Total Economic Value Research Articles

Economic Value of Major Lakes in Coimbatore City

Lakes are recognized as freshwater resources in rural and urban areas. In the last few decades, lakes situated vicinity of cities are rapidly degraded due to lack of maintenance and economic development. Lakes areas were encroached, converted into buildings and house plots because and people were not aware of the intrinsic value of lakes. Coimbatore is one of the tier II cities in India, it has several lakes in and around the city limits. In 2016, Coimbatore is one of the city selected under the smart city mission. Under the Smart City mission, Coimbatore city municipal corporation restores the water bodies. But, lakes around household activities and lake visitor’s activities affect the lake quality and ecosystem. The main reason was the people were not aware about the intrinsic value of lakes. Therefore, this study estimates the total economic value of ecosystem services derived from major lakes in Coimbatore city. The total hectare of major 9 lakes was647.61 ha and its ecosystem services value was 608.36 crores/year. Kurichi lake has the highest catchment area, its ecosystem services value was 127 crores per year. The monetary value of lakes makes awareness about the significance of lakes ecosystem services and people are co-operate with lakes restoration activities.

Is there a stronger willingness to pay for air quality improvement with high education: new evidence from a survey in China.

As a developing country with the largest population and serious environmental pollution in the world, China has made great efforts in air pollution. Air quality improvement depends not only on government administrative regulations but also on public support, especially how much the public is willing to pay for air quality improvement. Higher education will encourage the public to take action to improve air quality. However, the confirmation of the causality relationship between WTP and education has been missing. This study uses the Chinese General Social Survey (CGSS) to find the relationship between the two, and the conclusions are drawn: OLS regression model and instrumental variable both determine the positive influence of education level on air quality improvement WTP, and Heckman model further verifies the robustness of the conclusion. The positive influence of education level is greater in the groups of men, higher income, higher awareness of acid rain, and more air purifiers, and it has a greater impact on married people in rural areas than in urban areas. The function mechanism of education can improve residents' WTP by increasing regional GDP, promoting urbanization level, expanding afforestation areas, decreasing private car ownership and the number of newly registered civil cars, and reducing sulfur dioxide emissions, nitrogen oxides, and smoke (powder) dust. The total social and economic value of air quality improvement in China is 34.572 billion CNY to 672.42 trillion CNY.

Evaluation of Ecological Service Function of Liquidambar formosana Plantations.

A Liquidambar formosana plantation is a kind of fast-grown forest in the subtropical region, providing a variety of ecosystem services such as superior wood, carbon fixation and oxygen release, and biodiversity maintenance. However, the ecological service function value of Liquidambar formosana plantations is not clear. To gain insights into the characteristics and importance of its ecological and economic benefits, the Liquidambar formosana plantation in the Tianjiling Forest Farm of Changsha City was taken as the specific research object in this paper. The ecological service function evaluation index system for Liquidambar formosana plantations was established based on the relevant research worldwide and the actual situation. The market value method, shadow engineering method, carbon tax method, and other environmental economics methods were used to estimate the value of seven ecological service functions (including organic matter production, carbon fixation and oxygen release, water conservation, soil conservation, soil improvement, air purification, and biodiversity maintenance) of the forest of Liquidambar formosana. The results indicated that the total economic value of ecological service function provided by the Liquidambar formosana plantation of Changsha was 103,277.82 RMB/(hm2·a), and the indirect economic value was 8.47 times that of the direct economic value. Among the seven ecological service functions, the value of carbon fixation and oxygen release was the highest (36,703.33 RMB·hm-2·a-1), thus suggesting that the Liquidambar formosana plantation had strong photosynthesis and significant carbon fixation. This study directly reflects the value of forest ecological service function in the form of currency, which is beneficial to provide more insights into forest ecological service function so as to provide basic data and a scientific basis for the protection, construction, and promotion of the sustainable utilization and development of urban forest resources.

Ecosystem Sustainability Assessment Using an Economic Valuation Index for Selected Offshore Islands in Vietnam

Huong, D.T.T. and Lan, T.D., 2022. Ecosystem sustainability assessment using an economic valuation index for selected offshore islands in Vietnam. Journal of Coastal Research, 38(6), 1128–1134. Coconut Creek (Florida), ISSN 0749-0208. Two sites around Bach Long Vi Island (North Vietnam) and Tho Chu islands (South Vietnam) were selected to perform an economic valuation index analysis for the sustainability assessment of insular coastal ecosystems. The critical study methods are based on indicators and index selection and analyses following the well-documented Driver-Pressure-State-Impact-Response framework. Total ecosystem economic indices were proposed and calculated using three subindices, including the direct use value index (Idev) of a factor of 35.71 for Bach Long Vi Island and 9.52 for Tho Chu islands, the indirect use value index (Iidev) of 39.38 and 9.52, and the nonuse value index (Inuv) of 100 for both study sites. A total economic valuation index (Ieev) of island coastal ecosystems, consisting of coral reefs and rocky reefs at both sites, was calculated using Idev, Iidev, and Inuv. Ieev values at assigned scale between 0 and 100 points; values lower than 50 indicate ecosystems used unsustainably. Within this 100-point scale, the Ieev for the coastal ecosystems surrounding Bach Long Vi Island from 2014-detected parameters was calculated as 58.37, revealing an overall sustainable use. On the contrary, the value for the Tho Chu islands for the same period was 39.68, indicating that this latter site was unsustainably used. Developing and analyzing these indices can be applied to other coastal ecosystems, such as beaches, mangroves, corals, etc., both in Vietnam and in similar international contexts.

