Willingness to pay for the conservation of Yew-trees in Vietnam

UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM

INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS

VIETNAM - NETHERLANDS
PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

WILLINGNESS TO PAY FOR THE
CONSERVATION OF YEW TREES IN VIETNAM

BY

NGUYEN THANH TUAN

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

HO CHI MINH CITY, SEPTEMBER 2013


UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM

INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS

VIETNAM - NETHERLANDS
PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

WILLINGNESS TO PAY FOR THE
CONSERVATION OF YEW TREES IN VIETNAM
A thesis submitted in partial fulfilment of the requirements for the degree of
MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By

NGUYEN THANH TUAN

Academic Supervisor:
DR. TRUONG DANG THUY

HO CHI MINH CITY, SEPTEMBER 2013


Abstract
Yew tree has not only value in use of wood products but also in existence of itself which
provides valuable opportunities to other fields of research such as biology, chemistry,
pharmacology. The number of Vietnamese yew trees, however, has reduced year after year
and today there are only approximately 250 natural individuals locating in Daklak, Vietnam.
According to the IUCN and Viet Nam Red Data Book, Vietnamese yew trees are critically
endangered. The subject of this research is to measure the existence value of yew trees using
contingent valuation method (CVM) with single-bound dichotomous choice (DC). The study
finds out that the mean WTP for conservation of Yew in Vietnam is approximately VND
73,000 per household; and household heads with different socio-economic characteristics
such as age, income, occupation, and education have significantly different levels of WTP.

Acknowledgement
I would like to thank my supervisor for his instruction and comments through my research.
Especially I am deeply impressed by his enthusiasm with all students working with him. That
is one of the motivations to help me accomplishing the thesis.
I also want to say thanks to all of professors, lecturers, and other people in this program.
Without knowledge from their classes and tutorials, my thesis cannot be possible.
Eventually, I would like to express my gratitude to my family, my friends, and my company
who did support me during the time of studying and working on my thesis.
Nguyen Thanh Tuan


Table of Contents
Chapter 1: Introduction ........................................................................................................................... 1
Chapter 2: Literature Review .................................................................................................................. 6
2.1 A brief history of CVM .................................................................................................................. 8
2.2 Economic theory of CVM ............................................................................................................ 10
2.3 Basic elements of CVM ............................................................................................................... 12
2.4 Empirical applications ................................................................................................................ 16
2.5 Empirical studies In Vietnam ...................................................................................................... 17
Chapter 3: Methodology and Data ........................................................................................................ 19
3.1 WTP estimation ........................................................................................................................... 19
3.2 Survey design .............................................................................................................................. 21
Chapter 4: Results and Discussions ...................................................................................................... 26
Chapter 5: Conclusion........................................................................................................................... 53


List of tables
Table 1: Survey mode ........................................................................................................................... 13
Table 2: Statements ............................................................................................................................... 33

Table 3: Response of WTP questions – at the first time ....................................................................... 36
Table 4: Response of WTP questions – at the second time .................................................................. 36
Table 5: Calculated mean WTP – non-parametric estimate .................................................................. 43
Table 6: Definitions of variables included in the regression................................................................. 44
Table 7: Results of simple regression with constant and BID .............................................................. 45
Table 8: Regression results ................................................................................................................... 47
Table 9: Summary of parametric estimated WTPs for the case of dependent variable - Y22 .............. 51
Table 10: summary of estimated WTPs for the case of dependent variable – Y22 .............................. 52

List of figures
Figure 1: Distribution of respondents’ age ........................................................................................... 26
Figure 2: Cross - tabulation of marital status and group of age ............................................................ 27
Figure 3: Occupation by gender ............................................................................................................ 28
Figure 4: Levels of education ............................................................................................................... 29
Figure 5: Gender in levels of education ................................................................................................ 30
Figure 6: Distribution of reported household income ........................................................................... 30
Figure 7: Country facing problems ....................................................................................................... 31
Figure 8: Environmental issues ............................................................................................................. 32
Figure 9: Ranks of proposal species ..................................................................................................... 33
Figure 10: Attitude toward endangered species .................................................................................... 34
Figure 11: Survivor function for the second time WTP question ......................................................... 37
Figure 12: Reasons of why respondents dislike the proposed payment vehicle – electricity surcharge
.............................................................................................................................................................. 40
Figure 13: Discussion time to answer questionnaire............................................................................. 41
Figure 14: Survivor function after certainty adjustment for the first time WTP elicitation .................. 42
Figure 15: Survivor function after certainty adjustment for the second time WTP elicitation ............. 43


