Read the following article and answer the questions that follow.

Putting a value on wildlife A number of case studies and investigations have involved contingent valuations. In a widely reported study, Bandara and Tisdell (2004) used a sample of 300 residents in the Sri Lankan capital of Colombo to establish their willingness to pay for the survival of the elephant population in Sri Lanka. Background information was given to all respondents as regards the current threats facing the elephants, and details were also provided of a proposed conservation strategy.

The following question was then asked: ‘For the next five years would you be willing to pay z rupees per month to establish the proposed Trust Fund . . . . to conserve the elephants in the country?’ Various values were then listed to represent z rupees.

The results suggested that 93% of respondents were willing to make some payment, with 89% willing to pay (WTP) 25 rupees or more, 50% willing to pay 100 rupees or more, and 9% willing to pay 500 rupees or more. The average WTP was 110 rupees per month

(around $2), some 1% of the average respondent’s monthly income. These results suggested that the urban population of Sri Lanka as a whole were willing to pay $90 million per year for elephant conservation, much more than the $11 million estimated annual damage caused by elephants to crops and property in rural areas of Sri Lanka.

Source: adapted from Bandara and Tisdell (2004), ‘The net benefit of saving the Asian elephant: a policy and contingent valuation study; Ecological Economics, vol. 48, pp. 93–107.

(a) What issue is this case study addressing as regards putting a value on an environmental asset such as wildlife?

(b) What solutions are being suggested?