Extreme weather events are causing sand erosion across the NSW coastline. Beach erosion threatens the integrity and value of residential property, as well as leisure and tourism activities.
Local councils and the NSW Office of Environment and Heritage can continue to let nature take its course, or invest to protect the shoreline from further erosion.
The client wanted to identify the value the public derives from coastal protection measures, to decide which measure should be taken and to see if the public would be willing to pay a levy to maintain NSW beaches, and if so, how much they would be willing to pay and for how long.
Existing models in the environmental economics literature that estimate the publics willingness to pay for non-market goods are often flawed because they ignore individuals who are unwilling to pay any levy (nay-sayers), or are willing to pay any levy (yay-sayers). Innovative models are therefore required to ensure forecasts of revenue from a levy are not overestimated.
A Discrete Choice Experiment (DCE) was designed which asked respondents to choose between having no erosion prevention measures and a levy of $0, and hypothetical scenarios which required a levy payment over 10-50 years to preserve the current width and length of the beach. The experiment also varied the type of beach (surf, iconic, bay or main beach), its proximity to home, and the length of the levy.
There are four market segments who vary in their likelihood of accepting a levy.
The client was provided with a decision dashboard (DSS) to calculate the maximum levy that can be collected from each beach, dependent on the levy amount and the number of people who would be willing to accept a levy at that price.
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