IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v88y2013icp25-31.html
   My bibliography  Save this article

Divestment of the English Forestry Estate: An economically sound choice?

Author

Listed:
  • King, Steven
  • Fraser, Iain

Abstract

This paper evaluates if the proposed divestment of the English Forestry Commission Estate in 2010 was economically rational. The analysis is composed of two parts. First, an amenity value threshold for continued public access to the Estate was estimated. Based on a stated value of the Estate (i.e. £700million) and assuming a discount rate of 3.5% the Estate should never have been considered for sale. However, assuming a discount rate of 5% then the associated critical amenity value was estimated to be approximately £5million. Second, travel cost methods were employed to value public access to the Forest of Dean as a proxy for the Estate. An on-site survey was conducted that yielded estimates of consumer surplus that exceed the critical amenity value of the Estate by two orders of magnitude even when we employ a discount rate above that typically used in public policy decision making. Therefore, we conclude that the policy to divest the Estate for £700million was not ‘a good deal’ and as such the resulting policy reversal was an economically sensible decision.

Suggested Citation

  • King, Steven & Fraser, Iain, 2013. "Divestment of the English Forestry Estate: An economically sound choice?," Ecological Economics, Elsevier, vol. 88(C), pages 25-31.
    • Handle: RePEc:eee:ecolec:v:88:y:2013:i:c:p:25-31
    DOI: 10.1016/j.ecolecon.2012.12.021
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800912005046
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2012.12.021?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Willis, K G, 1991. "The Recreational Value of the Forestry Commission Estate in Great Britain: A Clawson-Snetsch Travel Cost Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 38(1), pages 58-75, February.
    2. Englin, Jeffrey & Shonkwiler, J S, 1995. "Estimating Social Welfare Using Count Data Models: An Application to Long-Run Recreation Demand under Conditions of Endogenous Stratification and Truncation," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 104-112, February.
    3. Reed, William J., 1993. "The decision to conserve or harvest old-growth forest," Ecological Economics, Elsevier, vol. 8(1), pages 45-69, August.
    4. Zandersen, Marianne & Tol, Richard S.J., 2009. "A meta-analysis of forest recreation values in Europe," Journal of Forest Economics, Elsevier, vol. 15(1-2), pages 109-130, January.
    5. Margaret Forsyth, 2000. "On estimating the option value of preserving a wilderness area," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(2), pages 413-434, May.
    6. Joe Amoako-Tuffour & Roberto Martínez-Espiñeira, 2012. "Leisure and the Net Opportunity Cost of Travel Time in Recreation Demand Analysis: An Application to Gros Morne National Park," Journal of Applied Economics, Taylor & Francis Journals, vol. 15(1), pages 25-49, May.
    7. Conrad, Jon M., 1997. "On the option value of old-growth forest," Ecological Economics, Elsevier, vol. 22(2), pages 97-102, August.
    8. Richard G. Walsh & John B. Loomis & Richard A. Gillman, 1984. "Valuing Option, Existence, and Bequest Demands for Wilderness," Land Economics, University of Wisconsin Press, vol. 60(1), pages 14-29.
    9. G. Cornelis van Kooten & Robert A. Schipper, 2002. "Forest Conservation in Costa Rica when Nonuse Benefits are Uncertain but Rising," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 150-160.
    10. Timothy C. Haab & Kenneth E. McConnell, 2002. "Valuing Environmental and Natural Resources," Books, Edward Elgar Publishing, number 2427.
    11. Ovaskainen, Ville & Neuvonen, Marjo & Pouta, Eija, 2012. "Modelling recreation demand with respondent-reported driving cost and stated cost of travel time: A Finnish case," Journal of Forest Economics, Elsevier, vol. 18(4), pages 303-317.
    12. Frank A. Ward & Diana Beal, 2000. "Valuing Nature with Travel Cost Models," Books, Edward Elgar Publishing, number 1768.
    13. Beal, Diana J., 1995. "A Travel Cost Analysis of the Value of Carnarvon Gorge National Park for Recreational Use," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 63(02), pages 1-12, August.
    14. K. G. Willis & G. D. Garrod, 1991. "An Individual Travel‐Cost Method Of Evaluating Forest Recreation," Journal of Agricultural Economics, Wiley Blackwell, vol. 42(1), pages 33-42, January.