Willingness to Pay for the Conservation of Yew-trees in Vietnam

Chapter 1: Introduction
Yew (also known as water-conifer) is - the scientific names Glyptostrobus pensilis listed in the IUCN and Vietnam red data Books as endangered situation (CR)1, and
considered as the living fossil of gymnosperm industry. The Decree 32/2006/NDCP of the Vietnamese government has stated that this kind of tree is classified into
group IA: strictly banned from exploitation and use for commercial purposes.
According to the reports of Forest Protection Department (FPD) of DakLak
province, this species of yew trees in the world now exists only in Ea Ral (Ea H'Leo
district), Trap K'sor (Krong Nang district) and a few dozen has been scattered in
Krong Buk district, DakLak province (Bao Huy, 2010). This ancient species facing
extinction needs urgent solutions for propagation, conservation and development.
Yew wood is un-attackable to termite, warping, and fragrant. Therefore, it is
normally used to produce furniture, household goods, musical instruments, etc. The
breathing roots which are smooth, porous, and light have been used to produce cork,
hat. Moreover, its branches, leaves, and ripe cones are used as arthritic medications,
pain reducing, and skinny tightening. It also has fine grain, many patterns, and
especially the longer soak in the water or mud, the shinier it is. Additionally, yew
shape is beautiful, then, one could grow yews for ornamentation, or for protection
the coastal land from erosion.
Population and habitats of yew tree in Daklak, Vietnam:
The number of yew currently is 255 individuals2 which only locate in Daklak
province (Bao Huy, 2010). There are 219 individuals of yew in Ea Ral, Ea H’leo

1

CR – according to classification of IUCN and Vietnam red data book, CR means critically endangered. The
order of classification is that Extinct (EX), Extinct in the wild (EW), Critically endangered (CR), Endangered
(EN), Vulnerable (VU), Lower risk (LR), Data deficient (DD), and Not evaluated (NE). Find more details in
Vietnam Red Data Book, Part II. Plants (Dang et al., 2007).
2
According to the managers of the conserving yew tree project in Daklak for period 2011 – 2015, this
number was updated as 162 individuals in Aug, 2012.

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
district; 31 individuals in Trap K’sor, Krong Nang district; and 5 old trees in Cu Ne,
Krong Buk district.
The existence of yew has not only meaning to itself, but also to the whole area of
primary forest with biodiversity in which they locate. According to Bao Huy (2010),
with the biological characteristic that they have just lived in the seasonal wetlands,
yews only exist in some specific areas in Vietnam or in the world. With the
thousand-year existence, yews and biological system in the area of conservation
have been a very valuable place for researches. If there is no action or intervention
from the government from now, the risk of permanent loss of the thousand-year
primitive forest is inevitable by the growing and strengthening effects of timber
extraction and yew-wood trading activities. That would be a large detriment for
studies have not been done as well as the discovery of biodiversity here.
Figure 1C (in Appendix C) illustrates the current distribution of yew individuals in
Trap Ksor (Krong Nang). Each individual has been numbered as shown in the
figure. The distribution is dispersed widely in a large area. In Trap Ksor (Krong
Nang, Daklak), on March 24, 1987 the local government of Daklak province
established a Decision about scheming and forbidding Trap Ksor forest area, and
identified that this zone had become a protection area of yew trees’ gene. The total
area is about 98.6 hectares and under the control of 2 rangers and 3 contractual
officers. The surrounding area is agricultural land, separated from the core zone by
simple barbed wire. The current problems with this preservation area are that there
are not sufficient human resources for protection purpose, low budget (about 16
million VND per year), and long distance from here to the managerial office (10
kilometers). This explains why there are still a lot of timber extraction activities
here. Moreover, the agricultural activities of farmers in surrounding area have

reduced the water resource that supports for growing and fire protecting of yew
(Bao Huy, 2010).

