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ECONOMIC VALUATION CASE STUDY

University of Southeastern Philippines


Graduate School of Agriculture and Related Sciences
Tagum-Mabini Campus, Apokon, Tagum City
Philippines 8100

"Using Choice Modelling to Estimate the Non-Market Value of


Panabo Mangrove Forest Park located at Barangay J.P. Laurel,
Panabo City, Davao del Norte, Philippines"

Presented By:
Matt B. Tacatani
Felix W. Mwanzia
Jhon Paul S. Lariba
Karen Claire L. Saludes
Dominica D. Amodia

Presented To:
Dr. Charlyn T. Gorgonio

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ECONOMIC VALUATION CASE STUDY

I. Introduction
Mangroves are a prominent coastal ecosystem composed primarily of flowering trees
and shrubs that are uniquely adapted to marine and estuarine tidal conditions (Duke 2011).
The mangrove ecosystem is recognized for the goods and services it provides to other
organisms and the biosphere in general (Alongi 2012). Hence, it is regarded as an
“ecologically and economically important forest of the tropics” (Alongi 2014).
Mangrove forest is considered a “blue carbon” ecosystem (Howard et al. 2014)
because of its capacity to sequester and store high amounts of carbon (Donato et al. 2011). Its
high vegetation and structural complexity stimulate organic carbon trapping, accumulation,
and stabilization (Krauss et al. 2003). Its surrounding anoxic sediment condition reduces
respiration while enhancing long-term carbon burial and storage (Chen et al. 2017).
The Philippines is a tropical archipelagic country in Southeast Asia that is widely
acknowledged as the world’s most mangrove-diverse region (Spalding et al. 2010).
According to the Forest Management Bureau of the Department of Environment and Natural
Resources (DENR-FMB), the estimated country’s mangrove is at 311,400 ha in 2020 (FMB
2021) and has a relatively high diversity with 33 true mangrove species identified (Primavera
et al. 2016a). However, the extent of mangrove areas in the country has declined for the past
century (Buitre et al. 2019) due to natural disturbances as well as anthropogenic activities
(Garcia et al. 2014) such as overexploitation and conversion (Primavera 2004).
The Panabo Mangrove Forest Park is a 73-hectare mangrove forest located
7°16’20.579” N, 125°40’50.984” E in Barangay J.P. Laurel, Panabo City, Davao del Norte,
Philippines. The park features a 430-meter boardwalk that allows visitors to immerse
themselves in the dense mangrove growths, providing a unique experience of nature and an
opportunity to learn about the importance of mangrove ecosystems. The mangrove area is
managed by the Local Government Unit of Panabo City through the City Environment and
Natural Resources and the Bureau of Fisheries and Aquatic Resources. The area receives tidal
inundation regularly and has a muddy soil type with a depth of as much as 1.00 meters. There
are settlements of approximately more than 100 households within the 500-m radius from the
mangrove park.

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In the study conducted by Alimbon JA and Manseguiao MRS in 2021, entitled


