as the budget for data processing and analysis. In case
these conditions are unfavorable, we could decide to use benefit transfer techniques to
determine this value. Earlier value functions capturing the surplus property value of
coral reef ecosystems were estimated in Bermuda and Hawaii.
3.6
Research and education value
USVI is home to a great number of endemic species and many researchers are
attracted by this biodiversity. We will determine a specific value of biodiversity through
estimates of expenditures by government agencies and NGOs on coral reef research in
the USVI, using the following steps:
Step 1: Assess value of education and research. We propose to estimate the education
and research values of coral reefs through 'expenditures data' on reef-related research
and education grants. Note that these should be confined to sources outside the USVI,
such as Federal funds, grants by US and international NGOs, etc. Funds from the USVI,
such as local budget allocations are considered a transfer and do not constitute
'additional' economic value. The research value is the sum of all incoming money from
non-USVI sources to all the organizations, institutes and activities focused on reef
research and education in the USVI.
Step 2: Collection of additional information: Besides this information, the actual
number of students involved in different coral reef based modules will be collected as
well as any estimate of gross expenditures to prepare and deliver these modules. This
information is additional and these gross expenditures will not be added to the
estimate discussed in the previous paragraph to avoid double counting but serve as a
general quantified description.
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4
4.1
23
Recreation and culture
Introduction
This chapter describes the economic valuation of the cultural and recreational services
that the coral reefs surrounding the United States Virgin Islands provide to local
residents. The aim of this chapter is to determine the Willingness To Pay (WTP) of the
local residents for coral reef conservation and estimate the cultural and recreational
value component of the total economic value (TEV) of the USVI’s reefs. Cultural and
recreational values are derived from the use the USVI’s aquatic environment for
recreational purposes, such as recreational fishing, swimming, diving and snorkelling,
and the enjoyment of the territory’s clear coastal water and intact reef systems.
Because most residents of the USVI do not depend on the marine environment for
subsistence or livelihood, the relationship between residents and the reefs can be
described as predominantly recreational and cultural.
In order to quantify these recreational and cultural values in monetary terms, we have
designed and implemented a so-called choice model valuation study. Using a survey of
USVI households, we have attempted to elicit the preferences that residents have for a
number of characteristics related to coral reefs and the marine environment.
Choice modelling analyses public preferences towards environmental goods to
estimate their economic value. Data is obtained for this study from face to face
interviews, conducted in a representative sample of 779 USVI households. The
questionnaire includes seven sections on: background of respondent; recreational use
of reefs; environmental awareness; choice model; demographic characteristics;
recreational fishing; diving and snorkelling. In the choice model section each
respondent is repeatedly asked to choose between complex, multi-attribute profiles
describing various changes in USVI’s coral reefs. The attributes selected were: quality
of coral reef, fish catch per fishing trip, swimming restrictions, water clarity, and a
monthly tax. Given the complexity and specificity of the choice model design and
questionnaire development, a description of the steps taken is given in the
methodology section.
4.2
Methodology
The methodology used in designing and implementing the choice model valuation
study involves the following steps:
1.
2.
3.
4.
Choice model design;
Questionnaire development;
Survey implementation; and
Analysis of results.
A more extensive explanation of the choice modelling valuation method itself is
provided in Annex A.
4.2.1 Choice model design
The choice model design comprises of firstly selecting the attributes and levels that are
used to describe the alternative options that respondents are asked to choose between;
and secondly the representation of choices to respondents.
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24 Recreation and culture
Determining the attributes and their levels
For the choice experiment designed for this study, the number of attributes was set at
five: a monthly environmental tax, reef quality, fish catch per trip, water clarity and
swimming restrictions. The number of five attributes is the result of a trade-off
between the complexity of the choice cards and the comprehensiveness of the
representation of the ecosystem. Considering the complexity of the scenarios, it is
advisable to keep the number of attributes low. At the same time, a large number of
attributes is necessary to capture every aspect of an ecosystem and its services. The
five attributes were chosen in such a way that they capture the total state of the reef
ecosystem, while at the same time keeping the inevitable overlap between them to a
minimum. These attributes were adapted from similar previous studies (Cesar 2004;
Van Beukering 2006; Van Beukering 2007; Bervoets 2008; Van Beukering 2009). These
attributes have proven to be understandable to survey respondents and yield
meaningful WTP estimates. The initial levels of the attributes were also adapted from
previous studies, but were adjusted after consultation with stakeholders, experts and
pre-testing. The attributes and the levels that were eventually decided upon are listed
in Table 4.1, followed by a more detailed description of each of the attributes.
Table 4.1: Overview of attributes and levels
Attribute
Level 1
Level 2
Level 3
Level 4
Level 5
Monthly tax
$0
$5
$ 15
$ 25
$ 40
Reef Quality
Poor
Moderate
High
Fish Catch per trip
-20%
No change
+20%
Water Clarity
Poor
Moderate
High
7 days
4 days
0 days
Swimming restrictions
1. Monthly tax: Although generally the public opinion towards taxes is not very
positive, it was decided to use a monthly environmental tax as a payment vehicle.
The main reason for this is that the USVI residents are not familiar with
environmental levies tied to the use of other goods and services. A tax is a widely
recognized payment vehicle.
2. Reef Quality: The reef quality describes the abundance and variety of the coral reef
ecosystem, including coral species, reef fish and other creatures. To keep the
choice experiment simple, the reef quality was expressed in qualitative terms
rather than quantities. The levels for this attribute are poor, moderate and high.
3. Fish catch per trip: This attribute describes the change in catch per trip from the
present catch. The levels for this attribute were set at 20% less catch, no change in
catch, and 20% more catch.
4. Water clarity: This describes the extent of visibility under water. The water clarity
is affected by pollution, runoff and sedimentation. For the same reasons as the
reef quality attribute, the levels used for this attribute are qualitative: poor,
moderate and high.
5. Swimming restrictions: Describing the number of days that one would not be
allowed to go swimming. The levels were set at 7 days, 4 days and 0 days.
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25
The design of the choice cards
The statistical design for the choice experiment (the combination of attribute levels
and alternatives in each choice presented to the respondent) was generated using
Sawtooth/SSI software and a fractional factorial design. Six separate choice sets, each
consisting of five choice cards, were generated. Each choice card contains three
alternative options: two management options and an option representing the future
situation without extra management. Each respondent is asked to answer one set of
five choice cards (i.e. there are 30 choice cards in total). In order to avoid a starting
point bias, each set of choice cards was equipped with an identical first card. This first
card was an extra choice card that was used as an example to explain and illustrate
the choice experiment to the respondent.
No prohibitions on the combinations of attribute levels within an alternative were
included in the design, so it is possible that apparently contradictory combinations
could occur (e.g. poor water clarity with no swimming restrictions). Whether or not
respondents picked-up on any contradictory combinations of attribute levels was
examined in the pre-test. The design was manually checked for dominant choices, i.e.
for combinations of alternatives in which the attribute levels for one alternative are all
better than in the other alternative.
The attribute levels for each alternative on a choice card were represented by
pictograms together with explanatory text to aid respondent understanding of the
choices they are asked to make. An example choice card is presented in Figure 4.1.
Several other choice cards are shown in Annex C.
4.2.2
Development of the questionnaire
In order to place the results of the choice experiment in the right context the choice
experiment is accompanied by an additional survey. In this study, the choice
experiment was combined with a structured interview in the form of a questionnaire.
The sequence of the questions for every interviewee is standardised to minimize
ordering effects. The questionnaire comprised of mostly closed-ended questions, since
this facilitates a relatively uncomplicated coding of answers. The use of closed-ended
questions also allows for straightforward comparisons between sample subgroups.
The questionnaire was developed in three phases. The first phase consisted of the
drafting of a first version adapted from similar previous research (Cesar 2004; Van
Beukering 2006; Van Beukering 2007; Bervoets 2008; Van Beukering 2009). This
version of the questionnaire was sent to a number of stakeholders to gain feedback on
the relevance of the questions. The stakeholders were local experts in the fields of
ecology, socio-economics, fisheries, coastal zone and resource management. The
second phase comprised the revision of the first draft and the incorporation of the
feedback of these experts, resulting in a second draft. The third phase comprised of
three rounds of pre-testing of the questionnaire.
Pre-testing is a crucial part in questionnaire development. It assesses the effectiveness,
clarity and comprehensibility of the questionnaire and the design of the choice sets;
and it gives an indication of the required length of time required to complete the
questionnaire. Each round of pre-testing was done with five different respondents.
After each round of pre-testing, the questionnaire was refined by addressing any
problems that were encountered during pre-testing. The result of this extensive
process was a questionnaire consisting of seven different sections and 42 questions in
total. The content of the different sections is described below. The complete
questionnaire is provided in the Annex.
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26 Recreation and culture
Figure 4.1 Example of a choice card used in this study. The respondent is asked to
make a choice between the three different scenarios/options depicted.
1. Section I of the questionnaire contains general questions addressing the
background and household composition of the respondent. The questions were
straightforward and easy to answer, providing a warm-up for the rest of the
questionnaire.
2. Section II is made up of questions regarding beach-related recreation. The purpose
of these questions to obtain information on the frequency and types of recreation
that the respondent engages in. Given that all types of beach-related recreation are
directly or indirectly dependent on the existence of the reef and healthy marine
environment, this information is used to assess the level of use of the reef.
3. Section III addresses the environmental awareness of the respondent, by assessing
their activities related to the environment in general, their perception of
environmental threats, and more specifically the threats that the reef is facing, and
their preference and support for different management options. A number of
questions in this section were requested by NOAA in order to assist in a study on
public awareness of the effects climate change. The section was concluded by
asking if the respondent was, in principle, willing to pay an environmental fee or
tax contributing to the improvement of the US Virgin Islands marine environment,
setting the tone for the next section- the choice experiment.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
27
4. Section IV, the choice experiment, is a more involved section that requires the
assistance of the interviewer. Following each choice the respondent was asked to
make, they are also asked to state the certainty of their choice. The rest of the
questions in this section focused on the way that the trade-offs were made and
preferences for the organization managing collected funds.
5. Section V focuses on demographics, asking questions on age, ethnicity, education,
profession and income. Since some of the questions touched upon sensitive
matters, especially those regarding income and ethnicity, the respondents were
made aware that these questions were for statistical purposes only. This section
was included to test the representativeness of the sample and obtain information
of respondent characteristics that potentially determines willingness to pay.
6. Section VI is an optional section, containing questions regarding diving and
snorkelling. The section is only completed if a member of the respondent’s
household is involved in either diving or snorkelling. The questions focus
specifically on the level and frequency of snorkelling and diving, as well as the
favourite locations and key motivations to go snorkelling or diving.
7. Section VII is another optional section, focusing on recreational fishing. It contains
questions about the frequency and locations of fishing trips and the amount and
composition of the catch per trip. It also asks the respondent for the key reasons
to go fishing.
Simultaneous with the design of the questionnaire, a database was developed in Excel.
In order to facilitate smooth data-entry, the design was kept straightforward; every
section is indicated by a different colour, and simple drop-down boxes are used where
possible in order to reduce entry errors.
4.2.3 Survey implementation
Determination of sample size
The initial proposal for this research took the approach of considering the three
islands as one population. Adopting this approach, a sample size of 400-500 was
determined to be sufficient to be able to draw statistically sound conclusions.
However, during the course of the project it was decided to increase the sample size,
to allow each island to be considered as a separate population. The main advantage of
this approach is the opportunity to detect differences between islands and to identify
key island characteristics that determine recreational and cultural values. In order to
attain convincing conclusions, sample sizes of 300 for St John, 400 for St Thomas and
450 for St Croix were required, in total 1150. This was the target sample size for this
study.
Sampling strategy
A team of interviewers was employed to conduct the interviews and to do the dataentry. The interviewers were local residents; most of them were students at the
University of the Virgin Islands (UVI). They were recruited either through a notice that
was distributed by a number of professors at the UVI, or through word of mouth. All
interviewers were originally from the Caribbean, minimizing the possible effect of
cultural differences with the respondents. The total number of 20 recruited
interviewers were divided in two teams. One team of 8 interviewers was based on St
Croix, covering the sampling on that island, while the other team of 12 interviewers,
based on St Thomas, conducted the survey on both St Thomas and St John.
IVM Institute for Environmental Studies
28 Recreation and culture
In order to secure an adequate level of comprehension of the research and consistency
in interviewing among the interviewers, all interviewers received a 2-day training
session. The first day of the training session provided a section on coral reefs and the
threats they face followed by an introduction to the total economic valuation study.
The second part of the first training day entailed a lecture on interview techniques,
providing guidelines on how to conduct the interview. The choice experiment required
a thorough explanation in order to make sure that it was conducted properly by all
interviewers. The first training session was concluded by going through the
questionnaire question by question, and explaining how to enter the data in the
database. The interviewers got the assignment to conduct one interview and to enter
the data before the following training session the next day. The second training
session entailed a feedback session, allowing the interviewers to share their
experiences, to ask questions and to address ambiguities that were encountered. The
interviewers received a compensation of $100 for the two training days, and $15 per
correctly conducted and entered questionnaire. In order to minimize interviewer bias,
all interviewers were given a uniform with the logo of the University of the Virgin
Islands.
Each interviewer was given a set of documents for use in conducting the survey. All
interviewers were also provided with a ‘portable desktop’, a sophisticated clipboard
equipped with a calculator and a compartment for the storage of these documents and
pens. The set of documents included the following:
1. The questionnaires. Each interviewer was given a set of blank questionnaires to be
completed, plus a laminated read-along version of the questionnaire for the
respondent. This enabled a smooth proceeding of the interview by facilitating the
respondent’s information processing. See Annex B for the complete questionnaire.
2. Three versions of choice sets. Each interviewer was provided with three different
versions of the choice sets. These sets were laminated to ensure durability. The
first card, which was used to explain the choice experiment to the respondent,
was the same in every choice set.
3. Instructions for interviewers. These instructions summarized the information that
was given to the interviewers during the training. This included information on
logistics, an explanation on the design of the sampling (explained later in this
section), instructions on how to use the database, and proceedings on practical
issues such as communication and evaluation. Two different versions of these
instructions were made; one for the interviewers on St Croix, and one for the
interviewers on St Thomas. They differed on two points: the design of the
sampling and the method of evaluation.
4. Interview protocol. The interview protocol was designed for the interviewers to
become familiar with the interview process. It contains an overview of the
questionnaire, a step-by-step manual on how to conduct the interview and
practical information on what to bring during a day of interviewing (see Annex E).
5. Map of the distribution of the different sections of the islands. This map was
included for the convenience of the interviewers, to see where they had to conduct
the interviews. Besides that it could be used to clarify any possible ambiguities
about the district in which a respondent was living (see Figure 4.2).
6. Background on coral reefs. Most of the interviewers did not have extensive
background knowledge on coral reefs. In addition to the lecture on coral reefs
given in the training, interviewers were provided with a card with background
information. This included a summary on the biophysical characteristics of coral
reefs, the services they provide and the most important threats they are facing.
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
This extra information also enabled the interviewers to answer any basic questions
of respondents about coral reefs (Annex
(
F)
7. Dive sites map. From previous studies it became clear that respondents often
could not name a beach or dive site by name, even if they had been
been there before,
while they were able to point to it on a map. In order to get a good representatio
representation
on which locations were most visited by snorkelers and divers, we provided a map
of the USVI with the most well-known
well
dive sites (Annex G)
8. Fish card.. In order to get an insight in the catch composition of recreational
fishermen, we asked them to state the percentage of catch per habitat. In order to
facilitate the correct answer of the questions, a fish card was designed. This ca
card
depicted the most important fish species for recreational fishing, stating their
Latin as well as their local names to avoid confusion. The pictures were grouped
by habitat (Annex H).
In order to secure a representative sam
sample
ple and an even distribution of the different
versions of the choice sets, a detailed sampling plan was designed. Based on the data
provided by the 2000 Census (United States Census Bureau 2002),, the islands were
divided into a number of different districts;
district see Figure 4.2 and Table 4.2.. Considering
the number of residents in each district, each interviewer was assigned to conduct a
fixed number of interviews per district, using a predetermined
predetermined version of the choice
sets. Each of the interviewers
viewers received an Excel
Excel database, stating precisely the number
of interviews per district and which version of choice sets should be used with each
interview. The time period for the sampling was three weeks.
weeks. In these three weeks, the
progress of the interviewers was monitored in dif
different ways including face-to
to-face, email and phone contact with the interviewers in order to answer their questions, and to
get an insight in their progress and the quality of
o the work they delivered.
Figure 4.2:: Division of islands into census districts
29
30 Recreation and culture
Table 4.2: List of census districts in the USVI
St Thomas
St John
St Croix
1. Central
1. Anna's Hope
2. West End
2. Coral Bay
2. Christiansted
3. North Side
3. Cruz Bay
3. East End
4. South Side
4. East End
4. Frederiksted
1. Charlotte Amalie
5. Tutu
5. North Central
6. Water Island
6. North West
7. East End
7. Sion Farm
8. South Central
9. South West
4.3
Data description
To test the representativeness of our sample to the USVI population, the most recent
socio-economic data is used as a comparison. In most of the cases, this means that the
sample was compared with the 2007 United States Virgin Islands Community Survey, a
document assembled by the Bureau of Economic Research and the University of the
Virgin Islands (Mills 2009). This document provides the most recent update on the
data provided by the U.S. Census Bureau (United States Census Bureau2003). It is
based on an extensive household survey done by professional interviewers associated
with the University of the Virgin Islands. The 2000 Census is used as a reference for
population characteristics that could not be found in the 2007 USVI Community
Survey.
4.3.1
Geographic distribution
The total number of respondents is 779. The distribution of the sample across the
three islands is shown in. The sample obtained for St Thomas is close to the target
sample size. The samples for St John and St Croix, however, are considerably below
target, which may have implications for the estimation of statistically significant island
specific values.
Table 4.3: Distribution of the sample across St Thomas, St John and St Croix
Target
Sample
Percentage of target
St Thomas
400
393
98%
St John
300
128
43%
St Croix
450
258
57%
Total
1150
779
68%
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
2000
Census
Sample
Ch
ar
lo
tte
Am
No ali
rt e
hs
id
e
Tu
Ea tu
st
So En
ut d
h
W s id e
W est
at En
er d
Isl
an
d
Percentage
40
30
20
10
0
District
30
25
20
15
10
5
0
2000
Census
Sample
An
na
's
H
Ch
ris ope
t ia
ns
te
d
Ea
st
En
Fr
ed
d
er
No ikste
r th
d
ce
nt
ra
No
rth l
W
Sio est
n
F
So
ut arm
h
Ce
nt
So
r
ut al
h
W
es
t
Percentage
Figure 4.3: Distribution of the sample across districts on St Thomas
District
80
60
40
20
0
2000
Census
Co al
ra
lB
ay
Cr
uz
Ba
Ea y
st
En
d
Sample
Ce
nt
r
Percentage
Figure 4.4: Distribution of the sample across districts on St Croix
District
Figure 4.5: Distribution of the sample across districts on St John
Within each island, the distribution of the sample across districts is generally
reasonably close to the distribution of the population, as recorded in the 2000 census.
A few districts are underrepresented, for example Charlotte Amalie on St Thomas and
Cruz Bay on St John.
31
32 Recreation and culture
4.3.2
Socio-demographic representativeness
To assess the socio-demographic representativeness of the sample, it is compared
with recent data on population characteristics of the USVI recorded in the 2007 United
States Community Survey (Mills 2009).
Age, gender and ethnicity
The distribution of age in the sample is sowewhat different from the 2007 Community
Survey. Of the six age categories that were used in the survey, the three lower age
categories are overreperesented and the older age categories are underrepresented
(Figure 4.6). The distribution of the sample by gender and ethnicity are closely
representative of the USVI population.
Percentage
30
20
2007 CS
10
Total
sample
0
18-25 26-35 36-45 46-55 56-65
66+
Age group
Percentage
Figure 4.6: Distribution of age groups in sample and 2007 Community Survey
60
50
40
30
20
10
0
2007
CS
Total
sample
M
F
Percentage
Figure 4.7: Gender division in sample and 2007 Community Survey
100
80
60
40
20
0
ixe
+m
k
c
a
(bl
k
c
Bla
2007
CS
Total
sample
d)
ite nic ther
O
Wh Hispa
Figure 4.8: Distribution of ethnicity in sample and 2007 Community Survey
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Income and education
35
30
25
20
15
10
5
0
to
Total
sample
Pr
ef
er
no
t
010
K
10
0K
+
an
sw
er
2007 CS
10
K20
K
20
K30
K
30
K40
K
40
K50
K
50
K75
K
75
K10
0K
Percentage
Compared to the 2007 Survey, the mid-range income categories are somewhat
overrepresented in the sample (Figure 4.9). It is also notable that a large proportion of
respondents (32%) declined to provide their household income. This is problematic for
further analysis of the choice data, which examines the underlying determinants of
variation in preferences. Regarding education, the lowest education category is heavily
underrepresented (Figure 4.10). This discrepancy could have resulted from the
interviewers mostly targeting respondents from the same social background or from
respondents not accurately answering a potentially sensitive question.
40
35
30
25
20
15
10
5
0
2007 CS
or
as
)
te
rs
/P
os
Do
td
n'
oc
tk
no
w/
re
fu
se
d
M
(B
ac
he
l
Co
lle
ge
/
Un
i
iat
es
ca
l
ec
hn
i
e/
as
so
c
So
m
e
co
l
leg
sc
ho
o
l/t
12
th
Hi
gh
Le
ss
th
an
de
g
Total
sample
gr
ad
e
Percentage
Figure 4.9: Distribution of income levels in sample and 2007 Community Survey
Figure 4.10: Distribution of education levels in sample and 2007 Community Survey
4.3.3
Recreation
Table 4.4 provides an overview of the types of recreation that the residents of the US
Virgin Islands are involved in. Types of recreation that do not require contact with the
water, like picnicking on the beach and relaxing are the most popular, followed by
swimming and wading. The other types of recreation are less common. Since board
sports, kayaking, sailing and jetski/powerboat are not practiced very often, and there
is no direct relation between these forms of recreation and the reef, these will not be
specified in further detail. Since people that go swimming, snorkelling, scuba diving or
fishing do directly interact with the reef, these forms of recreation will be further
elaborated upon below.
33
34 Recreation and culture
Table 4.4: Overview of the percentages of respondents per form of recreation
Beach Picnic
Relaxing
Wading
Swimming
Board Sports
Kayaking
Sailing on sail boat
Jetski/Powerboat
Snorkelling
Scuba Diving
Recreational fishing
Never
1-6 times a
year
6-12 times
a year
More than
once a
month
More than
once a
week
29
30
50
23
91
87
82
73
66
90
80
47
38
27
32
6
11
12
19
23
7
13
16
16
13
25
2
1
5
6
7
3
4
6
12
7
16
1
1
1
2
3
1
2
2
4
2
4
0
0
0
0
0
0
0
When asked for their favourite locations for recreation, respondents mostly gave the
same locations. The top three locations for recreation for each island are listed below.
The intensity of beach-related recreation on St Thomas and St Croix is fairly evenly
distributed across each island, while most of the recreation on St John takes place on
the north side of the island. This is likely due to the accessibility of the north side of St
John by car.
Table 4.5: Top 3 most popular locations per island for beach-related recreation
Location
1
2
3
St Thomas
St John
St Croix
Brewers/Lindbergh Bay
Magens Bay
Coki Beach
Maho Bay
Cinnamon Bay
Hawksnest
Frederiksted (Dorsch)
Cane Bay
Cramer Park
Swimming
The ability of a respondent to swim largely determines their participation in
recreational activities that access the reef resource. In previous studies, the ability to
swim was found to be a significant factor in the preparedness to pay for reef
conservation (Van Beukering 2006). The question regarding the level of swimming
competence was phrased in such a way that the respondents could indicate to what
extent they were comfortable in the water. This phrasing was designed to avoid
confusion between swimming and wading, as well as subjectivity in stating one’s
swimming abilities. In our sample, 47% of respondents were either comfortable in deep
water for a short, or for a long time, indicating a relatively high level of swimming
skills, 29% are able to swim a little, 12% cannot swim but do wade in the sea, and
another 12% of respondents do not get close to the water.
Swimming is one of the most popular recreational activities: 4% of the respondents go
swimming at least once a week, 16% at least once a month, and 32% at least once per
two months. Only 23% of the respondents state that they never go swimming. This
percentage is to be expected, considering the percentage of respondents that cannot
swim (24%).
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Snorkelling and diving
A separate section on snorkelling and scuba diving was included in the questionnaire
for the respondents that actively go snorkelling and diving. Of all respondents, 34%
snorkel and 10% dive. In an average
average household, one or two people are involved in
either diving or snorkelling. The most important attractions for diving and snorkelling
are the presence of large fish, turtles and coral reef ecosystems. Wrecks are generally
considered less important.
The most popular dive sites (the ones most visited)) in St Thomas are the Tunnels of
Thatch and Cow & Calf; in St Croix the most popular sites are Cane Bay and the
Frederiksted Pier (Figure 4.11
11). This figure also showss that the dive sites on St Croix
are visited more frequently compared to the dive sites on St Thomas and St John.
St Thomas/ St John
St Croix
Figure 4.11:: Dive sites and the number of times they have been visited
Recreational fishing
The number of households in the sample that are involved in recreational fishing is
151 (approximately 20% of the sample).
sample) On St Thomas, 70 of the residents'
households were involved in fishing, compared to 12 on St John and 69 on St Croix. In
terms of percentages
ages of households, on St Thomas approximately 20% are involved in
recreational fishing, 10% on St John, and 27% on St Croix. Most of the households go
fishing less than once a week ((Figure 4.12), and this happens mostly in the weekends.
Number of households
60
50
40
30
20
10
0
0 to 1
2 to 4
5 to 8
9 to 12
Figure 4.12:: The number of fishing trips per month
13 to 16
16 to 20
35
36 Recreation and culture
The average number of fish caught per trip is approximately 17. In Figure 4.13 it is
seen that most of the fishing
hing trips yield a modest catch of less than 10 fish. Figure
4.14 depicts the composition of catch. Almost half of the catch is made up from
shallow reef fish such as Barracuda, Tarpon and Jacks, a quarter of the catch is
represented by deep reef fish such as Snappers, Kingfish and Rainbow Runners, and
10% of the catch consists of deep sea fish like Mahi Mahi, Tuna and Marlin. A relatively
minor share is made up from invertebrates such as lobster and whelk. Conch is also an
invertebrate, but it is treated as a separate category because it has a distinctive
cultural value to the residents of the USVI
USVI. Conch is used in a number of traditional
Caribbean dishes, and its large pink shell is used
u ed for many different purposes, for
example people use it for decoration and for the manufacturing of musical
instruments.
Number of households
60
50
Fish per
trip
40
30
20
10
0
1 to 5
6 to 10 11 to 20 21 to 35 36 to 50 50 to 75
75 to
100
Figure 4.13:: The number of fish caught per trip
The main reasons for respondents to go fishing are diverse. Around one-third
third of the
respondents consider the enjoyment of fishing the most important motivation to go
fishing. Around a quarter mainly fishes for food. Social interaction is also a key
motivation for fishing: 14% of the respondents
respond
fish for bonding, 13% fish to give the
catch to friends and family, and 11% fish for reasons related to tradition.. Only 3% of
the respondents that fish for recreation consider selling their catch the main
motivation (Table 4.6).
Figure 4.14:: Composition of recreational fishing catch
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
37
Table 4.6: Key motivations for recreational fishing
Motivation
Percentage of fishers
I enjoy fishing
33%
For food
26%
For bonding
14%
To give catch to family and friends
13%
For tradition
11%
To sell catch
3%
4.3.4
Environmental Awareness
A separate section in the questionnaire is dedicated to assess the level of
environmental awareness respondents. The section consists of five questions, all
touching upon a different aspect of environmental awareness, including questions on
the actions a respondent undertakes to improve the environment, the perceptions of
threats and the support for different management options.
Environmental score
One of the questions in this section of the questionnaire (question 10) asked if the
respondent had participated in any of a list of 11 activities to improve the environment
in the past year. These activities ranged from proper waste disposal to participation in
public environmental events, and from transport to donations to environmental
causes. Because all of these activities require a concious choice regarding the
environment, the answers to this question are suitable for the calculation of a score
representing the environmental awareness of each respondent. The calculation of the
environmental score is calculated as the total number of times that a respondent
participated in one of the 11 listed environmental activities. Therefore the lowest
possible score is 0, and the highest possible score 11.
Using this environmental score as a proxy for environmental awareness, it becomes
apparent that residents of St Thomas and St John share approximately the same
average environmental awareness, scoring an average of around 4. The residents of
both St Thomas and St John have relatively high percentages of people with a score of
0: 11% and 15% respectively, compared to not even 4% on St Croix ( Figure 4.15). The
environmental awareness of the residents on St Croix differs substantially from those
on St Thomas and St John in the sense that the average environmental score is more
than 1.7 points higher, indicating that people on St Croix exhibit a higher
environmental awareness. Although the three islands differ substantially, a
straightforward explanation for the finding that people on St Croix are more
environmentally aware is not immediately obvious.
IVM Institute for Environmental Studies
38 Recreation and culture
Figure 4.15:: Environmental score distribution per island
Donations to the environment
Whether or not people donate money or time to environmental causes usually proves
to be a good indicator for their willingness to pay (Van Beukering 2009).. This is why a
question on this topic was included in the questionnaire. Respondents were asked
ask if
they had donated any time or money to an environmental cause in the last year, and to
specify the amount of dollars and hours.
The average share of respondents that donated money to environmental causes is 12%.
The percentage of respondents on St Thomas
Thomas and St John that donated money is 9%,
whereas the percentage on St Croix is 16%. Not only the share of the population that
donates money, but also the average amount of donated money differs between the
islands. For St Thomas and St John the average amount
mount donated to envrionmental
causes per year is $100 and $90 respectively, whereas the average annual donation for
St Croix is $224.
The average share of respondents that donated time to environmental causes is 14%.
Again, there is a difference between the share of respondents that donate time to
environmental causes on St Thomas and St John (9 % and 10% respectively), and the
respondents on St Croix (21%). The respondents on St Croix also spend more time on
environmental causes: 50 hours per year on ave
average,
rage, compared to 35 hours by
respondents on St Thomas and 23 hours by respondents on St John.
Perceived threats to the reef
Another question in the environmental awareness section addressed the perception of
threats facing the reef. After asking the respondents
respondents to name three important threats
from the top of their heads, they were asked to rank the importance of twelve
environmental threats from being not important to being very important on a Likert
scale with 5 categories.
The top-3
3 environmental threats
threat are listed in Table 4.7. Commercial fishing is
recognized as the most important threat to the condition of the reef, followed by
recreation by residents and tourists, including recreational fishing. A striking finding
finding is
that scientists and researchers are perceived as the main threat to the coral reef on St
Thomas. This could have to do with the fact that there is a marine sciences department