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
Figure 2C (in Appendix C) describes the current distribution of yew population in
Ea Ral (Ea H’leo). In comparison with population in Trap Ksor, the individuals’
location is quite close. This would be a good condition in planning this area for
conservation program. In Ea Ral (Ea Hleo), the Yew management station has been
established and under control of Ea Hleo forest protection unit (FPU) in 1994. But
according to the manager, there has been not an official decision for this
establishment. The number of rangers here is just five persons. Similarly to Trap
Ksor, this lack of management gives more opportunities to illegal loggers. The
statistic number of FPU shows that during 2009 there have been 22 violating cases
caught and prosecuted (Bao Huy, 2010).
The number of yew trees in Cu Ne (Krong Buk) is just five individuals. In addition,
these trees are very old and without top of trees. All of them locate far away from
the residential area, then, the officers face many considerably difficulties in
protecting activities (Bao Huy, 2010). According to scientists (Bao Huy, 2010;
Tran, 2012 in Thai, 2012), the number of current yew trees is going to be reduced in
the near future due to the increasing illegal logging and trading.
Current efforts of conserving yew tree in Daklak province: In 2011, the
government of Daklak province has approved the project of conserving habitat and
yew trees in DakLak for period 2011 - 2015. The project was designed with funding
from the state budget and partly from the contributions of the people and the
international donor organizations. However, this project had not been implemented
until August 2012, and at that time, only Ea Ral area was taken over by the project
managers. The remaining areas in Krong Buk and Krong Nang have just been

handed over in March 2013. This slow procedure is due to lack of personnel and
funding3. According to the project design, the Ea Ral area needs at least 7 people on
patrolling duty. However, three of them are general staff, and handle concurrently
3

Mr. Phuoc – current director of Yew conservation program – answered reporter of Da Nang Polices
Newspaper on May 20, 2013. Online version is available at />
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Willingness to Pay for the Conservation of Yew-trees in Vietnam
jobs as official and patrolling staff in reality. Infrastructure and equipment are not
fully equipped. This has made limited in ability to protect yew populations in Ea
Ral, especially patrolling activities in protected areas. With flooded and marshy
properties, the movement of patrol is very difficult. In heavy rain conditions, this
problem is even more difficult. Another concerning problem is the area around the
belt has not been cleared; there are many individuals of yew being on the boundary
and adjacent areas of agricultural crops of the local residents. Therefore, it is very
easy for illegal loggers to intrude the reserves. At the same time, farming operations,
irrigation of the surrounding population directly affect water resources and
ecological conditions of the yew populations.
As mentioned above the number of yew individuals in Ea Ral area was counted as
219 at the time of conducting the project research by a group of researchers from the
Tay Nguyen University in 2010. However, until the project management was
officially formed and accepted the transfer of management, this number is only 140
yew trees. The main reason is due to destruction of illegal loggers. If the loss of
control is continued, there will be more individuals of yew ruined annually. The
reduced number of yew also means that the resource for research and breeding will
decrease. Reducing the number of individuals and increasing of competing species
which have been dominated habitats, plus the impacts of unfavorable natural

elements from the surrounding agricultural activities will directly affect the habitat
of yew environment. This increases the risk of loss of yew in the future.
Research problems
In summary, the lack of resources for research and management has constrained the
conservation of yew trees. Moreover, the low ability and quantity of rangers make
this task limited. One important thing should be considered is that during 35 years
the scientists who were tracking these areas did not recognize any regeneration of
young yew tree by seed, just only a few plants regenerated by buds. Most individual
yews in these areas are old, and have a very poor growth and sparse foliage.

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
Annually plants still flower and fruit set, but the results are flat-seeds (Bao Huy,
2010).
Research questions
The above problems raise a question of whether resources should be devoted to
conserve yew trees. A full cost-benefit analysis is required to answer this question.
This study contributes by measuring the economic benefits of the conservation of
yew trees. This research analyzes attitudes and preferences on the issue of
Vietnamese yew trees through a public survey. This paper’s aims are to (i) assess
the public awareness of yew trees; (ii) to answer the question “Are people willing to
pay for the conservation of Vietnamese Yew?” If yes, how much are they willing to
pay?; and (iii) to determine the impacts of socio-economic characteristics on the
respondents’ WTP.
In answering the above questions, this study is able to partially measure the
economic value of conserving yew tree in Daklak, which will be helpful for policy
makers to decide on the conservation of yew trees, especially in the funding for a
project if it would be conducted.

