Economic Valuation of Pantai Baru Bantul Regency using Travel

Cost Method

Astuti Purnamawati

and Retno Wulandari

STIE YKPN School of Business, Yogyakarta, Indonesia

Keywords: Economic Valuation, Travel Cost Method, Surveys, Regression.

Abstract: This research is the application of the valuation of natural resources by using Travel Cost Method. This

study aims to determine the economic value of Pantai Baru with travel cost method and to investigate the

factors that affect the visits of Pantai Baru. Researchers collected data by interviews and questionnaires.

Demand Function Pantai Baru Kabupaten Bantul was found based on the data that has been collected and

processed. Based on the demand function, the researchers estimate the willingness to pay and calculate the

consumer surplus. Pantai Baru was selected as the study object because Pantai Baru is a relatively new

beach compared to other beaches in Yogyakarta, and it has the potential to be developed.

1 INTRODUCTION

Tourism sector is one of government’s superior

sectors in increasing the government income from

either domestic tourists or foreign trourists.

Indonesia has many tourism destinations which have

a potential to be developed, for example Bali Island,

Toba Lake, Raja Ampat, and many more. One of the

tourism destinations in Indonesia is Yogyakarta

which has various mesmerizing tourism objects

including natural tourism, cultural trourism, and

culinary tourism. Yogya has relatively new tourism

object which has a potential to be developed named

Pantai Baru.

Pantai Baru, one of tourism destinations in

Yogyakarta, is located in Ngentak Area, Poncosari

Village of the Sub-district Srandakan, Bantul

Regency, and it is close to other beaches such as

Pandansimo, Kuwaru, and Goa Cemara beach.

Although it is still newly recognized, it has adequate

facilities, for example food stalls, public toilet,

parking lot, and praying house (mushola).

Pantai Baru is continuously developed as a

natural tourist resort and also as technology based

educational tourism with windmill as the electricity

power source. The development is also focused on

agrotourism, specifically on fishery and stock

husbandry with 10 ponds and 150 sheds

respectively. There is also a fisherman group which

has approximately 96 members. By observing the

recent potential, Pantai Baru is still in progress as a

tourism destination which could improve the

economy of the society and raise the income of

Bantul Regency. The improvement of Pantai Baru

could be in the form of reorganized spots and

improvement of the facilities to increase the interest

of people to visit Pantai Baru. Based on the

discussion above, we decided to do a research

entitled ‘Economic valuation of Pantai Baru Bantul

Regency using travel cost method: an estimation of

tourism object demand’.

This study was aimed to determine the economic

value of Pantai Baru based on the cost analysis of

visitor trip during their visit to Pantai Baru and to

investigate the factors that affect visits to Pantai

Baru.

2 MATERIAL AND RESEARCH

METHOD

2.1 Economic Value

Value is a price given by an individual for a thing in

specific time and place. Economic value is defined

as the measurement of the maximum number of

goods and services that an individual is willing to

pay to get other goods and services. Formally, this

concept is called willingness to pay towards goods

and sevices from the natural resources and

environment (Nurhayati et al.,).

320

Purnamawati, A. and Wulandari, R.

Economic Valuation of Pantai Baru Bantul Regency using Travel Cost Method.

DOI: 10.5220/0008492503200324

In Proceedings of the 7th International Conference on Entrepreneurship and Business Management (ICEBM Untar 2018), pages 320-324

ISBN: 978-989-758-363-6

Suparmoko (2006) stated that there are two types

of value of a region, utilization value and non-

utilization value. Utilization value could be in the

form of direct usage value, indirect usage value, and

alternative value. Direct usage value is the value or

benefit felt directly by an individual. Indirect usage

value is the value or benefit gained indirectly from a

particular region. Alternative value is an expected

value of a natural resource in the future.

2.2 Demand for Goods and Services

The demand for good or service is influenced by

several factors. According to Samuelson (2010), the

factors that influence demand are the price of goods,

income, tastes, and prices of other related goods /

services.

a. Prices negatively affect the demand for goods.

b. Revenue has a positive effect on demand.

c. Taste has a positive effect on demand.

d. Price of other related items.

According to the theory above, the hypothesis of this

research is:

H1: Income has a positive correlation towards the

number of visits to Pantai Baru Bantul regency

in the Special District of Yogyakarta.

2.3 Travel Cost Method

Garrod (2001) describes the concept of Travel Cost

Method as an approach to estimating economic

values related to ecosystems or locations for

recreation. The basic concept of the Travel Cost

Method is that the travel time and costs incurred by

individuals to visit a tourism site reflect the "price"

to access that location. Thus, the willingness of

people to pay to visit tourism sites can be estimated

based on the number of trips (visits) carried out with

various travel costs, so it can be said that the amount

of goods / services requested is determined by the

estimated willingness to pay.

