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Non-Use Values of Victorian Public Land Non-Use Values of Victorian Public Land

Non-Use Values of Victorian Public Land: Case Studies of River Red Gum and East Gippsland Forests

Public land has many values. Its resources have market values. But we also value its biodiversity, landscapes and recreation. VEAC, DSE and the Government need to gauge the $ values of such non-market features, to assist in evaluating competing alternative uses. When faced with hard decisions which hinge on such values, it is not helpful or true to say environmental features have zero value, or infinite value, or that they cannot be valued.

'Non-use' values are the existence, bequest, option and altruistic benefits we obtain from the existence of (for example) threatened species that we do not 'use'. Decision-makers may intuitively give a positive value to non-use features, but that is highly subjective and variable - a systematic study is preferable. If decision making does not adequately account for values not traded in markets, poorly-based decisions could be made, environmental goods under-supplied to the community, and public expenditure allocated inefficiently.

VEAC's 2007 economic study Non-use Values of Victorian Public Land: Case Studies of River Red Gum and East Gippsland Forests, determines how much the community actually values such features. Professor Jeff Bennett and Dr Rob Dumsday led the study for URS Australia Pty Ltd, using Choice Modelling questionnaires to evaluate these forests' environmental attributes.

The methodology and Final Report were peer reviewed by Professor John Rolfe of Central Queensland University. The project was overseen by a Steering Group of senior VEAC and DSE staff.

Non-market' values

Non-market features include 'use' and 'non-use' values. Non-market 'use' values are either direct (e.g. ecotourism and bushwalking) or indirect (e.g. some ecosystem services). Non-use' values include the following benefits we obtain. For example, from biodiversity:

  • existence value - knowing that particular animal and plant species exist in the wild
  • bequest value - knowing biodiversity will continue for future generations to appreciate
  • option value - keeping future options open for animal and plant use
  • altruistic value - knowing biodiversity is available for others to enjoy

Such values, with different emphases, underpin why people value non-use features. VEAC's recent economic study focuses largely on quantifying such non-use values.

Choice Modelling (CM) is a 'stated preference' technique which estimates the economic value of features that cannot be priced by markets. Households responding to the questionnaire state their willingness to pay, in this case, for protection of specified environmental attributes. CM avoids several difficulties associated with another stated preference technique, contingent valuation. CM is a better technique where the study area, attributes and responses are complex.

Rather than simply asking the open-ended "How much would you pay for…?", CM provides respondents with sets of choices between scenarios with different levels of protection for several attributes, for different annual payments.