    15. David J. EVANS, 2006. "Social discount rates for the European Union," Departmental Working Papers 2006-20, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adelina Gschwandtner & Jose Eduardo Ribeiro & Cesar Revoredo-Giha & Michael Burton, 2021. "Combining Stated and Revealed Preferences for valuing Organic Chicken Meat," Studies in Economics 2113, School of Economics, University of Kent.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simões, Paula & Barata, Eduardo & Cruz, Luís, 2013. "Joint estimation using revealed and stated preference data: An application using a national forest," Journal of Forest Economics, Elsevier, vol. 19(3), pages 249-266.
    2. Nicolas Borzykowski & Andrea Baranzini & David Maradan, 2017. "A travel cost assessment of the demand for recreation in Swiss forests," Review of Agricultural, Food and Environmental Studies, Springer, vol. 98(3), pages 149-171, December.
    3. Isabel Mendes & Isabel Proença, 2009. "Measuring the Social Recreation Per-Day Net Benefit of Wildlife Amenities of a National Park: A Count-Data Travel Cost Approach," Working Papers Department of Economics 2009/35, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    4. Heagney, E.C. & Rose, J.M. & Ardeshiri, A. & Kovač, M., 2018. "Optimising recreation services from protected areas – Understanding the role of natural values, built infrastructure and contextual factors," Ecosystem Services, Elsevier, vol. 31(PC), pages 358-370.
    5. Rolfe, John & Dyack, Brenda, 2010. "Testing for convergent validity between travel cost and contingent valuation estimates of recreation values in the Coorong, Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 1-17.
    6. Roberto Martinez-Espineira & Joe Amoako-Tuffour, 2008. "Multi-destination and multi-purpose trip effects in the analysis of the demand for trips to a remote recreational site," EERI Research Paper Series EERI_RP_2008_19, Economics and Econometrics Research Institute (EERI), Brussels.
    7. Amoako-Tuffour, Joe & Martınez-Espineira, Roberto, 2008. "Leisure and the Opportunity Cost of Travel Time in Recreation Demand Analysis: A Re-Examination," MPRA Paper 8573, University Library of Munich, Germany.
    8. Heagney, E.C. & Rose, J.M. & Ardeshiri, A. & Kovac, M., 2019. "The economic value of tourism and recreation across a large protected area network," Land Use Policy, Elsevier, vol. 88(C).
    9. Curtis, John & Stanley, Brian, 2015. "Water Quality and Recreational Angling Demand in Ireland," Papers WP521, Economic and Social Research Institute (ESRI).
    10. Insley, Margaret, 2002. "A Real Options Approach to the Valuation of a Forestry Investment," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 471-492, November.
    11. Paula Simões & Luís Cruz & Eduardo Barata, 2012. "Non-market Recreational Value of a National Forest: Survey Design and Results," GEMF Working Papers 2012-09, GEMF, Faculty of Economics, University of Coimbra.
    12. Saúl Torres-Ortega & Rubén Pérez-Álvarez & Pedro Díaz-Simal & Julio Manuel De Luis-Ruiz & Felipe Piña-García, 2018. "Economic Valuation of Cultural Heritage: Application of Travel Cost Method to the National Museum and Research Center of Altamira," Sustainability, MDPI, vol. 10(7), pages 1-13, July.
    13. Luca Corato & Michele Moretto & Sergio Vergalli, 2013. "Land conversion pace under uncertainty and irreversibility: too fast or too slow?," Journal of Economics, Springer, vol. 110(1), pages 45-82, September.
    14. John Cullinan & Stephen Hynes & Cathal O’Donoghue, 2008. "Aggregating Consumer Surplus Values in Travel Cost Modelling Using Spatial Microsimulation and GIS Techniques," Working Papers 0807, Rural Economy and Development Programme,Teagasc.
    15. Di Corato, Luca, 2012. "Optimal conservation policy under imperfect intergenerational altruism," Journal of Forest Economics, Elsevier, vol. 18(3), pages 194-206.
    16. R. Martínez-Espiñeira, 2007. "‘Adopt a Hypothetical Pup’: A Count Data Approach to the Valuation of Wildlife," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(2), pages 335-360, June.
    17. Rolfe, John & Prayaga, Prabha, 2007. "Estimating values for recreational fishing at freshwater dams in Queensland," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), pages 1-18.
    18. Di Corato, Luca & Gazheli, Ardjan & Lagerkvist, Carl-Johan, 2013. "Investing in energy forestry under uncertainty," Forest Policy and Economics, Elsevier, vol. 34(C), pages 56-64.
    19. Voltaire, Louinord & Koutchade, Obafèmi Philippe, 2020. "Public acceptance of and heterogeneity in behavioral beach trip responses to offshore wind farm development in Catalonia (Spain)," Resource and Energy Economics, Elsevier, vol. 60(C).
    20. Kuosmanen, Timo & Nillesen, Eleonora & Wesseler, Justus, 2004. "Does ignoring multidestination trips in the travel cost method cause a systematic bias?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(4), pages 1-23.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:88:y:2013:i:c:p:25-31. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.