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
Chapter 2: Literature Review
Most of goods and services from natural resources and environment are considered
public goods, such as the forest, breathable atmosphere, water, recreational sides,
and wildlife. Unlike marketed goods which have market prices, these public goods
have neither market nor price. Public goods and services are not sold or bought in
markets; and markets do not regulate any activities of supplying or changing them.
A system of decentralized market is not believable to conduce to the optimization of
using natural resources (Freeman, 2003, chapter 1, p.6). Meanwhile, the measures of
welfare from these providing or changing of environmental goods and services in
term of money are very crucial for efficient use of natural resources. Up to now,
there are many methods that have been developed to monetize the welfare generated
by these goods and services.
One of the primary elements to reach the efficient uses of natural resources is to
assure that the valuation of environmental assets is appropriate. Asheim (2000) in
Amirnejad et al., (2005) states that the concept of environmental valuation brings on
questions about the ability to account for the environmental value in terms of
finance. According to Howard and Farber (2002), efforts to assess the monetary
value of ecosystem services act as various roles in management of the links between
natural systems and human. At the macro level, there is the contribution of
ecosystem valuation into the construction of indicators of human welfare and
sustainability. At the micro level, the studies of valuation are based on both the
structure and function, and the varied and complex roles of ecosystem in supporting
human welfare to reveal information.
The total economic value of a natural resource consists of use and non-use values.
Use value includes actual value (for instance, relaxing in a national recreational

area) and option value (value that is not planned to use at the present but preserved
the existence to use in the future as an option). Non-use value relates to the WTP to
maintain existence of some goods even though they have no actual or option uses.

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
Non-use value includes altruistic value, existence value, and bequest value.
Altruistic value is welfare generated from the fact that a good or service is available
to other people in the society. Bequest value is the welfare from knowing that goods
and services are available to the future generation. The existence value reflects the
value that an individual is willing to pay to maintain existence of goods, given that
individual knowing there is no value of actual use or planned use for anyone
(Bateman et al., 2002).This study aims to measure the existence value of yew tree in
Vietnam by estimating the WTP of yew tree conservation.
Several techniques have been developed to elicit the attitudes and preferences for,
and thus monetize the total economic value of public goods such as environmental
services, forest, and recreation. These techniques are usually classified into revealed
preference method and stated preference method. However, the most popular
technique to measure existence value is the stated preference (SP). Researchers
could apply this method to ask people about their WTP for public goods, or their
willingness to accept (WTA) a decrease in public goods, or to suffer the bad
services, based on a hypothetical setting. Among stated preference methods,
contingent valuation method (CVM) and choice modeling (CM) are popular to
analysts. In CVM, respondents are asked to give their WTP or WTA for a change in
supplying or quality improving of natural and environmental resources. In CM,
respondents will face a series of choice sets. In each set, they have to choose the
preferred alternative among several alternative goods, or rank the alternatives
(Mogas, Riera & Bennett, 2006). Bateman et al. (2002) suggests that if it is required

the WTP for the total values of environmental good or service, then the contingent
valuation method (CVM) should be chosen, instead of choice modeling (CM),
because the latter is more suitable for measuring the WTP for one or some attributes
of that good.
The following parts of this section will provide a brief history of CVM, economic
theory of CVM, and basic elements of CVM.

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
2.1 A brief history of CVM
Among the stated preference techniques, this paper applies the contingent valuation
method. CVM has been accepted by both academics and policy makers for the
purpose of valuation of resources, environmental goods and services (Han, 2011).
CVM has become the method to be used most widely for environmental valuation
with stated preference information, with the value estimates obtained are contingent
on the information which has been early provided to interviewees in the survey.
CVM was firstly introduced by Bowen (1943) and Ciriacy-Wantrup (1947), but
Davis in 1963, was the first person who used CVM in an empirical study; in which
he conducted a survey within hunters’ sample and estimated the goose hunting’s
benefits. The two important components in the total economic values were gained
after that in the environmental economics literature: option and existence values.
These values are not able to be estimated by the revealed preference methods such
as travel cost method (Smith, 1993); only the CVM or CM could capture the
estimation of these values (Desvousges et al., 1993). In this line of thought,
Hanemann (1994) states that this method is one of the methods that provide the
standardization and flexibility to measure the economic values. CV method is based
on questionnaire to estimate non-market goods’ economic values. In the survey,
people will be asked to give out monetary bids for hypothetical goods with the

provided information of products. However researchers in doing CVM need to
consider its possible shortcomings. Problems of CVM pointed out and criticized by
Diamond and Hausman (Hanemann, 1994) are validity of surveys, surveys’
vulnerability to response effects, creating the values of survey process, respondents’
prior experience or training for valuing the environment, and unable verification of
survey responses. Hanemann (1994) argues that it is theoretically possible to
establish experiments of CV scenario which avert problems in terms of economic
models commonly occurred with observed data.