There are three approaches in the Travel Cost

Method:

a. Simple zone travel cost approach

b. Individual travel cost approach

c. Random utility approach

In this study, the researcher chose the individual

travel cost approach to examine economic valuation

of Pantai Baru Bantul Regency.

According to Nurhayati (2012), economic

valuation or economic assessment is an effort to

measure the quantitative value of goods and services

produced by specific natural resources. The

economic valuation in this research was used to

determine the economic value of Pantai Baru.

There were a number of variables used in this

research to measure the economic value and this

economic value is to estimate the tourism demand

using Travel Cost approach. The variables included

the number of visits to Pantai Baru, the cost spent to

go to Pantai Baru, the distance of the visitors’ house

to Pantai Baru, and visitors’ income.

The previous research with similar topic was

used by the researcher as the reference in this study.

One reference from the research by Nurhayati

Samsudin about economic valuation of Bunaken

National Park shows that the travel cost variable

negatively affects the number of visits while income

and age do not influence the visit quantity. It proved

that travel cost has a reversed correlation with the

visit quantity which means that the higher the travel

cost, the lower the number of visits.

A similar research conducted by Yosefhie Maria

about economic valuation of ecotourism of National

Park of Sentarum Lake Kapuas Regency Hulu of

West Kalimantan Province used travel cost zone

approach and revealed that the biggest percentage of

the visitors were from Kapuas Hulu. In other words,

travel cost has negative correlation towards number

of visits.

According to these research results above, the

hypothesis is:

H2: Travel cost has a negative correlation towards

the number of visits to Pantai Baru Bantul

Regency the Special District of Yogyakarta.

Another research related to economic valuation was

done specifically about economic valuation of

tourism using travel cost method at Nglambor beach

by Aditya Agung Pratama (2016). The result of the

study denoted three statistically significant variables,

travel cost, distance, and access variables. It shows

that the number of visits to Nglambor beach is

affected by travel cost, distance, and access

variables.

According to this research result above, the

hypotheses is:

H3: Distance has negative correlation towards the

number of visits to Pantai Baru Bantul regency

the Special Disctric of Jogjakarta.

The researcher chose the convenience sampling

method in collecting the data for simplicity and

flexibility. There were 165 visitors from various

background who were willing to be the respondents,

and only 155 questionnaires were processed due to

the incompleteness of the data given by 10

Economic Valuation of Pantai Baru Bantul Regency using Travel Cost Method

321

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respondents. Sampling was conducted by doing

survey multiple times to the research location.

3 RESEARCH RESULT

Statistic test results were divided into partial and

simultaneous test. Partial test is to test the impact of

each independent variable towards dependent

variable while simultaneous test is to test the impact

of all variables altogether towards the dependent

variable. The researcher elaborated the partial test

for each independent variable continued by

simultaneous testing. Table 1 displays the result of

double regression with the variables of income,

distance, and travel cost as independent variable and

number of visits as dependent variable.

Table 1.

Coefficients

Model

Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

Std.

Error

Beta

(Constant) -.079 1.037 -.076 .940

Ln_Income .009 .076 .010 .114 .909

Ln_Distance -.169 .056 -.281

3.007

.003

Ln_TC -.097 .038 .250 2.565 .011

a. Dependent Variable: Ln_NV

Analyzed using the SPSS program, the partial

test on the income variable denoted the t count 0.114

and sig 0.909, which means that income do not have

a correlation towards number of visits. Income do

not influence the number of visits to Pantai baru

since the visitors lived in a relatively close region.

The result of partial test on distance showed the t

count -3,007 and sig 0.003. Using α= 5% the

statistical test result showed that distance have a

significantly negative impact towards the number of

visits. It can be said that the further the distance to

Pantai Baru location, the lower the frequency of

visits.

Partial test result on the travel cost showed the t

count 2.565 and sig 0.011 which indicated that the

travel cost significantly has negative impact towards

the number of visits. This result supports the

previous research that travel cost negatively affects

the number of visits.

The researcher also used SPSS to test the

impact of all independent variables towards

dependent variables (simultaneous test) and the

result is displayed in Tabel 2.

Table 2.

NOV

Model

Sum of

Squares

Mean

Square

F Sig.

