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Valuing options for reserve water in the Fitzroy Basin

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  • Rolfe, John
  • Windle, Jill

Abstract

Option values may be an important component of non-use values when development options for environmental assets are considered. These are values that the community might hold for maintaining options to make future choices about allocating resources. However, option values are very difficult to define, at both theoretical and practical levels, and there has been a retreat over the past decade to the more inclusive concept of option prices. In the present paper, estimates of option values are reported for retaining unallocated water in reserve rather than using it for current development. The use of option values rather than option prices is justified on the basis that the focus is on nonuse values, and demand and supply uncertainties have been minimised. These values have been assessed through a series of nine choice modelling surveys that have been conducted over a 3-year period in the Fitzroy River Basin in central Queensland. The results are then extrapolated to the case study areas within the basin to assess whether unallocated water should be held in reserve or used for development.

Suggested Citation

  • Rolfe, John & Windle, Jill, 2005. "Valuing options for reserve water in the Fitzroy Basin," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(1), pages 1-24.
    • Handle: RePEc:ags:aareaj:118439
    DOI: 10.22004/ag.econ.118439
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    3. Zander, Kerstin K. & Straton, Anna, 2010. "An economic assessment of the value of tropical river ecosystem services: Heterogeneous preferences among Aboriginal and non-Aboriginal Australians," Ecological Economics, Elsevier, vol. 69(12), pages 2417-2426, October.
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    5. Ekin Birol & Phoebe Koundouri & Yiannis Kountouris, 2008. "Using the Choice Experiment Method to Inform River Management in Poland: Flood Risk Reduction vs. Habitat Conservation in the Upper Silesia Region," DEOS Working Papers 0802, Athens University of Economics and Business.
    6. Sandorf, Erlend Dancke & Crastes dit Sourd, Romain & Mahieu, Pierre-Alexandre, 2018. "The effect of attribute-alternative matrix displays on preferences and processing strategies," Journal of choice modelling, Elsevier, vol. 29(C), pages 113-132.
    7. Richard Yao & Pamela Kaval, 2009. "Evaluating the Welfare Effects of Biodiversity on Private Lands: A Choice Modelling Application," Working Papers in Economics 09/04, University of Waikato.
    8. Roy Brouwer, 2009. "Multi-Attribute Choice Modeling of Australia’s Rivers and Wetlands: A Meta-Analysis of Ten Years of Research," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2009-05, CSIRO Sustainable Ecosystems.
    9. Sukanya Das & Ekin Birol & Rabindra N. Bhattacharya, 2010. "Informing Efficient Solid Waste Management to Improve Local Environmental Quality and Public Health in West Bengal, India," Chapters, in: Jeff Bennett & Ekin Birol (ed.), Choice Experiments in Developing Countries, chapter 10, Edward Elgar Publishing.
    10. Romy Greiner, 2023. "Examining Participation in and Supply of Private Land for Voluntary Conservation in Australia’s Tropical Savannas: A Discrete-Continuous Choice Experiment," Land, MDPI, vol. 12(7), pages 1-19, June.
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    12. Kragt, Marit Ellen & Bennett, Jeffrey W., 2008. "Developing a Questionnaire for Valuing Changes in Natural Resource Management in the George Catchment, Tasmania," Research Reports 94807, Australian National University, Environmental Economics Research Hub.

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