Estimating the Economic Benefits from Outdoor Recreation on a Scenic Route: The Ponale Road

Abstract

The Ponale Road features a spectacular panorama, consisting of one of the most beautiful mountain-top views of Lake Garda (northern Italy). In the past, it attracted large numbers of tourists from all over Europe, especially mountain bikers, due to its unique characteristics. However, it was closed at the end of the 1990s due to geological instability. In this study, we estimated the social benefit of the reopening of this scenic route using the contingent valuation method, focusing exclusively on its recreational use value. During 2002, we conducted face-to-face interviews with 675 randomly drawn potential users of the road and got a response rate of 96%. Our target population was all potential road users, both tourists and residents, because at the time the research was carried out the road was closed to any type of use. A hypothetical scenario proposed the reopening of the road conditional on users paying an access fee. We elicited willingness to pay (WTP) using a payment-card format. The Cameron and Huppert parametric interval regression method was used to analyze data. Benefits compared with annual cost of maintenance show the attractiveness of the project. The feasibility of a pricing policy was also evaluated.