#### 30 April 2004 {#april-2004 .heading-style1 .unnumbered}

Cesar Environmental Economics Consulting

Kastanjelaan 9\
6828 GH Arnhem\
The Netherlands

Tel. ++31-26-4452175\
Fax. ++31-26-3704915\
E-mail: <herman.cesar@ivm.vu.nl>

E-mail: beukering@ivm.vu.nl

Web: www.ceec.nl

Number range TableNumber range TabelNumber range FiguurNumber range
FigureNumber range EquationContents

1\. Introduction
[3](#number-range-equationnumber-range-figurenumber-range-figuurnumber-range-tabelnumber-range-tableintroduction)

2\. Methodology [3](#methodology)

3\. Socio-economic characteristics [4](#socio-economic-characteristics)

4\. Marine-related activities [5](#marine-related-activities)

5\. Willingness to Pay for conservation
[7](#willingness-to-pay-for-conservation)

6\. Funding mechanism [9](#funding-mechanism)

Appendix I. Questionnaire
[13](#number-range-equationnumber-range-figurenumber-range-figuurnumber-range-tabelnumber-range-tablequestionnaire)

  -----------------------------------------------------------------------
  ***Colophon***

  This study is part of a larger report with the title "Assessment of
  Economic Benefits and Costs of Marine Managed Areas in Hawaii\" by
  Herman Cesar, Pieter van Beukering and Alan Friedlander. This
  publication is a result of research carried out by Cesar Environmental
  Economics Consulting (CEEC) and funded by the National Oceanic and
  Atmospheric Administration, Coastal Ocean Program, under awards NA
  160A2412 to the University of Hawaii for the Hawaii Coral Reef
  Initiative Research Program. Co-funding was obtained from the Division
  of Aquatic Resources (DAR) and the Department of Business, Economic
  Development & Tourism (DBEDT). The field data were compiled by Linda
  Flanders (Waiopae), Sara Peck (Kahaluu), Liz Foote (Honolua), Hannah
  Barnard (Molokini and rest Maui) and Jan Dierking (Oahu sites). Scott
  Atkinson (then at TNC) managed the collection of other surveys on Big
  Island.
  -----------------------------------------------------------------------

# Number range EquationNumber range FigureNumber range FiguurNumber range TabelNumber range TableIntroduction

Marine Managed Areas (MMAs) provide several direct and indirect benefits
to the tourism industry, including: (a) Enhanced attractiveness of reefs
-- maintaining and enhancing coral cover, fish stock and coral and fish
diversity will increase satisfaction from diving, snorkeling and glass
bottom boat rides; (b) Shoreline maintenance -- a healthy reef will
protect the shoreline from erosion and maintain sand levels on beaches;
(c) Support for reef fisheries in adjacent areas as well as pelagic
fisheries in coastal areas through improved reef health and fish
biomass.

In this study we focus particularly on the first aspect. Little is known
about perceptions of divers and snorkelers in Hawaii and how important
good quality reefs are for these reef users. A study in the early 1990s
reported on the diving industry in 1990 only from a macro-economic
perspective. The main motivations of divers and snorkelers in Hawaii to
involve in marine activities were studied by Cesar et al. 2002[^1].
Still, it remains unknown how recreational users perceive MMAs, whether
they are willing to contribute financially to the management of MMAs and
whether better reefs also lead to higher satisfaction and therefore
higher welfare levels. To fill this lacuna, a survey was conducted in
close collaboration with The Nature Conservancy (TNC) during the period
of April till October 2003.

# Methodology

The target audience was the group of active users of coral reefs in
Hawaii. In total 532 divers and 771 snorkelers have been interviewed. In
addition, 77 non-users filled the questionnaire to investigate
differences in perception between users and non-users. In conjunction
with The Nature Conservancy (TNC), Cesar Environmental Economics
Consulting (CEEC) developed a survey that focused on individual divers'
activities and contingent valuation of visits to the reefs. The
questionnaire was pre-tested at several locations to ensure the accuracy
of the completed forms. In conjunction with the overall study, six sites
were specifically targeted: Hanauma (283 respondents) and Diamond Head
(95) on Oahu, Molokini (237) and Honolua (243) on Maui, and Waiopae (98)
and Kahalu'u (188) on Big Island. The remaining 250 respondents were
interviewed at various other dive and snorkel sites in Hawaii. All
interviews were self-administered, i.e., the respondents are handed
surveys and fill them out themselves, and then return them to the
interviewer.

