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Willingness to pay and demand elasticities for two national parks: empirical evidence from two surveys in Pakistan

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Abstract

Using survey-based data approach for modeling the demand for environmental goods/resources, this study estimates income and price elasticities of demand for improved environmental quality of two National Parks in Northern Pakistan. The study uses data from two studies. The estimates indicate that improved environmental quality effects can be described as a luxury and an ordinary and price elastic service. Confidence intervals show however that the classification as a luxury is not statistically significant. Income elasticities of willingness to pay are estimated for a broad range of environmental services. The study finds that income and willingness to pay vary directly and significantly. The elasticity estimates, in general, are greater than zero, but less than unity. The study concludes that environmental improvements are more beneficial to low-income groups than for high-income groups.

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Notes

  1. Hobky and Soderqvist (2003) use the label “environmental services” for all goods and services provided by the environment and the ecological systems, including environmental quality.

  2. These methods are classified as direct and indirect methods. See also the stated and revealed preference methods for estimating own-price, cross-price and income elasticities of demand for non-market goods and services. For more details see Freeman (1993); Bateman and Willis (1999); Garrod and Willis (1999); Khan (2006).

  3. The two national parks include the Margalla Hills National Park, Islamabad and Ayubia National Park, Galliat both located in Northern Pakistan. See Sect. 2 for details.

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Authors and Affiliations

  1. Department of Development Studies, CIIT, Abbottabad, 22060, Pakistan

    Himayatullah Khan

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  1. Himayatullah Khan
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Correspondence to Himayatullah Khan.

Additional information

This study is based on a merged data set from two different studies conducted by the author (Khan 2003 and 2004). The author is highly indebted to the Higher Education Commission, Islamabad, and the South Asian Network for Development and Environmental Economics (SANDEE) for providing financial support for this study. See also Khan (2006. Willingness to pay for Margalla hills national park: Evicence from the travel cost method. The Lahore Journal of Economics, 11(2), 43–70.) for further details.

Readers should send their comments on this paper to: BhaskarNath@aol.com within 3 months of publication of this issue.

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Khan, H. Willingness to pay and demand elasticities for two national parks: empirical evidence from two surveys in Pakistan. Environ Dev Sustain 11, 293–305 (2009). https://doi.org/10.1007/s10668-007-9111-6

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