Valuing Ecosystem Diversity in South East Queensland: A Life Satisfaction Approach
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The valuation of complex environmental goods represents a considerable challenge for conventional non-market valuation techniques. The use of life satisfaction (or happiness) data has recently emerged as a new means of placing monetary values on non-market goods and services. This approach offers several advantages over more conventional techniques. This paper uses data from the Household, Income and Labour Dynamics in Australia survey along with Geographic Information Systems data to value ecosystem diversity in South East Queensland, Australia. It is found that, on average, a respondent has an implicit willingness-to-pay of approximately AUD$14 000 in household income per annum to obtain a one unit improvement in ecosystem diversity. This result confirms that the preservation, or improvement, of existing levels of ecosystem diversity is welfare enhancing. To our knowledge, this is the first paper to value ecosystem diversity using the life satisfaction approach.
KeywordsBiodiversity Ecosystem diversity Household, Income and Labour Dynamics in Australia (HILDA) Life satisfaction Non-market valuation
We thank Griffith University for the Griffith University Postgraduate Research Scholarship and the Griffith Business School for the Griffith Business School Top-up Scholarship; funding that was instrumental in facilitating this research. This research would not have been possible without data provided by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA), the Queensland Department of Environment and Resource Management (Biodiversity Planning and Assessment Unit), and the Australian Bureau of Statistics. This paper was presented at the 2011 New Zealand Agricultural and Resource Economics Society Annual Conference; we thank participants for providing valuable feedback and comments. Revisions to this paper were made while Christopher Fleming was a visiting researcher at the University of Stirling; we thank staff for their support. Finally, we would like to thank two anonymous reviewers for comments on an earlier draft. This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) survey. The HILDA project was initiated and is funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either FaHCSIA or the Melbourne Institute.
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