Advertisement

Social Indicators Research

, Volume 115, Issue 1, pp 45–65 | Cite as

Valuing Ecosystem Diversity in South East Queensland: A Life Satisfaction Approach

  • Christopher L. Ambrey
  • Christopher M. FlemingEmail author
Article

Abstract

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.

Keywords

Biodiversity Ecosystem diversity Household, Income and Labour Dynamics in Australia (HILDA) Life satisfaction Non-market valuation 

Notes

Acknowledgments

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.

References

  1. Ambrey, C., & Fleming, C. (2011). Valuing scenic amenity using life satisfaction data. Ecological Economics, 72(1), 106–115.CrossRefGoogle Scholar
  2. Australian Bureau of Statistics. (2010). Australian standard geographical classification. Catalogue No. 1216.0. Canberra.Google Scholar
  3. Australian Government. (2011). Australia’s bioregions. http://www.environment.gov.au/parks/nrs/science/bioregion-framework/index.html. Accessed August 4, 2011.
  4. Bertrand, M., & Mullainathan, S. (2001). Do people mean what they say? Implications for subjective survey data. The American Economic Review, 91(2), 67–72.CrossRefGoogle Scholar
  5. Brereton, F., Clinch, J. P., & Ferreira, S. (2008). Happiness, geography and the environment. Ecological Economics, 65(2), 386–396.CrossRefGoogle Scholar
  6. Carroll, N., Frijters, P., & Shields, M. (2009). Quantifying the costs of drought: New evidence from life satisfaction data. Journal of Population Economics, 22(2), 445–461.CrossRefGoogle Scholar
  7. Clark, A., Frijters, P., & Shields, M. (2008). Relative income, happiness, and utility: An explanation for the Easterlin Paradox and other puzzles. Journal of Economic Literature, 46(1), 95–144.CrossRefGoogle Scholar
  8. Cunado, J., & Perez de Gracia, F. (2012). Environment and happiness: New evidence for Spain. Social Indicators Research, Article In Press. doi: 10.1007/s11205-11012-10038-11204.
  9. Czajkowski, M., Buszko-Briggs, M., & Hanley, N. (2009). Valuing changes in forest biodiversity. Ecological Economics, 68(12), 2910–2917.CrossRefGoogle Scholar
  10. Ferreira, S., & Moro, M. (2010). On the use of subjective well-being data for environmental valuation. Environmental & Resource Economics, 46(3), 249–273.CrossRefGoogle Scholar
  11. Ferrer-i-Carbonell, A. (2005). Income and well-being: An empirical analysis of the comparison income effect. Journal of Public Economics, 89(5–6), 997–1019.CrossRefGoogle Scholar
  12. Ferrer-i-Carbonell, A., & Frijters, P. (2004). How important is methodology for the estimates of the determinants of happiness? Economic Journal, 114(497), 641–659.CrossRefGoogle Scholar
  13. Freeman, A. (2003). The measurement of environmental and resource values: Theory and methods (2nd ed.). Washington, DC: Resources for the Future.Google Scholar
  14. Frey, B., Luechinger, S., & Stutzer, A. (2010). The life satisfaction approach to environmental valuation. Annual Review of Resource Economics, 2(1), 139–160.CrossRefGoogle Scholar
  15. Frey, B., & Stutzer, A. (2002a). Happiness and economics: How the economy and institutions affect human well-being. Princeton: Princeton University Press.Google Scholar
  16. Frey, B., & Stutzer, A. (2002b). What can economists learn from happiness research? Journal of Economic Literature, 40(2), 402–435.CrossRefGoogle Scholar
  17. Frijters, P., & van Praag, B. (1998). The effects of climate on welfare and well-being in Russia. Climatic Change, 39(1), 61–81.CrossRefGoogle Scholar
  18. Horne, P., Boxall, P., & Wiktor, A. (2005). Multiple-use management of forest recreation sites: A spatially explicit choice experiment. Forest Ecology and Management, 207(1–2), 189–199.CrossRefGoogle Scholar
  19. Krueger, A., & Schkade, D. (2008). The reliability of subjective well-being measures. Journal of Public Economics, 92(8–9), 1833–1845.CrossRefGoogle Scholar
  20. Leadley, P., Pereira, H., Alkemade, R., Fernandez-Manjarres, J., Proenca, V., & Scharlemann, J. (2010). Biodiversity scenarios: Projections of 21st century change in biodiversity and associated ecosystem services (Vol. Technical Series No. 50). Montreal: A Technical Report for the Global Biodiversity Outlook 3.Google Scholar
  21. Luechinger, S. (2009). Valuing air quality using the life satisfaction approach. Economic Journal, 119(536), 482–515.CrossRefGoogle Scholar
  22. Luechinger, S., & Raschky, P. (2009). Valuing flood disasters using the life satisfaction approach. Journal of Public Economics, 93(3–4), 620–633.CrossRefGoogle Scholar
  23. MacKerron, G. (2012). Happiness economics from 35,000 feet. Journal of Economic Surveys, 26(4), 705–735.CrossRefGoogle Scholar