of the University of the Virgin Islands on that island, conducting experiments,
experiments, setting
traps and sometimes losing
osing or unintentionally leaving materials in the marine
environment. Coastal development and runoff is mentioned as the second most
important threat on St John. This could have to do with the fact that in the last dec
decade,
St John has been subject to substantial residential development,
development, causing severe runoff.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Table 4.7: Top-3
3 perceived environmental threats by US Virgin Islanders
St Thomas
St John
St Croix
Threat 1
Scientists
Commercial fishing
Commercial fishing
Threat 2
Resident Recreation
Coastal development & Runoff
Recreational fishing
Threat 3
Commercial fishing
Tourist recreation
Resident recreation
The twelve different threats mentioned previously and their average
average score are
represented in Figure 4.16.. Each respondent was asked to rate the importance of each
threat on a Likert
ikert scale with 1 being not important and 5 being very important. To
these scores, weights were assi
assigned in order to convert the rating to a score between
0 and 10, weighing them as follows: Score 1 was rewarded 0 points, 2 was rewarded 3
points, 3 was rewarded 5 points, 4 got 7 points and 5 received 10 points. This
weighting system was adapted from previous
prev
studies. (Van Beukering 2009)..
Compared to these studies, the residents of the US Virgin Islands
ands do not rank these
threats very highly. Where the residents of Bermuda ranked the threats between 5.8
and 8.8, the residents of the USVI averagely ranked the threats between 2.8 and 5.3
5.3.
Figure 4.16: Perceived
rceived importance of threats to the reef. 0 = not important, 10 = very
important.
Violations of environmental laws
For the Division of Coastal Zone Management, a question on the violation of laws was
included in the questionnaire (question 10). This question
question was inserted in order to get
an insight in the amount and frequency that environmental laws are violated. After
ensuring the respondents that everything they said was anonymous an confidential,
they were asked to state how often they had heard of or seen any of eight listed
violations of USVI environmental laws in the last year.
The dumping of trash in the ocean, beach and mangroves is the most widely
recognized violation of the USVI environmental rules, followed by taking fish out of
season on St Croix,
x, and fishing with wrong gear and taking coral on St John. In
general, violations on St Croix seem to occur more and more frequently. This could be
the result of possible poorer enforcement of rules on St Croix. It could also be
explained by the fact that because the residents of St Croix have a higher
environmental awareness, they are more likely to be aware of any environmental
violations.
39
40 Recreation and culture
Consumption of locally caught fish
Since the consumption of locally caught fish is one way of making use of the reef
re
resource, it is considered as an influence on the willingness to pay for conservation
conservation.
Respondents were asked how often they eat locally caught fish. Almost half of the
respondents (48%) stated that they eat locally caught fish at least once a week, with
wit
18% having it 2-4
4 times, and 8% 5-7
5 7 times per week. 31% of the respondents only
consume locally caught fish once a month, while 21% says that they never put it on
their plates.
There is a difference in the consumption of locally caught fish between St Thomas
Thomas and
St John on one side, and St Croix on the other. Where 26% of the residents of St
Thomas, and 30% of the residents on St John state never to eat locally caught fish, only
7% of the people on St Croix state that they never eat locally caught fish. This
This indicates
a higher consumption of locally caught fish on St Croix. The consumption of locally
caught fish per island is depicted in Figure 4.17.
Figure 4.17: Frequency
equency of local fish consumption per island
Management options
In order to assess the amount of support for a number of different management
agement
options, respondents were asked if they would be in favour of 8 management
strategies. Figure 4.18 represents the relative support for each management option.
The relative support was calculated as follows. The total amount of people that were
opposed to a certain management strategy was subtracted from the total amount of
people
ple that were in favour of a certain management strategy. This number represents
the ‘score’ of a management strategy. For example, the management strategy that was
most widely accepted (the prohibition of untreated sewage water), had 666
respondents voting
g in favour of it and 21 respondents opposed to it. This makes the
total score of this management option 645. Since this management option was
favoured the most, it was set as the benchmark to which the other management
options were compared.
From Figure 4.18 it can be concluded that the support for management options in
general is somewhat more on St Croix than on St Thomas and St John. Besides the
prohibition of the emission of untreated sewage water, the enforcement
enforcement of existing
rules gets full support on St Croix. This could be another indicator of poor execution
of environmental regulations and laws on St Croix. Although recreation by tourists and
residents is mentioned as important threats to the reef, the management
management option of the
restriction of Scuba Diving and snorkelling was met with resistance on all the islands.
This could be explained by the great economic dependence of the USVI on the tourist
and recreation industries.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Figure 4.18:: Relative support for management options
4.4
Preferences and willingness to pay
Preferences for marine attributes and respondents’ willingness to pay for changes in
their provision are determined from the responses given in the choice model section of
the questionnaire. In the choice experiment, respondents were asked to make a choice
between three alternative scenarios on a choice card, scenarios A, B and C, all
depicting different levels of attributes. Scenario C is the same on each of the choice
cards and represents the expected future situation without additional marine
management and without need to raise taxes
taxes.
Opting out
If a respondent repeatedly chose option C and by doing so ‘opted out’ of paying an
additional tax with every choice, they were asked to state why they were not willing to
pay. The number of respondents that opted out was 99, of which 47 lived on St
Thomas, 33 on St John and 19 on St Croix. The most frequently stated reason for
opting out (39%) was that the coral reef system was more complex than the choices in
the choice experiment imply. A substantial porportion of the respondents that opted
out could not provide a reason for their decision (17%). Table 4.8 lists the main
reasons for opting out and the percentage of respondents stating them as most
important.
Table 4.8:: Key reasons for opting out
Reason
The coral is more complex than these choices assume
Not applicable
I cannot afford it
I’m not confident that the money will be used well
I do not need another tax no matter what it is used for
I am not responsible for the degradation of the reef
Other
% of respondents
39%
17%
13%
10%
8%
7%
6%
Attributes
Table 4.9 shows how the respondents rated the importance of the different attributes
for making a trade-off
off in the choice experiment. The scores are generated by
41
42 Recreation and culture
calculating a weighted average for each attribute. The respondents were asked to
choose a score on a Likert scale, between ‘not important’ and ‘very important’. The
weights vary from 0 points for ‘don’t know’ and ‘not important’ and 10 points for ‘very
important’. In the table it can be seen that respondents from St Croix generally rate
the attributes slightly higher than respondents from St Thomas and St John. Table also
shows that the two attributes that score the highest are ‘water clarity’ (average score:
6.8) and ‘reef quality’ (average score: 6.7), followed by ‘tax’ (average score: 5.7) and
‘beach advisory’ (average score: 5.7). ‘Fish catch’ (average score: 5.3) is considered to
be the least important attribute.
Table 4.9: Rated importance of the different choice- experiment attributes per island
St Thomas
St John
St Croix
USVI
Tax
5.7
5.5
5.7
5.7
Reef Quality
6.4
6.8
7.2
6.7
Fish Catch
4.9
5.5
6.0
5.3
Water Clarity
6.8
6.4
7.1
6.8
Beach advisory
5.7
5.4
5.9
5.7
Managing the funds
When asked about the respondent’s preference for an organization that should
manage the funds, most of the respondents (34%) opted for a non-profit organization
or an NGO, 29% of the respondents would prefer the federal government to manage
the funds, 15% chose an independent trust, 13% indicated that their preference would
be for the local government. 9% of the respondents thought none of these
organizations should manage the funds.
Preferences for the marine environment and willingness to pay
From the responses that were given in the choice experiment, the preferences for
particular attributes and the respondent’s willingness to pay can be determined. A
logit regression analysis of the choice data was used to identify the relative
preferences for the different attributes. The preferred model specification is a multinomial logit model with dummy coded variables for reef quality, fish catch and water
clarity; and continuous variables for swimming restrictions and tax. This specification
was found to have the highest explanatory power. The parameter coefficients, the
standard errors and the P-values for each attribute are given in Table 4.10. Each
attribute affects the probability of an option being chosen in the expected direction.
The estimated coefficients for reef quality, fish catch and water clarity are all positive,
indicating that an increase in these attributes improves the probability that an option
will be chosen. The estimated coefficients on swimming restrictions and tax are
negative, indicating that respondents dislike these attributes and are less likely to
chose an option with high swimming restrictions or high tax. The coefficients of all
attributes are statistically significant (p<0,05).
The estimated coefficients represent the slope of the utility function, or the change in
marginal utility per unit change of each attribute. An example interpretation of a
dummy coded variable is that the increase in water clarity from ‘poor’ (the omitted
category in the regression) to ‘high’ will increase utility by 0.588. An example
interpretation of a continuous variable is that a decrease in the number of days of
swimming restrictrions from 7 to 4 days increases utility by 0.162 (-3*-0.054 = 0.162).
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
43
Table 4.10 shows, in correspondence with the findings described in the previous
section, that the attributes that yield the highest increase in utility per increased unit,
are water clarity and reef quality.
Table 4.10: Main effects multinomial logit regression results
Reef Quality: Moderate
Reef Quality: High
Swimming restrictions
Fish catch: No Change
Fish catch: +20%
Water Clarity: moderate
Water Clarity: high
Tax
Coefficient
Standard Error
P-value
WTP
0.422
0.568
-0.054
0.157
0.144
0.588
0.824
-0.012
0.055
0.053
0.008
0.054
0.053
0.050
0.052
0.002
0.000
0.000
0.000
0.003
0.006
0.000
0.000
0.000
-35.44
-47.72
4.57
-13.23
-12.11
-49.38
-69.28
N = 3380
Adjusted Pseudo R2 = 0.12
Willingness To Pay per attribute
The choices made by the respondents can be used to determine average Willingness
To Pay (WTP) for each attribute level. This is done calculating the marginal rate of
substitution between the monetary attribute and the other, non-monetary attributes.
The marginal rate of substitution represents the monetary compensation required for
changes in the level of provision of each attribute. The marginal WTP for a change in
each attribute i can be calculated using the formula
βi / βtax
(5)
Where βi is the part-worth utility for attribute i and βtax is the part-worth utility for the
tax attribute. With this method, the WTP values of each of the four non-monetary
attributes and their different levels were calculated. These values are reported in the
last column of Table 4.10. The average USVI household is willing to pay $35 per month
to improve the quality of the reef from a poor state to a moderate state, and $48 to
improve the reef quality from a poor to a good state. Average WTP to avoid one day of
swimming restrictions is $5. To change from a situation with 20% less fish catch per
trip to a situation similar to the current amount of fish caught per trip or 20% more
catch, the average WTP is $13 per month (there is no statistically significant difference
between the estimated coefficients on these two attribute levels). To improve water
clarity from poor to moderate, the average WTP is $49 per month; to move from poor
to good water clarity, the average WTP is $69.
Integrated, but excluding the use-values categories fishing and swimming, these data
yield a total monthly WTP per household of $88 to improve the overall state of the
USVI’s coral reef ecosystem from poor to moderate, and $115 to improve the state
from poor to good. Multiplying these values by the total number of households in the
USVI yields an overall average monthly WTP of the entire USVI. The total number of
households in the USVI is 41,765 (Bureau of Economic Research 2009). The monthly
WTP to improve the state of the USVI’s coral reefs from poor to moderate is $3.5
million; and the monthly WTP to improve the state of the USVI’s coral reefs from poor
to good is almost $4.8 million.
IVM Institute for Environmental Studies
44 Recreation and culture
WTP for recreational fish catch
The above WTP values raise a number of questions that require further investigation. It
is notable that the estimated WTP for improvements in fish catch are substantially
lower than for other improvements to the marine environment. This finding may be
explained by the fact that only a minority of respondents to the choice experiment
survey engage in recreational fishing. It is to be expected that respondent that do not
fish will have significantly lower WTP than direct users. This distinction can be tested
by including interaction terms in the regression specification to estimate separate
coefficients and WTP for households that engage in recreational fishing and those that
do not. The results of this regression model are presented in Table 4.11. The results
show a marked difference in WTP between users and non-users. Respondents from
households in which at least one member engages in recreational fishing state an
average WTP of $38 per month to change from low to current catch rates, whereas
respondents from households in which no-one fishes for recreation state an average
WTP of $ 6per month. The motivation for non-uses to state a positive WTP for
improvements in recreational fish catch may be related to altruism towards
recreational fishers, the value of maintaining the option to fish in the future, or a belief
in maintaining the quality of the marine environment unrelated to its direct use.
Table 4.11 Main effects multinomial logit regression model with interaction variables
defining respondents participating in recreational fishing
Coefficient
Standard
Error
P-value
WTP
0.423
0.567
-0.055
0.068
0.090
0.456
0.279
0.589
0.828
-0.012
0.055
0.053
0.008
0.059
0.057
0.123
0.123
0.050
0.052
0.002
0.000
0.000
0.000
0.248
0.117
0.000
0.023
0.000
0.000
0.000
35.26
47.27
-4.61
5.67
7.49
38.03
23.30
49.10
69.00
Reef Quality: Moderate
Reef Quality: High
Swimming restrictions
Fish catch: No Change (non-user)
Fish catch: +20% (non-user)
Fish catch: No Change (direct-user)
Fish catch: +20% (direct-user)
Water Clarity: moderate
Water Clarity: high
Tax
N = 3380
Pseudo Adjusted R2 = 0.12
Differences in WTP across islands
The estimated WTP values presented above are average values for the total sample of
respondents from St Thomas, St John and St Croix. Given the differences in the
characteristics of the populations on each island (see Section 4.3 and Table 4.12), it is
likely that WTP for improvements in the marine environment will vary across islands.
This is of policy interest for two reasons. Firstly, if the values of ecosystem services
from the marine environment vary across the population of the USVI, and specifically
across the three islands, this may provide motivation to strategically target
investments in marine conservation at specific locations in order to maximise the
resulting benefits. Second, if values for characteristics of the marine environment do
vary across the population, it may not be valid to assess the value of improvements at
a specific location using average values for the USVI. Instead it is necessary to estimate
location specific values that reflect the characteristics and preferences of the
population at that location. To this end it is important to know how values vary with
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
45
population characteristics. The issue of transferability of values for the marine
environment is also important to the use of the values estimated in this study to
contexts outside of the USVI. If inter-island transfer errors are high even within the
USVI, it is unlikely that values can be reliably transferred to inform policy decisions in
other states or territories.
Table 4.12 Population characteristics by island
Income
Education
Age
Gender
Black
Employed in
Env.
Rec. Fish
(000's)
(years)
(years)
(0=female;
1=male
ethnicity
tourism sector
Aw.
score
dummy
St Thomas
Mean
36.24
13.42
37.38
0.43
0.72
0.15
4.35
0.15
N
4107
4863
4923
4923
4932
4932
4902
4932
SD
27.09
2.13
11.44
0.50
0.45
0.36
2.59
0.36
Mean
47.49
13.55
41.73
0.42
0.48
0.25
4.23
0.07
N
1134
1554
1554
1554
1554
1554
1554
1554
SD
30.07
2.36
12.24
0.49
0.50
0.43
3.03
0.25
Mean
48.75
13.08
41.04
0.45
0.60
0.08
5.71
0.29
N
2679
3639
3654
3654
3654
3654
3639
3654
SD
38.27
2.17
14.15
0.50
0.49
0.28
2.46
0.46
St John
St Croix
USVI
Mean
42.08
13.32
39.37
0.44
0.64
0.14
4.82
0.19
N
7920
10056
10131
10131
10140
10140
10095
10140
SD
32.28
2.19
12.75
0.50
0.48
0.35
2.70
0.39
To examine differences in preferences across islands, we estimate separate
regressions for each island and compute island specific WTP values. The results are
presented in Table 4.13. It can be seen that there are significant differences in WTP
across the three islands, with low WTP in St John and strikingly high WTP in St Croix.
The pattern of preferences and WTP across attributes are, however, broadly similar
(e.g., relatively low WTP for fish catch and relatively high WTP for water clarity) but the
absolute values of WTP are significantly different.1 This suggests that the difference in
WTP is driven by inter-island differences in marginal utility of income (represented by
the coefficient on the tax attribute). All else being equal, a lower coefficient on the tax
attribute indicates a higher WTP for all other attributes. To examine the underlying
drivers of variation in the marginal utility of income, we estimate additional models
that include interaction terms between the tax variable and potential explanatory
variables that influence WTP, namely income and environmental awareness. In all
models these variables prove to be significant in explaining variation in responses to
the tax attribute. Respondents with higher incomes and higher environmental
awareness are found to be less sensitive to the tax attribute, which translates in them
being willing to pay more for improvements in the attributes representing aspects of
the marine environment. The estimated coefficients on these interaction variables can
then be used to make adjustments to estimates of WTP in order to account for
differences in income and environmental awareness across different populations.
1
The exception to this observation is the difference in WTP for fish catch, which is relatively
and absolutely higher in St Croix. This is explained by the higher proportion of recreational
fishers in the sample in St Croix (see Table 4.12).
IVM Institute for Environmental Studies
46 Recreation and culture
In order to examine the transferability of estimated WTP values across socio-economic
contexts, specifically across the three USVI islands, we perform a value transfer
exercise in which values from each island are transferred to the other two. Unadjusted
and adjusted values (i.e., adjusted for variation in income and environmental
awareness) are compared to assess the extent to which the precision of predicted
values is improved by the adjustment process. Values for fish catch are not assessed
here since these are better predicted by a household’s recreational activity rather than
by variation in socio-economic characteristics.
Table 4.13 Island specific value functions and WTP.
St Thomas
St John
Coeff.
WTP
Coeff.
Reef Quality:
Moderate
0.391
-28.06
Reef Quality: High
0.533
-38.19
Swimming
restrictions
-0.052
3.72
St Croix
USVI
WTP
Coeff.
WTP
Coeff.
WTP
0.151
-9.94
0.606
-82.56
0.422
-35.44
0.245
-16.13
0.807
-109.90
0.568
-47.72
-0.055
3.61
-0.069
9.40
-0.054
4.57
Fish catch: No
Change
0.023
-1.68
0.093
-6.10
0.338
-46.02
0.157
-13.23
Fish catch: +20%
0.002
-0.12
0.027
-1.80
0.348
-47.45
0.144
-12.11
Water Clarity:
moderate
0.744
-53.35
0.163
-10.76
0.599
-81.61
0.588
-49.38
Water Clarity: high
1.092
-78.27
0.227
-14.97
0.831
-113.17
0.824
-69.28
Tax
-0.014
-0.015
-0.007
-0.012
N
1644
518
1218
3380
Adj. Pseudo R2
0.136
0.017
0.185
0.119
Table 4.14 presents the absolute percentage errors2 for the transfer of unadjusted
values between islands. St Thomas values can be reasonably well predicted by St John
values (mean absolute transfer error is 57%); and St Croix values can be reasonably
well predicted by both St Thomas and St John values (mean absolute transfer errors are
51% and 82% respectively). St John values are not well predicted by either St Thomas or
St Croix values. It should be noted that these high percentage errors for St John are
largely the result of St John values being low relative to the other islands (i.e., overprediction of values result in high percentage errors even though absolute differences
in values may be small).
Table 4.14 Inter-island value transfer using unadjusted values (absolute percentage
errors).
Transfer to:
Transfer from:
Reef Quality: Moderate
Reef Quality: High
Swimming restrictions
Water Clarity: moderate
Water Clarity: high
Mean transfer error
2
St Thomas
St John
St Croix
St John
65
58
3
80
81
St Croix
194
188
153
53
45
St Thom.
182
137
3
396
423
St Croix
730
581
160
658
656
St Thom.
66
65
60
35
35
St John
88
85
62
87
87
57
126
228
557
51
82
Calculated as: (predicted value – observed value) / observed value.
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
47
Table 4.15 presents the absolute percentage errors for the transfer of values adjusted
for each island’s average income and environmental awareness. Mean transfer errors
are significantly lower than under the unadjusted approach. Most notable is the
decrease in transfer errors for St John. Across all three islands, the mean absolute
percentage error decreases from 184% to 52%, which represents a substantial
improvement in the precision of prediction.
Table 4.15 Inter-island value transfer using values adjusted for income and
environmental awareness (absolute percentage errors).
Transfer to:
Transfer from:
Reef Quality: Moderate
Reef Quality: High
Swimming restrictions
Water Clarity: moderate
Water Clarity: high
Mean transfer error
St Thomas
St John
St Croix
St John
57
70
259
1
5
St Croix
21
15
10
55
43
St Thom.
19
10
48
90
97
St Croix
15
2
54
31
10
St Thom.
49
52
54
81
76
St John
85
85
125
41
45
78
29
53
16
62
76
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
5
49
Real estate
5.1
Introduction
The environmental amenity value is defined in this project as the potential value that is
added to houses through proximity of the USVI coral reefs. This value is determined
using the hedonic pricing method. In this method all the relevant characteristics are
considered that house owners take into account when buying a house. These
preferences reveal the price house owners paid for their residential property that can
be seen as a composite bundle of attributes. The value house owners attribute to the
proximity of a coral reef can be deducted from the relationship between the house
price and the specific characteristic coral reef distance.
5.2
Methodology
The process of determining the amenity value of the US VI coral reef is done in two
steps. First the relationship between the house prices and the bundle of house
characteristics is determined through regression analysis. The result is a hedonic
pricing equation that relates the house price to these attributes and specifically coral
reef related characteristics. The second step is to use this relationship to determine
the coral reef amenity value.
The hedonic price equation relates house prices to house characteristics. These
characteristics can be structural characteristics such as number of rooms, surface,
neighbourhood characteristics such as availability of playgrounds, schools,
accessibility characteristics related to important locations such as airports and
environmental characteristics such as clean air and proximity and availability of
ecosystems. This relationship is determined through regression analysis that estimates
the coefficient of the mathematical relation between the dependent variable (house
price) and the independent variables (house characteristics). The result is a functional
form where house price is an output and the relevant house characteristics are inputs.
This functional form can be any mathematical function; examples are linear, quadratic
and logarithmic forms. In general this relationship is used to make estimations for the
independent variables based on different factors, but in hedonic pricing we are
interested in the specific relationship between the house price and the distance the a
coral reef. Beforehand it is assumed that house prices are negatively related to
distance to coral reefs as people are expected to appreciate living near coral reefs. The
regression analysis must show if this assumptions is valid.
In the regression analysis relevance of the characteristics is determined based on the
significance of the variable and the explained variation (R2). Relevance means that the
found relationship is not coincidental and the house characteristics clearly contribute
to the house value. Two assumptions must be checked: collinearity between variables
and homoskedasticity. Collinearity shows the interdependence between one or more
variables. It is difficult to differentiate the effect of an independent variable that it has
on the dependent variable if it is highly collinear with other variables. High correlation
is one indication of collinearity between two variables; other statistics can be used to
determine less visible interdependences. The second assumption regards the
difference between the estimated house value, that can be estimated using the
established relationship, and the real house value from the dataset. In regression
analysis this difference is minimized and should show no trends, this is the
homoskedasticity assumption.
IVM Institute for Environmental Studies
50 Real estate
From the hedonic price equations it is possible to determine the change in house price
for changes in one of the independent variables. In this project we are interested in
changes in the distance to the coral reef. This can be used to determine the total
amenity value. It is assumed that the situation where the coral reefs are degraded can
be represented by an increased distance to the coral reef for all houses. The change in
value of a house relocated to a larger distance from the coral reef can be seen as the
amenity value of the US VI coral reef. Note that this is an upper bound of the amenity
value as the hedonic price equation and the house owners preferences will change if
one of the house characteristic changes. Both supply and demand for houses will
change. The house owners will spend the money that cannot be attributed to coral reef
distance on other house attributes or other goods and services such as food, holidays
etc. The assumption in this analysis is that house owners do not move to another
house and the only consequence of the coral reef degradation is a change in the value
of the house.
5.3
Data analysis and results
The dataset containing house prices and characteristics were retrieved from the US VI
Tax Office, consisting of 5,905 houses that are sold between 1993 and 2007 (see
Figure 5.1). The distances from the house to the closest coral reef, beach and coast are
calculated using a GIS model. The resulting dataset is cleaned by removing records
with contaminated data or extreme values and the cleaned dataset consists of 5895
data points. This represents about 12% of the housing units located on the e USVI.
St Criox
St Thomas & St John
Figure 5.1 Houses from the Tax Office dataset
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
51
The average house price in the dataset is $185,000 (see Table 5.1) and the average
land surface is 25 square meters with an average value of $39,000. A house has on
average 5.6 rooms.
Table 5.1
Descriptive statistics dataset
Variable
Minimum
Maximum
Mean
Std. Deviation
FINAL_VAL (house value)
5000
3125900
185015
203711
LAND_VAL (land value)
1000
1724300
38902
68034
TOT_ROOMS (number of rooms)
1
20
5,6
1,9
TOT_LND_SQ (land surface)
1
2592
25
69
Distance_Reef
0,0359
5,2831
2,1
1,3
Distance_Beach
0,0000
4,6684
1,5
1,1
Distance_Coast
0,0000
4,1405
1,2
1,0
Quality
unsound
superior
Condition
unsound
superior
no
yes
Usage
Central_A (air conditioning)
The maximum distance to the coral reef is 5.3 km and on average 2.1 km. Distances to
coast and beach are (by definition) shorter than the coral reef distances. Other
variables that are part of the dataset are quality and condition (from superior to
unsound) that indicate the state of the residence. Residential usage shows if the house
is occupied by a single family or has duplex use etc. The variable central_a describes if
a house is provided with central air conditioning (yes/no). Neighbourhood and
accessibility variables were not possible to retrieve in the allocated time of the project.
When checking the collinearity, especially the distance to coast, beach and coral reef
show high correlations and are between 0.82 and 0.89 (see Table 5.2). Therefore we
consider only regression models with maximum two out of these three variables.
Condition and quality are also highly correlated and therefore only quality is taken into
account. For the more subtle interdependence relations, other collinearity statistics
showed a high dependence between land value and land surface together with house
prices. The land surface influences the land price. Because the surface variable showed
higher significance and higher added R2 the land value variable was omitted.
Table 5.2 Correlations between distance variables
Distance_Reef
Distance_Reef
Distance_Beach
Distance_Coast
1
.82
.83
Distance_Beach
.82
1
.89
Distance_Coast
.83
.89
1
When we use the linear functional form for the house price in the US VI case, a trend is
found which indicates a violation of the homoskedasticity assumption. Higher house
prices show higher differences between the estimated and real house value. Taking the
logarithm of the house price improves the model. This functional form is called the
semi-log and represents a relationship that shows the percent increase of the house
value for a change in the house characteristics.
IVM Institute for Environmental Studies
52 Real estate
5.4
Hedonic pricing function
From the data above the hedonic price equation is determined through regression
analysis. In the analysis above some variables where already omitted (LAND_VAL,
CONDITION). The variables YR_BUILT and SALE_DATE are also not included in the
equation because these are not significant in the regression analysis. Especially the
sale date is surprising at first. But the graph (see Figure 5.2) of sale dates and house
prices shows no increasing price in time and therefore the sale date can be left out of
the model as it does not explain differences in house values. Adding the variable
AGE_AT_SALE defined as the difference between the sale date and building year
resulted in a significant variable and is included in the model.
Figure 5.2 House prices and sale dates
In the former paragraph it was shown that the semi-log functional form performs
better for the dependent variable house price than the linear form when applied to the
US VI dataset. The independent variables are included as linear factors. For the
distances we also tested including squared distances as former studies (Roelfsema,
2008; Brouwer et al, 2010) showed a quadratic relationship between coral distance and
house value. We tested two models, one that includes coral reef distance and coast
distance and one that includes coral distance and beach distance. The distance to
coast is not a significant variable in the coast model. The quadratic coast distance is
significant. In the beach model, both the linear and the quadratic beach distance are
significant variables and therefore we consider this model as the base model. The
explained variance (adjusted R2) is 0.52. The results for the coefficients and
significance are shown in Table 5.3. The column with heading ‘B’ shows the
coefficients of the hedonic pricing equation and these represent the percent increase
of the house price of a unit increase of the characteristic variable.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
53
Table 5.3 Results regression analysis including distance to coral reef and beach
Model
Unstandardised
Coefficients
(reef/beach)
B
Std. Error
t
Sig.
(Constant)
11.733
.037
320.447
.000
TOT_ROOMS
.098
.005
21.737
.000
TOT_LND_SQ
.002
.000
19.392
.000
AGE_HOUSE_AT_SALE
-.007
.000
-15.196
.000
Quality_S
1.038
.166
6.235
.000
Quality_E
.872
.055
15.800
.000
Quality_V
.659
.048
13.620
.000
Quality_G
.393
.023
17.160
.000
Quality_F
-.224
.021
-10.481
.000
Quality_P
-.430
.051
-8.409
.000
Quality_U
-.338
.099
-3.396
.001
Central_A_Y
.341
.031
10.822
.000
Central_A_E
-.018
.066
-.272
.785
Usage9999
.230
.274
.839
.401
Usage1950
.387
.080
4.813
.000
Usage1960
.192
.021
9.034
.000
Usage1970
.191
.043
4.425
.000
Distance_Reef
-.294
.034
-8.653
.000
Distance_Beach
-.149
.033
-4.532
.000
Q_Distance_Reef
.020
.007
3.021
.003
Q_Distance_Beach
.036
.008
4.546
.000
The house price increases with almost 10% for every extra room, 0.2% for every extra
m2 of land and decreases with 0.7% for a one year increase in age. The variables
quality, central_A and usage are modelled through dummy variables and show the
extra change compared to the reference values ‘average’ and ‘no’. This means that the
house price increases with more than 100% if the quality changes from average to
superior. The change in house price due to changes in distance to coral reef and beach
is dependent on the location of the house and is decreasing for distances from 0 to
5.5 km (see Figure 5.3). This is a relationship that is expected, the further away from
the coral reef, the cheaper a house (ceteris paribus). The beach distance is first
decreasing as expected, but starts increasing after 2.1 km from the beach.
IVM Institute for Environmental Studies
54 Real estate
1.0
Added VAlue (%)
0.5
0.0
-1
-0.5
1
2
3
4
5
6
Reef
Beach
-1.0
-1.5
Distance
Figure 5.3 Relationship between added percentage of house price and distance to
coral reef and beach
5.5
Amenity value
The relationship between distance to coral reef and house price can be used to
determine the willingness to pay for change in distance to coral reef. It is equal to the
first derivative of the hedonic price equation to the distance to reef variable (DR) and is
increasing in distance for values from 0 to 5.5 km from the coral reef (see Figure 5.4
and Formula (1)). This means that the further away a house is located from the coral
reef, the smaller the effect of relocating it even further.
WTP = House_Price*(-0.29+2*0.02*DR)
(1)
0.20
Added VAlue (%)
0.10
0.00
-1
-0.10
1
2
3
4
5
6
Reef
-0.20
-0.30
-0.40
Distance
Figure 5.4 Willingness to pay for a small increase in distance to coral reef
This willingness to pay function can be applied to small changes in distance. The total
amenity value is calculated by making a big change in distance and is equal to the
surface under the WTP function between the current distance and the distance in the
scenario where the coral reef is degraded. The assumption is made that this scenario
is equal to the situation where all houses are relocated to 5.5 km from the coral reef
(see Figure 5.5). The 5.5 km distance is slightly higher than the maximum distance in
the dataset. Using higher distances would make the estimation unreliable, because it
would be based on non-existent data.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Figure 5.5 Coral reef degeneration scenario
The value is determined for each house in the dataset and scaled for the number of
housing units at the US Virgin islands, which is equal to 50,202. The total amenity
value is $3.7 billion (see Table 5.4). When amortized over a 100 year period at a zero
percent discount rate, this is a $37 million annual payment.
Table 5.4
House value dataset in base and degeneration scenario
Item
Total Value
Value houses (base scenario)
$974,873,253
Value houses (degeneration scenario)
$539,295,588
Amenity Value
$435,577,665
Total Value US VI
5.6
$3,709,392,699
Uncertainty analysis
To show the uncertainty of the resulting amenity value the analysis is done again for
different assumptions regarding the functional form. As discussed, the best fit gave
the semi-log functional form for the combination distance to reef and beach variables,
including the quadratic distance. The uncertainty analysis shows the values for
different choices:
• Include coast variable instead of beach variable besides the distance to coral reef
variable;
• Only include the linear variable, not the quadratic variable;
• Use the linear functional form for the independent variable instead of the
logarithmic form.
The changes in the functional forms do not always deliver a model with fully
significant variables, but the range of amenity values based on these changes gives an
indication of the uncertainty and ranges from $1.0 billion to $4.7 billion (Table 5.5).
Table 5.5 Uncertainty analysis for amenity value (in billion $)
