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Valuing the Barmah–Millewa Forest and in stream river flows: A spatial heteroskedasticity and autocorrelation consistent (SHAC) approach

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  • Tapsuwan, Sorada
  • Polyakov, Maksym
  • Bark, Rosalind
  • Nolan, Martin

Abstract

This paper uses spatial heteroskedasticity and autocorrelation consistent (SHAC) hedonic property price analysis of house sales during 2000–2011 to estimate the marginal value of in stream flows and proximity to an iconic freshwater ecosystem, the Barmah–Millewa Forest (BMF) in Australia's Murray–Darling Basin. We establish: (1) that proximity to the BMF is a statistically significant and positive determinant of nearby house prices in Victoria and New South Wales, i.e. for an average property worth $199,000 that is 10km away from the BMF, moving 1km closer will increase sales price by $2000; and (2) a non-linear relationship between in stream flow and sales price which is suggestive of homebuyer preferences for flow that is neither low (i.e. drought flows) nor high (i.e. flood flows). The results provide estimates of the benefits of in stream flow that could be used to inform freshwater ecosystem restoration policy in the basin and are suggestive of regional benefits that accrue to homeowners living near key freshwater-dependent ecosystems in the basin.

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  • Tapsuwan, Sorada & Polyakov, Maksym & Bark, Rosalind & Nolan, Martin, 2015. "Valuing the Barmah–Millewa Forest and in stream river flows: A spatial heteroskedasticity and autocorrelation consistent (SHAC) approach," Ecological Economics, Elsevier, vol. 110(C), pages 98-105.
    • Handle: RePEc:eee:ecolec:v:110:y:2015:i:c:p:98-105
    DOI: 10.1016/j.ecolecon.2014.12.008
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    2. Bark, Rosalind H. & Robinson, Catherine J. & Flessa, Karl W., 2016. "Tracking cultural ecosystem services: water chasing the Colorado River restoration pulse flow," Ecological Economics, Elsevier, vol. 127(C), pages 165-172.
    3. Matthew Oliver Ralp Dimal & Victor Jetten, 2020. "Analyzing preference heterogeneity for soil amenity improvements using discrete choice experiment," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(2), pages 1323-1351, February.
    4. Roberto Evangelio & Simon Hone & Moses Lee & David Prentice, 2019. "What Makes a Locality Attractive? Estimates of the Amenity Value of Parks for Victoria," Economic Papers, The Economic Society of Australia, vol. 38(3), pages 182-192, September.

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