@article {bnh-6168, title = {Valuing non-market economic impacts from natural hazards}, journal = {Natural Hazards}, volume = {99}, year = {2019}, month = {08/2019}, pages = {1131-1161}, abstract = {

Prioritising investments to minimise or mitigate natural hazards such as wildfires and storms is of increasing importance to hazard managers. Prioritisation of this type can be strengthened by considering benefit and cost impacts. To evaluate benefits and costs, managers require an understanding of both the tangible economic benefits and costs of mitigation decisions, and the often intangible values associated with environmental, social and health-related outcomes. We review the state of non-market valuation studies that provide monetary equivalent estimates for the intangible benefits and costs that can be affected by natural hazard events or their mitigation. We discuss whether managers can usefully call upon these available estimates, with a view to using the benefit transfer approach to include non-market values in economic decision frameworks. Additional context-specific non-market valuation studies are required to provide a more accurate selection of value estimates for natural hazard decision making. Decision making would benefit from considering these values explicitly in prioritising natural hazard investments.

}, keywords = {Non-market values; Intangible values; Willingness to pay; Natural hazard mitigation; Prioritising investments}, doi = {https://doi.org/10.1007/s11069-019-03761-7}, url = {https://link.springer.com/article/10.1007/s11069-019-03761-7}, author = {Abbie Rogers and Fiona Dempster and Jacob Hawkins and Robert Johnston and Peter Boxall and John Rolfe and Marit Kragt and Michael Burton and David J Pannell} } @article {bnh-8039, title = {Value Tool for Natural Hazards: Guidelines}, number = {361.2018}, year = {2018}, month = {06/2018}, institution = {Bushfire and Natural Hazards CRC}, address = {MELBOURNE}, abstract = {

The {\textquotedblleft}Value Tool for Natural Hazards{\textquotedblright} comprises of a Value Tool Database, which provides a collection of non-market value estimates relevant to natural hazards, and these Value Tool Guidelines, which describe how to use the values collated in the Database. The purpose of the Value Tool is to provide an accessible list of non-market value estimates for policy makers to use in decision making about natural hazard management.

The non-market or intangible benefits and costs of natural hazards are large in many cases, and should be accounted for in prioritising investment in natural hazard mitigation. We recommend that non-market values should be considered in natural hazard decision making as follows:

The Guidelines provide an overview of non-market values and benefit transfer for natural hazard decision making as follows:\ 

The Value Tool Database and Guidelines provide guidance on how the non-market value estimates should be used, and the policy contexts under which they are best suited for use. We recognise that the non-market valuation literature is incomplete with respect to providing highly accurate value estimates for all of the value types that might be affected by a natural hazard (see Section 3). However, we advocate that the use of an approximate number is usually better than no number, when it comes to decision making. It is better to have some information about the intangible benefits of a decision, than to ignore them completely: the error, and decision bias, resulting from the latter is likely to be far greater than the error from using an inaccurate number.

Provided the policy maker is aware of the potential for this error, uses a conservative approach for transferring values, and undertakes appropriate sensitivity analysis in analyses that use those values, then the values can provide useful, quantitative information for decision making. As noted above, in some cases, where a value transfer is too unreliable, we don{\textquoteright}t recommend using the values in a quantitative analysis, but suggest using them in a qualitative manner to inform thinking about particular policies.

}, keywords = {guidelines, hazards, natural, tool, Value}, issn = {361}, author = {Abbie Rogers and Fiona L Gibson and Peter Boxall and Michael Burton and Jacob Hawkins and Robert Johnston and Marit Kragt and John Rolfe and David J Pannell} } @conference {bnh-2934, title = {Non-market valuation in the economic analysis of natural hazards}, booktitle = {AFAC16}, year = {2016}, month = {08/2016}, publisher = {Bushfire and Natural Hazards CRC}, organization = {Bushfire and Natural Hazards CRC}, address = {Brisbane}, abstract = {

To achieve value for money from investments in management of natural hazards (including mitigation, emergency response and clean up) economists advocate the use of tools like Benefit: Cost Analysis (BCA) to evaluate actions or policies (e.g. Milne et al. 2015). Many governments worldwide encourage the use of BCA for policy evaluation. For example, according to its Best Practice Regulation Handbook, {\textquoteleft}The Australian Government is committed to the use of cost{\textendash}benefit analysis to assess regulatory proposals to encourage better decision making{\textquoteright} (Australian Government 2010, p. 61).


Some of the relevant benefits and costs related to natural hazard management are relatively difficult to quantify, particularly in financial-equivalent terms. There are a number of advantages from expressing non-financial impacts in financial-equivalent terms: to compare the benefits and costs of policy or management actions in order to evaluate whether they are worthwhile policies or actions; to rank alternative investments in terms of value for money; and to make rigorous business cases for investment.\ Economists have developed a range of techniques to do so, known as {\textquoteleft}non-market valuation{\textquoteright}, but they remain underutilized in the natural hazard sector. The first purpose of this presentation is to identify the methods available to quantify non-market values in financial-equivalent terms. Non-market valuation techniques use empirical evidence about human behaviour or statements in surveys to quantify preferences for the provision of a public good or service.

}, author = {Fiona L Gibson and David J Pannell and Abbie Rogers and Marit Kragt and Atakelty Hailu} } @article {bnh-4116, title = {Non-market valuation in the economic analysis of natural hazards}, number = {1604}, year = {2016}, month = {05/2016}, institution = {School of Agricultural and Resource Economics, Unviersity of Western Australia}, type = {Working Paper}, address = {Crawley}, 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.

}, issn = {1604}, url = {http://ageconsearch.umn.edu/record/236941}, author = {Fiona L Gibson and David J Pannell and Peter Boxall and Michael Burton and Robert Johnston and Marit Kragt and Abbie Rogers and John Rolfe} }