"Species composition, stand characteristics, aboveground biomass, and carbon stock of
mangroves in Panabo Mangrove Park, Philippines," it was found that among the 16 mangrove
species documented in Panabo City (Pototan et al., 2017), five species were identified within
the Panabo Mangrove Park: Aegiceras corniculatum, Avicennia marina, Rhizophora
apiculata, R. mucronata, and Sonneratia alba. These species belong to four genera across
four families as classified by Primavera (2009) and Duke (2011).
Furthermore, the structural analysis of mangroves in the study area recorded a mean
DBH of 7.67 cm, a stand basal area of 14.65 m² ha ⁻¹, and a mean density of 11835 stems
ha⁻¹. Compared with other mangrove communities in the Philippines, its mean DBH
measurement is relatively higher than those measurements in Calatagan Mangrove Forest
Conservation Park, Batangas (Cudiamat and Rodriguez 2017), several plantations stand in
Banacon Island, Bohol (Camacho et al. 2011; Gevaña et al. 2017) and afforested mangrove
stands in Laguindingan, Misamis Oriental (Sharma et al. 2017).
However, knowledge deficits of the mangrove ecosystem and its services exist
(Dencer-Brown et al., 2018). As noted, local populations have limited knowledge of
mangrove species and their ecological and economic benefits (Satyanarayana et al., 2012).
Darkwa and Smardon (2010) even found out that fishers lack the scientific knowledge
necessary to derive the benefits offered by mangroves ultimately.
In another study conducted by Alimbon JA, Manseguiao MRS. 2021, entitled
“Community knowledge and utilization of mangroves in Panabo Mangrove Park, Panabo
City, Davao del Norte, Philippines,” findings revealed that the majority of the community
near the area were knowledgeable of the existence and the services of mangroves except for
their medicinal uses. Additionally, it was observed that many respondents had limited
knowledge regarding the diverse species of mangroves. Moreover, the study found that while
most respondents acknowledged utilizing the mangrove ecosystem as a food source at
varying frequencies but never utilized it for other purposes such as fuelwood, medicine,
dyeing agent, construction materials, fishing poles, household furniture, and other items.
This study aims to quantify the economic value of the ecological services provided by
the mangrove forest. Mangrove ecosystems are critical for their role in coastal protection,
biodiversity conservation, and supporting fisheries, yet their value is often underestimated in
conventional market analyses (Barbier et al., 2011; Brander et al., 2012). By employing
choice modelling, a method that captures preferences and trade-offs individuals make when
faced with hypothetical scenarios, this research provides a robust estimation of the non-
market value of the Panabo Mangrove Forest Park (Hanley et al., 2001; Hensher et al., 2005).
II. Objectives:
Mangrove ecosystems, such as those found in the Panabo Mangrove Forest Park,
provide vital ecological services and benefits that are often undervalued in conventional
markets. This study aims to bridge this gap by focusing on three main objectives:
1. To determine the demographic characteristics of respondents in terms of:
a. Sex;
b. Age;
c. Marital Status;

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ECONOMIC VALUATION CASE STUDY

d. Educational Attainment, and;


e. Household Size.
2. To determine the socio-economic characteristics of respondents in terms of:
a. Employment Status;
b. Monthly Income, and;
c. Household Income.
3. To determine the market value of the Panabo Mangrove Forest Park;
4. To assess community knowledge of the role, use, and conservation of mangrove
forests; and
5. To identify and analyze the key factors influencing respondents' Willingness to Pay
(WTP) for proposed changes and enhancements to the Panabo Mangrove Forest Park.
III. Study Site
As shown in Figure 1, the study is conducted in Barangay J.P. Laurel, Panabo City,
Davao del Norte. The sampling area for the choice modelling interviews encompasses the
nearby residents of the Panabo Mangrove Forest Park.

Figure 1. Location of the Study Site.

IV. Methodology
A. Analytical Framework
Choice modeling (CM), also known as discrete choice experiments, is a market
research technique based on stated preferences. When applied to non-market environmental
attributes, CM involves asking respondents to choose between several alternative future
scenarios. Each scenario is described in terms of various attributes, with each attribute taking

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ECONOMIC VALUATION CASE STUDY

on different levels. One of these attributes is typically a cost that the respondent would need
to bear to achieve the scenario outcomes. By analyzing the scenarios chosen across multiple
choice questions, researchers can estimate the average monetary value that respondents are
willing to pay for increases in individual attributes (Hanley et al., 2001). Thus, choice
modeling enables respondents to express their preferences while considering the trade-offs
among different attributes.

B. Questionnaire Design
The study primarily targeted residents of Brgy. J.P. Laurel as its main respondents,
while also including a subset of mangrove park visitors to examine their preferences for
enhancing mangrove forest park quality. The questionnaire was structured into four sections:
Section A focused on gathering demographic data, Section B delved into the socio-economic
profiles of the respondents, Section C aimed to assess the respondents' knowledge about
mangrove forests, and Section D consisted of Choice Modeling (CM) questions designed to
estimate visitors' preferences for improving mangrove forest quality. The initial CM
questionnaire was developed around five key attributes: Improvement of Parking Area,
Construction of Gazebo and Furnishings, Addition of Toilets, Hiring of Local Tourist Guides,
and a cost attribute which is the Entrance Fee (Table 1).
Table 1. Choice Modeling Question: Carefully consider each of the following three options for the
Panabo Mangrove Park. Suppose Option A, B, and C were the ONLY ones available, which one
would you choose?
ATTRIBUTE STATUS QUO OPTION A OPTION B
Entrance Fee

