Nonmarket valuation in developing countries: incorporating labour contributions in environmental benefits estimates

There are limitations associated with the application of nonmarket valuation techniques, including choice experiments, in subsistence economies. In part, this is due to the concern that using money as a mode of contribution may not capture the potential contribution of low‐income households. To address this limitation, respondents in this study were provided with the option of contributing towards the management of invasive plants in labour terms if they were unwilling to contribute in monetary terms. The results show that the existing practice of using dollar values to estimate willingness to contribute may disproportionately exclude the concerns of some groups within the community. The analysis also indicates that allowing respondents to express their willingness to contribute in labour increases their participation in environmental decision‐making processes and hence increases the estimated value of forest ecosystem services. This study contributes to the limited empirical literature on the development of nonmarket valuation surveys, particularly choice experiments, in low‐income countries in general and rural areas in particular.     

Piloting a systematic framework for public investment in regional natural resource management: Dryland salinity in Australia

The Salinity Investment Framework (SIF3) is designed to help environmental managers make better policy decisions about protecting key assets under threat of dryland salinity, a major degradation problem in Australia. This study reports results from applying SIF3 in partnership with two regional organizations (in the states of Victoria and Western Australia) with contrasting institutional powers and structures. We also engaged relevant policy makers with a view to influencing national policy. Available knowledge, science, and data were used to develop region-specific recommendations for public investment in salinity management. SIF3 proved easy to apply, requiring minimal changes from its original version. Establishing trust and credibility with stakeholders was extremely important. More time was required to be spent on communicating what SIF3 was and what it would mean for stakeholders than in applying it in the catchments. In both regions, recommendations included making a clear distinction between localized assets (such as a particular wetland) and dispersed assets (such as agricultural land as a whole); more targeted investment in spatially identified localized assets; using a broader range of policy tools; basing recommendations on the levels of public and private net benefits; anticipating the adoptability of sustainable land-management practices; and formally integrating relevant scientific, economic and social information with community values. The differences between current action and recommendations were significant in both regions, particularly in Victoria. As a result of our work both regions have decided to implementing a similar asset-based approach covering various environmental threats in addition to dryland salinity. The research indicates that it is feasible to use decision frameworks such as SIF3 to improve the rigour of decision making by community-based environmental management organizations. A broader range of policy tools are needed for dryland salinity, with less reliance on extension and small grants, and more emphasis on intervention around key assets and investment in technology development. We have influenced policy makers to some extent at state level and nationally through discussion of SIF3 in a national inquiry, preparation of a policy paper for peak multi-government policy committees, briefings and provision of advice on policy design. Despite this, achieving significant policy change at the state and national levels remains difficult for a number of reasons. Governments give limited signals to environmental managers to achieve environmental outcomes, being more concerned with community participation objectives and political considerations. We hope for significant policy change with increased scrutiny about sound decision making and public accountability.     

The West African middle belt: Land use patterns and development problems

The West African Middle Belt is an area of limited resources, low population density and a severe agricultural climate. Many reasons have been given for the poor state of agriculture in this region, but a look at the agricultural communities of tropical Africa clearly shows that land use cannot be explained by physical and environmental factors alone. For this reason, decision makers must increasingly take into account socioeconomic factors when making policy decisions for development in these peripheral zones.     

Managing groundwater in a mining region: an opportunity to compare best‐worst and referendum data

In nonmarket valuation, practitioners must choose a format for the valuation questions. A common approach in discrete choice experiments is the ‘pick‐one’ format, often with two alternative policy proposals and a status quo from which the respondent selects. Other proposed formats, include best‐worst elicitation, where respondents are asked to indicate their most and least favoured alternative from a set. Although best‐worst formats can offer efficiency in data collection, they can also lead to responses that are difficult to reconcile with neoclassical welfare estimation. The current article explores methodological issues surrounding the use of pick‐one versus best‐worst data for nonmarket valuation, focusing on framing and status quo effects that may occur within three‐alternative discrete choice experiments. We illustrate these issues using a case study of surplus groundwater use from Western Australian mining. Results identify concerns that may render best‐worst data unsuitable for welfare estimation, including a prevalence of serial choices in which the status quo is universally chosen as the worst alternative, rendering part of the choice process deterministic. Asymmetry of preferences and serial choices can be obscured when models are estimated using ‘naively’ pooled best‐worst data. Results suggest that caution is warranted when using best‐worst data for valuation, even when pooled results appear satisfactory.     

