Abstract
Contingent valuation method (CVM) is widely applied to value environmental goods and services. Initially developed in developed countries, CVM now is also widely applied in developing countries. However, in many cases, value estimates from CVM studies carried out in developing countries are smaller than expectations. One possible explanation for this phenomenon is that people in developing countries may have different preferences toward environmental goods and services. Another explanation argues that it is effect of poverty on the valuation, i.e., effect of limited income instead of deficiencies in preferences. A suggestion to resolve the problem according to the latter argument is by using nonmonetary contribution as payment vehicle. Following this argument, this paper reports result of CVM surveys using working time without pay (or called willingness to work, WTW) in addition to standard monetary contribution (or called willingness to pay, WTP) implemented for a contingent scenario to avoid deforestation and forest degradation in Segah watershed in Berau District, East Kalimantan, Indonesia. Both WTP and WTW are elicited in open-ended format, i.e., directly asking respondents about their maximum contributions for the proposed program. Results show that in terms of WTP, respondents’ average benefit from the proposed project is Rp124,088 for onetime payment, whereas average WTW is 20.25 days per year. When WTW is converted to WTP using casual daily wage, it turns out that WTW is 8.15 times higher than WTP. The results confirm findings of previous studies that value estimated in terms of WTW is substantially higher than WTP. In addition, among similar sets of socioeconomic and forest use variables, variables of income, gender, family having baby, living in mixed tribe villages, and extent of using river services are significant determinants for WTP, whereas migration, living in mixed tribe villages, extent of using forests, practicing ritual related to forests, having gardens located in forests, and belief in the scenario applicability are significant determinants for WTW. Although determinants of the WTP and WTW are found to be different, in general the variables exhibit expected signs, which shows validity of the model. Therefore, the finding supports for using nonmonetary contribution for CVM study implemented in developing countries, especially in community with limited cash income.
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Acknowledgements
The author would like to express special thanks to Government Financial Management and Revenue Administration Project (GFMRAP) for providing financial supports to undertake this research. Financial and administrative assistances from Fiscal Policy Agency Secretariat which enable the author to present this research in the 2nd ICOSI conference are also appreciated.
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Solikin, A. (2017). Willingness to Pay and Willingness to Work to Avoid Deforestation and Forest Degradation. In: Taufik, T., et al. ICoSI 2014. Springer, Singapore. https://doi.org/10.1007/978-981-287-661-4_14
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DOI: https://doi.org/10.1007/978-981-287-661-4_14
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