Description of valuation study conducted – DEMAND

Increasing demand for outdoor recreation requires an increasing need for comprehensive landscape management, capable of maintaining or improving the touristic infrastructure and the quality of landscapes attractive for outdoor recreation.

Following the economic crisis and the accompanying financial cuts and decentralization, public financing options have become scarce in the Netherlands. A transition from public financing to ‘market-based’ financing is therefore strongly desired. One way to replace public expenditures with general ‘market-based’ income is by means of a potential location advantage tax. This concept concerns facilities (e.g. cultural facilities, gastronomic facilities, accommodations) that enjoy an economic advantage due to their location, but which do not pay for the nature conservation of these locations (e.g. forests, castle grounds). Facility owners will be given the option to charge the location advantage tax on their products and services, thus transferring the costs on the recreationists. Revenues of the location advantage tax are expected to increase the provision level of outdoor recreation as a Public Good.

To calculate the total potential revenue from this new method (thereby not accounting for VAT), we conducted a total of 200 interviews (22th October to 13th November 2016) with outdoor recreationists in the Dutch case-study area. In the surveys, we asked recreationists about their use of facilities (e.g. expenditures) during their recreational stay. Moreover, we presented a hypothetical situation where a location advantage tax, used for landscape management and maintenance has been introduced. We then asked the recreationists for their WTP regarding this tax at different facilities and for different tax levels (0%, 2.5%, 5% and 7.5%).

PG valuation results – DEMAND

In order to explore the potential determinants (using variables such as age, gender and income) of recreationists’ WTP for nature management and maintenance, we used a quantitative approach. We ran one simple linear regression per variable and the three attributes representing the willingness to pay for nature management and maintenance, necessary for improving the supply of Ecosystem Services relevant for outdoor recreation in the Dutch case study area. These attributes are WTP for entrance fees of cultural facilities, gastronomy products, and accommodation. We also explored potential interactions between the variables and the WTP.

When conducting simple linear regressions per variable, the results show only one significant relationship between gender and WTP. We found that men generally show a higher WTP for cultural facilities than women. When including age in the regression model, we found a significant relationship for both variables with the WTP for cultural facilities, showing that a) men generally show a higher WTP for cultural facilities than women and that b) the WTP increases with decreasing age. In this model, gender is a stronger predictor of WTP than age. The relationship between age and WTP was not found when using age as the only predictor.

Description of valuation study conducted – SUPPLY

In the demand-side valuation we expressed the demand for outdoor recreation as the recreationists’ WTP for landscape management and maintenance through a location advantage tax. The revenue from the location advantage tax could be used for landscape management and maintenance, aimed to improve the touristic infrastructure and attractiveness of landscapes for outdoor recreationists. The costs of collection/administration of this potential location advantage tax would be the responsibility of local governments and thus be subject to public financing.  In order to analyze the costs of collection/administration of the potential location advantage tax, we have conducted an extensive desk study (e.g. policy documents, annual reports, governmental research documents) to gain more insights into this topic and combined the results with the findings from a survey with outdoor recreationists in the Dutch case-study area (n=200; 22th October to 13th November 2016). We have divided different relevant landscape elements – identified in the survey – in a variety of categories:  water, nature, cultural heritage, agricultural landscapes, and recreation areas. Through the desk study, we could then calculate the costs for nature management and maintenance for each landscape element, based on a variety of sources.

PG valuation results – SUPPLY

The costs are highly heterogeneous as their determinants differ significantly for each landscape element. Taking the heterogeneity of the costs for the provision of Public Goods into account is of great importance for the efficiency of Governance Mechanisms. It provides better insight into the allocation of resources and these insights can in turn be used to reduce inefficiencies such as dead-weights and over-compensation for the improvement of certain landscape elements. The total expenses for water management, for instance, are compiled from components that are logically very different from those that determine the total costs for cultural heritage or agricultural landscapes.

Table 1 summarizes the current costs of landscape management and maintenance for a variety of landscape elements. The data were found during the desk study.

Table 1: Current costs of nature management for a selection of landscape elements.

Landscape elements Current costs of landscape management and maintenance1
Rivers/water Taxes for water system maintenance 325 euro per household per year
Maintenance costs 4.85 euro per hectare per year
Cultural heritage Maintenance estate building 32.5000 euro per year (gross/total)
Maintenance estate surroundings (garden/natural areas) 300.000 euro per year (gross/total)
Nature (wildlife, forest and marshes) Forests 116.38 euro – 1,860.51 euro per hectare per year
Marshes 793.83 euro per hectare per year
Agricultural landscape (agricultural land, farm animals, grassland/ meadow, orchids, tree lines/hedgerows) Landscape elements 1,458.51 euro per hectare per year

 

Agricultural land 455.96 – 783.83 euro per hectare per year

1Maintenance of recreation areas (which can consist of different landscape elements) varies between 50 (low intensity use) to 3.435 euro per hectare per year.