Economics of Preserving Eucalypt Woodland: Dieback Control, Preservation of Woodland and Choices

Abstract

Grazing properties in southern New England have approximately one third of their land as woodland. Half of this woodland is dying due to the set of diseases and conditions known as eucalypt dieback. There appear to be substantial external costs from the decline and the death of this woodland, and the control of the problem provides many public-good benefits. The attitudes of a relevant segment of the public to eucalypt dieback have been sought, their preferences for different control measures have been elicited and analysed. The choices between alternative woodland types, and preservation benefits were also studied and analysed in the process. The results in this study have been obtained by regression analyses of cross-sectional survey data. Relatively straightforward regression analyses helped determine the magnitudes of recreation, existence, and option values. To estimate the demand for alternative dieback control measures, a system of demand equations was estimated jointly by Zellner's method of seemingly unrelated regressions. A single equation estimated by ordinary least squares was used to choose between alternative types of eucalypt woodland to preserve. The recreation, existence, and option values were estimated by the direct question method approved by the U.S. Water Resources Council in 1979. Respondents' willingness-to-pay determined these preservation values. The preferences for alternative control measures, and choice between alternative types of eucalypt woodland to preserve were determined through a budget-allocation game following Hardie and Strand (1978). This game appears to overcome the free-rider difficulty inherent in the demand for public goods. This study indicates that the individuals who respond are very concerned to improve the health of the surrounding woodland. They would appear to be willing to help fund research into the dieback problem, and would benefit from the knowledge that dieback would be reduced. The demand for dieback control indicates preferences for eucalypt alternatives like preserving mature trees, and fencing-out-stock from young eucalypt regeneration, rather than other plausible control measures. Apparently members of the sample had no consistent rational preferences for introduced tree species. Between the biological characteristics for choices between woodland types, they picked healthiness as the most important attribute of woodland.