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
There are some ways assuring the reliability of survey that are avoiding convenience
sampling and self-administered surveys; confronting subjects with situation that is
specific and realistic, instead of abstraction; applying closed-ended question; adding
an interrogating section at the bottom of questionnaire to check whether respondents
understand and accept the important parts of the scenario; and applying appropriate
statistical procedures in data analyzing.
Survey responses could be significantly influenced by some small changes in the
order or words used in the survey instrument (Schuman and Presser, 1981 cited in
Hanemann, 1994). But in some cases, the effects such as order, shifting meaning,
and framing effects can be controlled. For example, one choses the sequence to
create a cautious result or randomizes items’ order across interviews to deal with the
sequence effects. Or by using stringent tests with techniques of cognition,
researchers can understand what the meaning of instrument to people is, and what
the responses mean.
CV has been asserted that its respondents place an unreal value on item, and the
interview process generates the values that it is looking for to measure. Hanemann
(1994) stated that it is theoretically possible by debriefing section to identify that

whether one had inattention or no focus and stated “hasty or ill-considered
responses”, and researchers can discard them if desire.
By eliciting the suggestion of NOAA Panel, Hanemann (1994) confirmed that prior
experience or training is not relevant if the purpose of CV survey is to draw out
preferences of people.
To defend the idea that survey responses cannot be verified, Hanemann (1994)
listed a lot of studies and concluded that “replication, comparison with estimates
from other sources, and comparison with actual behavior where this is possible” are
the ways to make validation of CV results.

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
2.2 Economic theory of CVM
In term of welfare economics, there should be a public intervention when the total
benefits of this intervention are greater than its costs. However, the problem here is
that how can we measure this overall benefits? The starting point is the estimation
of individual benefit which then will be used to aggregate to the relevant population
to come up with the social benefits. The net change in income associated with the
change of public goods provided in terms of quality or quantity is the accurate
measure in the estimating procedure of an individual’s benefits. The information
observed from the CV survey will be employed to discover the willingness to pay
(WTP) distribution for a change in hypothesized provision of environmental goods.
A combination of the utility function in the economic theory and the error term in
econometric theory is the framework of CV method. In a discrete-choice CV survey,
respondents are asked to vote for or reject a program that provides an environmental
good or services, associated with a given monetary cost (T). Respondents are
assumed to have a utility function, U, which is a function of income (A), and a set of
conditioning factors (S): U (A; S). This means respondents know which factors are

important to their utility levels. But the true utility function may be unknown to the
researchers; therefore, they have to build up a simplified model of real one. Of
course, it also captures important factors that are in establishing their welfare
changes. The analyst’s model is given by u(a; s; ɛ). The lower cases a, s are used to
reflect the fact that including factors by analyst will not be exactly the same as
considered respondent’s ones. To take into account the differences, the researchers’
model contains a random element ɛ, which analyst cannot observe in the real utility
function of respondents. We can write the utility function as:
Uij(qi; Aj; Sj) = uij(qi; aj; sj) + ɛij

(1)

Where i=1 (q1) is the condition that the environmental good or service, or an
improvement in its quality, is supplied; and i=0 (q0) is the status quo. Each
individual will decide whether to contribute for the continued existence of the

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
environmental good (yew trees in this study) with a payment of specified monetary
amount, T. People will accept the suggested amount if
uj(q1, aj-T௝ ; sj) + ɛ1j ≥ uj(q0, aj; sj) + ɛ0j

(2)

and reject otherwise (Hanemann, 1984; Lee and Han, 2002).
However, the unobservable component ɛj is captured in this function. Which means
that analyst cannot observe it and is unable to predict the value taken by ɛ, but can
only estimate the probability of it taking any specific value. Therefore, the

probability of a “yes” response could be estimated by the followings:
Pr(yesj) = Pr(uj(q1, aj-T௝ ; sj) + ɛ1j ≥ uj(q0, aj; sj) + ɛ0j)

(3)

Now, if we assume the deterministic part is linear in income and covariates, then it
results the linear utility function. Hence the deterministic part can be re-written as:
‫ݑ‬௜௝ (ܽ௝ )= ∑௠
௞ୀଵ ߙ௜௞ ‫ݏ‬௝௞ + ߚ௜ (ܽ௝ )

(4)

