Entry Fees as an Instrument for Environmental Management: Study of a Wildlife Park in Kerala,India

Abstract

This paper presents a theoretical analysis of the appropriate economic objective for managing tourism in a wildlife park in a developing country so as to conserve the environmental resource and maximize revenue generation on a sustainable basis. It identifies and elaborates the ‘minimization of uncovered cost’ as a reasonable objective for this purpose and develops a simple but theoretically grounded tool to decide whether or not the number of tourists should be increased (by changing the user fees) to achieve that objective. Empirically, the study assesses the potential revenue from tourism and the current position in this regard and uses this information in judging the desirability of increasing fees. On the basis of a ‘willingness to pay’ survey of tourists, it seemed that tourist numbers would be reduced by half if higher entry fees were charged – and the higher fee would not have much effect on total revenue. However, the current institutional structure of the wildlife park, despite well-defined state ownership and strict enforcement of forest regulations, is not conducive to the implementation of this policy of revenue maximization compatible with environmental conservation.