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Non-market valuation in the economic analysis of natural hazards

Author

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  • Gibson, Fiona
  • Pannell, David
  • Boxall, Peter
  • Burton, Michael
  • Johnston, Robert
  • Kragt, Marit
  • Rogers, Abbie
  • Rolfe, John

Abstract

Natural hazards have a wide range of impacts, including on factors that are normally unpriced because they are not bought and sold in markets. Key examples include impacts on human health, the environment, ecosystem services and other outcomes relevant to social welfare. Economists seek to quantify these impacts in financial-equivalent terms in order to be able to compare them with market impacts and include them in Benefit: Cost Analysis (BCA) of policies and strategies to mitigate risks. Estimating these so-called non-market values can be difficult. This paper reviews the methods available for doing so, presents a comprehensive list of the non-market values that might be affected by natural hazards and reviews the existing literature that estimates non-market values relevant to natural hazards. We find that there are few applications specifically in a natural hazard context. We conclude with a discussion on the limitations of non-market valuation in the natural hazard context.

Suggested Citation

  • Gibson, Fiona & Pannell, David & Boxall, Peter & Burton, Michael & Johnston, Robert & Kragt, Marit & Rogers, Abbie & Rolfe, John, 2016. "Non-market valuation in the economic analysis of natural hazards," Working Papers 236941, University of Western Australia, School of Agricultural and Resource Economics.
    • Handle: RePEc:ags:uwauwp:236941
    DOI: 10.22004/ag.econ.236941
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    Cited by:

    1. Morteza Chalak & Veronique Florec & Atakelty Hailu & Fiona Gibson & David Pannell, 2017. "Integrating non-market values in economic analyses of flood mitigation: a case study of the Brown Hill and Keswick creeks catchment in Adelaide," Working Papers 256513, University of Western Australia, School of Agricultural and Resource Economics.

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