Semi-log functional form
Linear function form
(Million $)
Beach
Coast
Beach
Coast
Only linear variable DR
$4.41
$4.27
$4.66
$4.39
Also include quadratic variable (DR)2
$3.71
$2.57
$2.13
$0.97
55
56 Coastal protection
6
Coastal protection
6.1
Introduction
The coastal protection value (CPV) of coral reefs is one of the ecosystem services that
contribute to the economic value of coral reefs. The basic principle of coastal
protection by coral reefs is the observation that reefs dissipate wave energy either by
wave breaking or friction by reef structures (Gourlay 1996a, 1996b, 1997; Lugo
Fernandez, 1998; Sheppard, 2005). Recently, alarming declines in coral cover caused
by coral bleaching and diseases (Gardner et al., 2003; Koch et al., 2009) and a possible
increase of hurricane frequencies and sea level rise as a result of climate change (IPCC,
2007), have raised awareness for valuing the coastal protection function of coral reefs.
Generally, studies that estimate the CPV of coral reefs are part of a total economic
valuation study (TEV) (van Beukering et al, 2007, 2010; Burke et al., 2008). Beside the
CPV, TEVs address other ecosystem services such including fisheries, tourism,
residential values and amenity values. Despite the fact that CPVs generally form a
substantial part of the total economic value of coral reefs, current results of the CPV
should be considered as rough estimates. Due to budget constraints and
methodological difficulties, a lot of simplifying assumptions are made in CPV models.
This study, which addresses the CPV of coral reefs in the US Virgin Islands, aims at
improving the analytical framework and implementing a spatial model, in order to
provide a more accurate estimate.
Recent fall backs in coral cover and health in the USVI can affect the CPV of the reefs in
the near future. In order to be able to implement strategies for conserving coral reefs
in an economically responsible way, it is eligible that a sophisticated estimate of the
spatial distribution of the CPV is available. In this case valuable reefs can be
recognized and in response, management strategies can be adopted.
This Chapter’s main goal is to determine the coastal protection value of coral reefs in
the USVI. The structure of the chapter as follows. Section 2 describes previous
literature on the coastal protection value of coral reefs and present the conceptual
framework used in the analysis. Sections 3-8 explain the analysis step by step using
the conceptual framework presented in Section 2 as guiding principle. Section 9
presents the conclusions and recommendations. Throughout the report maps are
displayed to illustrate the analysis. In most cases the Christiansted area on St. Croix is
shown as an example. The level of detail displayed on the map, makes it impossible to
show the whole territory of the USVI in one image.
6.2
6.2.1
Methodology
Previous Studies on the Coastal Protection Value of Coral Reefs
This paragraph gives an overview of CPV studies in the past. The methodology and
results will be discussed briefly. Valuation of the coastal protection by coral reefs does
not occur on a large scale. Often, CPV studies are part of a total economic valuation
study (TEV), and as a result of time and budget constraints and methodological
difficulties, there is room for improvement in CPV methodology. In the last decade,
there have been some global and regional estimates on the CPV of coral reefs (Cesar et
al., 2003; Burke & Maidens, 2004). Cesar et al., (2003) estimate the CPV of coral reefs
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worldwide at $9 billion annually. This represents, over 50 years, a net present value
(NPV) of $240 billion, taking into account a 3% discount rate.
More locally, Burke & Maidens (2004) estimated the coastal protection value of coral
reefs along the Caribbean coastline at $750 million to $2.2 billion annually. The
numbers for the Caribbean region are calculated using a RC approach in combination
with a classification of coastline development. Results of these studies have to be
considered as rough estimates. Due to the lack of data, several simplifying
assumptions were made on critical parameters including: reef and wave characteristics,
climate and coastal development.
Case studies estimating the CPV of coral reefs comprise a more extensive
methodology and therefore provide more reliable results. The most extensive and
arguably the most accurate studies about the CPV of coral reefs are the economic
valuation of coral reefs in Tobago and St. Lucia (Burke, 2008) and the total economic
valuation study of Bermuda’s coral reefs by van Beukering et al. (2010). In the former,
Burke (2008) estimates the CPV of coral reefs around the Caribbean islands Tobago
and St. Lucia at a 2007 (annual) value of 18-33 million USD (Tobago), and 28-50
million USD (St. Lucia). The CPV of coral reefs around Bermuda represent a NPV of 266
million dollar per year (van Beukering, 2010). Due to high uncertainties about the
frequencies of hurricanes, the CPV ranges from 134-532 million dollars per year.
In both studies a damage cost approach is applied. The starting point in the Tobago
and St. Lucia study is a spatial analysis of the physical environment, to determine the
lands that are protected by coral reefs. The economic component comprises the
determination of the value at risk. Burke (2008) identifies six steps in the analysis: (1)
understanding the storm regime and assess the damage reported by hurricanes in the
past; (2) identify “vulnerable” areas to wave-induced damage; (3) Identify coastal areas
which are protected by coral reefs; (4) evaluate the stability of the shoreline and the
extent of protection by coral reefs; (5) assess the property values “vulnerable” areas
protected by reefs; (6) assess to what extent coral reefs prevent potential damages to
property values.
The steps determined by Burke (2008) are comparable to the methodology applied in
the coastal protection value chapter of the total economic valuation (TEV) report of
Bermuda’s coral reefs by van Beukering (2010). In order to come up with a monetary
value for coral reefs as natural barriers for coastal protection, van Beukering (2010)
defined seven steps in the analysis. The first step, (1) determining the coastal profile,
aims to assess the coastal vulnerability to floods. Key variables in this first step are
land elevation, the related shore type (beach, cliffs, etc) and the coral reef cover and
health. The second step is to (2) assess the local storm regime. As well as the US Virgin
Islands, Bermuda has a history of hurricanes and tropical storms. Key variables in this
stage of the analysis are storm frequency, intensity, surge and wave heights during the
storm. The third and fourth step defined are, (3) analyzing the historic information on
wave-induced erosion and property damage and (4) identifying areas vulnerable to
wave-induced erosion and property damage. The fifth step is (5) linking the reefs to
the areas which are vulnerable to floods: identifying the shorelines protected by the
reefs. The sixth step (6) is assessing the stability of the shoreline in terms of geology,
geomorphology, benthic habitat, slope and exposure to storms. The final step (7) is
measuring the property values in the areas protected by reefs and “vulnerable” to
floods.
Although the steps defined by van Burke (2008) and van Beukering (2010) are
relatively similar and both studies apply a DC approach, there are some differences.
Determining the coastal profile is an extra step used by van Beukering (2010) in order
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58 Coastal protection
to come up with the “vulnerable” areas. Moreover, the first step identified by Burke
(2008) is split up in the Bermuda report in two different steps (2&3). Finally, in the
Bermuda report there is no separate step defined to assess the avoided damage by
reefs and thus the coastal protection value.
Despite the fact that in these studies a similar analytical framework is applied, the
results are very different. A partly explanation for the differences in outcome is the
analysis of the storm regime. Burke only takes 25 year return time events into account,
van Beukering et al. (2010) also estimates damages of 52 year return time events. In
other words, by including severe low-probability events a more comprehensive but also
a more uncertain result is generated.
6.2.2
Conceptual framework
Figure 6.1 displays the conceptual diagram of the CPV analyses. It is a schematic
display of a spatial DC approach. The framework starts with a description of the
“coastal profile” on one side and a description of the spatial distribution of the
bathymetry (“water depth”) and “coral reef presence” on the other side of the diagram.
“Coastal profile” is determined by “coastal elevation” and “coastline type”. On the other
side, the variable “Wave energy dissipation by reefs”, is determined by “coral reef
presence” and “water depth” (bathymetry). Roughly, these are the main factors in wave
creation (Lugo-Fernández et al. 1998; Sheppard et al. 2005).
Figure 6.1 Conceptual Diagram
Natural hazards that cause floods in the US Virgin Islands region are mainly hurricanes
and tropical storms. The variables “water depth” and “coral reef presence” influence the
hurricane induced waves and therefore protect the coastline (see chapter 5). The
“vulnerable areas to floods” in this analysis are based historical “natural hazard
characteristics” and the related “wave characteristics”.
Furthermore, the “vulnerable areas to floods” are also determined by the coastal
profile. When, having defined the “vulnerable areas to floods” and the “wave energy
dissipation by reefs”, the shape of “vulnerable areas protected by reefs” can be derived
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from this information. In order to estimate whether vulnerable areas are protected by
coral reefs a GIS distance analysis is applied. Subsequently, the value at risk can be
determined by assessing the value at risk: the economic value allocated in the
“vulnerable areas to floods”. The value at risk is estimated by assessing the economic
value per land use type. By using a damage function, based on historical flood damage
data and flood damage methodology to calculate to what extent the value at risk will
actually be lost, eventually the coastal protection value can be estimated.
6.3
Vulnerable Areas to Floods
The first step in the analysis is to asses which areas in the USVI can be considered as
vulnerable areas to floods. The dark blue boxes in Figure 6.1 represents the variables
that are addressed in this chapter. The box “Vulnerable Areas to Floods” is determined
by “Wave Characteristics”, “Natural Hazard Characteristics” and “Coastal Profile”. These
three variables are considered essential when designating vulnerable areas.
The fact that the USVI are frequently hit by hurricanes and related waves and surges
emphasizes the importance of coral reefs in terms of coastal protection. Flood
damages during hurricanes and storms will increase significantly without the
protection of coral reefs. Because of the frequent hurricane hits, it is for this analysis
especially important that historical storm characteristics are taken into account when
assessing vulnerable areas to floods, to incorporate the direction and the wave height
of the particular hurricane.
The most devastating hurricanes that hit the USVI during the last decades were
hurricane Hugo (1989) and hurricane Marilyn (1995). The former caused an inflation
adjusted damage of $1.9 million in Puerto Rico and the US Virgin Islands; the latter
caused a damage of $2.4 million in Puerto Rico and the USVI (Blake et al., 2007).
The flood insurance rate maps (FIRMs) prepared by the Federal Emergency
Management Agency (FEMA) include shape files with flood zones on the USVI. The
flood zones distinguished by FEMA are the “Vulnerable Areas to Floods” in this
analysis. When assessing the “Coastal Protection Value” of coral reefs, only coastal
floods and no riverine floods should be taken into account. Therefore, only the flood
zones that can be affected by coastal floods are taken into account in the analysis.
Figure 6.2 displays the coastal flood zones in the Christiansted area on St. Croix.
The current FIRMs are based on an extensive analysis that takes into account historical
storm data, a storm surge analysis and the coastal profile (Drei-Horgan et al., 2006).
This suits the analysis: it is important that “Natural Hazard Characteristics” and “Wave
Characteristics” are already involved when computing the flood zones. This gives an
indication where on the islands severe waves and storm surges usually hit the coast.
Flood zones are divided in 1% annual flooding chance zones (100 year zones) and 0.2%
annual flooding chance zones (500 year zones). Also a distinction is made between
high wave energy zones (V zones) and low wave energy zones (A- zones) (FEMA, 1996),
which is also reflected in Figure 6.2.
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60 Coastal protection
Figure 6.2 Flood Zones Christiansted Area, St. Croix (Source: FEMA)
State of the Art Flood Hazard Analysis
The implementation of FEMA’s map modernization project has recently resulted in new
FIRMs for the USVI territory. Improvements in wave height and storm surge modelling
techniques created a need for this modernization project. In this section a brief
overview of this “state of the art flood hazard analysis” (Drei-Horgan et al., 2006).
To enable the prediction of storm surges (and thus the “Natural Hazard
Characteristics” in Table 6.1), the Advanced Circulation model for Coastal Ocean
Hydrodynamics (ADCIRC) was applied. This model takes into account historical floods
to predict storm surges under hurricane conditions. The twelve storms selected, were
the storms that most significantly impacted the USVI the last 100 years. The storm
data was obtained from NOAA’s Hurricane Database (HURDAT) (Drei-Horgan et al.,
2006). The selected storms for the ADCIRC model are displayed in Table 6.1.
Table 6.1
Selected Storms for the Flood Hazard Analysis
Name of Storm
Hurdat ID#
Begin Date
End Date
Unnamed Storm of 1916
219
21 Aug
25 Aug
Unnamed Storm of 1924
262
16 Aug
28 Aug
Unnamed Storm 2 of 1924
263
26 Aug
6 Sep
Unnamed Storm of 1928
292
6 Sep
20 Sep
Unnamed Storm of 1932
315
25 Sep
3 Oct
Hurricane Betsy in 1956
558
9 Aug
20 Aug
Hurricane Donna in 1960
597
29 Aug
14 Sep
Hurricane Klaus in 1984
827
5 Nov
13 Nov
Hurricane Hugo in 1989
872
10 Sep
25 Sep
Hurricane Marilyn in 1995
932
12 Sep
1 Oct
Hurricane Bertha in 1996
940
5 Jul
17 Jul
Hurricane Lenny in 1999
985
13 Nov
23 Nov
Source: Drei-Horgan et al., 2006
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
In order to generate 100 year (1% annual chance of occurrence) storm surge heights,
an Empirical Simulation Technique (EST) model was used for a stage-frequency
analysis. The maximum surge height of each of the modelled storm with ADCIRC was
input for a calculation of surge heights with a 100 year return period (Drei-Horgan et
al., 2006). A result of the EST analysis for St. Croix is displayed in Figure 6.3.
The starting wave conditions, represented by the variable “wave characteristics” in the
conceptual diagram, are calculated based on historical storm meteorology. The Shore
Protection Manual provided by the US Army Corps of Engineers (USACE) in 1984,
prescribes a prediction technique for the deepwater significant wave height and wave
period during slowly moving hurricanes. By applying this technique the deepwater
significant wave height for Puerto Rico and the US Virgin Islands is established at
27.36 ft. The deepwater significant wave period is established at 11.19 seconds (DreiHorgan et al., 2006).
Figure 6.3 100 year event Storm Surge heights St. Croix (Source: Drei-Horgan et al., 2006)
The protection of flood zones by coral reefs has been taken into account as well in this
analysis, and has been done according to the methods presented by Gourlay (1996a).
Wave set-up and run-up have been calculated to determine the A and V zones. The
concepts wave set-up and wave run-up are explained in Figure 6.4.
Figure 6.4 Wave Set-up and Run-up
Source: Ministry of the Environment of New Zealand, 2010
61
62 Coastal protection
Set-up is the elevation the wave rolls up the shore or a reef. Run-up is the maximum
“splash” height: when a wave collides with a vertical cliff or seawall, this is usually the
case. The analysis is based on a depth-limited wave height: the wave height on the reef
is limited to 0.8* (water depth + 1% SWEL). This means that the water depth during a
100 year event is assumed to be the regular water depth plus the depth of a 100 year
swell. Subsequently, the wave height on a reef can only be 80% of the water depth
during the event (Drei-Horgan et al., 2006). V zones, the high energy zones, are flood
zones with a wave height equal or higher than 3 ft during a 100 year event. Wave
heights in A zones are below 3 ft.
Flood Depth
Flood depth per flood zone is calculated by subtracting land elevation from the base
flood elevation. When this number is positive, there is an actual flood during a 100
year return time event. First step in the calculation is to assess the average elevation of
the flood zone. To obtain this information, the ArcGIS Zonal Statistics tool is applied.
The static base flood elevation per flood zone is included in the attribute table of the
FIRM.
The attribute table attached to the FIRM contains specific information about every
polygon (flood zone). This paragraph gives a brief overview of the relevant variables
for the Coastal Protection Value analysis.
1. Polygon ID: the number of the polygon which identifies the specific flood zone.
2. Flood Zone Type: for this analysis only VE and AE zones are selected. This means
that only coastal high wave energy zones (VE) and coastal low wave energy zones
(AE) are included in the map and the table. AE and VE zones are both flood zones
with a 1% annual chance of flooding. 0.2% areas (500 year) are very rare in the
Virgin Islands FIRMs, there are only a few of them. Therefore 500 year areas are
left out of the analysis. VE zones are the high wave energy zones, with waves of 3
ft or higher during a 100 year flood.
3. Static Base Flood Elevation: this variable indicates the base flood elevation for the
specific flood zone. Number is based on the 100 year swell calculation obtained
via the EST analysis. This analysis is based on historical flood data.
4. Area: the variable “Area” represents the amount of hectares covered by the specific
flood zone.
5. Flood Depth: The flood depth in the particular flood zone is a result of subtracting
the average elevation (using a digital elevation map (DEM)) of the flood zone from
the base flood elevation.
6.4
Coastal Protection by Coral Reefs
This Section reviews the literature on wave energy dissipation by coral reefs and
presents a reef typology with the assumptions on coral reef protection in this analysis.
The two main reef characteristics that determine the amount of wave energy
dissipation by coral reefs, as presented in the literature (Lugo Fernandez, 1998;
Thornton & Guza, 1983; Gourlay, 1996a; Gourlay 1996b; Gourlay, 1997; Sheppard,
2005), are displayed in Figure 6.1.
Several coastal engineers have tried to model the wave energy dissipation function of
coral reefs. The model designed by Gourlay (1996a) is applied for designing the FEMA
flood insurance rate maps (FIRMs) for the US Virgin Islands. This model is based on
laboratory experiments. Wave set-up and wave generated flow are measured in this
analysis, which studies a horizontal reef under two different conditions: as a fringing
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reef and a platform reef. Wave set-up turned out to be highest during low tide and
wave generated flow during high tide. Wave set-up is the increased water level on the
reef as a result of wave breaking. Wave generated flow is the wave energy flow over de
reef top. The model designed by Gourlay (1996a) and applied for the flood maps in the
USVI is based on an idealized two dimensional reef and assumes that wave energy
dissipation by coral reefs only takes place when the waves break on the reef. An
important constraint of this model used for the flood maps is that is does not take into
account the dissipative function of friction by corals and sea bottom rugosity. LugoFernandez (1998) examines wave transformations on Tague Reef at the US Virgin
Island St. Croix. In this paper, a model designed by Thornton & Guza (1982) is applied
and tested with field data from St. Croix. The model takes into account both coral
friction and wave breaking as wave energy dissipation functions. According to this
study, the relative amount of wave energy dissipation of coral reefs is currently 75%85%. Without the dissipation function of friction thus without corals on the reef crest
the wave energy dissipation function would be 57%-66%. These results are similar to
results presented by Sheppard et al. (2005) on coral reefs in the Seychelles, where an
average wave energy dissipation rate 80% was found. This study emphasizes the
increase of wave energy reaching the shores caused by a trend of increasing coral
mortality on the reef flat. As a result of the disintegration of dead corals, the concept
of “pseudo sea level rise” was introduced. In this case, the still water sea level rises as
a direct result of coral die-off and disintegration.
In order to be able to address the frictional dissipation function of coral reefs,
Sheppard et al. (2005) apply the “friction factor” introduced by Gourlay (1996b).
Gourlay suggested that the friction factor of coral reefs varies from 0.1 (smooth,
dispersed) to 0.2 (rough, dense). A sandy bottom has a friction factor of 0.8.
The model applied by Sheppard et al. (2005) is used to determine the relative wave
energy dissipation for the reef types distinguished in this analysis. It suits this study
because the input data is available and both wave breaking and friction are included
separately in the model. Furthermore it is desirable that this study and the FIRM
analysis apply a similar methodology to calculate the wave set-up proposed by Gourlay
(1996a, 1997).
Table 6.2 Friction Factor and Reef Flat Zone Characteristics
Criteria
fw (friction
factor)
75%-100% sand
0.08
75%-100% smooth rock or coral pavement 75%-100% seagrass or algal turf
0.10
Smooth rock or coral pavement with 50%-100% coral rubble
0.12
10%-25% live coral or dead uneroded coral or tall (>30 cm) boulders
0.14
25%-50% live coral or dead uneroded coral or tall (>30cm) boulders
0.16
50%-75% live coral or dead uneroded coral or tall (>30cm) boulders
0.18
75%-100% live coral or dead uneroded coral or tall (>30cm) boulders
0.20
Source: Sheppard, 2005
Wave Model
Wave Model: the wave model presented by Sheppard et al. (2005) was applied for the
calculation of the wave dissipation rates of the four distinguished reef types in this
study. This section of the report briefly summarizes the wave model.
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64 Coastal protection
The model below (Equation 1, Sheppard, 2005 after Gourlay 1997) is used to calculate
the wave set-up on the reefs. Wave set-up is an important indicator for the wave height
and wave energy transmission on the reef: set-up on the reef increases the water level
on the reef and therefore alters the height of waves.
Equation (1)
In equation 1, S represents the relative submergence of the reef. Equation 2 displays
the expression for S. The terms in square brackets (equation 1) is referred to as Pt; the
parameter of wave transmission. If S is > 2.5, Pt = 0 and the wave does not break on
the reef. In this case there is no wave energy dissipation because of breaking. Pt = 1
when S = 0. In this situation all wave energy is dissipated by the reef because the reef
is not submerged (not under water). So: set-up occurs when S >0 and S < 2.5.
Equation (2)
The wave energy dissipation that can be contributed to reef friction and rugosity is
calculated using equation 3. This model is designed by Gourlay (1996b) and applied by
Sheppard et al. (2005). For a more inclusive elaboration of the model Gourlay (1996b;
1997) and Sheppard (2005) are recommended.
Equation (3)
Where
Coral Reef Typology
The USVI are surrounded by different types of coral reefs. The most obvious coastline
protecting reefs are the fringing-barrier reefs surrounding the island St. Croix and to a
lesser extend St. Thomas and St. John. These are shallow reefs, largely covered with
coral colonies and built of limestone sediments. Colonized bedrock en colonized
pavement colonies are generally having a lower density of corals (approx. 10%). These
different forms of coral reefs have a different influence on wave patterns.
Literature on wave dissipation by reefs indicates that the most important reef
characteristics are water depth on reef and coral cover (Sheppard et al., 2005; Gourlay,
1996a,b; Lugo Fernandez, 1998). Therefore four types of coral reefs are distinguished:
(1) shallow high density reefs (SHD reefs), (2) shallow low density reefs (SLD reefs), (3)
deep high density reefs (DHD reefs) and (4) deep low density reefs (DLD reefs).
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Figure 6.5 displays the different reef types in the Christiansted area on St. Croix. Water
depth can also be observed in the map. To illustrate the concept of the typology Figure
6.6 shows a schematic drawing of the four reef types with relative wave energy
dissipation functions. The reef types are ranked in order of protectiveness from left to
right.
Figure 6.5 Reef Typology in the Christiansted Area, St. Croix (Source: NOAA)
Figure 6.6 Schematic Drawing Reef Typology
65
66 Coastal protection
High Density Reefs: the label “high density” is based on the high density of corals on
this type of reef. To create the “high density” dataset in ArcGIS, “linear” and “spur and
groove” reefs from the NOAA benthic habitat shape files were selected. Subsequently,
these polygons were overlaid with a bathymetry (water depth) raster dataset. For the
high density reef polygons the mean depth was calculated using the Zonal Statistics
tool. High density reef polygons with a mean depth of less than 8 meters are
considered SHD reefs, High density reef polygons with a mean depth over 8 meters are
considered DHD reefs. SHD reefs are the most protective reefs. These are reefs where
stormy waves break on and where wave energy is further dissipated by the friction of
corals. The 8 meter threshold is based on the depth-limited wave height. The
maximum wave height under extreme (hurricane) conditions is 0.8-1.2 times the water
depth according to FEMA (1988, 2000). The deepwater wave height established for the
USVI under hurricane conditions is 8.34m (Drei-Horgan et al., 2006). This means that
under hurricane conditions the waves will brake at a depth of approximately 8 meters.
Low Density Reefs: low density reefs are reefs with a relatively low coral cover. For
this class the following reef types were selected from the NOAA 2005 benthic habitat
maps: “colonized bedrock”, “colonized pavement”, “colonized pavement with sand
channels”, “aggregated patch reef” and “scattered coral rock”. On average, these reef
categories have a coral cover of approximately 10% (Thomas, T., Devine, B., 2005). To
assess whether the low density reef polygons are SLD reef polygons or DLD reef
polygons, the same GIS analysis is executed as for the high density reefs. Again, a
threshold of 8 meters is applied to make a distinction between wave-breaking reefs
and non wave-breaking reefs.
Wave Energy Dissipation by Reef Type: for every reef type, wave and reef
characteristics were entered in the wave model. In this section, the input and results
are discussed. Wave characteristics were the same for all reef types, namely the wave
characteristics for a 100 year event applied for the USVI FIRM: a deep water wave
height of 27.36 ft (Ho in the model) and an offshore wave period of 11.19s (T in the
model) (Drei-Horgan et al., 2006). For the calculation of wave set-up and energy
dissipation, the still water depth on the reef (hr in the model) is very important. For
SHD reefs, the average depth is 2.5m; SLD reefs, 1.8m; DHD reefs, 15m; DLD reefs,
15m. The water level on the reefs in this study is the still water level plus a 1% annual
chance swell. For all reef types, the swell (part of hr in the model) is assumed to be 4
meters, which is the approximate average of the EST analysis, executed for the USVI
FIRM. For the calculation of wave energy dissipation by coral friction, an estimate of
the distance from reef to beach is needed (x in the model). However, in the model a
maximum of 250m is used. SHD, DHD and DLD reefs are assumed to be 250m wide.
These reefs are usually situated over 250 meters offshore. SLD reefs are assumed to
have a width of 150m. These areas are usually shallow coastal areas colonized
pavement/bedrock or aggregated coastal patch reefs. The frictional factor (fw) is 0.14
for low density reefs and 0.18 for high density reefs (Sheppard, 2005). Low density
reefs are assumed to be covered with 10%-25% with live or dead uneroded coral. High
density reefs are assumed to be covered with 50%-75% with live or dead uneroded
coral. It is assumed that for every reef type the reef profile shape factor, “Kp” equals 1.
Furthermore the beach slope gradient angle, “tan alpha beach” is assumed to be
0.125.
Results: for SHD reefs the relative wave energy dissipation is 95.5% (Figure 6.6). That
means that under hurricane conditions, 95.5% of the energy of the deep water waves in
Joules per square meter does not reach the coastline. 5.5% of this percentage is
generated by dissipation caused by friction of corals. The relative wave energy
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dissipation for an SLD reef is 90% (Figure 6.6). Only 3.5% of the dissipative force is
caused by coral friction.
Deep reefs have a less protective function, because waves do not necessarily break on
these reefs. It turned out that on DHD reefs the wave energy dissipation is 38%, from
which 10.5% is a result of coral friction. For DLD reefs the rate of wave energy
dissipation is 32%, from which 4.5% can be attributed to coral friction.
6.5
Vulnerable Areas Protected by Reefs
This Section combines “vulnerable areas to floods” with “wave energy dissipation by
reefs” (see Figure 6.1). In order to assess to what extent the “vulnerable areas to
floods” (flood zones) are protected by coral reefs, a spatial analysis has to be
conducted. The aim of this spatial analysis is to assess per flood zone if the zone is
protected by coral reefs and if this is the case, by which reef type. A GIS distance
analysis and subsequently an intersect analysis are used. First, a buffer is created
around the coral reef polygons, using the “Buffer” tool from the ArcGIS Analysis
Toolbox. Secondly, the intersect analysis determines if the buffer around the reef
polygon intersects with the flood zone. If this is the case, the flood zone is assumed to
be protected by coral reefs in this study.
Since a spatial economic valuation study of coastal protection by coral reefs with this
level of detail has never been conducted before there are no standard methods for
assessing whether an area is protected by coral reefs. However the distance from reef
to (vulnerable) coastline is used as a parameter in several studies on the CPV of coral
reefs (Burke & Maidens, 2004; Burke, 2008). In a regional study to estimate the coastal
protection value of coral reefs in the Caribbean, Burke & Maidens (2004) assume all
coastlines within 2000m from a mapped to be protected by coral reefs. This results in
an estimate that 29% of the Caribbean coastline is protected reefs. In a total economic
valuation study of coral reefs in Tobago and St. Lucia, Burke (2008) applies a distance
analysis for near-shore fringing reefs. The coastline is assumed to be protected when
within 100m from the fringing reef.
Buffer and Intersect Analysis
Before the distance analysis could be conducted, the data had to be prepared. When a
distance analysis is done using the “buffer” and “intersect” tools, the buffer distance is
critical in assessing the protection of flood zones by coral reefs. Because of the
differences in coastal morphology between St. Croix and St. Thomas and St. John,
different buffer distances were applied in St. Croix and St. Thomas and St. John. As a
parameter for the buffer distance, the maximum distance of a SHD reef from coastline
on the particular island was selected. The rationale behind this assumption is that the
most important protective reef type cannot be left out of the analysis, but the buffer
distance should not become too extensive. The buffers are created 360 degrees
around the coral reef polygons and might intersect with areas that are not protected
by reefs in reality (Figure 6.7). On St. Croix the maximum distance from the shore of
SHD reefs is approximately 1750m, hence the buffer distance is established at 1750m.
On St. Thomas and St. John the maximum distance to this reef type is approximately
750m, hence the buffer distance is established at 750m. In Figure 6.7 the purple
(shallow) and pink (deep) lines are the buffers around the reef polygons. The yellow
areas (flood zones) that are crossed by the buffers are “vulnerable areas protected by
reefs” in Figure 6.9.
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68 Coastal protection
Figure 6.7 Distance Analysis Christiansted Area, St. Croix (Source: FEMA)
Coastal Protection by Reef Type
The next step in the search for “vulnerable areas protected by reefs” is to analyse
which type of reef protects the particular flood zone. With the “intersect” analysis from
the ArcGIS Analysis Toolbox, the attribute information from the reef polygons is added
to the flood zones attribute information. This makes it possible to determine whether
a flood zone is protected by reef type 1, 2, 3 or 4. However there are many flood zones
that are protected by more reef polygons and hence more reef types at the same time.
To solve this problem a reef type ranking is applied. Reef type 1 (SHD reef) is ranked
the highest, because these reefs are the most protective reefs. Reef type 4 (DLD reefs)
have the least protective function and therefore are ranked lowest. Flood Zones are
protected by the highest ranked reef type intersected with. In other words: the highest
level of protection counts. Figure 6.8 shows the results of the distance analysis and
ranking in eastern St. Thomas and western St. John. The green to red scale represent
the level of reef protection. On the western tip of St. John there are for example no
SHD reefs. The result is that there is only SLD protection (light green) in this area.
Figure 6.9 shows the result of the distance analysis and the ranking in the
Christiansted area on St. Croix.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Figure 6.8 Flood Zones Protected per Reef Type (Source: FEMA, NOAA)
Figure 6.9 Flood Zone Protection per Reef Type Christiansted Area, St. Croix (Source:
FEMA, NOAA)
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70 Coastal protection
6.6
Value at Risk
After identifying the “vulnerable areas to floods” from the USVI FIRMs and presenting a
coral reef typology which recognized four types of reefs, the previous chapter linked
the “vulnerable areas to floods” to “wave energy dissipation by reefs”. The next step is
to estimate the economic value represented in every polygon (flood zone). Possible
damages to property values in residential, industrial and commercial areas are taken
into account. Because of a lack of field data, land use valuation methodology is
applied. A land use map created by the University of the Virgin Islands (UVI), which
analyses land use change from 1989-1999, distinguishes similar land use types as the
typology provided by Klijn (2007). Klijn (2007) estimates the maximum damage per
land use type per hectare for the Netherlands. By transferring the Dutch absolute
values to USVI standards, the “value at risk” for study is determined.
Land Use Values
Five land use types are recognized. These five types are presented by Klijn (2007).
Riedijk et al. (2007), give a description of the classes distinguished by Klijn (2007):
1. Residential – High Density: the most densely populated class. These are
residential areas in central city districts including shops, hotels, cafes and socio
cultural facilities such as schools. The Dutch estimated value (or maximum
damage) per hectare is €9.100.000. This class is linked to the UVI land use types:
“urban” and “hotel resort”.
2. Residential – Low Density: this class represents a sub-urban environment.
Residential areas in the green outskirts of cities and entire villages are represented
by this type. The Dutch estimated value per hectare is €4.000.000. This land use
type is linked to UVI land use types: “high density residential”, “medium density
residential”.
3. Residential - Rural: this land use type represents rural residential areas outside
villages or cities. The Dutch estimated value per is hectare is €3.800.000. This
class is linked to UVI land use type: “low density residential”.
4. Commercial: the commercial class represents all commercial and industrial areas:
business estates, mining etc. The estimated Dutch value per hectare is
€6.000.000. This land use type is linked to UVI land use type: “Commercial”,
“Industrial Manufacturing”.
5. Recreational: the areas are predominantly green recreational facilities such as:
parks, zoo’s etc. The estimated Dutch value is €300.000 per hectare. Linked to UVI
land use type: recreational.
The next step is to translate the Dutch values to USVI standards. First of all, the
numbers are converted from euro to dollar. The exchange rate used is from 01-012007 (€1 = $1.32) (via Oanda.com); the year the report by Klijn (2007) was published.
Subsequently, the relative difference in property prices has to be adjusted. Hereby, it is
assumed that the quality of properties in the Netherland is the same as the quality of
properties in the US Virgin Islands. On average property prices in the USVI are 1.45
times the price of a Dutch property ($456,295 (USVI) /$314,506 (Netherlands) = 1.45).
The results of the conversion are shown in Table 6.3. In order to link the land use map
to the “vulnerable areas protected by reefs” (flood map) an overlay analysis is used.
From the land use map all areas within the flood maps are selected. Furthermore the
