Economic evaluation of vessel traffic service (VTS): A contingent valuation study

Abstract

Maritime safety has become a major concern in Korea. As an alternative to improve maritime safety, the Korean government is considering enhancing infrastructure associated with maritime safety, in the form of a vessel traffic service (VTS) facility for high density waterways. This study estimates the public value of a VTS facility construction project using the contingent valuation (CV) method. A CV survey using person-to-person interviews was administered to 400 randomly selected households to elicit their willingness to pay (WTP) for the project. Overall, the respondents accepted the contingent market, and on average, Korean households were willing to pay a significant amount toward the project. The mean WTP for the project is estimated to be approximately KRW 4149.5 (USD 3.7) per year per household, which is statistically significant. The estimate of the fiduciary benefit to Korean households is approximately KRW 11.07 billion (USD 9.91 million) per year for five years. The results are expected to be useful for policy-makers in determining the economic feasibility of a VTS. (C) 2015 Elsevier Ltd. All rights reserved.