Economic Valuation of Lake Tana: A Recreational Use Value Estimation through the Travel Cost Method

Abstract

Lake Tana is a well-known tourist spot in northern Ethiopia that lures both domestic and foreign tourists. The lake’s value is still underrated, despite the site’s immense potential for recreation and tourism. In this study, the recreational value of Lake Tana is estimated, and the consumer characteristics associated with recreational demand are analyzed. The study employs a Zero-Truncated Poisson (ZTP) regression model for data generated by the Individual Travel Cost Method (ITCM) and draws information from 1094 on-site surveys. According to ZTP regression results, variables that are significantly and positively associated with demand for Lake Tana recreation include the monthly income and age of the visitors and their preference for other recreation destinations such as Tis-Abay and Gondar Fasiledes Royal Castle. However, respondents’ leisure time, overall cost, and residential distance from the recreational site are all negatively associated with the demand for recreation. It is also evident that Lake Tana is endowed with a wealth of attributes, ranging from natural beauty to ancient religious and cultural heritages, making the lake a highly desirable recreation destination. According to the estimation, Lake Tana has a yearly recreational value of around USD 9.5 million. However, it also demonstrates that if lake settings were to improve in quality, the value of Lake Tana would rise considerably, reaching USD 17.3 million. The value of sentimental attachment implies that determining Lake Tana’s recreational value is a key element in the resource’s sustainable utilization and management. To make greater use of Lake Tana’s recreational amenities, however, uncontrolled waste disposal, favorable recreation facilities, and the spread of water hyacinth should be addressed immediately. Furthermore, it is imperative to maintain the lake’s diverse attributes, as the integration of these attributes is what gives the lake its primary appeal.

Assessing the Touristic Activities of Wetlands through the Travel Cost Method: A Case Study

“…Nowadays, the TCM is a well-established methodology that has been widely applied to assess different recreational activities in natural and rural environment. More in detail, there is also a great deal of studies that specifically focus on wetlands, as in Fleming and Cook [30] for Lake McKenzie (Fraser Island), or on lakes, as in Wubalem et al [31] for Lake Tana situated in the northwest region of Ethiopia or in Tienhaara et al [32] for Lake Puruvesi in Finland. In general, the results of these studies suggest to decision-makers what the overall economic gains derived from the touristic and recreational activities are while preserving the natural resources.…”

Economic Assessment for the Recreation Value of Al-Sunut Forest Reserve in Khartoum State, Sudan

“…People's willingness to pay to visit a site is thus estimated based on the number of trips they make at different travel costs [47,48]. This method is known as a "showed choice" approach because it "reveals" visitors' willingness to pay through their habits of spending [47,49].…”

Mangroves Addition as Innovation for Sustainable Tourism

“…Variables of age, income, and education are accommodated by this method. This information is difficult to obtain in ZTCM (Batubara et al, 2020;Wubalem, 2023).…”

“…A visitor's value to the environment, an unmarketed attribute, can be deduced from the costs incurred at the location visited (Wubalem, 2023). A visitor's travel costs can be seen from transportation costs, entry fees, expenses at the place of recreation, and the cost of time.…”