The Impact of Environmental Classifications on Tourist Arrivals and Willingness to Pay for Conservation: A Case Study of the Galapagos Islands

Abstract

This paper analyzes the impact of environmental classifications on tourists’ demand for a site, using a case study of the Galapagos Islands of Ecuador. The fragile ecosystems in the Galapagos Islands are facing a major threat from tourism, which is not appropriately compensated for by the fees collected from visitors (Galapagos Conservancy, 2019; Benitez, 2001). This study examines the effect of the designations of marine reserve, biosphere reserve and UNESCO “Heritage Site In Danger” on tourist arrivals and willingness to pay conservation fees. Using several time series and panel regressions on historical tourism data, this study does not find consistent evidence that the three classifications have statistically significant impacts on tourist arrivals. Although the estimated impacts on visitation are inconclusive, results of a semi-contingent valuation survey suggest that tourists are willing to pay higher fees if the Galapagos Islands are on UNESCO’s danger list, with high statistical significance.