Choice Modelling in Australia:past, present and future
Jeff Bennett
Crawford School
ANU
Some quiet contemplation
Non-market environmental valuation … and choice modelling in particular … appears to have reached a turning point in Australia
Significant interest in applications and useful levels of funding for research
Some strong ‘nodes’ of application and training Appropriate to contemplate what has happened, to
assess where we are, to speculate on future developments and to plan
In the beginning …
The Phoenix of Kakadu Resource Assessment Commission Forestry Inquiry
… the appetite for CVM applications had been lost Contingent Ranking and Rating? Louviere and Hensher Vanuatu Forests … CV and CM studies for ACIAR• Flatley, Rolfe
LWRRDC “General Call” application• Blamey, Morrison, Huybers, Whitten
Slow and steady
Sequence of applications and developments National Land and Water Audit NSW EPA Fitzroy River Basin SA - CSIRO WA - UWA Vic – Neil Sturgess … Rivers and VEAC NZ – Kerr and Sharp Health and transport developments
Not always forward
NSW Rivers … two steps forward and one step back Living Murray … one step forward and one step
back Great Barrier Reef …two steps forward and into
oblivion MBIs … no interest in assessing the level of
investment MCA … advanced as the means for avoiding the
need for the hassles of NMV The politics of economic analysis
A new impetus
Inception of the Environmental Economics Research Hub
Specific interest in advancing non-market valuation as a key element of developing government policy
Hub theme devoted to Valuation Specific projects looking at:• Integrating valuation into bio-economic models• Scope and scale effects• Time• Uncertainty• Expert vs lay values
Preparation of an application guide
Why now?
People • demand: DEWHA, State agencies • supply: capacity
Policy• Environmental issues to the fore • BUT the ‘ascendancy’ of economics and finance
Pressure • Regulatory Impact Statements
Remaining barriers
Deeply held scepticism in some quarters• The ‘anti-economics’ environmental lobby • The ‘anti-economics’ bureaucrats• The antagonistic economists
The political process … rent seeking rules Technical issues
The research frontier
Demonstrating the accuracy of results remains the ‘holy grail’ … policy makers require the assurance that they are not entering a quagmire of dispute
Incentive compatibility … belief in the results is ‘counterintuitive’ to decision makers
Hypothetical bias … also ‘counterintuitive’ Context sensitivity … what is the ‘right’ context?• Scope and scale … framing concerns• Questionnaire presentation issues … cognition,
comprehension, confusion• Information provision
Room for wide-scale experimentation (lab and field) … especially revealed vs stated preference comparisons that are not confounded by the public/private good divergence
Consistency and convergence Useful to find points of agreement within the
profession without ‘standardisation’ Avoid ‘freezing’ the evolutionary process
Contingent behaviour and choice modelling ‘Green’ accounting … at the national scale and for
individual environmental assets … values for stocks and flows of non-marketed assets
Coping with uncertainty Dealing with the ‘over-surveyed’ respondent ….
Timing is vital for policy making. Without a bank of studies and a well-recognised process of benefit transfer, the time needed to do environmental valuation (esp stated preference work) is a killer.
Benefit transfer – to be widely accepted – needs to be founded on a thorough understanding of the impacts of all the variables affecting value estimates … scope, frame, presentation etc etc
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