It is our conclusion that policy makers can justify a one-time expense of
US$195,000–US$400,000 in order to provide a benefit to the visitors of the
Nizzanim LTER Coastal Sand Dune Nature Reserve, which is conservatively
valued at approximately US$570,000. On the other hand, comparing the cost of
containment, approximately US$19,500–US$40,000 annually (see Table 17.6),
with the annualized benefit of approximately US$450,000 derived from the mean
use value of the visitors to the nature reserve gives a less straightforward answer.
The annual payment for an NPV of US$450,000 is US$35,708 (at a 5 % interest
rate over 20 years). This is a slightly smaller annual benefit than the annual cost of
containment using Treatments A or B, is slightly higher than the cost of Treatment
C, and considerably higher than the annual costs of Treatments D and E (see
Table 17.6). We conclude that if policy makers choose to contain the spread and
not eliminate the invasive species, there is only an economic justification for such
actions if one of the methods, Treatments C through E, is deemed effective and
used. The annual benefit from containment (US$35,708) is less than the annual
costs of treatments A and B (US$40,151 and US$38,962 respectively) resulting in
a net loss (see Table 17.6).
17.6 Discussion
17.6.1 Economic Theory
In order to validate the results of the CVM survey, they must conform to economic
theory. Carson et al. (2000) suggested two tests for conformity to economic theory:
1. The number of respondents who are willing to pay for an environmental good
should fall as the price increases.
2. The respondents should be willing to pay more for a higher quality or larger
amount of the environmental good.
Figure 17.1 demonstrates that as the hypothetical price of controlling the spread
of A. saligna in the Nizzanim LTER Coastal Sand Dune Nature Reserve increases,
the number of respondents willing to pay for that environmental good will fall.
The CVM survey asked respondents their WTP for two different environmental
goods, containment of the spread and eradication of the species from the nature
reserve. The intention of presenting respondents with these two environmental
goods was to test whether the respondents were willing to pay for a higher quality
of the environmental good. The results of this study show that the mean contribution that respondents were willing to pay for eradicating A. saligna from the
Nizzanim LTER Coastal Sand Dune Nature Reserve was higher ($8.92) than the
mean contribution that the respondents were willing to pay for the conservation of
the current situation or stopping further spread of A. saligna ($8.50). However, this
difference was not found to be statistically significant. This result raises the
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D. Lehrer et al.
US$195,000–US$400,000 in order to provide a benefit to the visitors of the
Nizzanim LTER Coastal Sand Dune Nature Reserve, which is conservatively
valued at approximately US$570,000. On the other hand, comparing the cost of
containment, approximately US$19,500–US$40,000 annually (see Table 17.6),
with the annualized benefit of approximately US$450,000 derived from the mean
use value of the visitors to the nature reserve gives a less straightforward answer.
The annual payment for an NPV of US$450,000 is US$35,708 (at a 5 % interest
rate over 20 years). This is a slightly smaller annual benefit than the annual cost of
containment using Treatments A or B, is slightly higher than the cost of Treatment
C, and considerably higher than the annual costs of Treatments D and E (see
Table 17.6). We conclude that if policy makers choose to contain the spread and
not eliminate the invasive species, there is only an economic justification for such
actions if one of the methods, Treatments C through E, is deemed effective and
used. The annual benefit from containment (US$35,708) is less than the annual
costs of treatments A and B (US$40,151 and US$38,962 respectively) resulting in
a net loss (see Table 17.6).
17.6 Discussion
17.6.1 Economic Theory
In order to validate the results of the CVM survey, they must conform to economic
theory. Carson et al. (2000) suggested two tests for conformity to economic theory:
1. The number of respondents who are willing to pay for an environmental good
should fall as the price increases.
2. The respondents should be willing to pay more for a higher quality or larger
amount of the environmental good.
Figure 17.1 demonstrates that as the hypothetical price of controlling the spread
of A. saligna in the Nizzanim LTER Coastal Sand Dune Nature Reserve increases,
the number of respondents willing to pay for that environmental good will fall.
The CVM survey asked respondents their WTP for two different environmental
goods, containment of the spread and eradication of the species from the nature
reserve. The intention of presenting respondents with these two environmental
goods was to test whether the respondents were willing to pay for a higher quality
of the environmental good. The results of this study show that the mean contribution that respondents were willing to pay for eradicating A. saligna from the
Nizzanim LTER Coastal Sand Dune Nature Reserve was higher ($8.92) than the
mean contribution that the respondents were willing to pay for the conservation of
the current situation or stopping further spread of A. saligna ($8.50). However, this
difference was not found to be statistically significant. This result raises the
284
D. Lehrer et al.