No Entrance Fee PhP50.00 PhP100.00

Parking Area
No Parking Area With Parking Area and With Parking Area
Payment of PhP10.00 for and Free of Payment
Motorcycle and PhP20.00
for Car

Gazebo and Furnitures


There is an existing 1 Additional of 1 same size Additional of 3 small
Gazebo with no Gazebo with furnitures Gazebo with
furnitures furnitures

Toilet
There is 1 available Procurement of 1 Procurement of 1
public toilet but cannot additional public toilet additional public
totally accommodate all toilets accompanied
visitors by janitor

Local Tourist Guide


There is no tourist guide Recruit 2 local tourist Recruit 3 local tourist

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guide who will guide and guide who will guide


educate the visitors and educate the
visitors

Respondent Choice
Put Check ()

V. Review of the Related Literature


In non-market valuation research, choice modelling has been widely used to assess
consumer choices and behavior. This approach was first developed by Lancaster (1966)
wherein it aims to gather customer preferences by weighing the specific qualities of the
products that are offered and selecting the good that offers the most usefulness. Ibrahim et al.
(2018) define Choice Modelling as a method to determine the value related to the effects of
modifications made to various variables that characterize the results of various policy
options.
Saptutyningsih and Diswandi (2019) noted that the Choice model is used to estimate a
natural resource's non-market economic value is not just merely assessing the product if it is
good or bad but it evaluating attributes characteristics by choosing the preferred conditions.
In the application of Choice Modelling, Hassen (2018) discussed that respondents are asked
to indicate which traits and attribute levels they prefer by ranking and rating them to estimate
environmental goods' use and non-use values. Additional components of choice experiments
include selecting the experimental design to be used, characteristic levels, choice sets to be
presented to respondents, evaluating preferences as either choice, ranking, or rating, and
estimating the process.
Petcharat et al. (2020) examined how people make decisions or choices that enable
estimation of the quantities and relative relevance of specific environmental characteristics
using choice modelling. Additionally, in measuring non-market values in CM research,
respondents are given "choice sets", and select their top choice and every option set typically
comprise three or more substitute products. A combination of multiple attributes is an option,
with each characteristic assuming a value, often referred to as a level that varies depending on
the options.
Non-market Valuation of Environmental Resources
Historically, non-market valuation has been taken into account when assessing
environmental value. This technique offers advantages over other methods for bringing
environmental outcomes into policy analysis because it tends to provide an objective estimate
of the value that the community places on these outcomes. The need to incorporate the
natural environment into the decision-making process gave rise to this kind of approach.
A group of techniques known as "non-market valuation" aim to highlight any changes
in the economic worth of goods and services that are not able to be exchanged on the open