Returned forms were logged, then reviewed for completeness and
condition. Blank forms, incomplete, and damaged forms were discarded.
Data were then entered by a data entry specialist and verified by the
project director. The database was checked for internal consistency,
missing or duplicate records, and improperly observed contingency items.
Response options were checked for multiple answers, blank fields, and
out-of-range codes. If any errors were found to have slipped by quality
control procedures applied to this point, response values were checked
against the survey form to assure the proper information had been
recorded.

# Socio-economic characteristics

First, we tested whether the sample was representative in terms of
socio-economic and demographic background of the respondents. The most
obvious variable to test is the country of origin. The sample has been
subdivided into regions, of which each consist of a cluster of states in
the US or specific countries and continents (see Figure 1).

![](media/image1.wmf){width="4.990972222222222in"
height="3.4208333333333334in"}

Figure 1: Country of origin

Table 1 shows the proportion of each region defined in the sample
(column 1) and compares this with the actual visitor numbers to Hawaii
in 2002 (column 2). With only 1% of the total sample, Japan is highly
underrepresented. This is probably due to language constraints since the
questionnaire has only been distributed in English. When adjusted for
this, the survey sample is fairly representative of marine visitors to
Hawaii.

Table 1: Adjustment of sample distribution of country of origin

  ------ ------------------- ---------------- ---------------- -------------- --------------
  Zone   Region              Survey           Actual           Survey         Actual
                             (*unadjusted*)   (*unadjusted*)   (*adjusted*)   (*adjusted*)

  1      Pacific Coast (US)  50%              32%              50%            44%

  2      Japan               1%               26%              \-             \-

  3      Mountain (US)       10%              7%               11%            9%

  4      West South Central  4%               4%               5%             5%
         (US)                                                                 

  5      West North Central  4%               6%               4%             9%
         (US)                                                                 

  6      Canada              4%               4%               4%             5%

  7      East North Central  5%               3%               5%             4%
         (US)                                                                 

  8      South Atlantic (US) 7%               5%               7%             7%

  9      East South Central  1%               1%               1%             2%
         (US)                                                                 

  10     Middle Atlantic     6%               4%               6%             6%
         (US)                                                                 

  11     New England (US)    2%               2%               2%             2%

  12     Other Asia          0%               2%               0%             2%

  13     Oceania             2%               1%               2%             2%

  14     Europe              3%               2%               3%             3%
  ------ ------------------- ---------------- ---------------- -------------- --------------

The other demographic characteristics are summarized in Table 2.
Throughout the analysis, a distinction has been made between divers,
snorkelers and non-users. Compared to snorkelers, divers are generally
older, wealthier, more often male, and better educated. The few
non-users interviewed are at the other end of the spectrum. With an
average age of 39, Hawaii visitors are generally older than those at
many other popular holiday destinations. This may be due to the high
costs involved in visiting Hawaii.

Table 2: Summary of demographic variables

  ----------------- ----------------- ----------------- -----------------
  Variable          Divers            Snorkelers        Non-users

  Sample            532               771               77

  Male              60%               46%               43%

  Age               40                38                35

  Education         3.90              3.71              3.37

  Income            US\$ 99,694       US\$ 89,773       US\$ 84,052
  ----------------- ----------------- ----------------- -----------------

Looking into more detail at education and income structure of the
sample, it is clear that the respondents are generally highly educated
and relatively wealthy (Figure 2).

  --------------------------------------------------- ----------------------------------------------------
  *Education*                                         *Income*

  ![](media/image2.wmf){width="2.689583333333333in"   ![](media/image3.wmf){width="2.3986111111111112in"
  height="1.6930555555555555in"}                      height="1.5520833333333333in"}
  --------------------------------------------------- ----------------------------------------------------

Figure 2: Educational and income-related background

# Marine-related activities

To determine the experience level of the respondents and spatial
distribution of their activities, respondents were asked how many diving
and snorkeling experiences they had had at a number of locations in
Hawaii in the previous 12 months. After eliminating the outliers[^2],
the number of activities was summed for each site in order to determine
the popularity of each potential marine site.

Figure 1 shows the distribution of dives and snorkel trips in Hawaii
over the previous 12 months by the respondents. Accounting for 45% of
the activities, Big Island is by far the most popular diving/snorkeling
destination of the main islands of Hawaii. Figure 1 also shows that some
sites are typical diving sites (e.g. Molokini) while others are
particularly popular with snorkelers (e.g. Hanauma and Honolua). The
average annual number of diver and snorkel trips in Hawaii per "active"
person is 3.2 and 7.8, respectively. In summary, the majority of users
is relatively inexperienced regarding water activities.