The Governance of Rural Land in a Liberalised World

Liberalisation of agricultural policies reduces the influence of policy on land‐use decisions, but environmental policy objectives remain. Governance provides an approach that recognises the role of institutions and collective action. The formulation of environmental policy objectives in terms of the provision of public goods raises questions as to the role of economic valuation and as to whether the definition of ‘goods’ may misdirect policy attention. An alternative approach relates to ecosystem services and sees management issues in terms of ecosystem resilience and the adaptive governance of socio‐ecological systems. Governance involves a mix of regulation, markets, government incentives and collective action. Regulation sets the domain within which markets operate and social judgements as to property rights are required as a basis for exchanges. Depending on commodity prices, agri‐environment schemes may be required either to reduce agricultural production intensity or to keep land under production. The diffuse nature of the environmental benefits and costs of land uses, the complexity of ecosystems and the need to co‐ordinate land management decisions indicate a role for local adaptive co‐management of land resources. Governments play a major role in supporting the institutional framework within which this can take place.     

Risk and risk management in organic and conventional cash crop farming in Norway

This study presents empirical insight into organic and conventional cash crop farmers' perceptions of risk and risk management strategies, and identifies socio-economic variables linked to these perceptions. The data originate from a questionnaire survey of farmers in Norway. The results indicate that organic farmers perceived themselves to be less risk averse than conventional farmers. For both groups, crop prices and yield variability were the two top rated sources of risk, followed by institutional risks. The two groups evaluated risk management strategies quite similarly; favoured strategies were good liquidity and to prevent and reduce crop diseases and pests. The farmers' evaluation of sources of risk and choice of risk strategies depended on various socio-economic variables. The importance of institutional risks implies that policy makers should be cautious about changing policy capriciously and they should consider strategic policy initiatives that give farmers more long-term reliability.     

A strategic environmental assessment method for agricultural policy in the UK

There are a number of significant environmental impacts that arise from agricultural practices that may be influenced by policy. A Strategic Environmental Assessment Method (SEAM) is described which aims to assess the environmental impacts of agricultural policy and aid the development of more sustainable policy formulation. The method addresses the issues of selecting appropriate performance criteria and measurements, and makes use of effect-damage functions and targets to determine the significance of potential impacts in relation to sustainability. A set of profiles is produced, describing the environmental performance of a specific policy. A confidence assessment system (CAS) is also described which provides details about the quality of the assessment and areas of uncertainty. SEAM provides information about impacts in simple format that can be easily used in decision making. It can identify environmental trade-offs and provides a holistic view that is essential when making decisions that affect the environment.     

Does research applying the DPSIR framework support decision making?

The Driver-Pressure-State-Impact-Response (DPSIR) framework was developed in the late 1990s to structure and organize indicators in a meaningful way. Since then, the framework has increasingly been applied in research projects with the aim of supporting decision making. A number of attributes of the framework regarding structuring and communication issues in research further strengthen its original purpose of bridging the science policy gap. We reviewed several studies that were mainly concerned with criticism and drawbacks of the DPSIR framework. Based on these studies and our own experiences in applying the DPSIR framework in an EU project to develop a decision support tool, we developed two criteria that we believe are crucial for policy relevant research: (a) the development of conceptual models integrating knowledge from different disciplines, specialists and policy makers, as well as those affected by their decisions; and (b) the potential to explain the results and analysis of research to different disciplines, specialists, stakeholders and the public and to demonstrate alternatives and provide decision options. We analyzed 21 studies using the DPSIR framework with regard to their relevance for decision making. We analyzed the definitions of the five DPSIR elements and whether specific end users were addressed in the respective studies. We found that in many studies, the DPSIR elements were defined in literature review or by researchers and that only a few studies targeted specific government authorities as users of research results. Eight out of 21 studies applied transdisciplinary research concepts and integrated broad ranges of stakeholder opinions and values into the research. Nine out of 21 studies presented alternative outcomes to decision makers and used the valuation of these outcomes by stakeholders to add further support to the decision-making process. The different positive and negative implications of the DPSIR framework are discussed with reference to research that supports policy making. Finally, we conclude that studies employing DPSIR may provide effective solutions for “real world problems” by taking into account additional criteria based on knowledge integration, stakeholder involvement and the provision of alternatives. Therefore, DPSIR is a useful tool to support decision making by means of showing solid evidence with alternatives and decision options, rather than by presenting predetermined solutions.     

Traditional agricultural land use and some changing trends in Maridi district, southern Sudan

This article looks at the differences in land use management in Maridi District, southern Sudan, and asserts that these reflect not only varying socioecological and environmental circumstances, but also factors such as population pressure, sociocultural and traditional beliefs and values, economic and resource factors, opportunities and accessibility and historical trends. The article concludes that policy makers and socioeconomic development planners of the rural areas of southern Sudan should identify constraints to increases in food production. This is only possible through appropriate knowledge about the different enterprise patterns and crops grown, including information on socioecological factors, environmental resource use and farmers' perceptions and production techniques. It should be possible to offer alternative methods of analysis essential for effective rural and agricultural land use development planning in similar socioecological and environmental situations in the southern Sudan and other areas of tropical Africa.     

