Optimal pricing for national park entrance fees in Zambia

Type Thesis or Dissertation - Masters of Economic
Title Optimal pricing for national park entrance fees in Zambia
Publication (Day/Month/Year) 2013
URL https://open.uct.ac.za/bitstream/item/5713/thesis_com_2013_chikumbi_l.pdf?sequence=1
Protected area management represents Zambia with opportunities for attracting foreign exchange and improving economic growth and development. The challenge however, is for stakeholders to exploit avenues that can maximise its revenue for efficient management. This study seek to investigate whether the optimal entrance fees for Zambia’s national parks with particular focus on the four most popular parks namely South Luangwa, Mosi-oa-tunya, Lower Zambia, and Kafue are optimal. This study collects data from tourists which it then uses to estimate the parks visitation demand functions, the price and income elasticities. Using price elasticity estimates, optimal conservation fees are estimated. The study employs the contingent behaviour approach to elicit park visitors’ behaviour in response to changes in entrance fees. This is done for both actual and hypothetical scenarios. The study reveals that demand elasticities estimated at the four parks are fairly different, demonstrating the heterogeneity characterizing both tourist behavior and park attraction and amenities. The cross price elasticity that was estimated showed that substitutability in visitation demand existed in all the four parks. This entails that increasing price at one park can effectively influence tourists to move from that park to another. The study findings also indicate that tourists are willing to pay (WTP) higher prices ranging between $50 and $61.85 for the four parks. The study established that the current prices set-up at the four parks is not optimal. ZAWA could experiment with a price increase of upto US$213.88 for South Luangwa, US$44.71 for Mosi-oa-tunya, US$51.69 for Lower Zambezi and $58.75 for Kafue national park.

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