  --------------------------------------------------- ----------------------------------------------------
  *Diving in Hawai'i*                                 *Snorkeling in Hawai'i*

  ![](media/image4.wmf){width="2.676388888888889in"   ![](media/image5.wmf){width="2.5965277777777778in"
  height="1.6680555555555556in"}                      height="1.6625in"}
  --------------------------------------------------- ----------------------------------------------------

Figure 3: Distribution of diving and snorkeling destinations in Hawaii

To test their experience level, the respondents were asked to estimate
the total number of dives and snorkel trips they took in their lifetime.
Figure 4 shows the outcome of this question. Most respondents snorkeled
around 7 to 15 times in their lifetime. Women are generally less
experienced than men. Diving is much less common among the respondents.
54% of the man and 68% of the women had never taken a dive trip in their
lifetime. Most divers have taken 1 to 10 dives so far. Only very few
respondents are highly experienced and belong to the category 500 plus.

+----------------------------------+-----------------------------------+
| *Male*                           | *Female*                          |
|                                  |                                   |
| *\# snorkel in lifetime*         | *\# snorkel in lifetime*          |
+----------------------------------+-----------------------------------+
| ![](media/image6.                | ![](media/image7.                 |
| wmf){width="2.053472222222222in" | wmf){width="1.8430555555555554in" |
| height="1.8229166666666667in"}   | height="1.792361111111111in"}     |
+----------------------------------+-----------------------------------+
| *\# dive in lifetime*            | *\# dive in lifetime*             |
+----------------------------------+-----------------------------------+
| ![](media/image8.                | ![](media/image9.                 |
| wmf){width="2.126388888888889in" | wmf){width="2.0006944444444446in" |
| height="1.7708333333333333in"}   | height="1.725in"}                 |
+----------------------------------+-----------------------------------+

Figure 4: Gender distribution of number of snorkel and dives experiences

Next, respondents were asked about their perception of the state of the
reef that they visited on "today's" dive/snorkel experience. Figure 5
shows how respondents perceive the health of the reef they visited last.
The majority of the respondents consider the Hawaiian reefs to be in a
healthy state (i.e. between 40 and 50%). Compared to snorkelers, divers
generally are more pessimistic about the health of Hawaiian reefs.

![](media/image10.wmf){width="4.393055555555556in"
height="2.8381944444444445in"}

Figure 5: Respondent's perception of reef quality

Table 3 shows the composition of different nationalities recorded at the
6 study sites. Waiopae clearly has the largest proportion of local users
(i.e. 65%) since it is not located in a region that is particularly
popular among foreign tourists. Waikiki Diamond Head is divided as local
users tend to use the Diamond Head location while tourists reef users
exclusively frequent the Waikiki location. The majority of the tourists
in the remaining sites consist of US mainlanders.

Table 3: Country composition by site

  -------------- -------------- -------------- -------------- --------------
  Sites          Hawaii         Mainland US    Canada         Other

  Waiopae        63%            32%            4%             1%

  Diamond Head   24%            60%            4%             12%

  Kahalu\'u      19%            72%            2%             7%

  Hanauma        12%            78%            3%             7%

  Honolua        7%             86%            2%             5%

  Molokini       5%             89%            5%             1%

  Other          9%             82%            4%             5%
  -------------- -------------- -------------- -------------- --------------

# Willingness to Pay for conservation

An important aspect of the survey is what people are willing to pay
(WTP) for the conservation of coral reefs on top of what they are
already paying in terms of standard expenditures (e.g. dive equipment,
boat fee, tanks, instructor). First, an introductory text was presented
which was phrased as follows: "Let\'s say, divers and snorkelers are
asked to help fund activities that protect corals, reef fish, sea
turtles and other reef animals in Hawaii." Next, the question was posed
whether the respondent would be willing to pay a certain amount per
dive/snorkel experience, in addition to the usual expenses, to fund a
program for a healthier marine environment. The possible answers were
"yes" or "no". Those who answered "yes" where asked "What would be the
maximum you would be willing to pay per dive/snorkel experience, in
addition to the usual expenses, to fund this program for a healthier
marine environment?"

Figure 6 shows the distribution of the WTP of the respondents to pay
extra for conservation. Less than 25% answered that they would not pay
anything extra for conservation of the reef. The most frequently
answered amount to pay extra for conservation is \$5 per experience.
Excluding non-payers, the average payment of the respondents is \$3.77
per experience. Including non-payers, this average amounts to \$2.81.
Divers have a slightly (i.e. 8%) higher WTP than snorkelers. When asked
about how they feel about paying extra, the large majority of the
respondents feels really good about contributing to conservation. Only
between 8 to 9% of the users would actually refrain from taking the
activity. For non-users this lost market share is less than 1%.

