Exploring Dual Discount Rates for Ecosystem Services: Evidence from a Marine Protected Area Network

Peer Reviewed
1 February 2019

Felipe Vasquez-Lavín, Roberto D. Ponce Oliva, José Ignacio Hernández, Stefan Gelcich, Moisés Carrasco, Miguel Quiroga

This paper presents a joint estimation of willingness to pay for conservation activities aimed to preserve the flow of ecosystem services provided by a marine protected area network and respondents´ personal discount rate using a contingent valuation survey. It contributes to the literature on identifying people´s discount rates moving beyond the use of the exponential schemes, to include a hyperbolic discount rate through variations in the timing and duration of the provision of public goods. We present evidence that different discounting processes are associated with different programs, which depend on the type of ecosystem services under protection, including provisioning (seed banks) and cultural ( biodiversity-based tourism) services. The results show the importance of using decreasing discounting (hyperbolic discounting) for projects aimed to preserve cultural services. Exponential discounting, in conservation program assessment aimed to preserve the flow of cultural services, undervalues the net benefits associated with tourism by 23%, affecting the project’s cost-benefit analysis. Results are key to inform the design of marine conservation programs by clarifying the relationship among conservation project goals, the discounting used, and the relevant lifetime project assessment.  

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Sustainable Development Goals
Publication reference
Vasquez-Lavín, F., Ponce Oliva, R. D., Hernández, J. I., Gelcich, S., Carrasco, M., & Quiroga, M. (2019). Exploring dual discount rates for ecosystem services: Evidence from a marine protected area network. Resource and Energy Economics, 55, 63–80. doi:10.1016/j.reseneeco.2018.11.004
Publication | 9 June 2019