Managing wetlands: an ecological economic analysis of the Hong Kong Wetland Park

This paper addresses the question of whether the Hong Kong government made a rational economic decision when it decided to set aside land to develop a Wetland Park,or whether it should have used the land for alternative commercial developments.Different analytical methods are used to estimate the economic value of the environmental benefits of the Wetland Park:the Value Transfer Method is used to estimate the economic value of the ecological services provided by the Park,the Direct Market Price analysis for the economic" value of the goods purchased in the Wetland Park,the Hedonic Housing Price Analysis jbr the value of the Park to those residing in its proximity,the Travel Cost and Contingent Valuation Method for the value of the Park to the visitors,and the Contingent Valuation for the Passive (Nonuse) Values of the Park.These benefits are compared to the opportunity cost of the land and the cost of running the Wetland Park.The article concludes that if a rate of 5% or less is used to discount future costs and benefits,we would find that the government's decision to set aside land for a Wetland Park was economically sound,while using a discount rate of 6% or more shows that it was not.