Working to Make Interdisciplinarity Work: Investing in Communication and Interpersonal Relationships

In this paper, we apply qualitative methodologies to explore the practice of interdisciplinary research. The UK's Rural Economy and Land Use (RELU) Programme aims to advance understanding of the challenges faced by rural areas through funding interdisciplinary research to inform future policy and practice on management choices for the countryside and rural economies. Addressing the challenges faced by rural areas often requires a combination of different perspectives, involving research to address subjects that may lie beyond the skills of individual researchers. An interdisciplinary approach requires the integration of both data/information and the experiences and perspectives of different people (natural/social scientists, local people and policy‐makers). We focus here on the processes involved in making interdisciplinarity work, documenting the experiences, perceptions, ideas and concerns of researchers working in interdisciplinary projects (specifically two EU‐funded projects but also the first wave of RELU projects). A key finding from this research is that interdisciplinarity requires conscious effort, time and resources for the development of interpersonal relationships to enhance effective communication and thus successful collaboration.     

Optimising adaptation decisions in macadamia production using contingent claim valuation

Altering production systems and land management of tree crops is a costly, disruptive and ultimately irreversible decision. Using traditional valuation methods to appraise long‐term land management outcomes ignores the full impact of irreversible or delayed decisions. We employ a variant of the real options decision process to examine uncertainties around climatic effects on macadamia growers and the explicit decision to adapt via cultivar replacement. We examine the trade‐offs between the timing of the decision to replace macadamia cultivars by considering both the value of flexibility as well as the value of new information that can be used to resolve uncertainty. We compare the relative responses that generate the most value for growers across four geographical locations. We show that simple switching decisions using traditional valuation methods are found to be suboptimal and initiate poor decisions, potentially undermining adaptation efforts. As the rate of orchard degradation increases, the need to transition to higher‐yielding cultivars becomes greater, especially for Hawaii, California and Australia where gross margins are leaner. Investment decisions are thus highly dependent on both local conditions and the economic structure of existing production systems.     

Toward farm-based policy analysis: concepts applied in Haiti

Many policies – on the delivery of inputs or on marketing systems, credit, or extension – influence the potential utilization of new technologies. Through 'farm-based policy analysis' it is possible to use data generated in on-farm research (OFR) to identify policy constraints to the use of new technologies, and to effectively communicate that information to policy makers. This paper describes a tentative framework for farm-based policy analysis and suggests a sequence of five steps for the analysis: (1) identify the policy-induced constraints; (2) determine the rationale behind the policy; (3) identify the decision makers to whom the results should be communicated; (4) identify solutions or policy options; and (5) communicate results to decision makers. A case of farm-based policy analysis from Haiti illustrates the concepts and methods described in the first part of the paper. On-farm experiments in Les Cayes, Haiti, confirmed a response to nitrogen in maize, but adoption of the recommended practice and consequent gains in productivity and income were constrained by the scarcity of urea in the local market. An analysis of local supply and potential local demand for urea and the potential benefits of urea application was conducted, and results communicated to two target groups of decision makers: representatives of the Ministry of Agriculture responsible for fertilizer distribution policy, and representatives of private fertilizer enterprises. These groups responded by making larger supplies of urea available to local farmers. Adoption of the fertilizer recommendation and urea sales increased. The case demonstrates the potential value of farm-based policy analysis building upon data from OFR.     

Risk Behaviours and Grazing Land Management: A Framed Field Experiment and Linkages to Range Land Condition

We use a framed field experiment considering hypothetical stocking rate decisions made by grazing enterprise managers and estimate non‐linear multinomial logit models for a range of nested non‐expected utility and expected utility models. The risk and decision‐bias parameters for five models estimated for individual responses are shown to be significantly related to land condition but in ways which suggest behavioural aspects of decision making are critical in understanding land management and stocking rate decisions. Our results show that individual heterogeneity in decision making amongst farming groups is likely to be a significant source of variation in farming intensity and technology adoption decisions. This heterogeneity does not appear to be a reflection of socio‐demographic characteristics. Furthermore, decision functions appear to be biased toward selection of simpler representative functions (e.g. Expected Utility) for sample averages. This suggests that experimental findings that Expected Utility is representative for actual decisions may be due to sample averaging rather than reflect actual behaviour.     

Factors Impacting Food Safety Risk Perceptions

We developed and applied a model of consumer risk perceptions of beef food safety to better understand the underlying drivers of consumer demand for food safety. We show how consumer demographics, country‐of‐residence, as well as reliance on, and trust in, alternative food safety information sources affect risk perceptions of consumers in Canada, Japan and the United States. Consumers in all three countries have risk perceptions shaped by their level of reliance on observable and credence attribute information. Risk perceptions of consumers in each country are significantly higher for those less trusting of doctors. Moreover, personal and indirect food safety experiences substantially affect risk perceptions. These results are useful to decision‐makers in developing more efficient supply chain management strategies and public policies aimed at building or sustaining consumer confidence in food safety.     