attributed data of the polygons of the flood map and the land use map is combined.
Another result of the “overlay” analysis is that the total number of polygons went up
from approximately 900 towards circa 2000; Flood zone polygons that contained more
land use types are split up. Figure 6.10 shows the land use types and corresponding
values per hectare within the flood zones in the Christiansted area (St. Croix).
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Table 6.3
Property Values per Land Use Type
Land Use Type Klijn
(2007)
Land Use Type UVI
Original Value
per Hectare
USVI Value per
Hectare
Urban
Urban, Hotel Resort
€9.100.000
$13.202.567
Residential
Medium/High Res.
€4.000.000
$5.803.326
Low Res.
€3.800.000
$5.513.160
Commercial/Industrial
€6.000.000
$8.704.989
Recreational
€300.000
$435.249
Low Residential
Commercial/Industrial
Recreational
Figure 6.10 Land Use Types and Value Christiansted Area, St. Croix (Source: FEMA, 2007)
Damage Functions
The purpose of a damage function is to estimate how much damage is done by a flood
to a particular building or area. The depth and wave energy produced by the flood are
possible parameters when estimating flood damage. Usually, depth damage curves are
relative damage functions. That means that the functions give an indication of the
damage relative to the total value of the property, based on flood depth and wave
energy (Nadal, 2007). In this study relative damage functions are applied to assess the
relative damage to the “Value at Risk”. The methodology used in this study similar to
the HAZUS-MH flood methodology applied in the US mainland counties. The HAZUS
model uses FIRM data combined with a digital elevation map (DEM) to establish the
flood depth per flood zone. Subsequently, a depth-damage curve is applied to
determine the relative damage per property or flood zone (Nadal, 2007; Scawthons,
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72 Coastal protection
2006a). Damage curves included in the HAZUS software package originate from the
Federal Insurance Mitigation Administration (FIMA, formerly known as FIA; Federal
Insurance Administration) and the US Army Corps of Engineers (USACE) (for more
information on HAZUS and the NFIP, see Annex E). Despite the fact that depth-damage
curves are the best available tool and used all around the globe to estimate flood
damages, the results remain uncertain (Nadal, 2007). Many critical factors including
duration of flood, soil scour, sediment load, debris impacts and building condition are
not represented in these curves (USACE, 1988). The FIA relative depth-damage curves
are applied in this analysis. The FIA methodology represents over 20 year of flood
damage data (Scawthons, 2006a), and provides damage curves for high energy flood
zones (V zones) and low energy flood zones (A zones).
FIMA Damage Functions and Wave Energy Dissipation
FIMA is the mitigation division of the Federal Emergency Management Agency (FEMA),
the organization that is responsible for the US National Flood Insurance Program
(NFIP). Since the 1970s this organization provides depth-damage relationship curves.
The FIMA damage curves are updated annually and are a combination of theoretically
determined damage curves and historical flood claims data (Comisky, 2005; Nadal,
2007). Initially two different damage curves are applied, a V zone damage curve and
an A zone damage curve (see table in Annex A). The percentages in the table represent
the relative damage to properties in a particular flood zone.
Table 6.4 shows the distribution of wave energy dissipation per reef type over friction
and breaking effects. The column “Friction Effects” shows the amount of wave energy
dissipation caused by bottom friction relative to the deepwater wave height Ho (see
chapter 4). The relative amount of frictional dissipation (of the deepwater wave height)
that can be attributed to coral friction is the result of: frictional effects (corals etc.)
subtracted by frictional effects without coral (sand). The result of this subtraction per
reef type is displayed in the column C in Table 6.4 Energy Dissipation Factors per
Reef Type (for the definition of C see Legend).
Table 6.4
Energy Dissipation Factors per Reef Type
Reef type
A
B
SHD
20,5%
15,0%
SLD
11,5%
8,0%
DHD
21,0%
10,5%
DLD
15,0%
10,5%
Where:
A Total Friction Factor = B+C
B Friction Factor w/o coral cover = A-C
C Friction Factor att. to coral cover = A-B
D Breaking Factor = E-A
E Total Wave Dissipation = A+D
C
5,5%
3,5%
10,5%
4,5%
D
75,0%
78,5%
17,0%
17,0%
E
95,5%
90,0%
38,0%
32,0%
To translate the energy dissipation rates of coral reefs into an actual value, it is
necessary to express the wave dissipation rate in monetary terms. Therefore, it is
assumed that an increase of 5% wave energy (of Ho) reaching the coastline results in
extra damages equal to 1 foot extra flood depth. This assumption applies for both A
and V zones. Table 6.5 shows the increased inundation levels for two scenarios: a
scenario (1) without coral friction (“Increased inundation without coral friction”) and a
scenario (2) for the hypothetical situation that all reefs including limestone sediments
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
73
disappear (“Increased inundation without coral reefs”). When scenario (1) becomes
reality, SHD reefs will for example dissipate 5.5% less wave energy of the deep water
significant wave height (Ho = 8,34m). This will lead to an increase in flood damage
which equals an increased inundation level of 1.1ft in V and A zones (in zones
protected by this type of reef). If scenario (2) becomes reality, there will be no wave
energy dissipation by coral reefs anymore. The disappearance of the dissipation
function of DHD reefs would mean an increase of damage that equals an extra
inundation of 7.6 ft (in zones protected by DHD reefs).
Table 6.5
Reef Type
SHD
SLD
DHD
DLD
6.7
Increased Inundation Levels Damage Functions
Coral Friction
Energy
Dissipation
5.5%
3.5%
10.5%
4.5%
Increased
inundation w/o
coral friction (ft)
1.1
0.7
2.1
0.9
Total Reef
Energy
Dissipation
95.5%
90.0%
38.0%
32.0%
Increased
inundation w/o
coral reefs (ft)
19.1
18
7.6
6.4
Coastal Protection Value
To determine the coastal protection value of coral reefs in the US Virgin Islands, the
avoided damage costs approach is used. This implies that storm damages with coral
reefs are compared with a hypothetical scenario without coral reef protection. In this
study, two forms of coral reef coastal protection are recognized: (1) short term coastal
protection and (2) long term coastal protection. Short term protection (1) only takes
into account the coastal protection function of coral friction. Coastal protection by
coral friction is considered short term, because coral die-off and disintegration can
occur on a relatively short time scale (within 10 years).
Processes that influence the long term coastal protection, which includes the water
depth on the reef (and hence the breaking function), are relatively “slow” processes
such as reef flat erosion, sea level rise caused by climate change and coral reef erosion
caused by ocean acidification (Hoegh-Guldberg et al., 2007). Table 6.6 shows the
coastal protection value of coral reefs for a 100 year return time event grouped by
flood zone type and reef type. The values in column “Total CPV” represent the total
coastal protection value of coral reefs in the US Virgin Islands; scenario (2) has been
applied here. The values in column “Short Term CPV” represent the coastal protection
value of coral friction on the reefs (i.e. scenario 1). The column “Total Damage Value”
displays the total flood damage of a 100 year event without the coastal protection of
coral reefs. As a result of the ranking of reef type protection, the area protected by
DHD and DLD reefs is relatively small. Therefore the CPV provided by these reef types
is relatively low. With a 0% discount rate applied, the annual short term CPV of coral
reefs in the US Virgin Islands is ($92.8 million/100) $928,000. The annual total CPV
equals ($672 million/100) $6.72 million.
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74 Coastal protection
Table 6.6
Coastal protection value of coral reefs for a 100 year return time event.
Results ($*1000)
Total CPV
Short Term CPV
Total Damage Value
A zones SHD
$329,475
$50,742
$550,418
A zones SLD
$194,313
$16,224
$277,608
A zones DHD
$129
$69
$167
V zones SHD
$90,802
$17,436
$477,528
V zones SLD
$55,828
$7,822
$177,147
V zones DHD
$1,052
$475
$4,884
V zones DLD
$49
$40
$88
$671,649
$92,807
$1,487,841
USVI 100 yr Event
Figure 6.11 shows the spatial distribution of the short term CPV in the Christiansted
area on St. Croix. The yellow areas are areas with a $0 short term CPV per hectare.
This can be attributed to the fact that there is no flood (the static base flood elevation
does not exceed the land elevation) or that the value at risk 0$ per hectare in that
particular flood zone. The urban areas of Christiansted (in the centre of the map) as
well as the resort at the left tip of the fringing-barrier SHD reef, score relatively high on
short term coastal protection with values of over $500,000 per hectare during a 100
year period.
Figure 6.11 Short Term CPV Christiansted Area, St. Croix
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Figure 6.12 shows the spatial distribution of total CPV (ST+LT) in the Christiansted
area. Obviously, the total CPV per hectare is higher than the short term CPV. The red
areas in the map represent a total CPV per hectare higher than 2,5 million USD.
Figure 6.12 Long Term CPV Christiansted Area, St. Croix
6.8
Coral Disintegration and Reef Substrate Erosion
Short Term Processes: Several scholars (Williams et al., 1999; Sheppard at al., 2005;
Alvarez-Filip et al., 2009) indicate that die-off of corals, especially of reef building
species such as Elkhorn coral (Acropora Palmata), “flattens” the reefs and therefore the
wave energy that reaches the shores increases. However, very little is known about the
disintegration time of dead corals. Sheppard (2005) estimates that corals disintegrate
in approximately 10 year’s time; Williams (1999) emphasizes the importance of
hurricane waves in washing away the dead coral structures.
A part from the reduced wave energy dissipation by coral friction, wave energy
reaching the shore might increase because of pseudo-sea level rise, a concept
introduced by Sheppard (2005). This concept means that the disappearance of coral
reef ramparts lower the submergence of the reef. As a result, more wave energy can
pass.
Long Term Processes: Wielgus et al., (2010) use the model designed by Sheppard
(2005) in a case study on beach erosion in the Dominican Republic. In this study it is
assumed that, when there is no live coral on the reef left, the reef substrate erodes
with a pace of 6 mm per year. It is emphasized however, that this assumption is a
gross approximation.
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76 Coastal protection
Climate change induced sea level rise also influences the coastal protection value of
coral reefs. The relative amount of wave energy dissipation caused by breaking
depends on the water depth on the reef. Because of sea level rise, the depth on the
reef increases. Table 6.7 gives an overview of short and long term processes. The
current knowledge on the effects of long term processes on the CPV of coral reefs is
limited. More research is needed to be able to more accurately project future impacts.
Table 6.7
Short Term and Long Term Processes
Processes
Short Term
Coral Disintegration
Long Term
x
Reef Flat Erosion
x
Sea Level Rise
x
Ocean Acidification
x
6.9
Conclusions & Recommendations
The annual coastal protection value of the USVI coral reefs for short term and long
term processes is estimated at 928.000 USD and 6,72 million USD. With the
application of the FIRMs, reef typology, the wave model designed by Sheppard (2005)
and the FIA depth-damage curves, the accuracy of the CPV modelling has undoubtedly
increased. However, this approach has its limitations as well. Assumptions are made to
estimate the relationship between the increase of wave energy reaching the coastline
and the actual damage to properties. A sensitivity analysis on these assumptions is
recommended to test the robustness of the results. Furthermore the distance analysis
has to be improved to show more accurate results in the future. Another constraint is
the inability of the model to assess the CPV of a particular reef polygon, since flood
zones are generally protected by more reef polygons at the same time.
To assess the costs and benefits of coral reef conservation it is essential to gain
insight in short term and long term processes that affect the CPV. Further research is
needed to estimate whether long term processes such as reef flat erosion and ocean
acidification induced coral reef erosion are a serious threat to the USVI reefs. More
reliable estimations and observations can be made on the disintegration time of dead
corals. Therefore it is recommended that the coastal protection function of coral
friction is integrated in the FIRMs provided by FEMA, in order to be able to assess the
effect of coral cover decline. This change can easily be adopted by applying the
methodology used by Gourlay (1996b) and Sheppard (2005), instead of the currently
applied model by Gourlay (1996a) which assumes an idealized smooth reef without
coral friction. To gather the required data on sea floor rugosity, but also in monitoring
erosion on degraded reefs, FEMA, NOAA, DPNR and the University of the Virgin Islands
(UVI) should work together closely.
It is recommended to expand the Coastal Barrier Resources System (CBRS) tot non-land
areas such as coral reefs to raise awareness for the coastal protection function of coral
reefs. FEMA defines a CBRS as: “unique land forms that provide protection for distinct
aquatic habitats and serve as the mainland's first line of defence against damage from
coastal storms and erosion” (FEMA, 2010). This phrase perfectly matches the
description of the coastal protection function of coral reefs. Furthermore it should be
examined whether it is possible to implement an earmarked tax, to raise funds for
coral conservation, as a part of the flood insurance in reef protected flood zones. In
that case, property owners who benefit from the reefs presence also pay for its
conservation.
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
7
77
Tourism
7.1
Introduction
The USVI is advertised as America’s Caribbean Paradise, and rightly so, as a stay on the
islands is considered by many, nothing short of true bliss. The historic sugar mills and
scenic golf courses of St Croix, the beautiful harbour and abundance of duty free
shopping of St Thomas and of course St John’s United States Virgin Islands National
Park lure many stay-over tourists to the USVI each year. What the USVI is most
renowned for is its abundance of pristine and secluded beaches, turquoise waters,
diverse sea life and of course the coral reefs and (sub) tropical climate.
The tourism industry in the USVI heavily depends on the coral reefs and the goods and
services it provides (CIA Factbook, 2010). When taking into consideration that the
tourism sector accounts for 80% of the USVI’ GDP (ibid) it is easy to understand that
ensuring proper management of coral reefs is not only vital from an environmental
perspective but also from an (socio) economic point of view. It is the coral reefs that
stand at the centre of a vibrant tourism industry, drawing snorkelers, divers and sport
fishermen from all over the world. In fact, St Thomas (and the other islands to a lesser
extent) is a very popular cruise ship destination, attracting over 1.75 million cruise
passengers in 2008 (USVI BER 2009). Coral reefs also help to build the region’s
beautiful white sand beaches and slow coastal erosion (WRI 2009).
The development of (marine) tourism has become a dilemma to policy makers and
decision makers. On the one hand, it generates income for society, and perhaps more
importantly the government in place. On the other hand, it also contributes to the
degradation of coral reefs and other marine resource which could impede long term
economic and environmental loss (Asufa-Adjaye et al 2008). What makes the dilemma
more complicated is inadequate or, at times, a complete lack of information on the
economic, social and ecological benefits of natural resources such as coral reefs.
The main aim of this Chapter is to estimate the tourism value of the coral reefs.
Moreover, this part of the study will provide comprehensive information on the
economic contribution of coral reefs to the USVI’ economy, as well as the potential
losses that could stem from (further) degradation.
7.2
Tourism trends
For the USVI where the tourism sector accounts for 80% of the GDP (CIA Factbook
2008) this sector is the mainstay of the local economy (UNEP 2010). UNEP (2010)
described the relationship between tourism and natural resources as “tourism in the
Caribbean is dependent almost entirely on coastal resources, most development takes
place in the coastal zone and most of the impacts occur in the coastal zone. And so
the importance of the coral reefs to the local economy and population of the USVI
cannot be emphasised enough.
Caribbean
“The Caribbean is one of the most tourism dependent regions in the world with a
contribution of the broader tourism economy estimated at 14.8 per cent of the
region’s GDP and contributing to a possible 2.4 million jobs” (ECLAC 2005). Caribbean
tourism consists of three main elements: land-based tourism (also referred to as stayover tourism), yachting and cruise ship tourism. A generally accepted definition of a
IVM Institute for Environmental Studies
78 Tourism
tourist is a person staying on one of the islands for longer than 24 hours, and this is
considered land-based tourism. A person visiting the island by cruise ship (and staying
less than 24 hours) is considered a cruise passenger or cruise visitor. Yachting is when
a person visits the island by yacht and spends the night on that yacht.
The top nine of the world’s most frequently visited cruise ports all belonged to the
Caribbean area in 2005 (Bartolomé et al. 2009). Caribbean wide, cruise ship tourism
has grown at a high and steady rate over the past decade (ECLAC 2005) as is shown in
Figure 7.1. However, the region is characterised by erratic arrival trends in individual
ports: Guadeloupe, for example has shown a steep decline in cruise ship calls (ECLAC
2005). Furthermore, more than 50% of the total amount of cruise ship passengers
visits the region during the high season, which is the Northern Hemisphere’s winter
(Wild, 2006).
Figure 7.1 Cruise ship passenger arrivals in the Caribbean
Source: Caribbean Tourism Organization (2005)
ECLAC (2005) states that there “is shift from land-based tourism towards cruise ship
tourism” happening in the Caribbean. While reliable estimates of the total number of
cruise ship tourists visiting the region basically do not exist, ECLAC estimates that
between 6.5 and 7 million cruise ship tourists visited the region in 2004 (ECLAC 2005).
This report also points out the lack of (reliable) information on regional impacts and
whether the increase in cruise ship tourism affects land-based tourism. Other trends
which have been observed by ECLAC (2005) are the increase in the size of ships, the
increase in the number of available berths and a shift from Eastern (which includes the
USVI) and Southern Caribbean to the Western Caribbean.
US Virgin Islands
Being an island state, the tourism market of the USVI depends heavily on the aviation
and marine industries to bring in visitors. In 2008 24% of all visitors arriving in the
USVI did so by airplane (USVI BER 2009). In 2008 83.3% of the occupied hotels rooms
were occupied by visitors from the USA (ibid). And so, the number of seats available on
planes per year departing from the USA, and especially from how many different cities
in the USA direct flights depart to the USVI, has a significant influence on the total
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
79
number of visitor arrivals in the USVI. In 2008, 72% of all visitors arrived by cruise ship
in the USVI. This makes the number of berths available on cruise ships that make a
port-of-call in St Thomas, St John or St Croix another important indicator of total visitor
arrivals.
According to the CIA fact book the US Virgin Islands hosted 2.4 million visitors in
2008. The USVI Bureau of Economic Research has published annual tourism indicators
going back as far as 1980 and until as recent as 2008. This data is used to analyse the
tourism industry in of the USVI. Figure 7.2 shows an overview of visitor arrivals to the
USVI from 1980 through 2008 in 10 year intervals, as well as the number of cruise
ships calling on the islands. In Figure 7.3 the percentage of growth of each 10 year
period has been plotted. Several observations can be drawn from these two Figures:
1. Total visitors to the USVI: There is an increase in visitors from roughly 1.07 million
per year in 1980 to 2.34 million in 2008. Since 1980 the total amount of people
visiting the USVI (over roughly 10 year periods) has always increased. Despite the
staggering increase in visitors of 20 years, this line of growth did not continue for
much longer after 2000, and between 2000 and 2008 a mere 1.2% increase in
total visitors was achieved. In other words, the period pre-2000 cannot be
compared with the post 2000 period in terms of growth in visitor arrivals. Even
though there is still in increase in amount of visitors, the decrease in the growth
rate is worrisome.
2. Relationship between cruise visitors and airplane tourists: Since 1980 there have
always been more people visiting the USVI by cruise ship than airplane. In 1980,
35% of the total number of tourists visiting the USVI came in by airplane, in 1990
29%, in 2000 24% and in 2008 25%.
3. Airplane tourists: The number of tourists visiting the USVI by airplane has
increased steadily since 1980. The number of tourists visiting the USVI by airplane
increases by roughly 18% between 1980 and 1990, 16% between 1990 and 2000,
and 6% between 2000 and 2008.
4. Cruise visitors: From 1980 to 2000 there was an enormous growth of cruise ship
tourism (38%), but between 2000 and 2008 this growth stagnated and over that 8
year period there was actually a decrease in cruise ship tourism (-0.6%).
5. Decline in number of cruise ships calls: Even though there is a tremendous
increase in the number of cruise ship visitors visiting the USVI, the number of
cruise ships docking in USVI harbours has actually declined from 883 in 1980 to
752 in 2008. This underlines a trend that is seen in cruise ship tourism all around
the world, the building of larger ships that can fit more passengers on it; economy
of scale ship building. Even though there is a tremendous increase in the number
of cruise ship visitors visiting the USVI, the number of cruise ships docking in USVI
harbours has actually declined from 883 in 1980 to 752 in 2008. This underlines a
trend that is seen in cruise ship tourism all around the world, the building of
larger ships with a bigger passenger capacity; economy of scale ship building. The
largest ship in the world, Royal Caribbean’s Oasis of the Seas, calls on St Thomas
every other week and which has room for roughly 6300 passengers and another
2000 crew members.
IVM Institute for Environmental Studies
80 Tourism
Figure 7.2 Cruise Visitor arrivals USVI 1980 - 2008
Figure 7.3 Growth rate visitor arrivals USVI 1980 – 2008 (in %)
Figure 7.4 illustrates the total visitor expenditures from 1980 to 2008, based on data
published by the USVI BER. Again, a number of observations can be made from this:
1. Increase in total expenditures: There is an increase in total amount spend by
tourists visiting the USVI, much in line with the total increase of tourists visiting
the USVI.
2. Cruise ship visitors expenditures: There is an increase in money spend by cruise
ship visitors of 19% from 2000 to 2008 despite a decrease of 1.4% in the number
of cruise ship visitors.
3. Airplane tourists expenditures: Between 1980 and 1990 there is an increase of
66% in expenditures made by land-based tourists, from 1990 to 2000 a 31%
increase and from 2000 to 2008 an 18% increase.
4. Relationship between airplane tourist and cruise ship visitor spending: The
interesting thing to note here is that for the past 30 years the group airplane
tourists have spend more money in the USVI than the cruise ship passengers
despite always being the smaller group. This implies that on average an airplane
tourist spends more than a cruise ship visitor.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
5. Increase in total expenditure flattens: When looking at the growth of visitor
expenditures, one can conclude that there is a general increase in total
expenditures since 1980. But, the increase becomes less and less, from 188% from
1980 – 1990 to 23.3% from 2000 to 2008.
Figure 7.4 Total visitor expenditures 1980 - 2008
In Figure 7.5 the total number of visitors arriving in the USVI in 2008 is broken down
in percentages of tourists and cruise visitors, and is plotted against the total
expenditures made by visitors in that same year also broken down into the percentage
made by tourists and cruise visitors. What can be seen is that in 2008 tourists
accounted for 25% of the total visitor arrivals but at the same time accounted for 61%
of the total visitor expenditures. While cruise visitors made up 75% of the visitor
arrivals and 39% of visitor expenditures. If the same comparison is made for the years
1980, 1990, 2000 and 2008, we observe that at every single 10 year point, stay-over
tourism brings in a consistently higher percentage of the total expenditures than
cruise ship tourism despite consisting of a lower percentage total visitors.
Figure 7.5 Visitor arrivals and expenditures in percentages for 2008
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82 Tourism
7.3
Methodology
This Section describes the methodology applied to estimate the tourism value of coral
reefs in this study, subsequently addressing the questionnaire, the survey, the
empirical model, as well as the methodological limitations of the chosen empirical
model.
Questionnaire and data
Data for this study was collected by the means of a tourist exit questionnaire,
conducted by students of the University of the Virgin Islands on several locations on ST
Thomas and St Croix. No questionnaires were conducted on St John because no cruise
ship docked at the island during the time the study was conducted and the tourists
leaving the island by plane have to make use of the airport on St Thomas. The touristexit survey, along with supplementary data obtained from the USVI’ Bureau of
Economic Research and several sources provided the information to estimate the
consumer surplus, producer surplus and willingness to pay.
Questionnaire: The questionnaire used for this study is an adapted version of the
questionnaire used for the Total Economic Valuation study of Bermuda’s coral reefs by
van Beukering et al (2009). Nonetheless the questionnaire was first pre tested amongst
cruise ship passengers before it was carried out by students of UVI at various locations
on the two islands. In total 443 respondents participated in the semi-structured
survey. The survey was divided into five parts (see Annex for the full version):
• Part 1 – Verification: consists of three questions to verify that the respondent met
our selection criteria: older than 18, non – USVI native and the purpose of trip
needed to be leisure.
• Part 2 – Vacation: consists of 10 questions focusing on getting details of the
respondent’s trip such as costs of travel to the USVI, expenditures made while in
the USVI, lengths of stay and reasons to visit the USVI.
• Part 3 – Diving and snorkelling: consists of 9 questions relating to the respondents
marine affinity
• Part 4 – Reef preservation: this part of the questionnaire was designed to examine
the participants awareness of the corals reefs and his/her willingness to pay to
preserve these reefs.
• Part 5 – Demographics: this part included 6 questions on the demographic profile
of the respondent.
Locations: On St Thomas the questionnaire was conducted at three different places:
First, Thomas E. King airport: in cooperation with the US customs and border patrol
access was gained to the passenger lounge where tourists leaving the islands (St
Thomas and St John) were interviewed. Second, West Indies Cooperation dock (WICO)
and Haven Sight mall: WICO gave permission to conduct interviews with cruise ship
passenger returning to the cruise ship infront of the WICO dock and in Haven Sight
Mall. And third, Crown Bay plaza: Virgin Islands Port authority gave permission to
interview cruise ship passengers returning to the ships docked at Crown Bay. On St
Croix the questionnaire was conducted at two different places. First, Henry E. Rohlson
Airport: in cooperation with US Customs and Border control access was gained to the
passenger lounge of the airport where tourists leaving the island were interviewed
while waiting to board their plane. And second, Frederiksted pier: Virgin Islands Port
Authority gave permission to interview cruise ship passengers returning to their ship
docked at Frederiksted Pier.
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
83
Data issues: When examining the database several issues were identified and solutions
found. First, in total 14 cases were found to have no financial data at all, or $0 filled
out for each question. All of these cases were excluded from the sample bringing the
total sample size down to 430. Second, in total 123 respondents did not have an
amount listed for question 12c “how much did you pay for the flight”. Subsequently it
was checked if the flight had been included in the package or in the case of a cruise
ship passenger if it was likely that he/she could have driven to the port of
embarkation, but this was for none of these 123 cases the case. For each case one a
proxy value was estimated on the basis of secondary data sources. Third, in total 51
airplane tourists had $0 filled out for the questions “how much did you pay for
accommodation?” This amount was left at $0 as it is possible that they for example
made use of a timeshare or a similar arrangement.
Valuation techniques
There have been numerous studies which have used these methods to measure the net
benefits, or producer/consumer surplus, from coral reef ecosystems around the world
(Ahmed et al 2007). Each of these studies has shown the “large potential net benefits
from coral reefs or the huge impending losses from their degradation” [ibid]. Table 7.1
gives an overview of a few of the most relevant studies within the past 10 years and
focussing at island or series of islands context.
Table 7.1
Estimates of coral reef related tourism valuation
Author (year)
Location
Valuation techniques
Tourism value*
Van Beukering
et al. (2009)
Bermuda
Travel Cost Method
Net Factor Income
Contingent Valuation
$611 per tourist,
$24 WTP per tourist
Guam (USA)
Benefit transfer
Production function
$94.6 per tourist
Van Beukering
et al. (2007)
Carleton & Lawrence
(2005)
Turks and Caicos
Islands
$18.2 million for tourism
and diving
Carr & Mendelsohn
(2003)
Great Barrier
Reef (Australia)
Travel Cost Method
Between $350 and $800
per visit
Ngazy et al. (2004)
Zanzibar
(Tanzania)
Phi Phi Islands
(Thailand)
Continent valuation
Travel Cost Method
Contingent Valuation
Burke et al. (2002)
Indonesia
Based on other studies
WTP $84.70 per diver for
diving pristine coral reefs
US$1,309 per tourist or
$6243/h/year for
recreation
$103 million for tourism
Cesar et al. (2001)
Hawaii (USA)
Travel Cost Method
Contingent Valuation
$19.6 per diver/snorkeler
Hon Mun Islands
(Vietnam)
Travel Cost Method
Contingent Valuation
Between $33 and $69 per
visitor
Seenprachawong
(2003)
Pham & Tran (2001)
* Per year unless otherwise stated
The main conclusion that can be drawn from this overview is that the value that is
added by tourism and the techniques used to measure this vary greatly between the
different studies. Reasons for this can be the geographical location of the study site,
which parts of the tourism sector have been included, which goods and services are
assessed and the assumptions that have been made (Brander et al 2006). These
differences make it difficult to compare values of the different coral reefs. Another
IVM Institute for Environmental Studies
84 Tourism
aspect which makes it difficult to compare this study to other is that of the above list
only the Bermuda study includes cruise ship tourism.
In general, three economic valuation techniques are utilised to conduct an economic
analysis of the survey data and estimate the reef-associated tourism value. First, the
Travel Cost Method (TCM), based on travel costs, is used in order to estimate the
consumer surplus. Second, the Net Factor Income Method (NCIM), based on tourist
reef-associated expenditures, is used to estimate the producer surplus, and finally the
Contingent Valuation Method (CVM) is used to find the (maximum) willingness to pay
(WTP) to fund activities to conserve the USVI’ coral reefs. The total tourism value of
coral reefs in the USVI is the sum of the consumer surplus, and the producer
surplus. The willingness to pay value which results from the CMV is the potential extra
consumer value. This study utilizes the net factor income method (NCIM) and the
contingent valuation method (CVM) to estimate the benefits resulting from the USVI’
coral reefs.
Net factor income method
The net factor income method (NFIM) is a revealed preference method and estimates
the value of, in this case, the coral reefs as an input in the production of a marketed
good such as a diving trip (Beukering et al 2007). This technique involves looking at
the market price of a good (total revenue for the producer), i.e. a dive trip and
deducting the costs of the other inputs such as labour and equipment the amount that
is left is called the producer surplus or profit and can partly be attributed to the coral
reef. Now, when applying the NFIM in this study the assumption is made that
expenditures made by the tourists on reef-related activities (goods) are equal to the
revenues made by the operators (producers) of those activities in the tourism sector.
Now as mentioned only part of the profit may be attributed to the reefs and so the
total profit needs to be discounted by a certain percentage in order to get the reefrelated producer surplus. Cesar et al (2001) calculated that 25% of all direct and
indirect reef related expenditures of tourists visiting Hawaii can be attributed the coral
reefs. Except for airfare (indirect) this is discounted at 2%. Van Beukering et al have
adopted these percentages in economic valuation studies of Guam’s (2007) and
Bermuda’s (2009) coral reefs. And so, these same percentages will be used in this
research.
There is no literature available on the value added by cruise ships, other than the
Bermuda study Van Beukering et al (2009) where they have calculated a new
percentage this. For this study the same method was used to calculate a percentage
but with different site specific values.
Table 7.2 shows the different fees, taxes and dues that cruise ship companies have to
pay to the government of the USVI. The passenger tax is based on the figures provided
by the USVI port authority for the Crown Bay dock, it is assumed that cruise ship
companies pay the same for docking at the WICO dock and Frederiksted pier. Cruise
ship companies do not have to pay a service or docking fee anywhere in the USVI.
From this it can be concluded that the government receives a minimum of $20.75 per
cruise ship, and so 1.4% of the average cruise ship package price ($1,453) is used to
calculate the producer surplus. What should be kept in mind here is that this 1.4%
does not include the costs that the government incurs for building the needed
infrastructure, ranging from docks to shopping centres to waste disposal facilities, and
possibly dredging harbours. So in reality this 1.4% could very well be on the high side.
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Table 7.2
85
Fees and taxes that cruise ships pay to the USVI government
Item
Service fee
Docking fee
Passenger fee
Wharfage
Port dues
Total
Comments
Per passenger
N/A
N/A
Based on Crown Bay figures
USVI wide
USVI wide
$9.35
$5.80
$5.60
$20.75
Finally one more issue has to be dealt with in order to accurately calculate the value
added by indirect reef-related tourist expenditures. This is the fact that a tourist has
different reasons for choosing the USVI as a holiday destination of which only is reefrelated. And so, the indirect reef related expenditures are discounted a second time by
the percentage that represents the relative importance of the coral reefs in the
respondents decision to choose the USVI as a holiday destination. This percentage is
estimated by asking the respondents to rate the reasons that motivated them to
choose the USVI in section two of the questionnaire.
Contingent valuation method
The contingent valuation method (CVM) is a stated preference method, and is in this
study used to estimate the (maximum) willingness to pay of a tourist to fund activities
to preserve the USVI’ coral reefs. As such the value that is derived is considered to be
potential extra consumer surplus and is not part of the tourism value of the USVI’ coral
reefs. CVM estimates both use and non-use values from coral reef (Seenprachawong
2003).
At the end of part 3 of the questionnaire the respondent is told the following:
“Let’s talk more on how you appreciate the USVIs coral reefs. There are a number of
threats caused by human activity, such as the increased pressure from tourism that
can change the quality of the coral reefs. If these threats are not adequately dealt
with, they will damage USVI’ reefs, beaches and its turquoise waters. To help preserve
USVI’ coral reefs, extra funds may be needed for which tourists may be asked to
contribute.”
After this the respondent is asked five questions 1) the respondent is –in principlewilling to pay a fee in addition to his/her current expenses, to fund activities to
preserve the USVI’ coral reefs, 2) in case the respondent is not willing to pay, why not
3) what is the maximum amount he or she is willing to pay per visit, 4) what the
preferred method of paying this fee is and 5) whether paying a fee should be
mandatory or voluntary.
Pearce and Turner (1990) identify four different sources of bias when using the CVM;
strategic, design, hypothetical and operational. The strategic bias is not considered
