Using Choice Experiments to Value Catchment and Estuary Health in Tasmania with Individual Preference Heterogeneity

21 Pages Posted: 11 Apr 2011

See all articles by Marit E. Kragt

Marit E. Kragt

University of Western Australia - School of Agricultural and Resource Economics

J. W. Bennett

affiliation not provided to SSRN

Abstract

Choice experiments (CE) have become widespread as an approach to environmental valuation in both Australia and overseas. However, there are few valuation studies that have addressed natural resource management (NRM) changes in Tasmania. Furthermore, few studies have focussed on the estimation of estuary values. The CE study described in this paper aims to analyse community preferences for NRM options in the George catchment, Tasmania. Catchment health attributes were: the length of native riverside vegetation; the number of rare native animal and plant species in the George catchment; and area of healthy seagrass beds in the Georges Bay, which was used as a measure of estuary condition. Mixed logit models with interactions between socio-economic variables and the choice attributes were estimated to account for systematic and random taste heterogeneity across respondents. Results reveal considerable variation in preferences towards the attributes and show that value estimates are significantly impacted by the way in which we account for preference heterogeneity. Preference heterogeneity thus needs to be considered when estimating community willingness-to-pay for environmental changes. This study further shows little responsiveness to the presented changes in estuary seagrass area.

Keywords: catchment management, choice experiments, environmental value, interaction effects, mixed logit model, non-market valuation, preference heterogeneity, Tasmania

Suggested Citation

Kragt, Marit E. and Bennett, J. W., Using Choice Experiments to Value Catchment and Estuary Health in Tasmania with Individual Preference Heterogeneity. Australian Journal of Agricultural and Resource Economics, Vol. 55, No. 2, pp. 159-179, 2011, Available at SSRN: https://ssrn.com/abstract=1806107 or http://dx.doi.org/10.1111/j.1467-8489.2011.00533.x

Marit E. Kragt (Contact Author)

University of Western Australia - School of Agricultural and Resource Economics ( email )

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Crawley, WA Western Australia 6009
Australia

HOME PAGE: http://www.are.uwa.edu.au/contact/staff

J. W. Bennett

affiliation not provided to SSRN

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