November 8, 2022

Valuation of Ecosystems Services

by Ria Paxel

Abstract

The Scope of Work (SOW) encompassed the compilation of previous studies pertaining to Willingness to Pay (WTP) and recreation pricing investigations. To fulfill this aspect of the SOW, researchers diligently conducted an extensive literature review encompassing various topics directly and indirectly relevant to the primary objectives of this project. The bibliography provided below offers a partial compilation of the studies examined during this phase of the project. It serves as a comprehensive resource list for the Forest Service. While numerous works are cited within this section, some are not explicitly referenced but have been included due to their potential relevance. It’s important to note that several other studies were omitted from the bibliography when researchers determined their practical applicability to be limited.

Introduction

Before presenting a summary of our findings, it is crucial to highlight some overarching observations from the literature related to this topic and offer a brief caution regarding the generalizability of the referenced studies. One of the most significant observations, which has been underscored in several recent papers, is the abundance of studies conducted on this subject during the late 1960s to the early 1980s, contrasted with the relatively limited research undertaken in recent years, particularly with a focus on the United States. Brooker and Joppe (2014) raised this concern a few years ago when they noted that “American researchers have shown diminished interest in the camping sector, based on output trends since the 1960s. Whereas campgrounds were once a popular research topic, particularly from the 1960s to the 1980s, minimal new insights have been offered in recent decades, despite the industry’s continued growth and evolution.”

This dearth of recent research raises several issues. Firstly, camping and camper preferences have evolved. A report on camping sector trends from 2012 (Garst, 2012) highlights that camping has transformed “over the past 40 years,” and contemporary campers hold different expectations for campground amenities, placing a higher value on comfort and convenience compared to campers in the 1960s. While some research findings from four to five decades ago may still hold relevance today, many do not. For instance, one crucial aspect related to the concept of Willingness to Pay (WTP) is conditioned expectation, as elucidated by Laarman and Gregersen (1996). This suggests that a consumer’s willingness to accept a price is influenced, in part, by their perception of what constitutes a fair price. The landscape of camping fees, especially on public lands, was markedly different in the early 1970s than it is today. Consequently, consumers are more inclined to accept gradual price increases as opposed to significant jumps, a phenomenon demonstrated by Laarman and Gregersen (1996) in relation to campgrounds and other goods and services.

Another notable factor is the influence of generational differences on consumer behavior and WTP. Marketers across various sectors have conducted extensive studies on understanding the purchasing behaviors of different generations. A family camping in the early 1970s likely had parents who lived through the Great Depression. It is reasonable to assume that price tolerance, as well as preferences for certain amenities, may have shifted for parents today in comparison to their counterparts from the past.

In addition to the age of some of these studies, caution must always be given to the generalizability of results.  What was found in a study of a suburban state park in Massachusetts, might not be true in a large National Forest in Idaho.  Contexts make a difference not only in research, but also in practice.  For instance, although consumers seem willing to pay more for a campsite with a beautiful view, beauty is subjective.  If consumers are willing to pay more for a view of a river or lake, will they also be willing to pay more for a meadow full of wildflowers, or a lovely open prairie?  One piece of wisdom that seems as true today as when it was written more than 50 years ago, “There is no such thing as an average camper” (Shafer, 1969)

Finally, many of the studies reported, particularly the ones on WTP for specific features and amenities, used some kind of choice experiment as their method.  Although these types of studies are useful to understanding consumer preference for specific attributes, their inherent limitation is that they are hypothetical experiments, which have been shown to sometimes overestimate effects.

Below is a brief summary of the most interesting relevant findings from all of the studies, broken into categories, as well as overall conclusions by the researcher.

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