significant based on several studies (van Beukering et al 2009). Furthermore as this
part of the questionnaire was almost literally adopted from the Bermuda questionnaire
it is assumed that potential design, hypothetical and operational bias’ were dealt with
when designing the original questionnaire.
IVM Institute for Environmental Studies
86 Tourism
7.4
Survey results
This Section describes the results of the tourist survey conducted among stay-over
tourists and cruise visitors. First, the characteristics of the sample are described in
detail. This followed by a section describing the total tourism value result and the
results for each individual method used to get to this total value. This is followed by a
section that addresses the differences between the islands and finally the chapter ends
with a synthesizing and concluding section.
Sample
The total sample size of the tourist-exit survey is 443. Roughly 60% of the respondents
are cruise ship visitors and the remaining 40% came in by airplane. According to the
annual tourism figures of the USVI Bureau of Economic Research (BER), in 2008 75% of
the tourists were cruise ship visitors and 25% airplane visitors. This means that for the
sample as a whole there is an under representation of cruise ship visitors and an over
representation of airplane tourists. The distribution of the sample across the different
islands is as follows: 59% of the respondents visited St Thomas, 8% visited St John and
34% visited ST Croix. Figure 7.6 also illustrates the division between cruise and air
respondents on the different islands. This shows that the distribution on St Thomas is
much in line with the data from BER and the over representation of airplane tourists
mostly stems from the St Croix sample. During the data collection period no cruise
ships docked at St John and hence all the respondents are airplane tourists.
Furthermore, BER does not have the tourism data split up into the different islands and
hence it cannot be compared.
Figure 7.6 Distribution of the sample covered by the exit survey
Demographics
Of the respondents 82% reside in the United States, 12% in other Caribbean nations,
and 2% came from Europe, Canada and other parts of the world. The average age of
the respondents is 39 years and 5 months; cruise visitors are on average slightly older
at 40 years and 5 months than airplane tourists who are on average 38 years old.
Gender wise the sample is split into 52% males and 48% females; for cruise visitors the
ratio is exactly 50:50 (129 each) while for airplane tourist the ratio is 56% males and
44% females. Further details of age and gender can be found in Table 7.2.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Table 7.3
Selected demographic information of the sample
Cruise
Air
Combined
18 - 25
13%
22%
17%
26 - 35
27%
26%
21%
9%
5%
0%
22%
25%
29%
16%
10%
27%
19%
9%
1%
1%
3%
0%
56%
52%
44%
48%
Age (years)
36 - 45
46 - 55
56 - 65
66 or older
Prefer not to say
Gender
Male
Female
50%
50%
The average income for cruise visitors is roughly $90.600, for airplane tourists it is
$94.250 and the average combined annual gross income is $91.900. Figure 7.7
illustrates the distribution of the respondents among the different income categories.
Figure 7.7 Average annual household income
Roughly 2% of both the cruise and airplane tourists refused to answer the question
“What is the highest level of education that you completed”. 4 cruise ship passengers
answered elementary school vs 1 airplane passenger. 22% of cruise visitors marked
high school has highest level of completed education vs 17% of airplane tourists. The
remaining 75% of cruise ship visitors has at least a university or college degree, and
28% of these people have a master of other advanced degree. The remaining 81% of
airplane tourists have at a university of college degree and 44% of the people have a
masters or other advance degree.
Expenditures and trip characteristics
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88 Tourism
Table 7.4 shows the average expenditures per tourist per trip. The cruise package for
cruise visitors includes the amount paid for the cruise and possible flight to and from
the port of embarkation and port of disembarkation divided by the number of days of
the cruise. The average of $21 for accommodation for cruise ship visitors stems from
the fact that a few respondents stayed a night(s) in a hotel before or after the cruise.
Table 7.4
Average expenditure per person per visit
Average expenditures per person per visit
Item
Cruise
Cruise package
Flight
Accommodation
Diving
Snorkeling
Touring the reef
Local transportation
Shopping
Meals
Other expenditures
Total
$
$
$
$
$
$
$
$
$
$
$
Air
197,13 $
$ 594,46
20,50 $ 558,10
6,77 $
10,82
17,29 $
29,63
6,50 $
6,05
25,69 $ 117,50
195,53 $ 262,95
41,17 $ 251,65
4,62 $
43,70
515,20 $ 1.874,85
The average number of days spend in the USVI is for cruise ship passengers all 1, and
for airplane tourists 6. 45 days. In the report ‘U.S. Virgin Islands Economic Review and
Industry Outlook’ (2007) BER calculated that for 2007 the average stay for tourist was
4.4 nights, however it is unclear how many days this is on average, and hence it
cannot be compared. There is a slight difference in length of stay amongst the three
islands 6.69 for St Thomas, 6. 48 for St John, and 6. 18 for St Croix but this difference
is not significant.
Of the cruise ship visitors interviewed, 70% visited St Thomas, 30% St Croix and none
indicated that they visited St John because, as mentioned, no cruise ships arrived on St
John during the data collection of this research. Roughly 42% of the interviewed
participants visited St Thomas, 19% St John and the remaining 39% St Croix.
For 60% of the interviewed cruise visitors it was the first time they visited the USVI
versus 50% of airplane tourists. What is interesting to see is that a larger percent of
airplane tourists return back to the USVI for a 2nd, 3rd of 4th+ time than cruise ship
visitors, as is illustrated in Table 7.5.
Table 7.5
Total number of visits to the USVI
Number of visits
Cruise
Air
Combined
1
2
3
4+
60%
50%
56%
19%
20%
20%
7%
9%
8%
14%
20%
16%
Motivation to visit and return to the USVI
For this study it is highly relevant to know whether a tourist is an active user of the
reef or an inactive user. Active means in this case that the person has gone diving or
snorkelling previous to this trip. As shown in Figure 7.8, there is a significant
difference the amount of respondents that are active users amongst cruise passengers
(44%) and amongst airplane tourists (70%). For the overall sample the share of inactive
users is roughly 45% and active users make up 55% of the sample.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Figure 7.8 Active of inactive users
When asked about their motivation to visit the USVI cruise passengers indicated that
on average 42% was reef related, and for airplane tourists this is 43%. Finally the
participants were also asked whether they would return to the USVI for another
vacation. Roughly 1% of the respondents indicated that they would not return to the
USVI for another vacation, 6% was not sure yet and the remaining 93% said that they
would. Of the 1% (=6 people) that would not be returning only 1 person indicated that
this was because the “coral reefs are not healthy or dying”, the other reasons were all
non reef related. As a follow up question it was asked if the respondent “would return
to the USVI for another vacation if the coral reefs were in a significantly worse shape
than they are currently?” Figure 7.9 shows comparing results for the two questions for
all the respondents. What can be seen here is that there is a significant shift from
‘yes’(-44%) to ‘not sure’ (+34% and even to ‘no’(+10%).
Figure 7.9 Impact of state of the reef on re-visitation
7.5
Tourism value
The Net Factor Income Method was utilised to estimate the total tourism value of the
USVI’ coral reefs, and the additional willingness to pay of visitors conserve the coral
reefs was calculated using the contingency valuation method. In this section the total
tourism value and additional WTP is presented, detailed results from each method can
be found in the following subsections.
Net Factor Income Method
The first step in calculating the tourism value of the USVI’s coral reefs is finding out
the importance of coral reefs for tourism, or what the marine related share of tourist
revenues is. In question 13 of the tourist-exit questionnaire respondents were asked to
89
90 Tourism
provide their expenditures on a number of activities and items. From this list only the
reef related expenditures are relevant and so the shopping and ‘other expenditures’
are disregarded for this part of the analysis. A percentage of the expenditures made by
a respondent which is reef related, can be seen as attributed by the coral reefs. The
specific percentages are as follows: for direct reef related expenditures 25% is
counted, and for indirect reef related expenditures 25% is counted with the exception
of airplane fare of which only 2% is counted (highlighted in Table 7.8), and the cruise
ship package which is counted for 1.4% (highlighted in Table 7.7). However, the
indirect reef related expenditures are discounted a second time by the percentage that
represents the relative importance of the coral reefs in the respondents decision to
choose the USVI as a holiday destination. For cruise ship visitors this is 42.46% and for
airplane tourists 43.46%, as is illustrated in Table 7.6.
Table 7.6
Motivation to visit the USVI
Cruise visitors
Air tourists
Reef related
42.46%
43.46%
Non reef related
57.54%
56.54%
The next step is to discount the tourist revenues according to these calculated
percentages, as is shown in Table 7.7 for cruise ship visitors and in Table 7.8 for
airplane visitors. As shown in the Tables, the tourism value for each cruise ship
passenger arriving in the USVI is $23.21, and for each airplane tourist this is $116.42.
Table 7.7
Producer surplus – cruise ship visitors
Table 7.8
Producer surplus – airplane visitors
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Willingness to pay estimate
At the end of part 3 of the questionnaire, respondents were told the following:
“Let’s talk more on how you appreciate the USVIs coral reefs. There are a number of
threats caused by human activity, such as the increased pressure from tourism that
can change the quality of the coral reefs. If these threats are not adequately dealt
with, they will damage USVI’ reefs, beaches and its turquoise waters. To help preserve
USVI’ coral reefs, extra funds may be needed for which tourists may be asked to
contribute.”
After hearing this information the respondent was asked if he/she “would –in principlebe willing to pay a fee in addition to your current expenses, to fund activities to
preserve the USVI’ coral reefs?” 69% of cruise ship passengers and 72% of airplane
passengers said that they are –in principle- willing to pay an additional fee to conserve
the reefs.
In case the respondent indicated he or she was not willing to pay a fee, it was asked to
give a main reason why not. Table 7.9 illustrates the different reasons.
Table 7.9
Main reason for not wanting to pay a fee to preserve coral reefs - Cruise
No need for management
Conservation responsibility of USVI
My activities have no impact
Conservation program would not be effective
I cannot afford it
Other
Don't know/ refused
Total
Cruise %
1%
21%
22%
4%
13%
13%
26%
100%
Air %
2%
22%
26%
7%
17%
13%
13%
100%
Total %
2%
21%
24%
5%
15%
13%
21%
100%
In Figure 7.10 the average maximum amount a respondent is willing to pay on top of
his/her current expenses, is presented. For both cruise and airplane respondents the
minimum someone was willing to pay was $1 and the maximum $100. To calculate the
average amount all respondents that were not willing to pay a fee were included as
having a WTP of $0. The average maximum WTP is $19.05 for cruise ship passengers
and $16.54 for airplane passengers.
Figure 7.10 Willingness to pay to preserve the reef of the USVI
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92 Tourism
Table 7.10 illustrates the preferred method of payment of this fee by the respondents
that are willing to pay. Most of the cruise and airplane visitors prefer to pay per visit,
such as an exit fee at the airport or charge per cruise ship passenger, or per reef
related activity for example, per dive or snorkel trip. Also quiet a large percentage
(30% +) seem to have no preference, doesn’t know what they prefer or refused to
answer the question.
Table 7.10 Preferred method to pay the fee (1)
Per visit
Per activity
Per year
No preference
Don't know/ refused
Total
Cruise %
29%
31%
5%
14%
22%
100%
Air %
32%
30%
8%
15%
16%
100%
Combined %
30%
31%
6%
14%
19%
100%
As a last question in this section respondents were asked whether they thought this
fee should be mandatory or voluntary for everyone. There is no significant difference
between cruise visitors and airplane tourist. On average, the majority of the
respondents is in favour of a voluntary payment (56%) as opposed to those
respondents that prefer a mandatory payment (34%). The remaining 10% of the
respondents do not have a clear preference on the type of payment. However, as
shown in Figure 7.11, there is a big difference between active and inactive users of the
reef: 44% of active users support mandatory fees versus 12% of inactive users.
Figure 7.11 Preferred method to pay the fee (2)
The regression analysis of the WTP shows that the annual household income (,000),
inactive/active user of the reef (,034) and which island was visited (,000) are all
significant predictors of the willing to pay to fund activities to conserve the reefs.
Figure 7.12 shows the difference in max WTP per visitors per island. What can be seen
here is that even though from the overall sample it seemed that the average cruise
ship visitor is willing to pay more than an airplane tourist, when we look at the
individual islands we see that St Thomas and St Croix are completely different. Cruise
visitors on St Thomas are on average willing to pay $12.84 while on St Croix the cruise
ship passengers are willing to pay nearly twice as much, $25.25. For airplane tourists
the difference between St Thomas ($17.52) and St Croix ($19.45) is not as big, but
between St Thomas and St John there is still a $4 difference.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Figure 7.12 WTP by island
As shown in Figure 7.13, there are also interesting differences to be noted between
active and inactive users the cruise visitor group and airplane group and between the
inactive cruise and airplane users. However these results should be interpreted with
care as by splitting up the data twice the groups are becoming relatively small:
smallest is 51 (active air) and the largest 144 (inactive cruise). It would be interesting
to verfiy if there is also a difference between cruise visitors/ airplane tourists and
inactive/ active users that visit the different islands but the sample size (namely for St
John and to a lesser extent St Croix) is insufficient to test this hypothesis.
Figure 7.13 WTP by level of activeness
Total tourism value
The next step in the calculation of the tourism value is to multiply the number of
visitors with the per visitor values derived from the survey. Before doing this, two
issues regarding the final estimation are report.
First, the actual number of cruise visitors going ashore should be corrected. The
results of a study by BREA and FCCA conducted in the period from May 2005 through
April 2006. In this study, information was collected about onshore expenditure data of
passengers of 16 FCCA cruise line members, in 18 Caribbean ports (and Key West).
One of the results was that on average ‘only’ 85% of passengers actually go ashore in
any port-of-call. This means that in the case of the USVI total cruise ship tourists
expenditures should be multiplied by 85% in order to get a more realistic figure. In
2008 total cruise visitors expenditures was $569.6 million, multiply this by 85% and it
turns out that the actually total expenditures by cruise visitors was only $484.16
93
94 Tourism
million in 2008: $85.44 million less than assumed. Therefore, for this study the
average consumer and producer surplus amount will be multiplied by 85% if the total
visitor arrivals as recorded by the USVI BER.
Second, factors influencing the expenditures of cruise ship visitors should be corrected
for. There are several factors that can influence the average expenditures recorded by
cruise ship visitors visiting USVI:
1. The tourist-exit surveys that are conducted in order to measure the expenditures
of cruise ship visitors are usually done at the end of the day at the WICO dock/
Havensight mall or Crown Bay plaza (also shopping mall). The problem with this is
that this way the visitors that only go ashore in the morning to walk around and
return before lunch (=spend less), and those that are away on a tour are usually
not included. These two groups will most likely spend significantly less than the
people walking around the shopping mall in the afternoon.
2. A certain percentage of the cruise ship passengers are children, who will spend
less.
3. Surveys are not conducted on Sunday’s when a good percentage of the shops and
attractions are closed, and so tourists will spend less.
4. Expenditures could be different depending on if it is the first stop or last stop
5. Expenditures could be different depending on the length of the cruise (3 vs 40
days).
Not taking into account these factors will lead to an inflated average expenditures
amount (AEA) for cruise ship visitors. And so the AEA should be discounted by a
percentage which represents these factors. FCCA study controls for all of these factors
by doing in cabin questionnaires for all passengers. They came to an average amount
spend of $177 for cruise ship visitors in St. Thomas in 2005. In contrast, USVI BER
records an average of $286 per cruise ship visitor in 2005. This is a difference of 38%.
The total tourism value of the USVI’ coral reefs and WTP for conservation per visitor are
presented in Table 7.11. The total tourism value per cruise ship visitor is on average
$23 and for an airplane tourist $116. Furthermore, a cruise ship visitor is on average
willing to pay an additional $19 for conservation of the coral reefs, whereas an
airplane tourist is willing to pay $17 on average.
Table 7.11 Total tourism value of the USVI' coral reefs per visitor
Cruise visitors
Air tourists
Tourism value
$23.21
$116.42
WTP for conservation
$19.05
$16.54
The total tourism and WTP values for cruise and airplane tourists are extrapolated to
estimate the total tourism value of the USVI’ coral reefs per year and the willingness to
pay for conservation of the reefs per year. In Table 7.12 the results are summarised.
The total tourism value of the USVI’s coral reefs is roughly $103 million per year. The
total willingness to pay of visitors for conservation of the coral reefs is roughly $38
million per year, of which the majority (75%) would be paid by cruise ship visitors.
Table 7.12 Total tourism value of the USVI' coral reefs per year
Cruise visitors
Air tourists
Total
Tourism value
$34.66 million
$68.01 million
$102.87 million
WTP for conservation
$28.45 million
$9.69 million
$38.14 million
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
7.6
95
Conclusion
In this chapter the total tourism value of the USVI’ coral reefs is presented, $102.86
million per year is the added reef-related value to the USVI’ economy, and visitors are
willing to pay another $38.14 million per year for reef conservation.
The large difference between the reef-related value added by a cruise visitor ($23.21)
and an airplane tourist ($116.52) to the USVI’ economy indicates that these two groups
should not be averaged out. It is important of recognising and treating the two groups
of visitors as different, and using a general average tourism value per visitor to
calculate the total tourism value.
The difference in WTP for the conservation of coral reefs in the USVI between cruise
visitors ($19.05) and airplane tourists ($16.54) is important to notice, but what is
perhaps more important is the difference between WTP of tourists visiting the different
islands (STT $14.16, STJ $21.52 and STX $22.55) and whether the person is an active
or inactive user of the reef. What is also a noteworthy result is the fact that by far the
most cruise ships dock at St Thomas, but the passengers of this ship are ‘only’ willing
to pay $12.84 per visitor, the lowest of all.
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96 Fisheries
8
Fisheries
8.1
Introduction
To determine the value of coral reef associated fisheries, both the commercial and
recreational value of reef-associated fishing need to be considered. The commercial
value of coral reef associated fisheries relates to the producer surplus generated by
the USVI fisheries sector. The recreational value relates to the cultural and recreational
importance of fishing in the USVI. These two components of reef related fishery value
are estimated separately using different methods.
8.2
Commercial fishery
The commercial value of coral reef associated fisheries relates to the producer surplus
generated by the USVI fisheries sector. The valuation is based on the recognition that
reefs are an input into the production of commercially caught fish. The methodology
applied to estimate the value of the commercial reef related fishery is the net factor
income approach. This valuation method involves calculating the gross revenue of
commercial fishing, and subtracting operating costs (labour and non-labour costs) to
arrive at net factor income of the reef.
Data on commercial landings for the period 2003-2007 are obtained from the
Department of Planning and Natural Resources Division of Fish and Wildlife
Commercial Catch Reporting Program. Landings data is available separately for St
Thomas and St Croix (see Table 1). Assessing the costs of fishing effort in the USVI is
difficult due to the general lack of reporting on incomes and expenditures in the USVI.
To estimate the costs of commercial fishing for the purpose of this study, information
on labour and non-labour operating costs is transferred from a previous study
conducted in a similar context (van Beukering et al. (2010). The valuation focuses on
commercial fish species that depend directly on coral reef for at least a portion of their
life cycle, including groupers (Serranidae), jacks (Carangidae), snappers (Lutjanidae),
grunts (Haemulidae), porgy (Sparidae), and spinylobsters (Panularis argus). In the
commercial fishery, an average share of 81.44% of the total catch (by weight) is
assumed to be reef-associated. This assumption is based on data collected for a
previous study (van Beukering et al., 2007). This percentage also corresponds closely
with the percentage of USVI commercial fishers that target reef fish (DPNR 2005, Table
IV-1). Average market prices for unprocessed fish in the USVI are assumed to be 5 US$
per pound based on a survey of USVI fish markets.
Table 8.1 presents the data on commercial fish landings and estimates of reef
associated fish catch, total annual revenue that is reef associated, and net factor
income attributable to the reef. The five-year average value is calculated in order to
avoid distortions (unrepresentativeness) due to variable annual figures.
An important consideration in using data on past catch levels is that it is difficult to
assess whether these catch levels are sustainable in the long term. If they are not
sustainable, the estimated annual value of the fishery is likely to be an over-estimate of
the actual long run annual value. There is evidence to suggest that fishing activity in St
Croix is above a long term sustainable level given that total catch has risen
dramatically over the past 20 years and that total catch per area of ocean shelf is
considerably higher than at other locations (Olsen, 2010). If this is the case, the value
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
97
of commercial fishing in St Croix is likely to decline in the medium term. We do not,
however, have information that allows us to model the dynamics of fish stocks and
future catch. We can therefore only raise this issue as a caveat on the estimated value.
The total annual value of USVI coral reefs as an input to commercial fisheries is
estimated to be approximately US$ 1.4 million.
Table 8.1
Commercial landings, reef associated catch, reef associated total revenue, and net
factor income
2003
2004
2005
2006
2007
Total Catch (lbs)
790,000
830,000
800,000
775,000
710,000
Reef Assoc. Catch
(lbs)
643,376
675,952
651,520
631,160
578,224
3,216,880
3,379,760
3,257,600
3,155,800
2,891,120
643,376
675,952
651,520
631,160
578,224
Total
990,000
1,060,000
980,000
1,100,000
820,000
Reef Assoc. Catch
806,256
863,264
798,112
895,840
667,808
4,031,280
4,316,320
3,990,560
4,479,200
3,339,040
806,256
863,264
798,112
895,840
667,808
5 year
average
St Thomas
Total Revenue (reef
ass.)
Net Factor Income
(US$)
636,046
St Croix
Total Revenue (reef
ass.)
Net Factor Income
(US$)
Total USVI (US$)
8.3
806,256
1,442,302
Recreational fishery
The economic value of reef related recreational fishing relates to the cultural and
recreational importance of fishing in the USVI. The value of recreational fishing is
assessed using the results of the choice experiment household survey described in
Chapter X. The choice experiment method, survey, model and willingness to pay
calculations are presented in that chapter. Information obtained from the household
survey on recreational fishing is summarised here.
The number of households in the surveyed sample that are involved in recreational
fishing is 151 (approximately 20% of the sample). On St Thomas, 70 (20%) of the
residents' households were involved in fishing, compared to 12 (10%) on St John and
69 (27%) on St Croix. Most households that participate in recreational fishing go less
than once a week, generally in the weekends.
The average number of fish caught per trip is approximately 17 and most of the
fishing trips yield a modest catch of less than 10 fish. Almost half of the catch is made
up from shallow reef fish such as Barracuda, Tarpon and Jacks; a quarter of the catch
is comprised of deep reef fish such as Snappers, Kingfish and Rainbow Runners; and
10% of the catch comprises of deep sea fish such as Mahi Mahi, Tuna and Marlin. A
relatively minor share is made up from invertebrates such as lobster, whelk and conch
(see Figure 8.1).
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98 Fisheries
The reasons for respondents to go fishing are diverse. Around one-third
one third of the
household that go recreational fishing consider the enjoyment of fishing the most
important. Around a quarter principally fishes for food. Sociall interaction is also an
important motivation for fishing: 14% of the respondents fish for bonding, 13% fish to
give the catch to friends and family
family, and 11% fish for reasons related to tradition
dition. Only
3% of the respondents that fish for recreation consider
consider selling their catch the main
motivation (see Figure 8.2).
Figure 8.1 Composition of recreational fishing catch
Selling
3%
Bonding
14%
Enjoy fishing
Tradition
33%
11%
GiveAway
Food
13%
26%
Figure 8.2 Key Motivations
otivations for recreational fishing
From the results of the choice experiment described in chapter 4,, the estimated annual
household willingness to pay to avoid moving from a scenario with the current
availability fish to a scenario with 20% lower fish is 38 US$ for households that engage
in recreational fisheries. We assume there is a single linear effect of losses in fish
availability, i.e. that fishing households are willing to pay this amount for each
subsequent 20% loss in availability. This assumption
assumption is likely to be an underestimate of
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
99
actual WTP to avoid larger losses given that people are generally loss averse and that
values tend to increase with scarcity. Our value estimate is therefore considered to be
conservative. Following this reasoning, the annual household WTP to avoid a total loss
in fish availability for recreational fishing is estimated to be 190 US$. Multiplying this
value by the number of households on each island that participate in recreation fishing
gives the total WTP for recreational fishing at the island level (see Figure 8.2). For the
USVI as a whole, the annual value of recreational fishing is estimated to be
approximately 1.85 million US$.
Table 8.2
Total annual WTP for recreational fishing (in $/year)
Number of HHs
% Rec. Fishing
Number of HH Fishing
WTP per HH
Total Annual WTP
8.4
St T
St J
St C
18,527
1,519
21,719
0.20
0.12
0.27
3,705
182
5,864
190
190
190
704,015
34,639
1,114,187
USVI
1,852,841
Conclusions
The value of reef associated commercial and recreational fishing is substantial. Using
the net factor income approach, the input of coral reefs to the commercial fishery is
estimated to be worth approximately $1.4 million annually. The value of recreational
fishing is estimated using the results of the choice experiment described in Chapter 4,
and is determined to be approximately $1.85 million per year. In addition to the
producer surplus generated by the commercial fishery in the USVI, there is also likely
to be consumer surplus derived from the consumption of locally caught fish. The
results of the household survey show that almost half of residents eat locally caught
fish at least once a week. In addition, fish consumption has historical and cultural
significance in the USVI. These values have not been quantified and so our estimate of
the value of fisheries should be treated as a lower bound estimate.
IVM Institute for Environmental Studies
10 Total Economic Value
9
Total Economic Value
9.1
Introduction
The final step in determining the total value of the ecosystem services provided by the
coral reefs of the USVI is to sum up the individual benefits into a Total Economic Value
(TEV). This TEV can be calculated for a specific area or for alternative uses of that area
(e.g. preservation, tourism-based development, multiple use). As shown in Figure 9.1,
the TEV of coral reef ecosystems can be subdivided into use and non-use values. Use
values are benefits that arise from the actual use of the ecosystem, both directly and
indirectly, such as fisheries, tourism and beach front property values. Non-use values
include an existence value, which reflects the value of an ecosystem to humans,
irrespective of whether it is used or not. This Chapter assesses the current TEV of coral
reefs of the USVI’s, and considers this value’s change over time. In addition, some
sensitivity analysis is conducted to investigate the robustness of the estimated TEV
under different assumptions.
It is worth noting that although the USVI’s TEV is known as ‘Total’ Economic Value, this
analysis has not included all goods and services provided by the island’s coral reefs
and that some aspects of coral reefs may be ‘invaluable’ i.e. they have intrinsic value,
beyond any benefits provided to people. Hence, the TEV estimated here is likely to
under-estimate the true ‘total’ value of USVI’s coral reefs.
Total Economic Value
Use values
Direct use
Example:
-Fish
-Lime
-Ornaments
Non-use values
Indirect use
Example:
-Coastal protection
-Amenity services
-Tourist attraction
Option value
Bequest value
Existence value
Example:
- Genetic materials
for prospecting
- Biodiversity
Example:
- Avoided damage
from climate
change
Example:
- Rare species
- Indigenous rights
- Culture
Figure 9.1 Subdivision of the total economic value of coral reefs taken from Cesar and
van Beukering (2004).
9.2
Composition of TEV
Table 9.1 shows the composition of the main economic benefits of the coral reefs in
The USVI. The average annual value of the coral reef ecosystem amounts to US$ 722
million (based on 2007 USD). This high number certainly suggests that this ecosystem
is highly valuable and worth conserving, from an ecological, social and economic
perspective. Several ecosystem services contribute to this overall value:
• With an average annual benefit of US$ 103 million, the tourist value dominates the
overall value. This implies that almost 51% of the value of The USVI’s coral reefs is
dependent on tourism, and vice versa, that tourism is very dependent on the state
of the coral reef of the USVI.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
10
• The second most important component the local use and non-use value of coral
reefs in the USVI. Despite the relatively small population of the USVI, local
recreational and cultural importance of the coral reefs is still substantial:
approximating US$51 million per year. This also implies that local support for coral
reef management is likely to be substantial.
• The same can be said for the amenity value, which is reflected in higher house
prices. Although this surplus in house price is relatively small, it still amounts to a
value of US$37 million per annum.
• The coastal protection service of coral reefs in the USVI is valued at US$7 million
per year, which accounts for 3% of the TEV. With the USVI exposed to frequent
storms, the role of coral reefs in dissipating wave energy is crucial and thus of
important value.
• The importance of the fishery in the TEV is often perceived as an important
component. In actual fact, with an annual value of US$3 million the fishery (both
commercial and recreational) is one of the lesser values derived from the coral reef
ecosystem in the USVI.
• One value that has not been described in the report is the value that research and
educational organization derive from the coral reefs of the USVI. Because of lack of
data, value transfer has been conducted on the basis of similar values of
comparable islands. The average coral reef-related research and education budget
is estimated at US$1 million per year.
Table 9.1
Undiscounted annual benefits of coral reefs in The USVI (2010 US$
million/year)
Ecosystem Service
Tourism
Recreation & Cultural
Amenity
Coastal protection
Fishery
Research & Education
Total annual economic value
Average (USD million per year)
102.9
51.1
37.1
6.7
3.3
1.0
Share
51%
25%
18%
3%
2%
0%
202.1
100%
The estimation of the various ecosystem service values involves a large number of
assumptions that simplify the underlying dynamics and complexity of coral reefs in the
USVI. Therefore, lower and upper bound estimates are determined for each ecosystem
service, recognizing the uncertainty surrounding the economic analysis. The basis for
this range differs for each value category. In the case of coastal protection, for
example, the different storm frequencies available in the literature are used to create a
range of values. In the case of the fishery value, the wide range of financial cost
estimates is used to set the upper and lower bound of the value. The ranges estimated
for each ecosystem service is presented in Table 7.2. With an average estimate of US$
202 million per year, the lower bound estimate is determined at almost US$100 million
per year while the upper bound is set at US$273 million per year. Further study could
allow for the reduction of uncertainties and thus the narrowing of the value range.
To get an idea of the importance of coral reefs for the USVI, it is useful to compare the
TEV of coral reefs ($273 million) to the GDP. The GDP of the USVI was around $1.6
billion in 2010 (CIA, World Fact book, 2011) which implies that 13% of the size of the
economy in the USVI is directly or indirectly linked to the reefs of the USVI.
IVM Institute for Environmental Studies
10 Total Economic Value
Table 9.2
Upper and lower bound estimates of the annual benefits of coral reefs in
the USVI (2010US$ million/year)
Ecosystem Service
Lower bound
Average
Upper bound
Tourism
Recreation & Cultural
Amenity
Coastal protection
Fishery
Research & Education
64.7
17.5
9.7
3.4
3.1
0.5
102.9
51.1
37.1
6.7
3.3
1.0
141.0
66.7
47.2
13.4
3.4
1.5
Total annual economic value
98.9
202.1
273.2
9.3
TEV over time
Annual benefits of coral reefs (in US$)
The TEV of coral reefs in the USVI is changing over time for several reasons. First, as
the ecological integrity of coral reefs changes over time, the level of service provision
is also likely to change with it. Second, if socio-economic conditions change and lead
to increasing income, the people from the USVI may be willing to pay more for the
preservation of coral reefs or may develop habits (e.g. recreational fishing) that lead to
a greater appreciation of the coral reef ecosystem, hence increasing its value. An indepth analysis of such dynamic aspects underlying the TEV is beyond the scope of this
study. However, insight into the potential dynamics of the TEV can be obtained
through the simulation of scenarios; hypothetical scenarios on the change in the
health of the coral reefs the USVI and the associated changes in the economic value
can be adopted. A common approach to design these scenarios is by simulating
situations ‘with’ and ‘without’ coral reef management in the USVI. An example of such
a comparison is provided in Figure 9.2.
With
management
Additional benefits
of coral reef
management
Without
management
Time
Figure 9.2 Annual benefits of coral reefs with and without management
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
For the USVI, three hypothetical futures are simulated for the period 2012-2037. As a
baseline, it is assumed that the benefits remain constant over time. Whether this stable
condition is a plausible basis for a baseline scenario is debatable since current trends
show a decline in coral reef health and therefore the TEV is likely to decline with it.
Nevertheless, for illustrative purposes we assume the baseline to remain constant. The
baseline situation is compared to two different trajectories:
1. The “degradation” scenario which assumes decline in the TEV of 2% each year,
representing a situation in which stressors such as climate change and water
pollution continue to decline the coral reef health over time; and
2. The “recovery” scenario in which hypothetical measures are implemented that
successfully break the negative trend and allow the reef and thus the TEV to
recover at 1% each year.
Annual value (million US$/year)
Note that these simulations are purely hypothetical and are only meant to demonstrate
the impact of time and the discount rate on the TEV. With more time for research,
scenarios could be developed that more closely align with likely internal drivers, such
