Funding conservation through use and potentials for price discrimination among scuba divers at Sipadan, Malaysia

The protected coral reefs off the coast of Malaysia receive numerous tourists, while also being as fishing grounds. These joint environmental pressures raise the need for additional costly conservation measures. It is natural to consider the potential for expanding the 'user pays' principle, already implemented in the form of various user fees. This study explores the potential for price discrimination among scuba divers at Sipadan in Malaysia. The study applies a choice experiment to estimate scuba divers willingness to pay higher user fees for avoiding decreases of or getting improvements in environmental and recreational aspects of the diving experience. We investigate how sensitivity to fee size and hence willingness to pay vary with suitable selected characteristics of divers. We find potentials for a third degree price discrimination strategy exploiting higher willingness to pay among foreign divers (45%), male divers (16%) and people who has visited Sipadan several times (25%). Thus, revised pricing structures could significantly increase funds for the preservation of Sipadan.