Abstract:
Coastal lagoons are vital and productive ecosystems globally. However, recent anthropogenic pressures have
substantially degraded these environments. The sustainability of lagoon resources critically depends on
stakeholder engagement. Employing a choice experiment, this study quantifies the divergent preferences of key
stakeholder groups–fishermen, tourists, and flood-affected residents–for preservation versus degradation
scenarios in Sri Lanka's Batticaloa Lagoon. The survey targeted stakeholders using stratified sampling and
reached 405 participants in the Batticaloa Lagoon Watershed. The analysis further assessed local perceptions of
degradation and stakeholders' compensation expectations (WTA). The Choice Experiment and multinomial logit
model identified significant conflicts between conservation valuations and compensation expectations. This novel
empirical application directly compares within-subject Willingness-to-Pay and WTA measures, revealing
significant valuation asymmetries that complicate Payment for Ecosystem Services (PES) design. These results
provide empirical evidence of pronounced preference diversity among lagoon users in the study area. This study
argues that management decisions must account for heterogeneous stakeholder valuations, rather than universal
conservation ideals. The findings demonstrate the inevitability of one-size-fits-all PES policy failure and propose
a differentiated PES framework with tailored incentives for fishermen, tourists, and flood-affected residents.