+ when i = 1 (q1 condition)
‫ݑ‬ଵ௝ (ܽ௝ − ܶ௝ )= ∑௠
௞ୀଵ ߙଵ௞ ‫ݏ‬௝௞ + ߚଵ (ܽ௝ − ܶ௝ )

(5)

+ when i = 0 (q0 condition)
‫ݑ‬଴௝ (ܽ௝ )= ∑௠
௞ୀଵ ߙ଴௞ ‫ݏ‬௝௞ + ߚ଴ (ܽ௝ )

(6)

Then the change in deterministic utility:
‫ݑ‬ଵ௝ − ‫ݑ‬଴௝ = ∑௠
௞ୀଵ(ߙଵ௞ − ߙ଴௞ )‫ݏ‬௝௞ + ߚଵ (ܽ௝ − ܶ௝ ) − ߚ଴ (ܽ௝ ) (7)

Since the marginal utility of income is constant:
‫ݑ‬ଵ௝ − ‫ݑ‬଴௝ = ∑௠

௞ୀଵ ߙ௞ ‫ݏ‬௝௞ - ߚܶ௝

The probability for utility function is then:

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(8)


Willingness to Pay for the Conservation of Yew-trees in Vietnam
Pr(yesj) = Pr (ɛ௝ < ∑௠
௞ୀଵ ߙ௞ ‫ݏ‬௝௞ − ߚܶ௝ )

(9)

where ɛ௝ ≡ ɛଵ − ɛ଴ . The model can be estimated by assuming a distribution for ɛ௝ .
When a logistic distribution is assumed, the model can be estimated by a logit
model.
2.3 Basic elements of CVM
As described earlier, CV method is based on the information observed from a
survey. It measures value of a scenario, compared to status quo. Therefore, it is
basic but very important to the survey design including sampling, survey mode,
scenario, elicitation format, and questionnaire structure. Beside this, survey
administration is also a crucial part in CVM.
Once identifying the target population achieved, there will be a need to obtain a
relevant sample represented for this population. A sample is defined as the
representative group for target population and a subject that survey will be
implemented. By sampling, instead of entire population, time and expenses are
significantly saved. Designing sample includes both the types and the number of
interviewees. The principle of sampling is that the target subset must be

representative for the entire population and sufficiently large to produce unbiased
and precise estimations. Otherwise, there could be errors in sampling such as
sampling error or sample selection bias. To minimize the sources of these errors, an
appropriate approach of sampling must be taken. There are two main techniques of
designing sample: non-probabilistic design and probabilistic design. The former
reflects that the probability of being chosen of interviewees is not fixed and decided
by the researchers, meanwhile in the latter, individuals have a fixed and non-zero
probability of being chosen (Bateman, et al., 2002). Due to the importance of this,
sampling is a crucial part of CV study.
Another part of survey structure in CVM is choosing the survey mode. There are
generally three main survey modes including mail surveys, telephone interviews,

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
and face-to-face interviews which could be taken place in respondents’ homes or
outside the home of respondents (Bateman, et al., 2002). The first has advantage in
cost among these modes. Due to the travel to respondents’ home, face-to-face mode
has the highest expense and time consuming. The mediate one, telephone
interviews, is more expensive than mail surveys, but with the normally short calls its
cost is still lower than face-to-face interviews. However, the response rates are
inverse to the cost-based ranking, which means that the face-to-face survey mode
can touch the response rate at 70 per cent or even higher; while the rates of
telephone and mail survey modes are normally at 60-75 per cent, and 25-50 per
cent, respectively.
In term of bias, the mail surveys can make self-selection bias when the large ratio of
returned mails implies that they are interested in the survey’s topic. Meanwhile the
attendance of interviewers can also generate both negative and positive effects. For
example, respondents could feel uncomfortable to answer the sensitive questions

related to income or political attitudes with the appearance of interviewers. Or
interviewees could react with the answers that make them nice to interviewers.
The telephone survey mode can quickly get the results with calls but they are also
easily refused. There are some characteristics of these modes summarized in the
following table.
Table 1: Survey mode
Mode
Mail surveys

Advantages
Relatively inexpensive
Lack of interviewer bias
Easier to answer sensitive
questions
Can be completed at
respondent’s own pace

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Disadvantages
Low response rates 2550%
Self-selection bias
Time-consuming
Little control over who
fills the questionnaire


