Flood prone risk and amenity values: a spatial hedonic analysis

This study examines the impact of flood hazard zone location on residential property values. The study utilises data from over 2,000 private residential property sales occurred during 2006 in North Shore City, New Zealand. A spatial autoregressive hedonic model is developed to provide efficient estimates of the marginal effect of flood prone risks on property values. Our results suggest that a property located within a flood hazard zone sells for 4.3% less than an equivalent property located outside the flood hazard zone. Given the median house price, estimated discount associated with flood risks is approximately NZ$22,000.Flood hazard, Spatial hedonic, Amenity value, Land Economics/Use, Q15, Q51,

Benefit Transfer: Choice Experiment Results

Benefit transfer entails using estimates of non-market values derived at one site as approximations to benefits at other sites. The method finds favour because it can be applied quickly and cheaply, however the validity of benefit transfer is frequently questioned. Published studies generally indicate that errors from the approach can be extremely large and could result in significant resource misallocations. Assessing the validity of benefit transfer is complicated by differences in the nature of study and policy sites, the changes being valued, valuation methods, time of study, availability of substitutes and complements, and demographic, social and cultural differences. A choice experiment was used to evaluate the transferability of benefit estimates for identical goods between two different populations. The study design allowed most of the confounding factors to be controlled, so provides a strong test of benefit transfer validity. Several different tests were applied to evaluate benefit transfer validity, with conflicting results. The paper investigates the merits of the alternative tests and concludes that utility functions were different for the two populations.Choice model, Choice experiment, Benefit transfer, Mitigation, Agricultural and Food Policy, Environmental Economics and Policy, Financial Economics, Land Economics/Use, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,

Efficient design for willingness to pay in choice experiments: evidence from the field

Efficient experimental designs offer the potential to reduce confidence intervals for parameters of interest in choice models, or to reduce required sample sizes. C-efficiency recognizes the salience of willingness to pay estimates rather than utility function parameters. This study reports on a choice model application that incorporated updated statistical designs based on initial responses in order to maximize C-efficiency. The revised design delivered significant improvements.experimental design, choice experiment, efficiency, Environmental Economics and Policy, Research Methods/ Statistical Methods,

A Portfolio Approach for the New Zealand Multi-Species Fisheries Management

Marine species are reproducible resource. Maintaining the stock level of marine species and the sustainability of fisheries development become critical issues in current scientific research areas due to the explosion of human population and exacerbation of natural environment. The traditional method that protects the marine species is the single species approach which set maximum sustainable yield (MSY) to prevent over-harvest. However, with the development of technology and comprehension of marine science, the single species approach has been found obsolete and incapable of dealing with problems of severe depletion of fish stocks and escalation of fisheries confliction. Studies show that when regulations are species specific and species are part of a multi-species fisheries, the catch levels of different species are correlated which result in correlation of net return from each species. This paper employ financial portfolio into fisheries, treat fish stocks as assets, model the fishers’ behaviour who face multiple targeting options to predict the optimal targeting strategies. This methodology is applied to New Zealand fisheries that are managed in Quota Management System (QMS) introduced in 1986. Species considered in this research are selected carefully based on two criteria. Efficient risk-return frontier will be generated that provides a combination of optimal strategies. Comparison between results and actual data will be presented. Potential explanations will be given so that further suggestions to fisheries can be made.Agribusiness, Environmental Economics and Policy, Production Economics, Productivity Analysis, Risk and Uncertainty,

Understanding values associated with stormwater remediation options in marine coastal ecosystems: A case study from Auckland, New Zealand

This paper describes the design and implementation of a choice experiment to understand Aucklanders’ preferences for environmental qualities associated with the effects of urban run-off on marine coastal environments. Auckland’s coastal environments are affected by a range of ecological and human factors. While much research has been undertaken in the area of ecology, little is understood of human preferences for coastal environments and their management. An unlabelled choice experiment was developed with three environmental quality attributes specified at three broad coastal categories. The environmental qualities are ecological health, water clarity, and underfoot conditions. Willingness to pay estimates for these attributes indicates that respondents show a strong preference for improved environmental quality at outer coastal beach locations over middle and upper harbour locations. Water quality leads ecological health, then underfoot conditions in importance at beach locations. An application is discussed in which a hypothetical project consisting of policy and engineering components delivers changes in water quality and underfoot conditions in the Auckland upper harbour areas. A 95% confidence estimate of the money value of that change ranges from $783 m. to$ 1,122 b. The key outcome is demonstration of the choice experiment as a statistically robust and flexible approach to making sense of Aucklanders’ complex preferences for coastal ecosystem management.Environmental Economics and Policy, Research Methods/ Statistical Methods,

Flood prone risk and amenity values: a spatial hedonic analysis

This study examines the impact of flood hazard zone location on residential property values. The study utilises data from over 2,000 private residential property sales occurred during 2006 in North Shore City, New Zealand. A spatial autoregressive hedonic model is developed to provide efficient estimates of the marginal effect of flood prone risks on property values. Our results suggest that a property located within a flood hazard zone sells for 4.3% less than an equivalent property located outside the flood hazard zone. Given the median house price, estimated discount associated with flood risks is approximately NZ$22,000

Efficiency benefits of choice model experimental design updating: a case study

Efficient experimental designs offer the potential to reduce confidence intervals for parameters of interest in choice models, or to reduce required sample sizes. C-efficiency recognises the salience of willingness to pay estimates rather than utility function parameters. This study reports on a choice model application that incorporated updated statistical designs based on initial responses in order to maximise C-efficiency. The revised design delivered significant improvements

Transfer of choice model benefits: a case study of stream mitigation

Development activities place pressures on the natural environment that are very costly to avoid or remedy. In these cases, off-site mitigation may be used to address the effects of development. A choice model is applied to two different communities within a large metropolitan area to identify the values people place on stream attributes and to identify the types and scale of mitigation necessary to offset environmental damages. Tests of benefit transfer between the two communities identify significant, unexplainable differences in values for the same environmental changes. Pooled model tests were able to identify differences that could not be detected using overlapping confidence interval tests or value-difference tests with independently estimated models

Evaluating off-site environmental mitigation using choice modelling

Evaluation of off-site mitigation entails comparison of utility changes between two sites. Choice modelling has been used to identify community willingness to trade-off attributes for two different types of stream in New Zealand. Estimated utility functions are used to derive marginal rates of substitution and stream attribute part worths which can be used to design or evaluate both on-site and off-site mitigation policy. Latent class multinomial logit models identified classes of citizens who valued stream attributes quite differently. Significant differences in values for some attributes on different stream types imply heterogeneous mitigation ratios across environmental attributes