An economic analysis of coral reefs in the Andaman Sea of Thailand

The focus of this study is the valuation of coral reefs and how the information derived from the valuation can be used to imroved coral reef management in Thailand. The study focuses specifically on the Phi Phi islands, off the west coast of southern Thailand, in the Andaman Sea. The Phi Phi are rich in reefs that are seen by government planners as an ecotourism destination. The annual benefit from the recreational services of Phi Phi estimated using a travel cost method was 8 216.4 million baht (US$205.41 million), or about US$6 243 per hectare per year. Assuming the real value of this recreational value remains the same over 30 years, and using a real interest rate of 5 per cent, the present value of recreation of Phi Phi is US$3 157 million. A contigent valuation method (CVM) was used to estimate utility values associated with coral reef biodiversity at Phi Phi. The mean willingness to pay (WTP) per visit was estimated at US$ 7.17 for domestic visitors and at US$7.15 for international visitors. From this, the total value of Phi Phi`s coral reefs was estimated to be US$0.147 million a year for domestic visitors and US$1.24 million a year for international visitors. Using CVM the study also calculated the mean WTP of domestic vicarious users at US$15.85. From this, the total value (use and non-use) of the reefs was estimated to be US$497.38 million a year, or US$15118 per hectare per year. It is recommended that an instrument that captures the tourists` consumer surpluses, a user fee, be introduced. Determining that fee for Phi Phi is quite straightfoward, as the value that people obtain from visiting the Phi Phi reef site is US$7.15 to 7.17 per visit. Based on these numbers, this study suggests a basic entrance fee of US$1 per person per visit, and a user charge for additional services from the variety of recreational sites being offered at Phi Phi.