Title:
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An economic evaluation of coastal wetlands in Korea.
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AN ECONOMIC EVALUATION OF COASTAL \VETLANDS IN KOREA
BY IIEE-DONG PYO
The thesis undertakes a detailed economic analysis of the coastal wetlands of Korea
and applies the double-bounded dichotomous choice model and spike model of the
contingent valuation method to systematically evaluate their conservation value.
Further analysis including an extension of the original spike model using only singlcbounded
data (Kristrom, I ()(n) to modelling double-bounded data for more statistical
efficiency to deal with /.ero observations was made. As a result, the estimated
willingness-to-pay for conserving the coastal wetlands under the study is S3.9 per
month per household, and the annual aggregated conservation value for the entire
nation is about 175 million dollars in a conservative scenario. The study then applies
a benefit-cost analysis (8C';\) to coastal wetlands around the Youngsan River, an area
of dispute between development and preservation in Korea, with a synthesised
estimation of the ecosystcm functional values for coastal wetlands and rice paddies
developed by reclamation. The results show wetland development would be
preferred to its preservation in an optimistic seenano and conventional BC A,
yielding NPV of $49million at the discount rate of 8(Yo, IRR of 8.28%, and B/C ratio
of 1.03. By contrast, a normal scenario rejects economic feasibility for the
development project at the discount rate of 8°/c), yielding a NPV of -$271 million, IRR
of 6.5% and B/C ratio of 0.84. With an extended Be A including conservation values
for I-year, 5-year and 1 O-year payment, the estimates of IRR are 7.42%, 5.42%, and
4.06%, respectively under the optimistic scenario. Meanwhile, under the nOnllal
Scenario the estimates of IRR arc 5.85%, 4.25%, and 3.09%, respectively. In addition,
this study includes a discussion of a comprehensiYe review of conjoint analysis and
the integrated environmental management of coastal wetlands developing
sustainability indicators for coastal lisheries using bio-economic models in Appendix.
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