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2013-11-28 | project

Optimal Pricing of Parks and Wildlife Resources in Eastern and Southern Africa

Despite the centrality of African parks and other protected areas to nature-based tourism, they capture only a fraction of its value. For this reason, national parks and other protected areas have mostly relied on fiscal transfers from the state to fund their conservation activities.

However, the rise in calls for governments to also focus on other national objectives such as poverty reduction and enhancement of economic development has increased the competition for national parks and other protected areas in securing funds from the state. The result has been a general decrease in funds for conservation and this threatens the existence of national parks and other protected areas. There is an enormous amount of pressure on park agencies to consider alternative financing mechanisms. The main goal of the proposed research program is to support the use optimal pricing of park resources to achieve sustainable park management and to maximize the value of parks in Eastern and Southern Africa for a combination of parks and national interests. The proposed research program aims to provide formal frameworks that could be used by the park agencies in determining the optimal pricing of national park resources in Eastern and Southern Africa. The current phase of the research program will focus on a broader geographical area spanning across three countries namely Kenya, South Africa and Tanzania. There are grounds to believe that markets in Kenya, South Africa and Tanzania are interdependent especially because of the perceived nesting in the decision to visit Eastern or Southern Africa and park agencies should recognize this. The current work will involve stated preference surveys. First, the program will conduct a cross-country stated preference study about the Maasai Mara National Reserve (Kenya), Kruger National Park (South Africa), and Serengeti National Park (Tanzania) with tourists on site. Second, the program will conduct a cross-country stated preference study about the Maasai Mara National Reserve (Kenya), Kruger National Park (South Africa), and Serengeti National Park (Tanzania) with travel agents at tourism expos in Cologne and Gothenburg. This work will serve as a pilot and thereby help develop a standard survey template for Eastern and Southern Africa. The Contingent Behaviour Method will be used to generate experimental data from which cross price elasticies can be recovered. The analysis will determine the optimal price each park should charge under either a cooperative or non-cooperative setting as well as resulting profits for each country in the alternative settings. A discussion paper with a theoretical framework on how travel agents, park agencies and tourists interact during a change in park entrance fees will be produced. The expected outcome of this research program will be to get the key park agencies in Eastern and Southern Africa moving a step further towards cooperation in entrance fee determination.