Willingness to Pay for the Conservation of Yew-trees in Vietnam
Fixed question order
No clarification or probing

possible
Restricts the use of visual
aids
Respondent can alter
earlier responses
Telephone interviews

Complex questionnaire
structures are possible
Cheaper than personal
interviews
Permits probing and
clarification
Relatively quick to
administer
Easy to monitor

No use of visual aids
Restricts use of lengthy
scales
Respondent may get tired
Respondent may not
answer sensitive questions
Non-telephone or nonlisted respondents not
sampled

60-75% response rates

Face-to-face interviews

Highly flexible

Relatively expensive

Complex questions and
questionnaire structures
are possible

Interviewer bias

Permits probing and
clarification
Larger quantity of data
can be collected
Potential for extensive use
of visual and

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Intercept surveys: samples
normally not
representative and selfselection bias
Intercept surveys;
questionnaires have to be
short


Willingness to Pay for the Conservation of Yew-trees in Vietnam
demonstration aids
High response rates 70% +

Greatest sample control
Source: Bateman et al., (2002, p.106)
Each of them has both advantages and disadvantages that researchers should
consider to select in order to come up with a qualitative data collection.
In constructing questionnaire, the scenario and elicitation format are considerably
important. As any survey, CV survey also depends on the contexts, which means
that with different prospects of the provided scenario and questions, the estimated
values are contingent. Bateman et al. (2002) suggests that three main describing
elements should be included in a valuation scenario: the policy (or program, or
project) change of interest; the constructed market; and the payment method. More
details will be introduced in the section of survey design.
After being provided with information about the goods and the scenario,
respondents will be asked questions to decide the value of goods if they face the
chances to reach it under some certain conditions. In other words, that is the purpose
of measuring monetary values. In principle, elicitation method could be performed
in various ways: the open-ended format, the bidding game, the payment card, the
single-bounded dichotomous choice, and double-bounded dichotomous choice
(Bateman, et al., 2002). The open-ended format is the most straightforward to apply
for discovering values. Respondents decide the values by themselves, thus the
maximum WTP can be directly elicited from responses. However, this method
could lead to some problems, for instance, large number of non-responses, protest
and zero answers, and outliers. Moreover, this format is able to bring on unsound
responses as argument of Mitchell and Carson (1989) in Bateman et al. (2002). In
the bidding game format, respondents will be repetitively asked whether they are
willing to pay a certain amount. Raising or lowering the amounts is based on

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Willingness to Pay for the Conservation of Yew-trees in Vietnam

whether respondents have accepted the previous offers or not. This iterative process
will stop when a convergence of estimated WTP is achieved. Payment cards present
to individuals a list of values (the values could be point estimate or a range of
estimates) to make choice. In a dichotomous or discrete choice CV format,
respondents are asked to make decision of “yes” or “no” for voting a hypothesized
change of goods provision.
Therefore, a good design of scenario and an appropriate payment mechanism are
important parts that will crucially contribute to the reliability and accuracy of
responses.
Because the CV method is based on survey, then the questionnaire structure or the
ordering of questions is also an important stage in designing questionnaire. Bateman
et al. (2002) argues that the reasons of this importance are the effect of earlier
questions on the answers of the later stage, and the encouragement to answer the
rest questions.
Beside the main and crucial parts above of survey designing, survey administration
that consists of tasks from survey designing, pretest, to conducting survey needs
crucially paying attention from the researchers, especially in the stages of pre-test
and conducting main survey where the tasks are conducted by a group of people.
This allows the research to be on the right way as designed.
2.4 Empirical applications
As mentioned above, this paper explores the attitudes and preferences towards the
Vietnamese yew tree, and measures the WTP for the conservation of yew trees
using CVM.
To the best of my knowledge, there is no study valuing yew tree during last decade
by using CVM. There are several studies applying CVM to measure the welfare
changes of conservation of forest or avoiding deforestation. Chopra (1993) stated
that existence value of tropical forests is about 91% of total use and option values.