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market (Roussel and Tardieu, 2018). It is useful for figuring out the worth of ecosystem
services and items that don't have a market price (Manero et al 2022). Additionally, using
environmental valuation techniques it determines the costs and benefits of natural resources
and further enhances its conditions (Guijarro and Prodromos, 2020).
Mangroves
Recognized as the "Blue Forests," mangroves, salt marshes, and seagrass meadows
are considered to be the most valuable and important types of coastal ecosystems (Cornell et
al 2018). Mangroves particularly offer a number of socioeconomic benefits, including
fisheries, wood, tourism, and environmental services (Sarhan & Tawfik 2018). This
ecosystem is known as one of the most abundant in the world (Sreelekshmi et al., 2021) that
is vital to the community's storm-resilience because it lessens the impact of floods and coastal
erosion in the intertidal zone (Menéndez et al 2020) and it functions as a carbon sink
(Dinilhuda et al. 2020). Moreover, it has been shown to shield coastal towns from powerful
winds and storm waves (Sarkeret al 2020). Numerous ecological and financial services are
offered by mangrove forests. However, they face serious risks, with significant decline rates
in every nation (Ibrahim et al 2018).
Despite of the numerous services offered by this ecosystem still knowledge deficit
exists (Dencer-Brown et al. 2018). The degradation of mangroves, which is typically caused
by human activity, poses a threat to these key ecosystems' capacity to provide goods and
services (Owuor et al 2019). There are still some people who know very little about the
ecological, economic, and species-related aspects of mangroves. Another cause for concern is
the destruction of mangroves due to the community's reliance on its commonly recognized
consumptive uses, such as the production of charcoal (Ritabulan et al. 2019)
According to Forestry Statistics 2020 published by the Department of Environment
and Natural Resources' Forest Management Bureau (DENR-FMB), there were roughly
303,373 hectares of residual mangrove zones in the Philippines as of 2015. In the Philippines,
mangrove forests were used up, and their initial extent of roughly 500,000 hectares was
reduced to about 288,000 hectares. In 1970 and up to 123,400 acres in 1993. Mangrove land-
use conversion is seen as one of the human activities linked to the country's declining
mangrove populations (Pacyao & Barail, 2020), and the fast-expanding aquaculture sector
and climatic phenomena such as storm surges and typhoons (Buitre et al., 2019).
In response to the declining population of mangrove forests programs for restoring are
essential measures in combating the degradation of mangroves in the country (Gagarin et al
2022). One of these measures is the Department of Agriculture's (DA) flagship initiative, the
Philippine National Aqua silviculture run by the Bureau of Fisheries and Aquatic Resources
(BFAR). For program execution, BFAR and the Commission on Higher Education (CHED)
agreed into an agreement. In order to address concerns with food security, poverty, and
climate change among municipal and artisanal coastal fishermen, the program attempts to
restore mangrove forests and offer a means of subsistence (Pacyao and Llameg, 2018).
In research on mangrove forest structures in Davao City, Seniel et al. (2024) identified
21 true mangrove species and thirteen mangrove-associated species among the city's
surviving mangrove forests. Moreover, in the study conducted by Alimbon and Manseguiao
(2021) reported that the local population is aware of the presence of mangroves in the region,

Using Choice Modelling to Estimate the Non-Market Value of Panabo Mangrove Forest Park Page 7
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the ecosystem services they provide—aside from their usage as a source of food—and that
these are not widely used. It's possible that people refrain from using mangroves for
damaging purposes (such fuelwood or charcoal) because they are aware of the rules that
forbid such behavior in the area.
Factors influencing Willingness to pay
According to Gagarin et al.'s findings from 2022, the respondents' WTP is positively
impacted by their sex, age, membership in environmental organizations, and awareness of the
ecological functions and economic value of mangroves.
Larger household sizes have been found by Pham et al. (2018) to have a detrimental
impact on the WTP for the restoration of environmental services in Vietnam. According to
Ghosh and Mondal (2013), WTP is significantly positively impacted by household income
result suggests that respondents who made more money were more likely to pay more for the
management of wetlands.
Additionally, gender, household size, price, and respondents' local ecological
knowledge (LEK) had a negative and statistically significant impact on their WTP responses,
according to a study by Fauziyah et al. (2023). However, income had a major and favorable
impact on WTP. Furthermore, findings of Iqbal, M.H. (2020) propose that the important
features of ecosystem services and their levels are chosen based on a variety of factors,
including age, family size, income, education, and occupation.
VI. Results and Discussions
VII. Conclusion and Recommendation
A. Conclusion

B. Recommendation

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General comments:

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1. Your questionnaire design is unquantifiable, i.e., results from the survey cannot be used for
statistical analysis save some frequency distribution that could be deduced from the outputs;
2. Except for frequency distribution as mentioned above, i.e., counting the number of checks
made under each option, most that you can do is for qualitative analysis that should be
backed up by past studies’ results and largely related to established theories and practices;
3. It seems no demographic data are gathered to relate the same as to how respondents made
their choices, as per questionnaire design presented.
4. Objective no. 2 could have provided very meaningful and deeper insights into how affected
people view mangrove forests. Unfortunately, the research does not provide, as presented
herein, the necessary parameters needed to make such assessment more meaningful and in-
depth.
5. The best that could be done here is do some qualitative analysis with literature backup to
support such analysis.

Good luck.

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