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Contingent valuation and beyond: public attitudes to the uplands

Outline. Multi-functional agricultureValuation methodsWhy do we value?Contingent valuationAlternative methodsAlternatives to valuationUplands example. Multi-functional agriculture. Past agricultural policy has concentrated on productivist agriculture with little emphasis on the environment and

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Contingent valuation and beyond: public attitudes to the uplands

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    1. Contingent valuation and beyond: public attitudes to the uplands Dominic Moran & Alistair McVittie Scottish Agricultural College

    2. Outline Multi-functional agriculture Valuation methods Why do we value? Contingent valuation Alternative methods Alternatives to valuation Uplands example

    3. Multi-functional agriculture Past agricultural policy has concentrated on productivist agriculture with little emphasis on the environment and broader rural issues Policy increasing recognises multi-functional objectives for agriculture Many multi-functional outputs are public goods - market failure in provision may require policy intervention to ensure supply

    4. Outputs from agriculture

    5. Why do we value? Values represent preferences: What public goods should be supplied? How much should be provided? Where should they be provided? Values allow policy assessment: Are we (society) getting value for money? Input into CBA

    6. Valuation approaches Revealed preference approaches use actual behaviour to infer values for good of interest e.g. hedonic pricing, travel cost limited range of “values” can be determined, ex post valuation Stated preference approaches value policy scenarios using hypothetical markets wider range of “values”, ex ante and ex post

    7. Contingent valuation Widely used to value public goods - esp. environmental Contingent market used to elicit willingness to pay (WTP) or accept (WTA) from target population Complex issue is how to specify the good or policy to be valued (what) and the payment vehicle (how) Extensive literature developed that can guide best practice

    8. Contingent valuation: some issues CV can be inflexible to different elements of good/policy i.e. multi-functional outputs Does not indicate the relative preferences and values for these elements there may be trade-offs in policy delivery So called black box syndrome

    9. Alternative methods Choice experiments increasingly used in non-market valuation: recognise multi-attribute nature of policy/public goods elicits relative preferences and values estimation of marginal values Complex statistical design and sampling requirements

    10. Choice experiment

    11. Alternatives to valuation Valuation can be costly and time consuming to undertake Often “political” problems with putting a money value on some non-market goods Still need to understand public preferences Increasing interest in use of methods such as multicriteria analysis (MCA) policy trade-offs can be made although not tempered by cost implications

    12. Example: Public preferences for the uplands Study funded by the International Centre for the Uplands Postal survey of residents of Cumbria and Manchester - December 2004 CVM valuation MCA - Analytical Hierarchy Process

    13. Analytical Hierarchy Process AHP asks respondents to make pairwise comparisons between attributes and within attributes between their levels (qualities) e.g. Environmental vs. Social Produces within attribute weights and between attribute weights From these overall weights can be derived

    14. AHP attributes Upland landscapes Upland landscapes can be characterised as providing scenic views over the fells and moors. The lower lying landscape is characterised by traditional farm buildings and dry stone walls. The less intensive form of agriculture in upland areas results in greater peace and tranquillity; and offers greater opportunities for wild plants, birds and animals.

    15. AHP attributes Traditional farm management Hill farming has not seen the large changes experienced by lowland farming in recent decades, which has involved more intensive farming practices and specialisation. Hill farms are typically small family farms, with close links to the local community. This form of farming involves a number of traditional skills such as shepherding, maintaining dry stone walls, and common land management.

    16. AHP attributes Community culture Local communities are closely linked with hill farming through activities such as local shows and other community activities resulting in a strong local culture. These close links also mean that there are strong social networks within upland communities.

    17. Example pairwise comparison

    18. AHP results: attribute weights

    19. AHP results: attribute weights

    20. AHP results: overall weights

    21. AHP results: overall weights

    22. CVM results Double bounded referendum format: Mean WTP: Ł48.05 per household/annum 95% confidence interval: Ł36.96 - Ł64.23 Aggregated to UK population (24.5m households) using lower bound: Ł907m p.a.

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