as reef management practices or policies, or with possible external drivers, such as
climate change and population growth. Figure 7.3 shows the annual benefits over time
for the three scenarios at a discount rate of 0% (i.e. undiscounted levels).
300
250
200
150
TEV-baseline
100
TEV - degradation
TEV-recovery
50
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
0
Time
Figure 9.3 Annual benefits of coral reefs in the USVI (in million US$/year)
Figure 9.4 shows the sensitivity of the TEV to the discount rate. The present value is
the sum of all discounted annual benefits over the full period. By definition, the
present value declines with higher discount rates due to the fact that future benefits
are discounted more than without discounting. Assuming a discount rate of 4% for a
25-year period, the present value of the coral reefs of the USVI adds up to US$3.4
billion.3 As expected, it can also be seen that further degradation will lower the
present value with almost $1 billion while recovery can lead to an increase of $0.4
billion (Figure 9.4).
3
Pearce and Ulph (1995) recommend using a social discount rate between 2% to 4%. Since
then, several organisations came up with similar advice, such as DEFRA (Department for
Environment, Food and Rural Affairs), currently maintaining a standard social discount rate
of 3.5%. In this study, 4% is adopted, and a sensitivity analysis conducted to explore the
impact of the level of the discount rate.
10
10 Total Economic Value
Present Value (million US$)
7,000
6,000
5,000
4,000
TEV-baseline
3,000
TEV - degradation
2,000
TEV-recovery
1,000
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
-
Discount rate
Figure 9.4 Sensitivity analysis of the discount rate on the Present value of coral reefs
in the USVI (25 years, in million US$)
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
10
10
Value mapping
10.1
Introduction
As demonstrated in the preceding Chapters, coral reefs in the USVI play a significant
role in the local economy and culture. However, they face serious threats due to
anthropogenic activities, especially within last two decades. It is widely recognized that
coral reefs should be conserved to maintain the benefits that they supply. The
economic value of coral reefs is not distributed evenly and they face different levels of
threats. Since it is unfeasible to preserve all threatened coral reefs at once because of
the budget constraint, the problem to address is how to identify those coral reefs that
need conservation priorities. GIS techniques can help us visualize and better
understand the spatial distribution of economic values of coral reefs.
10.2
Methodology
GIS techniques have been effectively and extensively applied in environment science,
but are only modestly used in economic analysis of coral reefs. One of the few
applications of GIS in the economic analysis is provided by Bryant et al. (1998). Given
the significant spatial variation in reef values within a region, and the capability of GIS
to make this spatial variation explicit, the sporadic use of this type of tool is
remarkable. For example, a recent study in American Samoa showed that reef values in
some areas were up to 130 times the territory average (Spurgeon et al. 2004). Other
examples followed in Saipan (Van Beukering et al. 2006) and Guam (Van Beukering et
al. 2007).
Major over- or underestimation can occur if values are extended (without adjustments)
to another area of reef or are extrapolated across whole regions. Therefore, more
research is needed on factors affecting the spatial distribution of values and the
magnitude of variation between benefits (e.g. through meta analyses at the regional
level), as well as an examination of the potential for map-based tools (Roxburgh and
Spurgeon 2005).
The principal objective of this Chapter is to establish one evaluation model, combining
economic and spatial components, for the coral reefs of the USVI. The economic values
of USVI’s coral reefs, including general tourism, diving and snorkelling, amenity,
coastal protection and biodiversity values, were determined by environmental
economic valuation tools (as presented in the previous Chapters). GIS techniques will
now be used to visualize the distribution of these economic values. The procedure
consists of: (i) distributing all components of economic values of coral reefs; and (ii)
aggregating all maps to obtain the map that shows the distribution of total economic
value (TEV).
The GIS methods used to spatially distribute economic values of coral reefs on the
USVI are as follows:
•
Diving and snorkeling: The recreational and tourism sites on the USVI
influencing the coral reef economic values include diving and snorkeling spots,
beaches, parks and hotels. Diving and snorkeling are discussed separately
from other tourism values because these activities are more directly related to
coral reefs. Every year many tourists, who are different from other general
tourists, visit the USVI just for diving and snorkeling. Firstly, diving and
IVM Institute for Environmental Studies
10 Value mapping
snorkeling spots were divided into three categories according to their
popularity (i.e. most popular, popular and not popular spots). We considered
each “popularity” category as one layer and then focused on each layer, in turn.
Secondly, reefs within each layer were sub-categorized based on their distance
from diving and snorkeling spots. Coral reefs closer to diving and snorkeling
sites are considered to have higher values in terms of diving and snorkeling.
Following this principle, coral reefs were categorized in terms of distance to
the dive and snorkeling spots. Coral reefs within 100 meters of diving sites
were considered to have the highest value, within 100-250 meters a medium
value, within 250-500 meters a low value, and beyond 500 meters no dive
value at all (being too far from diving sites).
•
Tourism: Beaches, parks and hotels are major reef-relevant tourism sites apart
from diving and snorkeling spots. The major principles used for categorization
are twofold: (i) the closer to tourism sites, the more valuable the coral reefs
possess; (ii) coral reefs relating to more tourism sites have higher economic
value.
•
Amenity value: Coral reefs provide enjoyable amenities to people living within
a certain distance from the coast. 1000-meter is the reasonably furthest
distance that human eyes can reach. The main principles for classification
include: (i) people living closer to the coast enjoy more amenities than those
living far from the coast; (ii) coral reefs existing closer to the coast supply
higher amenity value than those growing far from the coast. Based on these
principles, first, we divide the entire island into four parcels. Parcel 1 (within
100 meters from the coastline) can enjoy high amenity value, parcel 2 (within
between 100 to 250 meters) enjoying medium amenity value, parcel 3 (within
between 250 to 1000 meters) enjoying low amenity value and parcel 4 (beyond
1000 metes) enjoying no amenity value. Furthermore, most of the amenity
value is supplied by coral reefs within 500 meters from each parcel. The
remaining are supplied by coral reefs within between 500 to 1000 meters.
•
Coastal protection: The principle used to determine the spatial allocation of the
coastal protection value is that without the protection of coral reefs, the waves
and storm surges would reach higher elevations and cause more serious
damage. The maps used include the elevation contour map of the USVI and a
map in which the locations of buildings on the USVI are shown.
•
Fishery value and biodiversity: Due to limited data sources as well as the
analytical and scientific complexity on how to allocate these values spatially,
values related to fisheries and biodiversity have not been taken into account in
the development of value maps for coral reefs of the USVI.
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
10.3
10
Results
The general methodology followed three distinct steps. Firstly, we allocated economic
values, which were calculated in the previous chapters (see Table 10.1), to coral reefs
in terms of tourism, snorkeling and diving, coastal protection and amenity values.
Secondly, these individual value maps to produce the thematic map in which the
distribution of the total economic value of coral reefs can be seen. This allowed for the
ranking of coral reefs based on their allocated economic value. The method is
explained in more detail in the coming sections. All benefit categories have been
spatially allocated, except for fisheries benefits, for which too little scientific data were
available to distribute these values in a reasonable manner. To demonstrate spatial
variability of the economic value of reefs in the USVI, many assumptions had to be
made which could not always be verified by existing data or literature, but instead was
based on expert judgments. The purpose of this Chapter is therefore illustrative rather
than a prescriptive.
Table 10.1 Spatially relevant coral reef values of the USVI
Type of reef-related value
Economic value (million $/year)
Tourism
Diving and snorkeling
Amenity
Coastal protection
90.0
12.8
37.0
6.7
10.4 Tourism
This value category focuses solely on beaches, parks and hotels. In line with the
economic valuation procedure, diving and snorkeling spots are discussed in the next
section. As for general tourism, coral reef categorization is mainly based on beaches,
parks and hotels, with the premise that coral reefs closer to recreational sites are more
valuable for tourism.
The total tourism values have been derived from Chapter 7. The total tourism value of
the USVI coral reefs is around $102 million annually, from which 68 million is
generated by airplane tourists and 34 million by cruise ship passengers. Through
information derived from the exit survey, values have been re-allocated to tourism in
general based on beaches, parks and coral reefs in general, on the one hand, and
snorkeling and diving activities, on the other hand.
Table 10.2 Monetary Distribution Sites vs Coastal Reefs
Category
Cruise ship tourists
Airplane tourists
Total
Sites
Coast
$8,183,422
$26,476,657
$4,637,660
$63,570,814
$12,821,083
$90,047,471
The amount of the $90 million on an annual basis is distributed over the reefs
according to methods presented in the Guam and Saipan studies (see Figure 10.1).
IVM Institute for Environmental Studies
10 Value mapping
Figure 10.1 Value Maps of general Tourism Coral Reefs USVI
10.5
Diving and Snorkeling
The reef-related
related diving and snorkeling
snork
value on the USVI is $12.8 million per year. The
dive and snorkeling value of various sites is based on the level of popularity of a dive
site. This level was determined by asking dive operators in the operator survey
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
10
(presented in Annex J) about the number of visits they paid to various sites in the USVI.
The resulting market shares of the various sites is used to allocate the total dive and
snorkel value across the various sites in the USVI (see Table 10.3).
Table 10.3 Allocation of dive and snorkeling value across diving sites in the USVI
Name of reef
Salt River -west
Frediriksted pier
Little St James
Cow and Calf
Salt River -east
Sprat point
Arches and tunnels
Coki
Congo Cay
Flat Cay
Cane bay wall
Eagle Shoals
Eagle Cay
Mingo Cay
STT Buck Island
Lime Stone
Lovango
Capella island
North Star (croix)
swirling reef of death
Eagle Shoal
Dever's
Grasse Cay
Henley Cay
Hidden Valley
Carval Rock
Long Reef
Stagglers
Captn Nightmare
Total
Market Share
11,89%
10,41%
8,12%
7,96%
7,37%
6,25%
5,63%
5,13%
4,93%
4,83%
4,60%
4,05%
3,29%
2,93%
2,87%
2,71%
2,41%
1,97%
1,27%
0,79%
0,77%
0,74%
0,64%
0,60%
0,49%
0,44%
0,38%
0,30%
0,30%
100,00%
Value Dive Site
$1,523,861
$1,334,958
$1,041,635
$1,020,557
$944,513
$801,071
$721,196
$657,526
$632,364
$619,376
$589,179
$519,658
$421,344
$375,729
$367,378
$347,609
$308,424
$252,065
$162,920
$101,825
$98,314
$95,505
$81,827
$77,246
$63,202
$56,179
$49,157
$38,202
$37,921
$12,821,083
The area around each of the above dive sites is divided into three sub-categories and
weights were given to these three sub-categories. Most divers enjoyed the beautiful
views underwater, which were within 100 m from diving sites. Some of the divers could
travel 100-250m from the diving sites where they started. Few divers could travel 250500m from the diving sites. Based on these facts, 60%, 30% and 10% were assigned to
these three sub-categories, respectively. After overlaying the three categories and
adding up the corresponding value per unit area, the value map for snorkeling and
diving activities was produced, as shown in Figure 10.2.
IVM Institute for Environmental Studies
11 Value mapping
Figure 10.2 Value Maps of Diving and Snorkeling activities Coral Reefs USVI
10.6
Coastal Protection
The coastal protection service of coral reefs in the USVI is valued at US$6.7
7 million per
year, which accounts for 3% of the TEV. To create a value map for coastal protection
ection
with reef values per m2, the USVI coastline is divided in 10k transects. These transects
The Economic Value of the
he Coral Reef Ecosystems of the United States Virgin Islands
represent the coastal protection value of the coral reefs. Using the Euclidean allocation
tool (ArcGIS 9.3) the reefs are linked to the closest coastline transect.
transect. Subsequently the
coastal protection value attributed
attri
to the coastline transect is divided by the amount of
m2 of coral reef in its vicinity. Because of the wave energy dissipating function of reef
structures, coral reefs as well as colonized hard bottom
botto is taken into account. Figure
10.3 presents the value map for coastal protection.
Figure 10.3 Value map of the Total Coastal Protection Value of Coral Reefs
11
11 Value mapping
10.7
Amenity values
With a value of US$37 million per annum, the amenity value which is reflected in
higher house prices is an important reef value of the USVI. To determine the value map
for the amenity value, the so-called dynamic method is used. This method has been
specifically designed for allocating the amenity value of coral reefs in the USVI (Salajan
et al. 2011). The Dynamic method completely assigns a tailor-made buffer sizes to
each house. The buffers are defined as the properties ‘ReefDistance+100m' and
'ReefDistance+500m’. That way, every house allocates its amenity value up to 100m
and 500m of its nearest reefs, weighed 70% and 30% respectively. Implemented in this
way, all houses allocate value to the reefs in their proximity. Figure 10.4 illustrates the
dynamic valuing method.
Figure 10.4 An illustration of Dynamic value method
In Figure 10.5, the dynamic buffer size can be seen quite distinctly: houses close to the
reefs have small buffers, while inland houses have large buffers that reach out to 'their'
closest reefs. Looking at the value distribution, no evident unrealistic results can be
distinguished.
Figure 10.5 Amenity value map of the Dynamic buffer method
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
10.8
Aggregation
Earlier sections provide various value maps of the individual value of the coral reefs of
the USVI.. To get a more general understanding of the variation in economic values
between the different
ferent reefs, we created a map in which these value maps are combined
(Figure 10.6). Note that this map only presents a share of the values measured in the
study, given the fact that not all these ecosystem services have been translated
translated into
spatial dimensions.
Figure 10.6 Total value maps
aps of the ecosystem services of coral reefs of the USVI
11
11 Value mapping
Note that the majority of the reefs of the USVI are in the lower regions of value per unit
of area valuing between $1 to $10 per square meter. Only a small fraction of the reefs
are of very high value ranging between $50 and $150 per square meter. Factors that
have a positive effect on the value of a specific area of coral reef include the use for
diving, snorkeling or other tourist exposure, the proximity to human settlements along
the coast in combination with the threat of storm damage, and to some extent the
health of the ecosystem.
The coral reef of the USVI are under pressure from various types of human-induced
threats. Threats and pressures affecting USVI coral reef ecosystems have been
reviewed extensively over the past 10 years in reports by Rogers and Beets (2001), and
in three ‘USVI State of the Reefs report’ by Catanzaro et al (2002), Jeffrey et al (2005),
and Rothenberger et al (2008). The last report by Rothenberger et al provides an
overview of the ten major anthropogenic and environmental stressors that have put
pressure on USVI coral reef ecosystems in the past 10 years.
Climate change and its resulting increasing sea surface temperatures (1) continue to
stress USVI coral Reefs. In 2005 a major coral bleaching (2) event occurred throughout
the Caribbean, and USVI coral reefs experienced extensive and widespread bleaching
with more than 90% of coral bleached in some areas. Episodic monitoring of National
Park Service’s South Florida Caribbean Network showed that bleached coral frequently
became affected with white plague disease (3). The coral bleaching event in
combination with the white plague disease ultimately resulted in >50% loss of coral
cover. Another major threat to coral reefs is coastal development and runoff (4): the
increasing land development, combined with poor planning and regulation of
development projects territory wide. Coastal pollution (5) such as bacterial
contamination of coastal waters is a primary problem caused by numerous point and
nonpoint source pollution discharges. Such discharges include failures at publicly
owned treatment works that result in sewage bypasses into near shore waters, failing
septic system and onsite sewage disposal system, and the improper discharge of
vessel waste directly into the water. Direct and indirect effects of tourism, recreation
(6) and associated development continue to affect USVI coral reefs. Furthermore, reef
fishing (7) and trade in live coral and live reef species (8) also form major threats as
does marine debris (9). Lastly ship, boats and groundings (10) have caused major
damage to the USVI coral reef (i.e. Voyager Eagle grounding by St John in 2002), and
will, together with vessel anchoring, remain a serious threat. A study done by Toller in
2006, not only gave insight into the impacts of decades of damage caused by the
anchoring of large vessels on the north and south anchorages of Frederiksted pier, it
also showed that anchor damage can dramatically affect the architecture of reef
systems and the biological communities they support.
An exercise that is outside the scope of this study would be to identify the specific
locations of these anthropogenic threats and create a threats map accordingly. Having
compared the distribution of total economic values of coral reefs and anthropogenic
threats to coral reefs, we can learn which valuable coral reefs face serious
anthropogenic threats, and thus should get priority in management plans.
10.9
Conclusion
As an attempt to comprehensively apply GIS techniques in the economic analysis of
coral reefs, on the one hand, this paper succeeds to build up one model to combine
the economic and spatial components. This model enables us to spatially distribute
economic values of coral reefs, visualize their differences from the economic aspect,
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
11
and further develop more cost-effective management approaches. Maps generally
communicate well with decision makers and therefore the presentation of economic
values in the form of value maps may increases the chances that the results of this
study will be taken into account in future decision making.
On the other hand, this model has some drawbacks and therefore needs further
improvement. One drawback of the spatial analysis applied for the coral reefs of the
USVI is the inaccuracies that result from the limited availability of recent spatial data.
For example, data for the benthic habitat maps applied in this study is collected before
the major bleaching event that killed nearly half of live coral in the USVI. Therefore, the
actual value maps of coral reefs in the USVI may take different shapes if updated
spatial information is fed into the spatial model.
A disadvantage of the above-mentioned methods is that coral reefs were treated as
somewhat isolated systems. In reality, the coral reefs on the USVI are mutually
connected by exchanging fish and larvae. In other words, attaching value to points
rather than larger systems has its drawbacks from an ecological point of view. If the
full ecological complexity would be accounted for, the “upstream” reefs would also
need to be credited for their ecological role in maintaining healthy reefs for tourists,
divers and properties. However, because the necessary maps and data for the USVI as a
whole are lacking to incorporate such ecological dimension to the GIS analysis, we
limited the spatial analysis to the above-mentioned approach.
A final drawback of the analysis refers to the aggregation of maps to generate the TEV
map. To get a better understanding of the variation in economic values among
different reefs, all monetary maps are combined to create the TEV map. Such an
aggregation may be open to criticism, given the fact that these values differ too much
in nature and size, and that combining them to produce one TEV map is not
scientifically sound. After all, some of the values are very explicit (i.e. divers revenues)
while others are more implicit (i.e. coastal protection value). Nevertheless, one
argument in favor of combining the individual values is that ultimately, they benefit
the citizens of the USVI, and therefore they can be combined.
IVM Institute for Environmental Studies
11 Discussion
11
Discussion
11.1
Conclusions
Given the importance of the coral reefs to the United States Virgin Islands (USVI), and
in light of the increasing threats caused by human development potentially reducing
the services provided by this ecosystem, there is a need for quantitative information to
guide decision making regarding management of coral reefs. The coral reefs of the
USVI provide a wide range of ecosystem services including tourism services,
recreational uses, fisheries, coastal protection, amenity values, and education/research
services.
The objective of this study is to provide a quantitative measure of how important the
reefs are to the USVI in monetary terms, and generates a reference point with which to
compare possible alternative development/conservation plans. Information on the
Total Economic Value (TEV) of reefs provides a basis for advocating the preservation of
the coral reefs in USVI, establishing damage compensation, setting fees for permit
applications, or determining potential user fees for residents and tourists.
The study involved a wide range of research activities. These include the following:
1. An elaborate local resident survey aimed at estimating the local cultural and
recreation attachment to the marine environment;
2. An extensive tourist survey with the objective to get a comprehensive insight into
the importance of the marine environment for visitors to the USVI;
3. A thorough analysis of the coastal protection function of reefs thereby revealing
the role of coral reefs in avoiding storm damage to properties and infrastructure;
4. A hedonic pricing analysis based on real estate transactions which led to conclude
about the positive impact of healthy reefs on house prices;
5. A spatial analysis aimed at preparing value maps of the coral reefs of the USVI;
6. An aggregation exercise combined with a rapid scenario analysis leading to the
estimation of the TEV of coral reefs of the USVI.
The above activities resulted in the estimation of the main ecosystem services provided
by coral reefs in the USVI. The levels at an annual basis vary between ecosystem
services: reef related tourism ($96 million), recreation ($48 million), amenity ($35
million), coastal protection ($6 million) and support to commercial fisheries ($3
million). The TEV adds up to $187 million per year. In addition to estimating TEV, GIS
techniques are used to visualize and better understand the spatial distribution of
economic values for three services: tourism, coastal protection and amenity.
11.2
Recommendations
The study provides various insights that help to develop policy measures directly
contributing to a more sustainable management of coral reefs in the USVI. First, the
study observed that the USVI territorial coral reef health is declining due to ineffective
natural resource management, inadequate land use planning, exploitation of
resources, and/or natural events. This decline exacerbated by a lack of data and
institutional limitations to address the anthropogenic stressors that adversely affect
the coral reef ecosystems. The TEV study may accommodate part of this problem by
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
11
creating a better understanding of the economic importance of coral reefs for the
USVI.
Second, the tourism sector plays an ambiguous role in the coral reef economy of the
USVI. On the one hand, tourism remains the most important beneficiary coral reefs in
the USVI. Without healthy reefs, the tourist industry and thus the island economy of
the USVI would be harmed substantially. On the other hand, the tourism sector forms
also one of the largest threats for the reef in the USVI. Therefore, it is in the interest of
the tourist industry itself to be proactive and take measures that will further reduce the
impact of tourist on the marine environment. Moreover, the Government of the USVI
has important decisions to make whether to expand tourism even further thereby
risking a collapse of the ecology and the economy alike, or to follow a more
conservative approach in which a conscious trade-off is being made between shortterm and long terms economic gains.
Third, the second most important beneficiary of the coral reefs is the local
community. Through recreational and cultural activities as well as through the hidden
amenity value of a healthy marine environment, people in the USVI are connected to
their marine environment in various ways and therefore value the health of this
ecosystem highly. At present, this local connectivity with the marine environment is
insufficiently recognised by decision makers who mainly focus their interventions on
the tourist industry and the fishery sector. Through stronger engagement of the public
in marine management, decision makers may find more support for conservation
oriented measures while at the same time enhancing the awareness of local
communities.
Fourth, given the foreseen increase of extreme weather events in the coming
decades, leading to substantially higher levels of storm and flood damage, there is an
urgent need for the USVI to adapt to climate change. Building storm buffers and
relocating human settlements is one adaptation option, yet the financial costs involved
for such operations are immense. Most likely, substantial financial investments can be
avoided if the creation of man-made structures is complemented with the conservation
and recovery of coral reefs in the USVI. The value maps produced in this study can help
to identify which reefs provide the most explicit coastal protection function.
Fifth, the study provides various insights that can help to develop policy measures that
can directly contribute to a more sustainable management of coral reefs in the USVI.
For example, for natural resource damage assessment in reef areas, the economic
valuation of coral reefs is a first step to determine losses. Damage claims have two
main components: (i) the cost of restoring the damaged resource to its original state;
and (ii) the compensation of interim losses from the time of damage until full recovery.
Especially with the recent BP oil spill event in the Gulf of Mexico, it has become even
more prevalent that policy officials need to be well prepared for such events and have
a protocol available to present a credible claim to the violators covering the full
economic value of reefs. The TEV study provides a solid basis to develop such a
protocol. At present, efforts are being made to prepare a damage assessment protocol
using the outcome of this TEV study. The result of this follow-up study will be added to
this report in a later stage.
Sixth, a key question in establishing effective management of coral reefs is how to
'capture' the estimated benefits in order to finance the cost of management.
Numerous countries and parks around the world by now have the experience of
sustainable financing projects and programs which provides the empirical basis for
recommendations on financing coral reef ecosystem areas. The TEV study provides a
clear perspective who is benefiting most from healthy coral reefs in the USVI.
IVM Institute for Environmental Studies
11 Discussion
Combined with the insights generated through the household and tourist surveys in
the USVI, some initial attempts are being made for the basis of a system for
sustainable financing in the USVI.
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
11
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IVM Institute for Environmental Studies
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Annex A Choice model valuation method
Choice modelling is a stated preference methodology that has increasingly been employed to
analyse public preferences towards environmental goods and to estimate their economic value.
Choice models are a generalised version of the dichotomous choice Contingent Valuation
Method (CVM) (Biénabe and Hearne, 2006). In a CVM study, the survey environment is used to
create a hypothetical market for a non-market good or service (e.g. local recreation or important
species) usually by giving a detailed description of the non-market benefit. In the simplest case,
respondents are asked how much they would be willing to pay for a change from the current
situation to a hypothetical future situation (Mitchell & Carson, 1989). However, many
researchers have raised concerns about the ability of CVM studies to derive valid estimates of
economic value (see Kahneman & Knetsch (1992) for a discussion of some of the limitations of
CVM).
Choice modelling or ‘discrete choice experiment’ (DCE) is also a hypothetical method in that it
asks people to make choices based on a hypothetical scenario. The choice modelling valuation
method, however, addresses a number of the difficulties traditionally associated with
contingent valuation methods. Rather than simply asking respondents how much they are
willing to pay for a single improvement in a given non-market good, a choice model requires
respondents to repeatedly choose between complex, multi-attribute profiles that describe
various changes in non-market benefits at a given cost (e.g. a change in tax paid). As such, the
choice modelling approach is useful as a tool for exploring proposed or hypothetical policy
options. The value estimates from a choice model study can then be used in a decision support
tool, such as cost-benefit analysis, to assess the desirability of alternative policies.
Choice modelling is generally an efficient means of collecting information, since choice tasks
require respondents to simultaneous evaluate multi-attribute profiles. In addition, economic
values are not elicited directly but are inferred by the trade-offs respondents make between
monetary and non-monetary attributes. As a result, it is less likely that WTP information will be
biased by strategic response behaviour. A further advantage of the choice experiment is that
research is not limited by pre-existing market conditions, since the levels used in a choice
experiment can be set to any reasonable range of values. Finally, and perhaps most importantly
in the context of non-market valuation, choice experiments allow individuals to respond to nonmarket benefits that are described in an intuitive and meaningful way, but without asking
respondents to complete the potentially objectionable task of directly assigning dollar figures
to important services such as species conservation.
In a typical DCE study, respondents are presented with a series of choice sets composed of two
or more multi-attribute alternatives (one alternative is often the current situation or business-asusual scenario). For each choice set, a respondent evaluates the alternatives and chooses a
preferred option. The alternative options in each choice set are described by a common set of
attributes, which summarise the important aspects of the alternatives. In economic valuation
studies, one of the attributes is a monetary indicator (e.g. tax), which makes it possible to
calculate willingness to pay for different levels of the other attributes. Each attribute is defined
by at least two distinct levels, which are varied systematically between the choice sets according
to an underlying statistical experimental design plan. Values are inferred from the hypothetical
choices or trade-offs that people make between the different combinations of attributes.
In the analysis of choice experiment responses, the objective is to derive a utility function that
explains the value of the different attributes in the choice experiment. The importance of the
non-monetary attributes relative to the monetary attribute gives the part-worth utilities of the
attributes. The utility function can be used to calculate the welfare changes resulting from
127
12 References
different policy scenarios that are described in terms of the attributes used in the choice
experiment.
The theoretical basis for stated choice research lies in random utility theory in which a person’s
utility from a particular site or experience is described by the following utility function
(sometimes referred to as a conditional indirect utility function):
U in = Vin + ε in .
(1)
The utility gained by person n from alternative i is made up of an objective or deterministic and
observable component (V) and a random, unobservable component ( ε ) (Adamowicz et al.,
1994, 1998).
The observable component of utility (V) can be expanded as follows:
Vin = ASC i + β 1 X 1 + β 2 X 2 + ... + β k X k .
(2)
ASCi is an alternative-specific constant which represents the “mean effect of the unobserved
factors in the error terms for each alternative” (Blamey et al., 1999, p. 341). The X k values are
associated with each attribute level used in the choice experiment, while the
β k coefficients are
included to capture the corresponding part-worth utility associated with each attribute level for
all k attributes.
An individual will choose alternative i over alternative j if and only if the total utility associated
with alternative i is greater than alternative j or U in > U jn . The probability that person n will
choose alternative i over alternative j is given by the equation:
Prob(i C ) = Prob{Vin + ε in > V jn + ε jn ; ∀j ∈ C} ,
(3)
where C is the complete set of all possible options from which the individual can choose.
The unobservable component ε , often referred to as a random error component, is commonly
assumed to be type I or Gumbel distributed and to be independently and identically distributed
(McFadden, 1974).
If the ε term is assumed to be Gumbel-distributed, the probability of choosing alternative i can
be calculated by the equation (McFadden, 1974):
Prob (i) =
exp µvi
∑ exp
µv j
,
(4)
j∈C
which represents the standard form of the multinomial logit model (MNL).
Although the MNL is the most common form applied to the analysis of discrete choice data due
to its robustness and simplicity associated with calculating the probabilities (Louviere et al.
2000), other models are also regularly used in stated choice research (e.g. the probit model).
An important outcome of the logit model is that choices are assumed to be independent of
irrelevant alternatives (IIA), meaning that “the ratio of choice probability for any two alternatives
is unaffected by addition or deletion of alternatives” (Carson et al., 1994, p. 354). In other
words, the alternatives are assumed to be independent.
The
β k coefficients (or part-worth utilities) are derived by fitting the choice model to the
observed data on the stated choice probabilities (aggregated over all respondents) and the
experimental design used to define the attribute levels seen by respondents for each choice set.
Choice models are usually estimated using maximum likelihood analysis.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
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To calculate efficient part worth utilities, the choice experiments are normally designed to
ensure orthogonality4 of attribute levels both within and between alternatives. A full factorial
design where all main effects and interactions are orthogonal represents one extreme. However,
full factorial design plans require individuals to evaluate an unrealistic number of choice sets
(e.g. every possible combination of attribute levels), even in cases where the total number of
attributes is small. Therefore, researchers typically make trade-offs between the ability of a
design plan to estimate all possible interactions and the necessity to limit evaluation to a
reasonable number of choice sets by employing a fractional factorial design plan. Fractional
factorial designs typically permit the orthogonal estimation of all main effects and at least some
interactions between the attributes.
4
In an orthogonal design, the attribute levels are uncorrelated with any other attributes, thus ensuring
that the part worth utilities measure only the intended attribute and are not confounded with other
attributes.
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13 References
Annex B Questionnaire household survey
RECREATIONAL VALUE TO RESIDENTS USVI
I. Name Interviewer:
V Interview No.:
II. Date of interview:
III. Island and location of
interview:
Island:
IV. Start time/end time of
interview
Start time:
Location:
End time:
Hello my name is.......... I am a student of the University of the Virgin Islands. We are conducting a
survey of local residents on the importance of the US Virgin Islands coral reefs. We would like to
know your personal opinions about the values of coral reefs for local people. Everything that you tell
us will be kept strictly confidential.
The interview will take about twenty minutes. Would you be willing to participate?
I. General Questions
1. Are you originally from the US Virgin Islands?
1] Yes
2] No
 (GO TO QUESTION 3)

