The economic value of gray whales to local communities: a case study of the whale watching industry in two communities in Baja, Mexico

Worldwide, whale watching is a growing business for coastal communities but over-exploitation of the environment, particularly in developing countries, is still a common problem for which tourism does not provide a simple solution. The situation demands economic conservation measures that provide incentives for local people to act as stewards of the environment. This study investigates the economic value of gray whales (Eschrichtius robustus) in two communities in Baja, Mexico. I develop a cost benefit framework for estimating the amount of economic rent that gray whales generate for local communities and offer cost effective strategies to maximize this rent, accounting for distributional effects of income to stakeholders. Results show that the rent currently captured by local communities is significant but not maximized. Moreover, analysing the current permit structure, which serves to limit whale watching capacity, reveals that the call for more permits and/or larger boats is unjustified.