![](media/image11.wmf){width="4.066666666666666in"
height="2.2631944444444443in"}

Figure 6: Distribution of WTP per activity for conservation program

Typically, the WTP is dependent on the characteristics of the site where
the interview was held. Table 4 shows the average WTP for each site and
reports the level of zero-bidders in the site-specific sample. The
uniqueness of the site, the service level and the health of the reef
have a positive impact on the WTP for conservation. Therefore, Molokini
and Hanauma score high. Remoteness and the absence of facilities depress
the level of the WTP. This explains the low WTP levels in Honolua and
Waiopae.

Table 4: Site specificity of WTP estimates

  ------------------------ ----------------------- -----------------------
  Interviewed at following Average WTP\*           Share zero WTP (%)
  site:                    (US\$/trip)             

  Molokini                 4.54                    18.6%

  Hanauma                  3.81                    29.0%

  Diamond Head             3.47                    26.3%

  Honolua                  3.32                    31.3%

  Waiopae                  3.15                    50.0%

  Kahaluu                  3.01                    22.9%

  Others                   3.98                    24.3%
  ------------------------ ----------------------- -----------------------

\* The average willingness to pay of the positive bidders. Zero-bidders
are excluded.

Another way of looking at the WTP estimate is the difference between
nationalities. Table 5 shows the significant variation in the degree of
zero-bidders across nationalities. It is the Hawaiian respondent that is
most clearly opposed a conservation contribution. Most likely Hawaiian
born respondents consider it a birthright to have free access to the
ocean and its reefs. Typically, the most agreeable group is the Mainland
US citizen of which almost 80% is willing to pay extra for conservation.
Being temporary users of the reef, they consider it normal to contribute
to conservation.

Table 5: Conservation willingness breakdown by nationality

  ----------------------- ----------------------- -----------------------
  Country                 No                      Yes

  Hawaii                  45%                     55%

  Mainland US             21%                     79%

  Canada                  26%                     74%

  Australia/New Zealand   44%                     56%

  Japan                   38%                     63%

  Other Asian country     20%                     80%

  United Kingdom          23%                     77%

  Europe (excl. UK)       30%                     70%

  Elsewhere               33%                     67%
  ----------------------- ----------------------- -----------------------

Figure 7 shows the motivations of the zero-bidders for not being willing
to pay for conservation. Again, a distinction has been made between
divers, snorkelers and non-users. Only a minority feels that management
is unnecessary. The majority of users feels that it is not their
responsibility but the government's to manage the marine environment.
Another important reason for not being willing to pay is the fact that
most respondents do not want the additional financial burden. Regression
analysis shows that the level of WTP is indeed positively related with
the level of annual household income.

![](media/image12.wmf){width="4.267361111111111in"
height="2.339583333333333in"}

Figure 7: Motivation for zero WTP for conservation

# Funding mechanism

Next, several follow-up questions focusing on the funding mechanism that
respondents see as the most convenient and trustworthy way in which
collection of the conservation contributions can be dealt with were
raised. For example, one follow-up issue to the WTP question looked at
the form in which respondent would like to pay. Respondents were asked
the following question: "*Do you prefer to be charged a small
conservation amount for each dive /snorkel day you take (for example
\$2) or would you prefer a larger conservation amount to be charged on
an annual basis (for example \$10)?*" The respondent could chose between
(a) payment per dive/snorkel day; (b) an annual contribution, or could
indicate to have (c) no preference. Table 6 shows the outcome of the
preferred payment vehicle as expressed by divers, snorkelers and
non-users. For most respondents, payment per activity is the most
popular payment vehicle. Still a significant share, especially within
the subgroup of intensive users, feels that annual payments are
preferable.

Table 6: Preferred payment vehicle

  ----------------- ----------------- ----------------- -----------------
  Payment vehicle   Divers            Snorkelers        Non-users

  Per dive/snorkel  50%               58%               72%
  day                                                   

  Annual            33%               27%               10%
  contribution                                          

  No preference     14%               14%               14%

  Don\'t know       3%                1%                3%
  ----------------- ----------------- ----------------- -----------------

This relationship between level of activity and payment vehicle choice
has been visualized in Figure 8. As expected, the popularity of the "pay
per activity" is negatively correlated with the number of activities,
while the option "annual basis" is positively related. Clearly, the
respondents calculate which option is most financially beneficial to
them. Another typical observation from Figure 8 is the fact that the
breakpoint of the "pay per activity" and the "pay per year" curves
coincides with the highest number of hesitant respondents. Respondents
that snorkel about 25 times in a year in Hawaii seem to be indifferent
to the type of payment vehicle.