2. If not, where are you from? (check only one)
1] Mainland United States

4] Elsewhere, specify:

2] Puerto Rico

5] Refused

3] Elsewhere in the Caribbean

3. On which island and in which area do you live? (REFER TO THE MAP)
1] STT
1. Charlotte Amalie

2. North Side
2] STX
1. Anna’s Hope


2. C’sted
3. Tutu

4. East End

5. South side
3] STJ
1. Central


2. Coral Bay

3. East End

3. Cruz Bay

4. F’sted

4. East End


5. Northcentral

1. Don’t know

6. West End

6. North West

7. Water Island

7. Sion Farm
8. South Central
9. South West



4] Other
4.What is your household composition? Check all that apply and specify the number of children.
1] Respondent

3] Children under 18

#
2] Partner

4] Children older than 18

#
5] Other people

#
5. Who is the head of the household? Check all that apply
1] Respondent

2] Spouse

IVM Institute for Environmental Studies
3] Other

The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
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II. Recreation
6. Are you comfortable in the water?
1] No, I preferably do not get close to water

2] I cannot swim but I do wade in the sea

3] I am able to swim a little, but not comfortable in deep water

4] I am comfortable in deep water, but not able to swim very long

5] I am very comfortable in deep water and able to swim for a long time

7. Please indicate who in your immediate family are comfortable in deep water
options that apply)
1] Respondent

2] Spouse
3] All children


4] Some children

(check all
5] Other people

8. How often do you participate in each of the following activities at the beach? And what is your
favourite location for each of these?
1]
Never
1] Beach picnic/ BBQ/
waterside camping
2] Relaxing

2] 1-6
times
a year

3] 6-12
times a
year

4] More
than once
a month

5] More
than once
a week






3] Wading





4] Swimming





5] Board sports





6] Kayaking





7] Sailing on a sail boat





8] Jetskiing/powerboating





9] Snorkeling





10] Scuba Diving





11] Recreational fishing





12] Other





Favourite Location(s)
9. How often do you eat locally caught fish?
1] Never

2] Once a month

3] Once a week

4] 2-4 times a week

5] 5-7 times a week

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13 References
III. Environmental awareness
1] Yes
2] No
1] Seek environmental information ( On Internet, TV, newspaper, radio etc)


2] Participate in beach/mangrove cleanup


3] Recycle aluminium cans


4] Attend a public meeting or event related to the environment


5] Not littering, encourage other people not to litter


6] Use fluorescent light bulbs in your home


7] Properly dispose of hazardous chemicals (oil, paint etc) that should not be poured down the drain


8] Walk, bike or take the bus instead of driving, at least once a week


9] Purchase environmentally friendly products (reusable bags etc)


10] Donate time to an environmental cause


IF YES, SPECIFY: ........................HOURS IN THE LAST YEAR
11] Donate money to an environmental cause


IF YES, SPECIFY: ........................ USD IN THE LAST YEAR
12] Other, specify …


10. Did you do any of the following activities in the past year?
11. What do you think are the three biggest threats to the health of the coral reefs here on this
island? [DO NOT SHOW LIST OF THE NEXT QUESTION!]
1. .......................................................................................................
2. .......................................................................................................
3. .......................................................................................................
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
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12. How important do you consider the following potential threats facing the coral reefs in the
US Virgin Islands? (1 being not important and 5 being very important)
Not
important
very
important
Don’t
Know
1] Climate change and coral bleaching
1
2
3
4
5
0
2] Impacts from commercial fishing
1
2
3
4
5
0
3] Impacts from recreational fishing
1
2
3
4
5
0
4] Coastal development and dredging
1
2
3
4
5
0
5] Runoff and sedimentation
1
2
3
4
5
0
6] Other pollutants such as sewage (from homes or boats)
1
2
3
4
5
0
7] (Cruise)Ships for tourists (anchoring, waste, oil & grounding)
1
2
3
4
5
0
8] Ships for residents (anchoring, waste)
1
2
3
4
5
0
9] Water-related tourist recreational activities (diving, snorkeling)
1
2
3
4
5
0
10] Water-related residents recreational activities (diving, snorkeling)
1
2
3
4
5
0
11] Impacts from scientific research
1
2
3
4
5
0
12] Invasive species (e.g. Lionfish)
1
2
3
4
5
0
13] Other, specify:
1
2
3
4
5
0
13. Are you in favour of using the following management activities to improve coral reef health?
1.Yes
2. No
3. Not
sure
4. Don’t know
/refused
1] Prohibit the emission of untreated sewage water




2] Restricting SCUBA diving/ snorkeling




3] Restricting coastal development




4] Install Marine Protected Areas (areas where fishing is not allowed)




5] Set a maximum amount of catch that can be taken in one season




6] Install seasonal closures (times of the year in which fishing is banned)




7] Set a minimum size for each fish caught




8] Improve enforcement of existing environmental regulations




9] Other:




133
13 References
14. In the Virgin Islands, how likely do you think it is that each of the following will occur during
the next 50 years due to climate change?
Not likely
Very likely
Don’t
know
1] Sea level rise
1
2
3
4
5
0
2] Worse or increased amount of storms & hurricanes
1
2
3
4
5
0
3] Droughts and water shortages
1
2
3
4
5
0
4] Fewer fish
1
2
3
4
5
0
5] Smaller beaches
1
2
3
4
5
0
6] Less tourism
1
2
3
4
5
0
7] Damage to coral reefs/Coral bleaching
1
2
3
4
5
0
8] Ocean acidification
1
2
3
4
5
0
9] Other:
1
2
3
4
5
0
[REMIND THE RESPONDENT THAT THIS IS AN ANONYMOUS QUESTIONNAIRE AND THAT
ANSWERS ARE USED TO GET AN INSIGHT IN CURRENT CORAL REEF USE ONLY]
3
4
5
2] Catching sea turtles or taking turtle eggs
1
2
3
4
5
3] Dumping trash in the ocean, beach or mangroves
1
2
3
4
5
4] Fishing in a closed area such as a marine reserve
1
2
3
4
5
5] Taking conch or lobster out of season
1
2
3
4
5
6] Taking conch, lobster or fish that is too small
1
2
3
4
5
7] Anchoring on a coral reef
1
2
3
4
5
8] Fishing using the wrong gear type / cyanide
1
2
3
4
5
9] Other violations of VI fishing rules
1
2
3
4
5
5. Once a
week or
more
4. Once a
month or
more
2
2.
Between
1-5 times
1
Not at all
1] Taking coral or sea fans
1.
3.
Between
6-11 times
15. In the past year, how often have you seen or heard of anyone doing the following activities
at the beach or in the ocean:
Please specify:
16. Are you in principle willing to pay an environmental fee or tax, which would be managed by a
Non-Profit organization, contributing to improving the US Virgin Islands marine
environment?
1] Yes
2] No


IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
13
IV Choice experiment
REFER TO THE INTERVIEW PROTOCOL IMPORTANT: FILL VERSION NUMBER____ !!!
4.
Refused
Question
5. Very
certain
3.
Option
C
4. Certain
2.
Option
B
3.Neutral
1.
Option
A
1. Very
uncertain
Choice set
2.
Uncertain
17. Record the respondent’s answers to each choice question and the certainty of the choice in
Choice Card 1
□
□
□
□
□
□
□
□
□
Choice Card 2
□
□
□
□
□
□
□
□
□
Choice Card 3
□
□
□
□
□
□
□
□
□
Choice Card 4
□
□
□
□
□
□
□
□
□
Choice Card 5
□
□
□
□
□
□
□
□
□
the table below. (Check only one box per row).
[ONLY ASK THE FOLLOWING QUESTION IF THE RESPONDENT HAS CHOSEN SCENARIO "EXPECTED
FUTURE WITHOUT EXTRA MANAGEMENT" EACH TIME OR REFUSED TO MAKE A CHOICE,
OTHERWISE SKIP TO QUESTION 19]
18. You have chosen the ‘Expected Future Scenario’ in each card or refused to make a choice.
Can you explain why? Check only one
1] I am not responsible for the damage to the
reef
2] I am not confident that the money will be
used as specified
3] I do not believe there are serious threats to
the reef
4] The issues are more complex than these
questions suggest
5] I cannot afford it /The costs were too high


6] Don’t need another tax no matter what it is
used for
7] I couldn’t understand the questions/ Too hard
to make the choices
8] The choices weren’t relevant to me / Didn’t
describe what matters to me
9] Other, specify…

10] Don’t know/refused







19. How did you make your choices? Did you:
1] Consider all items simultaneously

4] Use your intuition

2] Consider a few items

5] Make a random choice

3] Only consider one item

6] Don’t know

20. In making your choices, how important were the following items to you? (1 being not
important and 5 being very important)
Not important
Very important
1] Environmental fee/tax
1
2
3
4
5
2] Reef quality
1
2
3
4
5
3] Fish catch per trip
1
2
3
4
5
4] Clarity near-shore
1
2
3
4
5
5] Beach Advisory
1
2
3
4
5
6] Other, not mentioned, specify:
1
2
3
4
5
135
13 References
21. Would you have a preference for one of the following organizations to manage the collected
funds?
1] Non-Profit Organization

4] Independent trust (e.g. Magens Bay Trust)

2] Local government

5] Other, specify

3] Federal government

6] None of these

V. Demographics
[REMINDER: FOLLOWING QUESTIONS ARE FOR STATISTICAL PURPOSES ONLY]
22. Gender:
1] Male

2] Female

23. May I ask what age category you fall in?
1] 18-25

4] 46-55

2] 26-35

5] 56-65

3] 36-45

6] 66+

24. What is your ethnic background? I consider myself
1] Black

4] Mixed

2]White

5] Other, specify…

3] Hispanic

25. What is the highest level of education you have completed?
1] None

5] College/University (bachelors degree)

2] Less than 12 grade

6] Masters degree or other post-grad

3] High school graduate/technical school

7] Don’t know/refused

4] Some college/associates degree

th
26. In which sector are you employed? (If respondent has multiple jobs, check main field)
1] Management, professional etc]

8] Agriculture

2] Service & tourism

9] Student/education

3] Retail sales

10] Manufacturing /oil refinery

4] Fishing

11] I am unemployed

5] Construction & maintenance

12] I am retired

6] Transport

13] Other

7] Public Administration

14] Don’t Know/Refused

27. May I ask your household income before taxes in US $ last year?
1] $0 to $10,000

6] $50,000 to $75,000

2] $10,000 to $20,000

7] $75,000 to $100,000

3] $20,000 to $30,000

8] $100,000 to $150,000

4] $30,000 to $40,000

9] More than $150,000

5] $40,000 to $50,000

10]Prefer not to answer

28. If you have any other comments, please leave them in the box below.
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
13
VI. Scuba Diving and Snorkeling
29. In which of the following activities does anybody in your household participate in US Virgin
Islands? Please specify the number of people. (You may check more than one)
1]Snorkeling

