4. benefit transfer

The decision regarding the setting aside of forest areas from timber production still requires an understanding of the likely magnitude of the current year’s forest protection value. It is this understanding that enables the threshold value to be assessed.

To provide some understanding of the forest protection values, the results of other studies that have estimated similar values may be analysed. The benefits estimated in these other studies can be considered in terms of their suitability for “transfer” to the South Coast sub-region context. This process of “benefit-transfer” must be undertaken with considerable caution. The physical circumstances in which the original values were estimated may be very different from those existing in the current context. Furthermore, the population of people who enjoyed the originally estimated benefits may have different value structures to those whose values are important in the South Coast sub-region forests. These differences must be taken into account when transferring benefit estimates from one context to another.

4.1 Types of values

The identification of the various components of the forest protection benefits under consideration assists in developing a better understanding of their magnitude. Forest protection benefits can be classified broadly into use and non-use values.

Use values involve beneficiaries experiencing first hand the forest ecosystem. Non-use values are enjoyed even without that direct contact. Use values are mostly associated with tourism and recreation activities such as sight seeing, camping or bush walking.³

Non-use values are more complex in their classification. Passive use values do not involve direct contact with the environment and as such are non-use values but they do involve a “second-hand” experience. Hence, those people who enjoy reading books or watching films that are based on the environment enjoy a passive use value. Likewise, people who benefit from scientific advances that have been made through research undertaken in a protected forest are also passive users as are those who enjoy high quality water supplies that have originated in protected forest catchments.

Other non-use values do not even involve this type of indirect contact. These are known as existence benefits and they are held by people who simply enjoy the knowledge that some forest areas have been set aside in reserves even though they have no wishes to visit them. Existence benefits may be held because of a desire on the part of one person that others may experience either the passive use or use values provided. These are vicarious values. Where this desire extends to members of future generations, this value has been described as bequest value.

4.2 Dis-aggregated values

It is often difficult to determine the exact composition of the total value of the benefits arising from forest protection. It is clear that the various components of the use and non-use values are heavily interrelated. For instance, the generation of existence benefits is dependent on people learning about a protected area. This may occur because of direct use or from the products of passive use (say the viewing of a television programme featuring a protected area). Those enjoying use values may also hold bequest values for their children. Hence, from a theoretical perspective the distinctions between classifications are fuzzy.

Quantifying the structure of forest protection benefits is even more challenging. Most forest protection value estimation exercises use stated preference techniques. These techniques rely on respondents to a questionnaire indicating their reactions to hypothetical scenarios. For instance, respondents may be asked if they are willing to pay a tax surcharge for certain proposed forest reserves to be established. It is very difficult to construct plausible and realistic scenarios in such questionnaires that target anything but the aggregate of all values that arise from the protection of forests. Even questions which relate directly to the recreation use of a proposed reserve (say asking about the willingness to pay an entrance fee) cannot be guaranteed to stimulate responses that segregate use values apart from non-use values. Respondents may, for instance, be willing to pay an entrance fee to use the reserve and to know that the reserve is available for others to enjoy and as a place for wildlife to inhabit.

What is possible is to draw on the range of studies that have attempted to estimate various types of values in different forest decision situations and generate indicative proportions of total benefits for each benefit type. This provides some guidelines for decision-makers in their efforts to understand more fully the type and magnitude of benefits a forest protection is likely to generate.

Walsh, Bjonback, Aiken and Rosenthal (1990) estimated the proportion of the total value generated by forest quality protection programmes. This was achieved through an application of the contingent valuation method (CVM) together with a sequence of questions whereby respondents were asked to allocate their stated willingness to pay values across four categories of benefit; recreation value, option value, existence value and bequest value. These proportions and the willingness to pay values are set out in Table 9.

Also presented in Table 9 are the proportions of total value that were derived in a study of wilderness values (Walsh, Loomis and Gillman 1984)

The two studies reported give different pictures of the proportional disaggregation of the total forest protection value. The earlier study found that the ration of use to non-use values was in the order of 1:1 for lower levels of wilderness protection (1.2m acres protected), rising to almost 2:1 for greater levels (10m acres protected). However, the more recent study estimates the ratio at approximately 1:3. The analysis of forest protection values undertaken by the Resource Assessment Commission for the forest and timber inquiry (see Bennett and Carter 1993) supported the 1:3 ratio and it is this that will be taken as applicable for the current analysis. Similarly, whilst the “disaggregation” categories used by Walsh et al (1990) do not conform exactly with that described above, and as such can be regarded as less than complete, the proportions estimated will be adopted for this analysis.

Taking the mid range threshold value for the current year’s forest protection values:

Current Commitments: $2125

the disaggregated thresholds (indicative) are set out in Table 10.

In other words, for the forest protection areas under the Current Commitments scenario to be set up, the additional recreational use values that must be generated are in the order of $595 in the current year.

To put this in perspective, a number of travel cost studies carried out in northern NSW (Bennett 1996) have shown that the value of a day’s recreation is in the order of $40. This in turn implies that for the Current Commitments scenario to be socially desirable, an additional 15 days of recreational use would be required⁴. Hence, if more than 15 days of extra visitation would be generated by the declaration of the reserves defined by the Current Commitment scenario, the reserves should be established.

Another helpful source of data for comparison against these threshold values is Loomis, Lockwood and Delacy (1993). In that study, the protection of unreserved National Estate Forests in south eastern Australia was valued at approximately $100 per individual per annum. Given that this value reflects the total value of protecting forest areas, the implication is that to protect the forest areas defined under the Current Commitments scenario would require around 22 people to support the proposal in the current year.

Previous page | Contents | Next page