![](media/image13.wmf){width="5.129861111111111in" height="2.175in"}

Figure 8: Relation between activity level and payment vehicle preference

Next, the respondents were asked whether they believe the contribution
should be voluntary or mandatory. Figure 9 summarizes the responses. The
majority prefers the scheme to be mandatory. They may fear the
free-rider effect. The more activities the respondent is involved in,
the more he prefers a voluntary scheme. This also reflected in the
slightly higher proportion of divers that favor a voluntary scheme over
a mandatory scheme.

![](media/image14.wmf){width="3.8041666666666667in"
height="2.154166666666667in"}

Figure 9: Preference of scheme type

Respondents were also asked who they trust most in collecting and
allocating the funds for marine management in Hawaii. The first column
of Table 7 shows the options that respondents could chose from. Despite
the often-heard complaint that the government is not doing its job
properly, the public sector (chosen by 30% of respondents) is still the
most trusted organization to collect and allocate the funds. Snorkelers
and divers do not think very different in this respect. NGOs (19%) like
The Nature Conservancy and the Sierra Club are also trusted in playing a
role in the collection and allocation of the funds. Local communities
(12%) and the private sector (10%) are not particularly popular as
intermediaries between donors and beneficiaries. Nevertheless, from this
overview it is clear that some sort of collaboration between NGO's, the
public sector and private entrepreneurs is desirable.

Table 7: Most suitable organization to collect and allocate the funds

  ------------------------------------ ----------- ------------ -----------
  Organization                         Divers      Snorkelers   Non-users

  Public sector (State, Federal, etc.) 30%         31%          28%

  Non Governmental Organizations (TNC, 19%         18%          23%
  etc.)                                                         

  Public/private partnerships          14%         15%          6%

  Local communities                    10%         13%          9%

  Private sector (Operators, rentals,  13%         7%           13%
  etc.)                                                         

  Don't know                           14%         16%          21%
  ------------------------------------ ----------- ------------ -----------

Finally, respondents were given various options of possible actions to
be financed by the collected funds and were asked: "If we ask you to
allocate the collected funds to different actions that are aimed at
improving the marine environment in Hawaii, how would you distribute
these funds, percentage-wise, over the different actions (note that it
adds up to 100%)?". Table 8 shows the results of this inquiry. Comparing
the opinions of divers, snorkelers and non-users indicates that there is
no major difference between the different groups opinions on how the
funds should be allocated among the various management options.
Typically, water pollution is considered to be a crucial threat. People
also want the authorities to be stricter about poaching and other
harmful practices. Education and research are also popular items for
spending conservation funds. Non-use zones are particularly popular
among non-users, but less among divers and snorkelers.

Table 8: Allocation of the funds for various management options
suggested in the survey

  ----------------------------------------- --------- ------------ -----------
  Management options                        Divers    Snorkelers   Non-users

  Reducing water pollution                  17%       19%          20%

  Enforcing regulations (stop poaching and  17%       14%          14%
  feeding etc.)                                                    

  Supporting research and monitoring of the 13%       14%          10%
  coral reef                                                       

  Educating users/public about marine       14%       13%          12%
  environment                                                      

  Supporting wardens to help to protect     9%        9%           11%
  marine life                                                      

  Preventing spread of algae which kills    8%        9%           7%
  corals                                                           

  Creating conservation only areas (e.g. no 8%        8%           10%
  fishing/diving)                                                  

  Improving facilities (restroom, garbage   7%        8%           6%
  bins, etc.)                                                      

  Lobbying for more funds from State or     5%        5%           6%
  Government                                                       

  Other action                              2%        2%           4%
  ----------------------------------------- --------- ------------ -----------

###### Number range EquationNumber range FigureNumber range FiguurNumber range TabelNumber range TableQuestionnaire

![](media/image15.png){width="5.721527777777778in"
height="9.165277777777778in"}

![](media/image16.png){width="5.75625in" height="9.074305555555556in"}

[^1]: Cesar, H.S.J., P.J.H. van Beukering, W. Pintz and J. Dierking
    (2002) \"Economic valuation of the coral reefs of Hawaii\", HCRI,
    University of Hawaii, Hawaii.

[^2]: A number of respondents claimed to dive more than 250 times
    annually. Since these respondents are most likely either dive
    instructors or boasters, these individuals have been eliminated from
    the sample as they are not representative of the average marine
    user.