Number of people:
2] SCUBA diving
3] None [GO TO Q. 37]


Number of people:
very
important
not
important
30. Can you indicate how important the following items are when you or anybody else in your
household go diving or snorkeling? (1 being not important and 5 being very important)
1] Large fish
1
2
3
4
5
2] Turtles
1
2
3
4
5
3] Coral and associated small fish / species
1
2
3
4
5
4] Wrecks
1
2
3
4
5
5] Other:
1
2
3
4
5
31. Roughly how many snorkel trips were made in total, by people in your household?
1] 0-20

4] 101 – 300

2] 21-50

5] 301 – 500

3] 51-100

6] > 500

Roughly what share of the snorkel trips took place in the US Virgin Islands? _______%
IF RESPONDENTS HOUSEHOLD ONLY GOES SNORKELING, THIS SECTION IS FINISHED
(NOTE: THIS QUESTION FOR DIVERS ONLY)
32. Roughly how many dives were made in total, by people in your household?
1] 0-20

4] 101 – 300

2] 21-50

5] 301 – 500

3] 51-100

6] > 500

33. Roughly what share of the dives took place in US Virgin Islands? _______%
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13 References
34. How often did members of your household visit the following dive sites in the last year?
St Thomas & St John
# dives
St Croix
# dives
1] WIT shoal
10] Butler Bay wrecks
2] Tunnels of Thatch
11] Frederiksted Pier
3] Cow & Calf
12] Vertigo
4] French Cap
13] Cane Bay
5] Little st James
14] Salt River Canyon
6] Congo Cay
15] Buck Island
7] Carval Rock
16] Other:
8] Eagle Shoals
17] Other :
9] Other:
18] Other:
35. (NOTE: THIS QUESTION FOR DIVERS ONLY) What is the highest level of dive training the
divers in your household have? Please specify the number of people with a certain training.
(If not PADI certified, please use equivalent certification)
1] No training at all

#
4] Advanced Open water diver

#
2] Discover Scuba

#
5] Rescue Diver/Dive Master or higher

#
3] Open Water Diver

#
VII. Recreational Fishing in your household
36. How many people currently fish for recreational purposes in your household? Number:
_______ (IF 0, THIS IS THE END OF THE QUESTIONNAIRE. THANK THE RESPONDENT KINDLY
FOR HIS/HER TIME AND PATIENCE)
[Important Note – fishing can include any method of harvesting marine food from the sea; hook
and line, spearing, netting, gathering lobster, etc.]
IF THE RESPONDENT DOES NOT FISH BUT SOMEONE ELSE IN THE HOUSEHOLD DOES, ASK IF THE
RESPONDENT CAN ANSWER ON BEHALF OF THAT PERSON
37. How many fishing trips are usually made in your household and how much fish is usually
caught per trip on average either in pounds or number of fish?
1] # Fishing trips per month (average)
2] Average catch per trip
# fish
/
pounds
38. Can you indicate which of the following reasons are important for people in your household
to go fishing? Check all applicable boxes
1] I enjoy fishing/ I find it relaxing

5] For tradition: my family has always fished]

2] I catch for food

6] Fishing strengthens the bond with my friends & family

3] To give catch to family and friends

7] Other, specify …

4] I catch fish to sell the fish

IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
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39. What percentage of your total catch is made up of each of the following types of fish?
(Distribute catch across the different types of fish, total table should add to 100%)
Type of catch
Share (must add up to 100%)
1] Shallow reef fish (less than 80 ft) e.g. Barracuda, Jacks, Permit,
Snook, Bonefish, Tarpon etc.
2] Deep reef fish (more than 80 ft) e.g. Kingfish, Bonito, Yellowtail snapper, Bonefish, Cero, Rainbow Runner etc.
3] Deep Sea fish (marlin, wahoo, mahi mahi, tuna etc.)
4] Invertebrates like lobster and whelk
5] Conch
6] Bait fish
7] Total
40. Do people in your household mostly go shore fishing or do you fish from a boat?
1] Shore fishing

2] Boat fishing

41. Do people in your household think there is a shortage in places to go shore fishing?
1] Yes

2] No

3] Don’t know/refused

IF RESPONDENT WANTS TO LEAVE HIS OR HER PERSONAL INFORMATION IN ORDER TO RECEIVE INFORMATION
OF THE REPORT, ASK HIM OR HER TO DO SO NOW AND RECORD IT.
Name (optional): ______________________
Phone (optional): ______________________
E-mail (optional) ______________________
THANK THE RESPONDENT FOR HIS/HER TIME AND PATIENCE!!!
139
14 References
Annex C Example Choice cards
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
14
Annex D Example distribution sheet
Name Versions #
Els Verbrugge
1,3,4
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
1
2
3
4
5
6
7
8
1
2
3
4
5
6
7
1
2
3
4
5
6
7
1
2
3
4
5
1
2
1
ST THOMAS
District
CC Version
Charlotte Amalie
1
Charlotte Amalie
3
Charlotte Amalie
4
Charlotte Amalie
1
Charlotte Amalie
3
Charlotte Amalie
4
Charlotte Amalie
1
Charlotte Amalie
3
Charlotte Amalie
4
Charlotte Amalie
1
Charlotte Amalie
3
Charlotte Amalie
4
Charlotte Amalie
1
Charlotte Amalie
3
Charlotte Amalie
4
Charlotte Amalie
4
Northside
1
Northside
3
Northside
4
Northside
1
Northside
3
Northside
4
Northside
1
Northside
4
Tutu
1
Tutu
3
Tutu
4
Tutu
1
Tutu
3
Tutu
4
Tutu
4
East End
1
East End
3
East End
4
East End
1
East End
3
East End
4
East End
4
Southside
1
Southside
3
Southside
4
Southside
1
Southside
4
West End
1
West End
4
Water Island
4
ST JOHN
District CC Version
1 Central
1
2 Central
3
3 Central
4
4 Central
1
5 Central
3
6 Central
4
1 Coral Bay
1
2 Coral Bay
3
3 Coral Bay
4
4 Coral Bay
1
5 Coral Bay
4
1 Cruz Bay
1
2 Cruz Bay
3
3 Cruz Bay
4
4 Cruz Bay
1
5 Cruz Bay
3
6 Cruz Bay
4
7 Cruz Bay
1
8 Cruz Bay
3
9 Cruz Bay
4
10 Cruz Bay
1
11 Cruz Bay
3
12 Cruz Bay
4
13 Cruz Bay
1
14 Cruz Bay
3
15 Cruz Bay
4
16 Cruz Bay
1
17 Cruz Bay
3
18 Cruz Bay
4
19 Cruz Bay
1
20 Cruz Bay
3
21 Cruz Bay
4
22 Cruz Bay
4
1 East End
4
#
141
14 References
Annex E Interview protocol
What to bring for a day of interviewing:
1. These instructions
2. A supply of blank questionnaires
3. The set of laminated choice sets
4. The laminated ‘read along’ version of the general questionnaire
5. The laminated diving map
6. The laminated fish list
7. Notebook
8. Pens (more than one!)
9. Folder for completed surveys
How the survey works:
The US Virgin Islands coral reef valuation survey consists of two key parts.
1. The general questionnaire (including the fishing and diving/snorkeling sections)
2. The choice experiment
Overview of the questionnaire:
Sections I-III – General, Recreation, Environmental Awareness
Section IV – Choice Experiment
Section V – Demographics
Section VI – Diving/snorkeling section
Section VII – Fishing section
A special note on the choice experiment:
There are six versions of the choice experiment. You have all of these six versions in your set of
laminated cards. Each of the six versions again consists of six choice cards. The cards are numbered
on top. The first choice card is the same in all versions and should be used as the example when
explaining the choice experiment to the respondent.
For each interview that you do, use a different version of the choice cards. To avoid bias in the
sample, we want you to cycle through these versions as you complete interviews with different
people, so that you will have the same number of filled out questionnaires for each version.
CRITICAL - IT IS ABSOLUTELY ESSENTIAL THAT YOU RECORD THE CORRECT VERSION OF THE CHOICE
CARDS THAT YOU ARE USING IN THE MAIN QUESTIONNAIRE. IF THE INCORRECT VERSION IS
RECORDED, WE WILL NOT BE ABLE TO ANALYSE THE RESULTS AT ALL!!! DOUBLE CHECK THAT
VERSION OF THE CHOICE CARDS YOU SELECT MATCHES THE VERSION NUMBER THAT YOU RECORDED
How to conduct an interview:
1. Select a person to approach (see sampling strategy, next section)
2. CRITICAL - Complete the header information (e.g. date, time, ID number)
3. Greeting and introduction – use text box at the top of the questionnaire
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
14
4. Start the interview – see interview protocol
5. Choice experiment – select the version you will use (see previous section). Record the
version number in the main questionnaire. Refer to the interview protocol for instructions
on how to work through the choice experiment with the respondent. After each respondent
answer to the choices, record the response in the main questionnaire and ask how certain
the respondent was of his/her choice. After all choices ask the remaining questions in the
choice experiment section.
6. Ask section V, demographics
7. Snorkelling/diving section – when you get to this section of the questionnaire, ask the first
question in the questionnaire about the number of snorkelers/divers in the household. Then
there are three options:
a. There are no snorkelers/divers in the household – skip this section and continue with
the fishing section.
b. There are snorkelers/divers in the household and you are already talking to the main
snorkeler/diver of the household – complete this section with the respondent.
c. There are snorkelers/divers in the household and you are not talking to the main
snorkeler/diver, ask the respondent to answer the questions on behalf of
snorkelers/divers in the household.
8. Recreational fishing section – do the same as with the snorkelers/divers section. Finish and
thank the respondent for their time.
Sampling strategy:
Questionnaire ID number (what is it and how to record it):
Here is an example questionnaire ID: EV-0517-1
The questionnaire ID number is composed of three pieces of information:
Surveyor ID: your initials (e.g. EV)
Four digit date ID: the month and then the day. So 0517 is May 17th.
Questionnaire number: The nth questionnaire that you have completed in a given day. For
example, the first questionnaire of the day would be 1. The tenth questionnaire of the day
would be 10.
In summary, the questionnaire ID, EV-0506-1, means that Els Verbrugge administered this
questionnaire on May 6th and it was her first questionnaire completed that day.
-
Introduction for the interviewer:
This explanation of the questionnaire and choice model is meant to help you understand what we
want to find out with our questions, and help ensure that all interviewers understand this the same
way to provide consistent interviewing.
You will have a laminated read-along questionnaire with you to give to the respondent. He or she
does not have to fill out anything himself on there, but he might find it easier to read along.
At the top of your questionnaire is a grey box with information for you to fill out. Please do this right
before and after each interview to make sure you do not forget. Of course the end time can only be
filled out at the end of the interview, but the rest of the information should be filled out beforehand.
See the interviewer instructions on how to fill out the questionnaire ID number.
143
14 References
There are different sections in the questionnaire. We start with a few general questions, questions
about recreation and environmental awareness (Questions 1-15). Sometimes you will find skip codes
after some answers (like in Question 1, if people say yes). These skip codes and other instructions to
you, the interviewer, are always in CAPITAL CASE, and should not be read to the respondent.
After these first questions follows the section with the choice experiment. For this you have a
laminated explanation card, and 6 versions of 6 choice cards (also laminated). The first card is an
example card to explain the choice experiment to the respondent. You do not have to write down the
choice for this example. You can write down the choices for the other choice cards on your
questionnaire. Also, DON'T FORGET TO WRITE DOWN THE VERSION (1-6) OF THE CHOICE CARDS. THIS
IS VITAL! Please use the 6 versions sequentially, so that you will have the same number of filled out
questionnaires per version. The text below will help you explain the choice experiment to the
respondent. Try to stick to this text, but you can use your own words, if you feel some sentences don't
flow well for you.
Choice model:
Now we come to a new section of the interview. Although the coral reefs and the marine
environment surrounding the US Virgin Islands have suffered from damage and a major bleaching
event, its resilience has facilitated a recovery. However, in the next few years there are certain
threats that can damage the reef beyond the natural recovering capacity. These threats include:
•
Increased coastal development to accommodate residents and tourists
•
Widening of shipping channels and dock construction
•
Over-fishing
•
The runoff of pesticides and fertilizer
If these threats are not dealt with they can lead to loss of the reef system in the long term. Losing the
reefs means:
•
Accelerating natural erosion (Loosing our beaches)
•
Losing habitat for fish
•
Losing the overall beauty of the US Virgin Islands coral reefs
In the next 6 questions I will ask you to make a choice between possible future scenarios for US
Virgin Islands's marine environment, and the certainty of your choice. [Use the card with attribute
descriptions to explain how the future scenarios are built up].
1. In each question you can choose between 3 scenarios [show the 3 scenarios on the example card.
The example card is the first card (no. 0) in all versions of the choice sets, and is the same in all
versions]. In order to make your choice between these three scenarios, I will explain how they differ.
2. To make the choice between the 3 scenarios you have to look at the values of all the items. In the
third scenario, the "Expected future without extra management" scenario, there is no environmental
fee but, because the threats to the reef are not dealt with, all items of the reefs have deteriorated
from today. This scenario does not change in the 5 choices. In scenarios 1 and 2 the marine
environment is in better shape than in scenario 3, but there is a monthly environmental fee. The
scenarios 1 and 2 are different in each question.
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
14
Try to imagine in which situation you would like to be most (taking into account the environmental
tax, which would reduce the amount of money you could spend on other things) and then choose
that scenario.[show on the example choice card that the items for one scenario belong together and
indicate the respondent should choose one of the three scenarios]
Please remember that maybe none of these scenarios will be perfect from your point of view and
that some choices may be difficult. To get an insight in the difficulty of the trade-offs, we included a
section on the certainty of your choice. Please state after each choice how certain you were of
making that choice. There is no right or wrong answer; it is simply your opinion that matters.
Then ask if the respondent understands or would like to ask you something more about it. If you think
he/she understands show him/her the first real choice card. If necessary you could help him/her a
little with the first card by showing the differences between the scenarios. For the second choice card
explain to the respondent that this is a new choice; it has nothing to do with the previous choice;
he/she should just choose the best scenario from the new card. For the second choice card try not to
help the respondent too much, unless he/she really doesn't understand. Just briefly point out the
differences between the options if necessary but try to give a balanced presentation. Do not let your
values and preferences influence the respondent’s choice!! After all choices are made, ask the
respondent the follow up questions.
What to do if a respondent refuses to choose any of the options?
There will most likely be two reasons for respondents to do this.
1. They don’t really understand the question or what you are asking them to do
2. They fully understand what you are asking, but they don’t agree with the concept or how the
choices are being portrayed
Note how the respondent approached the question. Did they read it or try to compare the options at
first? Or did they quickly glance at the sheet and hand it back to you?
Gently probe the reasons for the response.
If you get a clear reason that sounds like one of the responses to follow-up question, continue asking
the remaining choice questions (if any) but try to point out some key differences in the options to
make sure that the respondent knows what the choices are. If they refuse, it should at least be an
informed refusal. Don’t just skip the rest of the questions!
If you get an unclear reason or a reason that sounds something like “I don’t know about these things”
or “I don’t understand” (they may look a little embarrassed) then bring out the last choice set again
and go over how the options are composed and what the key trade–offs are. Remind them that they
just have to choose what they think is the best option. Stress that it is their opinion and that there is
no right or wrong answer.
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Annex F Background on Coral Reefs
What are coral reefs?
•
•
•
•
Geological formations constructed from limestone secreting animals and plants
Highest biodiversity of any marine ecosystem
Provide important ecosystem services with direct and indirect benefits
Habitat, biological or system processes, shoreline protection, food provision,
aesthetic and cultural qualities
What are the main threats to coral reefs?
•
•
•
•
•
•
•
Climate change/ Coral bleaching
Overfishing
Coastal development/ Runoff and sedimentation
Poor water quality due to sewage etc.
Invasive species (e.g. lion fish)
Cruise)Ships and boats (anchoring, waste, oil and grounding)
Water-related recreational activities (diving, snorkeling)
How does climate change affect coral reefs?
•
•
•
•
•
•
Temperature
Sea-level changes
Solar radiation
Frequency and severity of storms
Salinity fluctuations
CO2 levels
Potential reef-related measures that can be taken
•
•
•
•
•
•
Prohibit the emission of untreated sewage water
Restricting coastal development
Install Marine Protected Areas (MPAs) (fishing-restricted areas)
o Set a max amount of catch that can be taken in one season
o Install seasonal closures (times of the year in which catch of certain species are
banned)
o Set a minimum size for each fish caught
Restricting SCUBA diving/ snorkelling
Increasing awareness of residents and tourists about good use of coral reefs
Improve enforcement of existing environmental regulations
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
14
Annex G Dive sites map
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14 References
Annex H Fish card
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Annex I
14
Questionnaire tourist exit survey
I. Interview No.
IV. Date of interview
II. Name of interviewer
V. Approximate start/ end time of interview
III. Interview location
Start:
End:
Tourist exit survey
Good morning/afternoon/evening, my name is _____. I am affiliated with the University of the
Virgin Islands and we are researching how tourists value the USVI’s coral reefs in order to
improve management of our coral reefs. For this we would like to ask a few questions about
your motivation to visit the USVI and your activities while in the USVI. Would you like to
participate? It will only take a few minutes and everything you tell us will be 100% anonymous.
Only tourists of 18 years and older are included in our survey. I would first like to check
whether you meet our selection criteria.
PART I
1. Are you 18 years or older?
a) Yes
b) No THANK AND TERMINATE ♦
2. Where
o
o
o
o
o
o
do you live?
The USVI THANK AND TERMINATE ♦
USA specify state: _____
Canada specify province/territory: _____
Other Caribbean specify territory/country_______
Europe specify country: _____
Other specify country: _____
3. What was the purpose of your visit?
o Business THANK AND TERMINATE ♦
o Former residents/ visiting friends or family THANK AND TERMINATE ♦
o Leisure
o Combination of leisure with either business or visiting friends/family (only if you
spend one day or more on leisure activities)
You meet our selection criteria. Now we start the survey.
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15 References
PART II
# of days
St Croix
St John
4. How many days did you stay in the USVI? _____
days (kindly indicate where you spent these days
below):
St Thomas
5. How did you travel to the USVI?
a) By cruise ship TO QUESTION 6
b) By (sailing) boat TO QUESTION 7
c) By plane TO QUESTION 8
6. Which cruise ship did you come in on? ____________
7. What is the total number of days in your cruise/boat trip? _____ days
8. How many times have you visited the USVI including this trip? _____ time (s)
9. How many persons, including yourself, travelled here with you? _____ person (s)
10. What kind of travel arrangement did you book (check one)?
o
o
Package TO QUESTION 11
Separately arranged TO QUESTION 12
11. What was included in the package (check all that apply)?
o
o
o
o
o
o
o
Cruise
Flight
Accommodation (cruise ship passengers: if accommodation on land is included)
Meals (cruise ship passengers: other then meals on the ship)
Local transportation (cruise ship passengers: i.e. from the airport to the ship)
On island activities such as tours
Other: _____
12. How much did you pay for the (per person)?
Package (only if relevant, check question 10)
Cruise
Flight
Accommodation*
$
$
$
$
* Double check if the amount is per room or per person!
13. How much did you spend on average during your stay in the USVI on (per person):
Diving
Snorkelling
Touring the coral reef by boat
Shopping
Local transportation*
Food and beverages
Other
Total
* This also includes travel by ferry and/or seaplane
IVM Institute for Environmental Studies
$
$
$
$
$
$
$
$
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
15
14. On a scale from 1 to 5 can you indicate how important the following activities were in coming
to the USVI (1 means not important and 5 means very important)?
Not
important
1
2
＜＞
3
Very
important
4
5
Business
Visiting family
Snorkelling
Diving
Touring the coral reef by boat
Enjoying the natural scenery from the water
Enjoying the beach
Shopping
Sailing
Sightseeing
Playing golf
Fishing
Eating and drinking
Historical/cultural activities
Other:
IF DIVING OR SNORKELLING > 3 CONTINUE
OTHERWISE QUESTION 21
PART III
15. Roughly how many dives have you had in your lifetime (refer to the boxes)?
Number of dives:
a)
0
b)
1-5
c)
6 – 10
d)
11- 20
e)
f)
g)
h)
21 - 30
31 - 50
51 - 100
100 +
16. Roughly how many days of snorkelling have you had in your lifetime (refer to the boxes)?
Number of days of snorkeling:
a) 0
b) 1-5
c) 6 – 10
d) 11- 20
e) 21 - 30
f) 31 - 50
g) 51 - 100
h) 100 +
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The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
15
17. On a scale from 1 to 5 can you indicate how important the following attractions were to your
overall experience of diving or snorkelling in the USVI (1 means not important and 5 means
very important)?
Very
Not
important
important
1
2
3
4
5
Coral reefs
Fish
Wrecks
Turtles
Sharks
Other
＜＞
18. On a scale from 1 to 5 can you indicate how satisfied you were with your diving and/or
snorkeling experience?
Not very
1
2
＜＞
3
Very much
4
5
Not applicable
Snorkelling
Diving
19. What did you like most and least about your dive experience?
Most ______________________________________________
Least ______________________________________________
20. What did you like most and least about your snorkel experience?
Most _______________________________________________
Least_______________________________________________
21. Would you return to the USVI for another vacation?
o
o
o
Yes, TO QUESTION 23
Not sure TO QUESTION 22
No TO QUESTION 22
22. Why not (check all that apply)
o
o
o
o
o
o
Coral reefs are not healthy or dying
Not enough activities
Did not feel safe
Too many cruise ship passengers
I rarely return to a destination place twice
Other, please specify ______________
23. Would you return to the USVI for another vacation if the coral reefs were in a significantly
worse state than they are currently?
o Yes, the quality of the coral reefs doesn’t affect my decision
o Maybe, I am sensitive to the quality of the reefs but do not know how much
o No, without healthy coral reefs I have no good reason to visit the USVI
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15 References
Let’s go more in depth on how you appreciate the USVI´s coral reefs. There are a number of
threats caused by human activity, such as the increase pressure from tourism that can change the
quality of the coral reef. If these threats are not adequately dealt with, they can damage the reefs.
This could ultimately mean losing the USVI’s beaches and turquoise waters. To help preserve the
coral reefs of the USVI, extra funds may be needed for which tourists may be asked to contribute.
PART IV
24. Would you - in principle - be willing to pay a fee in addition to your current expenses, to fund
activities to preserve the USVI’s coral reef?
a) Yes TO QUESTION 26
b) No TO QUESTION 25
25. What is the main reason you are not willing to pay to preserve the USVI’s coral reef (tick one)?
a)
b)
c)
d)
e)
f)
g)
No need for management of coral reefs
Conservation is the responsibility of the USVI
My activities have no impact on coral reefs
This conservation program would not be effective
I cannot afford it
Other: _____
Don’t know/refused
TO QUESTION 28
26. What would be the maximum you would be willing to pay per visit to the USVI, in addition to
your current expenses, to fund activities to preserve the USVI’s coral reefs (tick one, refer to
the list)?
o
o
o
o
o
o
o
$
$
$
$
$
$
$
1
3
5
10
15
25
40
o
o
o
o
o
o
$ 50
$ 60
$ 80
$ 100
More than $ 100: _____ (please specify)
Don’t know/refused
27. What is your preferred method to pay the contribution to preserve the USVI’s coral reef (tick
one)?
a) Per visit to the USVI, such as an exit fee at the airport or charge per cruise ship passenger
b) Per dive, snorkel or other water sport activity
c) Per year
d) No preference
e) Don’t know/refused
28. Do you believe a contribution to preserve the USVI’s coral reefs should be voluntary or
mandatory?
a) Mandatory
b) Voluntary
c) Don’t know/refused
IVM Institute for Environmental Studies
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
15
The remaining questions are for statistical purposes.
PART V
29. What is your sex?
a) Male
b) Female
30. What is your age (refer to the boxes)?
a)
b)
c)
d)
18
26
36
46
–
–
–
–
25
35
45
55
years
years
years
years
e) 56 – 65 years
f) 65+ years
g) Prefer not to say
31. What is your household size?
o Number of adults: _____
o Number of children living at home: _____
32. What was your annual household income in 2009 (before taxes)?
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
Less than US$15,000
Between US$15,000 and 25,000
Between US$25,000 and 50,000
Between US$50,000 and 75,000
Between US$75,000 and 100,000
Between US$100,000 and 150,000
Between US$150,000 and 200,000
Between US$200,000 and 300,000
More than US$300,000
Prefer not to answer
33. What is the highest level of education that
you completed?
a) Elementary/ grammar school
b) High school
c) University or college degree
d) Master or other advanced degree
e) Don’t know/refused
34. Which employment category applies to you?
a)
b)
c)
d)
Employed
Self-employed
Unemployed/seeking work
Retired/student/not in the work force
♦ Thank you very much for participating in our
survey!
If you would like to receive the results once the
study is finished please leave your name and
email (Individual information will not be
published, only a summary with aggregated
information)
155
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Annex J Operator survey
In the first section of this appendix the reef related tourist operator questionnaire is
given. This questionnaire was used to interview a total of 14 reef related tourist
operators on St Thomas, St Croix and St John. Each operator was interviewed in person
in their own shop/ office, with the interviews lasting between 40 minutes and 2 hours.
In this section the results of this questionnaire are discussed.
The questionnaire was divided into three parts. The first part –Introduction - focussed
on general issues and the background of the owner and its employees. In the second
part – Services and Customers- the questions were focussed on operational details, the
finances of the business, and preferences and background of the customers. Finally
the third and last part – Environmental Issues- focused on past and future
environmental issues such as threats to the reefs but also on how the operator thought
the reefs could best be managed.
Part 1: Introduction
In Figure K.1 below it is illustrated that of the 14 interview operators 7 have their
business on St Thomas, 4 on St Croix and 3 on St John. Of the interviewed operators
roughly 85% (N=12) came from the USA, 7% (N=1) each from Australia and Canada, and
none from the USVI. The 14 operators had in total 115 people working for them of
which 92% (N=105) came from the USA, 3% (N=3) from the USVI and 6% (N=7) from
other countries as is illustrated in Figure K.2.
Figure K.1
Number of operators interviewed per Island
Origin of owner
Figure K.2
Origin of staff
Country of origin of owner and staff
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15
Part 2: Services and customers
As shown in Figure K.3, for the customers a similar pattern can be observed with a
large majority coming from the USA (77%), 9% from the USVI, 6% from Europe, 6% from
Canada and 2% from other countries as is illustrated in figure 22. Roughly 76% of these
customers travelled to the USVI by airplane, 23% by cruise ship and e remaining 1% by
(private) yacht.
On average the operators rated the airplane tourists as most environmentally sensitive
and the cruise passengers as least environmentally sensitive. This is illustrated in
Figure K.4 ( 1= not sensitive at all and 5 = very sensitive).
Figure K.3
Country of origin customers
Figure K.4
Environmentally sensitive
According to the reef operators their customers find it most important to “see fish”
and are relatively least concerned with “going with a cruise ship recommended
company”, “the food and entertainment provided by the operator” and with “going to
secluded beaches”. The relative importance of these and other possible important
aspects of a customer’s tour are illustrated in Figure K.5.
The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands
Figure K.5
Relative importance of tour characteristics
There was a big difference in 2009 revenues amongst the different tour operators with
the lowest being $100,000 and the highest roughly $1,200,000 . The profit margin of
each operator also greatly differed with the lowest being 1% and the highest 20%.
Part 3: Environmental issues
Figure K.6 provides an overview of the most serious threats to the USVI’ coral reefs
from the past and also of the future according to reef operators, where 1 = no threat at
all and 5 = very serious threat. There are a couple of threats which have always been
relatively serious to the health and existence of the coral reefs and will continue to be
in the future such as runoff and sediments, coral bleaching, coastal development and
over-fishing (commercial) to name a few. However there are also threats which –
according to the operators- will become more serious in the future such as
construction work, invasive species, and over-fishing for recreational purposes to
name a few.
Questions 19 – 21 focus on how the quality of marine life affects the perator’s
business. If the quality of marine life stay’s about the same for the next five years,
roughly 14% of the operators think their business will improve a lot (over 10%
annually), 43% thinks it will improve some, 36% thinks there will be no change and 7%
fears that business will get worse. If the quality of marine life improves over the next
five years 93% (N=13) of the operators think that business will improve a lot (43%) or
improve some (50%), and only 7% (N=1) thinks there will be no change. However if the
quality of marine life were to worsen over the next five years 78% (N=11) thinks that
business will get a lot worse (14%) or just ‘get worse’ (64%) and 21% thinks there will
be no change.
Of all the operators that were interviewed 71% thinks that it is a good idea to charge
water sport tourists an “earmarked” environmental fee. What is interesting is that none
of the 14 operators think that the government should be responsible for collecting the
fees and the management of the reefs. Most operators agreed that a specific body (yet
to be formed) or the water sports operators together should be made responsible, but
several operators actually made a point of explicitly mentioning that the government
should under no condition be allowed to be responsible for the collection of the fees.
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16
Figure K.6
Past and future threats to the USVI’s coral reefs