A decision-relevant hierarchical valuation instrument for freshwater restoration

Abstract

Freshwater quality is multi-dimensional with many interrelated activities, indicators, and demand-relevant values. Managers of freshwater restoration funds have an obligation to invoke social values when deciding on specific interventions, and balance values with other important criteria. However, it is often difficult to apply non-market values to operational decisions because valuation attributes are either not decision-relevant, ecologically irrelevant, incomplete in scope, or not able to be aggregated or disaggregated to the required spatial scale. The purpose of this study is to develop a stated preference instrument strategically positioned to be relevant to freshwater restoration institutions in New Zealand. The study uses a hybrid approach with different measurement methods to enable the elicitation of not only total willingness to pay for crown restoration activities, but also to decompose values by restoration goal and distance. To solve the problem of the large number of relevant attributes, a novel hierarchical budget allocation approach is used in combination with the recently developed Multiple Discrete-Continuous Nested Extreme Value (MDCNEV) model. The lowest level of the hierarchy includes discrete choice questions to elicit quality and distance trade-offs.