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Estimating non-market values of protecting groundwater in a constrained environment

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  • Lan, Le
  • Iftekhar, Md Sayed
  • Schilizzi, Steven
  • Fogarty, James

Abstract

In groundwater-constrained areas, reallocating groundwater away from agriculture to achieve environmental outcomes has become a popular top-down regulatory approach. However, little attention has been paid to understanding public preferences for such policies. Using a choice experiment, we explore community preferences for different components of a groundwater allocation management program affecting agriculture in a severely water-constrained but highly groundwater-dependent environment, Western Australia. We find strong community preferences for a substantial reallocation away from agriculture, with compensation based on ecological benefits, regular monitoring through meters and a medium-level penalty for those that over-extract. The estimated non-market value to implement a groundwater management program comprising the preferred structure is up to AU$61 million per year. This result demonstrates the value of considering community preferences when designing groundwater management policies.

Suggested Citation

  • Lan, Le & Iftekhar, Md Sayed & Schilizzi, Steven & Fogarty, James, 2024. "Estimating non-market values of protecting groundwater in a constrained environment," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 68(02), January.
    • Handle: RePEc:ags:aareaj:343083
    DOI: 10.22004/ag.econ.343083
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    References listed on IDEAS

    as
    1. F Alpizar & F Carlsson & P Martinsson, 2003. "Using Choice Experiments for Non-Market Valuation," Economic Issues Journal Articles, Economic Issues, vol. 8(1), pages 83-110, March.
    2. Adamson, David & Loch, Adam, 2018. "Achieving environmental flows where buyback is constrained," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(1), January.
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