Case study Directory UMM :Data Elmu:jurnal:E:Ecological Economics:Vol32.Issue2.Feb2000:

parameter vectors subject to the equality restriction. 4 . 2 . Hypothesis 2 The second hypothesis is targeted towards the detection of differences in the marginal rates of attribute substitution MRS across the two data sets. Of particular interest are differences involv- ing the monetary attribute, as these are most relevant to welfare estimation. To the extent that inclusion of policy labels reduces the importance of the attributes, we would expect the implicit prices of these attributes to fall. Because the scale factors cancel when dividing coefficients for the models considered in this paper, estimates of MRS are essentially independent of differences in error variances. H2 is thus: H2: MRS L km = MRS G km where m refers to the monetary attribute and k refers to any other. Rejection of H1 and H2 for all attributes implies that the labelled treatment has not affected the importance of the attributes. The method outlined by Poe et al. 1994, 1997 is used to test H2. The Krinsky and Robb 1986 procedure is first used to simulate the distribution of the MRS measures. For each version of the questionnaire, multiple parameter vectors are drawn randomly from a multivariate normal dis- tribution with the mean and variance – covariance matrix of the sample logistic distribution. Each of these vectors is used to calculate the MRSs of interest. Following Poe et al. 1997, the simulated MRSs are then paired across the two treatments and differences taken. Finally, a one-sided ap- proximate significance level is estimated by calcu- lating the proportion of the differences with the hypothesised sign. 4 . 3 . Hypothesis 3 This hypothesis pertains to differences in com- pensating surpluses estimated for given policy changes. The equality of welfare estimates across the two treatments is tested. It is important that this hypothesis be considered as the inclusion of alternative-specific policy labels and levels may simply redistribute the source of the utility in terms of the attribute part worths and the ASC. The inclusion of policy labels may shift respon- dents’ attention from the attributes to the labels. The overall utility of a given policy option could conceivably remain unchanged if these changes are offsetting. The Poe et al. 1997 procedure is applied to estimates of compensating surplus CS obtained using Eq. 10 to test this hypothesis. The third hypothesis is thus: H3: CS L = CS G Hypotheses H1 to H3 are explored in the context of a CM study directed at estimating the non-use values associated with increased retention of rem- nant vegetation in the Desert Uplands region of Central Queensland, Australia.

5. Case study

4 The Desert Uplands is one of 13 terrestrial biogeographic regions of Queensland, covering some 6 881 790 ha 4 of Queensland. The re- gion is essentially a band of scattered woodland country between the open grasslands of the arid western plains and the semi-arid to sub-humid brigalow Acacia harpophilla country to the east. The region is relatively unproductive for pastoral and agricultural purposes compared to other re- gions in the south and east of Queensland. This is because of its relatively low rainfall and poor soils, and its vegetation which is reasonably un- palatable to domestic stock. One reason why the term ‘desert’ is attached to the area is because spinifex Triodia spp., a grass common to the drier areas of Australia, is a major grass species in the region. The region is almost exclusively used for pas- toral purposes. Cattle are bred and fattened for beef production over much of the region, and sheep are also run in some areas. Pastoralists have 4 Further details regarding the case study are provided in Rolfe et al. 1997. been attempting to increase the carrying capacity of their land by a variety of methods, including the clearing of trees and the introduction of non- native grass species. Initially these developments were limited to patches of more fertile soils. The region now has one of the highest clearing rates in Australia, with between 4 and 8 of many broad country types being cleared between 1992 and 1995 McCosker and Cox, 1996. Landholders must gain permission to clear trees from the Queensland Government through the Department of Natural Resources. In issuing the permits for broadscale tree clearing, the State Government policy calls for a balance between the benefits of increased productivity most of which accrue directly to the landholders against the environmental costs of diminished vegetation cover which are more broadly spread across the regional and national communities. The estima- tion of these environmental costs is the focus of the CM application described below. The Queensland Government has recently been revising its tree clearing policies, with the result that some vegetation communities are now pro- tected. Other vegetation communities can be cleared to 20 of their original extent on individ- ual properties. The CM exercise is aimed at as- sessing the environmental costs associated with alternate guidelines. The use of labels reflecting tree retention levels is thus the most policy relevant way of framing choice options. In the labelled version of the questionnaire employed in this study, respondents were asked to choose whether they prefer the current retention level of 20, increased retention of 30, or a further increase to 50. 5 Note that these labels communicate information regarding changes in protected vegetation area.

6. Questionnaire design