Regression 2.634 3 .878 3.574 .016

Residual 37.093 151 .246

Total 39.727 154

a. Dependent Variable: Ln_NV

b. Predictors: (Constant), Ln_TC, Ln_Income,

Ln_Distance

F count of the simultaneous test result is clearly

displayed on the table 3.574 with significance level

0.016, and it reveals that altogether the independent

variable (income, distance, and travel cost)

simultaneously has an impact on the number of

visits to Pantai Baru. The value of R and R square

are displayed in Table 3 below:

Table 3.

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .800

.640 .631 .28927

a. Predictors: (Constant), Ln_TC, Ln_income, Ln_Distance

The R square 0.640 indicates that the variation of

the number of visits to Pantai Baru described by the

variables of income, distance, and travel cost is 64%.

The rest or 36% is described by other variables not

included in this model. It means that there are still

some variables that could be used in this model for

the future research.

From the result of regression, the regression

equation model is as follows:

Ln NV = -0.079 + 0.009 Ln_Income - 0.169

Ln_Distance - 0.97 Ln_TC

where:

NV is the number of visits to Pantai baru

Income is the income of the visitors

Distance is the distance of the visitors’ house to

Pantai Baru

TC is the travel cost

4 DISCUSSION

From the three independent variables, there are two

variables which have an effect on the number of

visits, distance and travel cost. The other variable,

ICEBM Untar 2018 - International Conference on Entrepreneurship and Business Management (ICEBM) Untar

322

income, do not affect the number of visits.

Therefore, it could be concluded: (1) Income did not

affect the number of visits, The number of visits is

not influenced by the income since the distance of

the visitors’ house was relatively close to the

location of Pantai Baru. With the proximity of the

location, the cost was not high, (2) travel cost has a

negative effect on the number of visits. This result

supports the the previous research that travel cost

affects negatively the number of visits, and (3)

Distance negatively affects the number of visists.

Distance has a negative impact, which means the

further the distance with Pantai Baru location, the

lower the number of visits.

The researcher used the regression equation from

the research result to determine economic value of

Pantai Baru Bantul Regency. The regression

equation is:

Ln NV = -079 + 0.009 Ln_Income - 0.169

Ln_Distance - 0.97 Ln_TC

The regression equation above specifically shows

the demand function of Pantai Baru in the Bantul

regency with NV as demand and independent

variables (income, distance, and travel cost) as the

factors influencing the demand.

To count the consumer surplus, the researcher

used regression with the number of visits as the

dependent variable and travel cost as independent

variable while other variables besides travel cost

were assumed to be fixed. The regression is

displayed in the table below:

Table 4.

Coefficients

Model

Unstandardized

Coefficients

Standardized

Coefficients

T Sig.

Std.

Erro

Beta

(Constant) 3.899 .214 18.227 .000

Ln_TC -.281 .019 -.767

14.722

.000

a. Dependent Variable: Ln_NV

The regression equation gained is Ln_NV = 3.899 -

0.281 Ln_TC.

The demand function was used to yield the

consumer surplus as economic value. Integral was

used to count the consumer surplus per individual

each year with the top limit using the highest travel

cost and the bottom limit as the lowest travel cost.

The highest cost was Rp1.010.000 and the lowest

cost was Rp 2000 (cost of an entrance ticket).

The sum of the demand function integral is the

consumer surplus per individual each year with the

amount of Rp 504.706. To get the economic value,

consumer surplus per individual was multiplied by

the number of the vistors in 2016 which is 7.300

visitors. yielding the economic value of Pantai Baru

in 2016 as Rp3.684.353.800.

5 CONCLUSION

The results of the study are: (1) The distance of the

visitors’ house with the location of Pantai Baru has a

negative correlation towards the number of visits

(tourism object demand), (2) The travel cost

negatively impacts the number of visits: where the

the cost is high, the frequency of visits is low, and

(3) Income has no correlation with the number of

visits, and it is proven in this research where visitors

from any cluster of income could visit the tourism

object.

5.1 Limitation

This study uses the Travel Cost Method. In the

travel cost method, there are three approaches that

can be used, namely, the approach of a simple travel

cost zone, an individual travel cost approach, and a

random utility approach. In this study, the researcher

uses the second approach, namely the individual

travel cost approach. The result from the three

hypotheses formulated proved only two hypotheses.

In addition, the coefficient of determination is 0.64,

which means that the dependent variable variation of

64% is explained by independent variables. There

are still other variables that can be tested for this

study.

5.2 Suggestion

Based on the limitations of this study, for further

research, researchers who are interested in

researching this topic can use other approaches. In

addition, the next research can add new variables

that are predicted to influence the demand for

tourism.

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