Non-market valuation of New Zealand biodiversity

A native jewelled gecko on a tōtara in Canterbury. Image - Larry Burrows.

Biodiversity provides significant benefits to New Zealand. Consumers in our export markets value biodiversity as part of the ‘clean and green’ brand. Likewise, tourists value the ‘natural’ experience that our native biodiversity provides. To the wider New Zealand public, recreational opportunities and aesthetic benefits are placed alongside the role that native biodiversity has in forming our cultural identity.

The economic value of such biodiversity is difficult to estimate. Some direct benefits, such as those captured by eco-tourist businesses, can provide estimates of value through market prices. However, many of the benefits that flow from biodiversity are not so readily captured. There are no markets that allow the general public to express their preferences for biodiversity outcomes. Measurement of these benefits therefore requires non-market economic valuation. Peter Tait and Caroline Saunders from the Agribusiness and Economics Research Unit (AERU) at Lincoln University have been working with Graham Nugent and others at Landcare Research to extend current knowledge of the value of biodiversity to New Zealanders by using choice modelling, a highly quantitative non-market valuation technique.

Choice modelling is used to value goods and services that don’t have observable market prices. This approach is appropriate for valuing biodiversity itself or, as is the focus here, for valuing efforts made to protect biodiversity, i.e. because we don’t have prices to indicate how much New Zealanders are willing to pay to save native forests and birds from introduced pests such as possums and rats. Choice modelling has been widely used internationally to value biodiversity but less frequently in New Zealand. In this study, for the first time, we have assessed the value that New Zealanders place on the ancillary benefits to conservation, and to farmers, from the intensive control of possums over about 8 million hectares as part of the national programme managed for bovine tuberculosis. In two separate applications, choice modelling has been used to value, firstly, the wider benefits of TB-possum control to farmers, and secondly, the conservation benefits to the public of TB-possum control in native forest on public land.

Choice modelling is a survey-based method that presents respondents with a series of choice tasks. For each task, respondents choose between at least two options. In this study, the options represent alternative TBfree New Zealand management possibilities. Each option is described by a number of attributes that show possible outcomes for biodiversity or benefits to farmers. In the public survey, biodiversity benefits were described in terms of the degree of protection of canopy trees in native forest, native birds, large native invertebrates, and within-forest plants. For the farmer survey, potential benefits from TB-possum control were characterised in terms of reduction in damage to pasture, crops, trees and gardens on-farm; reduction in risk of infection, and reduction in threats to native plants, birds and animals both on- and off-farm in Vector Risk Areas (VRAs; the ~40% of New Zealand designated as potentially containing TB-infected wildlife). In each choice task, the levels of each attribute are systematically varied and combined to create a range of management outcomes that are then formed into the choice sets that respondents face. The underlying economic theory postulates that respondents will chose the options that they think are best for them.

Statistical information derived from these choice tasks is modelled to reveal the relative importance of each attribute. A monetary attribute is deliberately included in each choice set, either as the cost of action required to deliver that particular scenario, or in terms of how much extra (if any) the respondent would pay for the specified outcome. From these monetary attributes, the monetary value of other attributes can be calculated, and expressed as a ‘willingness to pay’. Essentially people are asked how much more they are willing to pay to have (for example) more native forest with unbrowsed canopy?

An example of a choice set used in the farmer survey is presented below (Fig.). The ‘current management situation’ is the same for all of the five sets presented, and is based on data specific to the VRA or Vector Free Area in which the farm is located. Likewise, the levels of each attribute are defined relative to this situation to construct management alternatives that are relevant to farmers in each area.

To date, only the farmer survey has been completed. Six thousand farmers were surveyed via online email in August 2013, and the 1021 responses received appeared to provide a good representation of farm type, size and location. Modelling results demonstrate that farmers derive significant value from the TBfree New Zealand programme over and above the levies they already pay for TB management. Notably, they valued the improved protection of native plants and animals that stem from TB-possum control on- and off-farm in VRAs at c. $1.5–3.0 million more than current annual levies. Unsurprisingly, farmers valued reductions in infection risk most, at c. $14–28 million more than current annual levies. The national public survey has now been completed and is currently being analysed.

Peter Tait & Caroline Saunders (AERU)
Contact: Peter.Tait@lincoln.ac.nz

Graham Nugent

Fig. An example of a choice set used in the farmer survey.