This paper estimates the visitation demand function for Kgalagadi Transfrontier Park (KTP) in order to determine the conservation fee to charge South African residents to maximise park revenue.
We conducted contingent behaviour experiments at KTP and three other national parks, which we assume are either substitutes or complements for visitors to KTP. Our random effects Tobit model shows that there is a wide variation in the own-price elasticities of demand between the parks, but they are generally not elastic. The cross-price estimates indicate that there is limited substitutability in visitation demand among the four parks. The study uses the unitary elasticity rule to demonstrate that there is a possibility of raising conservation fees to revenue-maximising levels at KTP, as well as the other parks, using methods such as a mandatory conservation fee increment or a community-bound voluntary donation above the regular conservation fee. Sharing conservation revenue with communities surrounding parks could demonstrate the link between ecotourism and local communities’ economic development, promote a positive view of land restitution involving national parks, help address South Africa’s heavily skewed distribution of income, and act as an incentive for the local communities to participate in conservation even more.
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