  24. MacKerron, G., & Mourato, S. (2009). Life satisfaction and air quality in London. Ecological Economics, 68(5), 1441–1453.CrossRefGoogle Scholar
  25. Maddison, D., & Rehdanz, K. (2011). The impact of climate on life satisfaction. Ecological Economics, 70(12), 2437–2445.CrossRefGoogle Scholar
  26. Moulton, B. (1990). An illustration of a pitfall in estimating the effects of aggregate variables on micro units. Review of Economics and Statistics, 72(2), 334–338.CrossRefGoogle Scholar
  27. Naidoo, R., & Adamowicz, W. (2005). Biodiversity and nature-based tourism at forest reserves in Uganda. Environmental and Development Economics, 10(2), 159–178.CrossRefGoogle Scholar
  28. Newman, C. (2007). Lord Mayor opens landmark Brisbane event. http://newsroom.brisbane.qld.gov.au/home/news_detail.asp?ID=765. Accessed January 19, 2010.
  29. Nijkamp, P., Vindigni, G., & Nunes, P. (2008). Economic valuation of biodiversity: A comparative study. Ecological Economics, 67(2), 217–231.CrossRefGoogle Scholar
  30. Nunes, P., & van den Bergh, J. (2001). Economic valuation of biodiversity: Sense or nonsense? Ecological Economics, 39(2), 203–222.CrossRefGoogle Scholar
  31. Office of Economic and Statistical Research. (2010). Queensland regional profiles: SEQ region. Brisbane: Queensland Treasury.Google Scholar
  32. Peterson, A., McAlpine, C., Ward, D., & Rayner, S. (2007). New regionalism and nature conservation: Lessons from South East Queensland, Australia. Landscape and Urban Planning, 82(3), 132–144.CrossRefGoogle Scholar
  33. Queensland Environmental Protection Agency. (2002). Biodiversity assessment and planning methodology. Brisbane: Biodiversity Planning Unit.Google Scholar
  34. Queensland Environmental Protection Agency. (2007). Biodiversity planning assessment: South East Queensland 3.5. Brisbane: Biodiversity Planning Unit.Google Scholar
  35. Ressureicao, A., Gibbons, J., Kaiser, M., Dentinho, T., Zarzycki, T., Bentley, C., et al. (2012). Different cultures, different values: The role of cultural variation in public’s WTP for marine species conservation. Biological Conservation, 145(1), 148–159.CrossRefGoogle Scholar
  36. Richardson, L., & Loomis, J. (2009). The total economic value of threatened, endangered and rare species: An updated meta-analysis. Ecological Economics, 68(5), 1535–1548.CrossRefGoogle Scholar
  37. Saucier, G. (1994). Mini-markers: A brief version of Goldberg’s unipolar Big-Five markers. Journal of Personality Assessment, 63(3), 506–516.CrossRefGoogle Scholar
  38. Secretariat of the Convention on Biological Diversity. (2010). Global biodiversity outlook 3. Montreal.Google Scholar
  39. Shields, M., Price, S., & Wooden, M. (2009). Life satisfaction and the economic and social characteristics of neighbourhoods. Journal of Population Economics, 22(2), 421–443.CrossRefGoogle Scholar
  40. Simpson, E. (1949). Measurement of diversity. Nature, 163(1), 688.CrossRefGoogle Scholar
  41. Smyth, R., Mishra, V., & Qian, X. (2008). The environment and well-being in urban China. Ecological Economics, 68(1–2), 547–555.CrossRefGoogle Scholar
  42. Spash, C. (2008). How much is that ecosystem in the window? The one with the bio-diverse trail. Environmental Values, 17(2), 259–284.CrossRefGoogle Scholar
  43. Spash, C., & Hanley, N. (1995). Preferences, information and biodiversity preservation. Ecological Economics, 12(3), 191–208.CrossRefGoogle Scholar
  44. van Praag, B., & Baarsma, B. (2005). Using happiness surveys to value intangibles: The case of airport noise. Economic Journal, 115(500), 224–246.CrossRefGoogle Scholar
  45. Watson, N., & Wooden, M. (2012). The HILDA survey: A case study in the design and development of a successful household panel study. Longitudinal and Life Course Studies, 3(3), 369–381.Google Scholar
  46. Welsch, H. (2002). Preferences over prosperity and pollution: Environmental valuation based on happiness surveys. Kyklos, 55(4), 473–494.CrossRefGoogle Scholar
  47. Welsch, H. (2006). Environment and happiness: Valuation of air pollution using life satisfaction data. Ecological Economics, 58(4), 801–813.CrossRefGoogle Scholar
  48. Welsch, H., & Kuhling, J. (2009). Using happiness data for environmental valuation: Issues and applications. Journal of Economic Surveys, 23(2), 385–406.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2012

Authors and Affiliations

  • Christopher L. Ambrey
    • 1
  • Christopher M. Fleming
    • 2
    Email author
  1. 1.Department of Accounting, Finance and Economics, Gold Coast CampusGriffith Business SchoolGold CoastAustralia
  2. 2.Department of Accounting, Finance and Economics, Nathan CampusGriffith Business SchoolNathanAustralia

Personalised recommendations