This article describes the framework adopted for the socio-economic assessment of protected areas intended to safeguard biodiversity. This framework, which can be described as a three-tiered approach to conservation, is applied to the process of assessment and establishment of a protected area (PA) in Vanuatu. The potential benefits that the landowners of the PA could derive from logging activities, and the subsistence values derived from the PA are considered. It appears that if the PA was to be established without the payment of any compensation, the landowners would face substantial net costs. During the research process, it was suggested that the Government of Vanuatu could take up a lease on the land to compensate the landowners for the loss of potential logging royalties. When the benefits accruing to the landowners from a lease agreement are compared with the foregone logging royalties, it is found that the net present value of a seventy-five year lease agreement is approximately equivalent to the net present value of logging royalties.