Valuing non-marketed recreational benefits of khanpur lake

Abstract

The research focuses on the application of Travel cost method, which is a non-market valuation technique to find the value of recreational amenities in Pakistan. The bank of Khanpur lake is taken a site of choice because it is a well-known resort located in the premise of historical city of Taxila with a large number of visitors and tourists. The study design a questionnaire to conduct an on-site survey. It captures the information on different variables that affect visitation to the site including, travel cost components, socio-demographics, experience in different activities available on-site, travel cost of substitute site, quality and attributes of the site, and visitors‟ willingness to pay for improvement of facilities available on site. Data with a sample size of 150 is gathered and a Zerotruncated Poisson model is estimated using STATA 12.0. The results show that travel cost significantly affect the rate of visitation, such that increasing cost decreases visits to the site whereas, quality of site does not significantly affect the visitation. The experience level of visitors in different activities has a significant impact on visitations. Majority of the visitors are willing to pay entry fee equivalent to Rs. 50 for development and improvement of the facilities on the site. The consumer surplus is estimated using the estimated model, which turns out to be Rs. 3333 per trip per visitor resulting in recreational use value of Khanpur Lake to be Rs 121.2 million. This amount can essentially be used for development of the site thus, increasing both its demand and consumer surplus substantially. This points out toward an important policy implication that with few more developments, the rate of visitation can be increased manifolds and Khanpur Lake can get the status of nationally recognized site. This will not only help in the economic uplifts of locals but will also impart a softer image of KPK in the broader arena as the adjoining area is a hub of international tourists.