Using Choice Experiments to value River and Estuary Health in Tasmania with Individual Preference Heterogeneity

Marit Kragt and Jeffrey Bennett

Environmental Economics Research Hub Research Reports from Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University

Abstract: Choice experiments (CE – otherwise known as Choice Modelling) have become widespread as an approach to environmental valuation in Australia. There are, however, limited applications that have focused on the estimation of estuary values. Furthermore, none of the existing valuation studies have addressed catchment management changes in Tasmania. The CE study described in this report aims to elicit community preferences for natural resource management options in the George catchment in north-eastern Tasmania. The survey was administered in different sub-sample locations in Tasmania to assess the trade-offs respondents are willing to make between environmental attributes and costs. Catchment health attributes were the length of native riverside vegetation and the number of rare animal and plant species in the George catchment. The area of healthy seagrass beds in the Georges Bay was used as a measure of estuary condition. Results from mixed logit models show that respondents are, on average, willing to pay between $3.47 and $5.11 for a km increase in native riverside vegetation and between $7.10 and $12.42 per species for the protection of rare native plants and animals, ceteris paribus. The results are ambiguous about respondents’ preferences for estuary seagrass area. This study further shows significant differences between logit models when accounting for unobserved preference heterogeneity and repeated choices made by the same individual. Key words: Choice experiments, Preference heterogeneity, Mixed Logit models, River health, Estuary health, Tasmania, Environmental valuation

Date: 2009-02, Revised 2009-09
New Economics Papers: this item is included in nep-dcm and nep-env
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Related works:
Working Paper: Using choice experiments to value river and estuary health in Tasmania with individual preference heterogeneity (2009)
Working Paper: Using Choice Experiments to value River and Estuary Health in Tasmania with Individual Preference Heterogeneity (2009)
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