Valuation on the Frontier: Calibrating Actual and Hypothetical Statements of Value

The lack of robust evidence showing that hypothetical behavior directly maps into real actions remains a major concern for proponents of stated preference nonmarket valuation techniques. This article explores a new statistical approach to link actual and hypothetical statements. Using willingness-to-pay field data on individual bids from sealed-bid auctions for a $350 baseball card, our results are quite promising. Estimating a stochastic frontier regression model that makes use of data that any contingent valuation survey would obtain, we derive a bid function that is not statistically different from the bid function obtained from subjects in an actual auction. If other data can be calibrated similarly, this method holds significant promise since an appropriate calibration scheme, ex ante or ex post , can be invaluable to the policy maker that desires more accurate estimates of use and nonuse values for nonmarket goods and services.     

Setting priorities in farm animal conservation choices--expert opinion and revealed policy preferences

We consider the choice of farm animal breeds for conservationprogrammes. An expert survey among breed societies and scientistsand the analysis of past decisions in EU member countries toenter breeds into conservation programmes show differences inthe valuation of breed characteristics. Whereas both sets ofactors value diversity aspects as well as cultural and economicaspects of breed conservation, policy makers, in comparisonwith experts, seem to be less concerned about true extinctionrisk. The results suggest broadening the discussion about theconservation of animal genetic resources to aspects preservingsocietal and cultural resources.     

Junk Car Clash on the Rural–Urban Fringe: A Case Study in Local Government Decision Making

This decision case is intended to provide an example of the complexity of local government decision making on the rural–urban fringe. In this case, a county is faced with making a decision about outlawing the existence of junk cars on personal property. Instructors can use this case to introduce topics such as zoning, takings, property rights, local government policy making, and the impact of the community on government decisions. Other issues could be explored, such as the role of culture and stereotypes in policy making, and how growth can impact local culture and lifestyle.     

Factors Affecting Farmers’ Participation in Agri‐environmental Measures: A Northern Italian Perspective

Agri‐environmental measures play an important role in Italian rural areas, as shown by the financial commitment to the Rural Development programmes. However, in contrast with other European Union (EU) countries, policy‐makers still have limited experience on how farmers approach environmental incentive schemes. This paper casts new light on this issue from a northern Italian perspective. The rationale of the farmers’ decision‐making process is explored using two multinomial models. The first explains the probability of non‐participation or participation in one of three specific agri‐environmental measures. The model outcomes show that labour‐intensive farming types and high dependency of household income on farming activity constrain farmers’ participation, whereas previous experience, easy‐to‐implement environmentally friendly farm practices and adequate compensation of extra costs encourage participation. The second model explores the effect of farmers’ attitudes and beliefs on their predispositions towards participation in any of the schemes. The results highlight that, besides income factors, the farm's future in the business, and the relationship with neighbouring farmers and their opinions on environmentally friendly practices all have significant effects on adoption of agri‐environmental measures. The paper concludes by suggesting that farmers’ attitudes and beliefs, as well as the local behavioural influences, have to be taken into account when designing and communicating agri‐environmental measures.     

Farmer's willingness to participate in wetland restoration: a hurdle model approach

Due to a severe degradation of the wetland ecosystem in China, great efforts have been devoted to promote farmers’ willingness to participate in wetland restoration. As the decision‐making body, farmer's willingness to participate is critical to wetland restoration. It is thus important to understand factors that will affect farmers’ willingness to participate and their levels of participation. Using a survey sample of 1,009 farmers from the Poyang Lake wetland area in China, this article applies a hurdle model to empirically investigate the factors affecting individual farmers’ sequential decisions on whether or not to participate and how much land to enroll in wetland restoration. Results suggest that farmers’ information and knowledge about wetland restoration compensation policy is crucial in determining whether or not to participate in the first stage. Meanwhile, individual farmer characteristics and household attributes play different roles in influencing farmers’ participation decisions and acreage enrollment decisions. This study provides useful insights to identify effective policy instruments to motivate participation and ensure success of such policies.     

Precaution: principles and practice in Australian environmental and natural resource management*

Since the late 1980s, the concept of precaution has been incorporated into numerous international agreements and laws, as well as in domestic statutes and policies in many countries. This paper examines the international emergence of the concept and its application in Australia. Despite rapid growth in adoption of the so‐called ‘precautionary principle’, the concept remains highly controversial, and its success in terms of improving environmental and natural resource management has been questioned. A common misconception is that the principle prescribes action. In fact, internationally accepted definitions are about decision‐making processes. This paper argues that implementation guidelines are essential to ensure that precautionary decision‐making is consistent with good decision‐making principles, and to avoid unnecessary costs and perverse outcomes.