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
By using contingent valuation approach, Echeverria et al. (1995) reported that the
estimated WTP of existence value of cloud forest in Costa Rica is U.S.
$121.05/respondent. Kramer and Mercer (1997) applied the contingent valuation
method to estimate the WTP valuation of U.S. citizen on the world tropical
rainforests. On average, respondents presented a one-time of WTP around $21-31
per household to protect an additional 5% of tropical rainforests. In recent years,
there were studies about forest of Amirnejad et al. (2005) and Andrea et al. (2010).
By using CVM, Amirnejad and partners found that the estimated WTP for forests’
existence value was $2.51 per household/ month in Iran. In the paper of Andrea et
al., the mean WTP value of Swiss citizen for conservation of tropical forests was
approximately CHF (Swiss franc) 110 per year.
2.5 Empirical studies In Vietnam
In recent years, there are more and more researches applied stated preference
techniques in Vietnam, especially in health care and environmental field. Dang &
Chennat (2010) applied the CVM to estimate the loss of value water resources
causing by pesticide pollution. They employed payment cards as elicitation method,
in-person interview, and payment fees as payment vehicle4. The results showed that
the WTP for improving water quality is VND 98,520/year/household. Pham, Le,
Petrie, Adams & Doran (2008) conducted a research about the households’ WTP for
a motorcycle helmet in Hanoi, Vietnam with changes in price of a helmet. The
authors used CV survey with both discrete-choice and open-ended questions to elicit
the WTP. Their finding was that the estimated WTP in average for a helmet is VND
163,794. By using both CVM and choice modelling (CM) methods, Tran & Navrud
(2007) estimated the social benefits of restoration and preservation programmes for
the My Son (a world cultural heritage site) in Vietnam. In the application of CVM,
they employed dichotomous choice questions with four bid levels for both
4

This is not correct in term of definition of payment vehicle (PV). PV is the channel through which the
money is collected, for example: income tax, property tax, electricity bill.

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
subsamples of residents and foreigners. They found out that the two methods
produce almost the same estimate. Instead of using WTP, Navrud, Tran, & Bui
(2012) used willingness to contribute (WTC) labour to a flood prevention program
in a CV study. The face-to-face survey was conducted in Quang Nam province,
Vietnam with sample size of 706 households. They suggested that this CV approach
of WTC labor is applicable to the estimation of total welfare loss of natural
disasters. Truong (2005) studied about the WTP for conservation of Vietnamese
rhinoceros by employing CVM. In the drop-off survey, the author employed the
single - bounded questions in eliciting the WTP, and electricity bill as payment
vehicle. The estimated WTP is approximately VND 40,000 per household.
In health care segment, CV is also applied to find out the demand for some types of
vaccines. Do, Whittington, Le, Utomo, Nguyen, Poulos, Dang, Kim, Nyamete, &
Acosta (2006) aimed to discover the demand function for typhoid fever vaccines by
using CVM with a sample size of 1065 households in Hue, Vietnam. The authors
gave evidence that estimated mean WTP for a single vaccine varies from US$2.30
to US$4.80. In another healthy study, Kim, Do, Poulos, Le, Cook, Nguyen,
Nyamete, Deen, Clemens, Vu, Dang, & Whittington (2008) conducted a survey on
800 randomly selected respondents for purchasing an oral cholera vaccine in Hue,
Vietnam. Their finding was that the estimated median WTP for 50% effective for 3
years vaccine is approximately US$5.

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Willingness to Pay for the Conservation of Yew-trees in Vietnam
Chapter 3: Methodology and Data
This chapter introduces the methodology that this paper applied, especially the
method to estimate the WTP including non-parametric and parametric estimation,
and the data collected from the CV survey.
3.1 WTP estimation
This section describes the procedure to estimate the non-parametric and parametric
WTP that will be employed to estimate the WTP based on single-bounded CV
questions.
Non-parametric estimation of WTP
Then mean of WTP is calculated as:
Mean WTP =∑௝ୀ଴ ܵመሺTjሻൣTj − ܶ௝ିଵ ൧ (10)
௃

In which:
• ܵመ(Tj): the estimation of survivor function at the price level Tj
ܵመ(Tj) =

௡ೕ
ேೕ

(11)

• Nj: the sub-sample facing bid level Tj (j = 0 to J, where J is the
highest level of bid, and T0 is equal zero)
• nj: the number of households replying “yes” with WTP that is equal or
higher than Tj within sub-sample Nj
Parametric estimation of WTP
For the linear random utility model defined in equations (8) and (9), the willingness

to pay (WTP) can be identified as:
௠
∑௠
௞ୀଵ ߙଵ௞ ‫ݏ‬௝௞ + ߚଵ (ܽ௝ − ܶ௝ ) + ߝଵ௝ = ∑௞ୀଵ ߙ଴௞ ‫ݏ‬௝௞ + ߚ଴ (ܽ௝ ) + ߝ଴௝

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(12)