Valuasi Ekonomi Ekosistem Mangrove Di Pulau Jeflio, Distrik Mayamuk, Kabupaten Sorong

Mangrove forest ecosystem is one of the natural resources of coastal areas that has very large functions and benefits. Economic valuation aims to provide economic value to the resources used in accordance with the real value from the community's point of view. The research was conducted on Jeflio Island, Mayamuk District. Methods of data collection using questionnaires and interviews. results Based on the research, the value of mangrove wood is Rp. 38,779,706,924; fish value Rp. 85.800.000; shrimp value Rp. 3,600,000; crab value Rp. 2,912,000; option value Rp.19,558,711; existence value Rp. 9,672,377. The total economic value of mangroves on Jeflio Island is Rp. 38,898,340,924. The utilization of the mangrove ecosystem on Jeflio Island is quite large so that the participation of related parties is needed in the management of the mangrove ecosystem.

A socio-economic analysis of the wood supply ecosystem service in the Oued Beht watershed, Morocco

ABSTRACT Forest ecosystems provide a range of ecosystem services (ES) of which timber forest products (TFPs) represent a significant proportion of their economic value. This proportion is not entirely included in the total economic value of forest as there is a lack of data on the direct wood harvesting done by the local population which negatively affects the sustainable management of these resources. This study aims to emphasising the economic value of wood, based on two wood mobilisation systems (official and unofficial) which have been explored to determine the quantities extracted and their economic values. The results of study show that the wood generate an annual socio-economic value of more than 199 million MAD or 5,981 MAD/ha/year. The right-use presents 66.80% of this value, more than 133 million MAD, followed by the auction with 31.09% and the illegal cuts with an amount of 4.2 million MAD. This work confirms the important role of this ecosystem service in the socio-economic life of local population. This information is useful towards emphasising need for participatory forest management to ensure the rational use of this ecosystem and the sustainability of its socio-economic values. This would ensure that community beneficiaries appreciate the economic role of forest products and the need to strengthen community governance structures in an endeavour to reduce conflict amongst beneficiaries. Therefore, we recommend institutionalising an equitable partnership between the users of space and the forest administration.

Ecosystem services valuation in developing countries: a review of methods and applicability approach

Urban growth has compromised the capacity of ecosystem services (ES), causing impacts such as degradation, urban heat islands, climate change and floods. Importance of ES can help improve their condition and management through political and urban planning instruments. This study was developed by reviewing the literature using the preferred reporting items for systematic reviews and meta-analyses disclosure guidelines to identify ES valuation methods based on the total economic value (TEV) framework. The literature review included 117 articles that (a) were based on the TEV framework and (b) offered quantitative results. The results show that: (a) 52 studies evaluated more than one ES and that the regulation service is the most investigated, (b) the contingent valuation method is the most used and the least used was the production function and (c) that 78 of the 117 studies conclude with proposals for the implementation of public policies, of which conservation, protection and restoration policies are the most important and the method most used for public proposals was the contingent valuation method. It is essential to mention that implementation of ES valuation in urban planning benefits users and ecosystems.

Water Allocation, Return Flows, and Economic Value in Water-Scarce Environments: Results from a Coupled Natural-Human System Model

In many parts of the world including the western United States, the allocation of water is governed by complex water laws that dictate who receives water, how much they receive, and when. Because these rules are generally based on the seniority of water rights, they are not necessarily focused on maximizing economic value across the entire economy. The maximization of value from water use economy-wide is a complex optimization problem that must explicitly consider each user’s water demand, willingness to pay (WTP) function, and the feedbacks among users in a coupled natural-human system model. In this study, we distill these complexities into a simple MATLAB® model developed to represent a two-user economy with water-dependent sectors representative of agriculture and industry. We feed the model with realistic values of relative water use, relative willingness to pay, and return flows to explore the relationships among these factors in water-limited systems. We find that the total economic value generated from water-dependent users depends primarily on the total water available in the system. However, for a given volume of water available, economic value is not necessarily maximized when all the water is appropriated to the user with the highest WTP. Rather, total economic value depends on the amount of water available, the relative WTP between the two users, and on the return flows generated from each sector’s water use. While our simple two-user model is a significant abstraction of the complexities inherent in natural systems, our study provides important insights into the coupled natural-human system dynamics of water allocation and use in water-limited environments.

Application of a multi-species bio-economic modelling approach to explore fishing traits within eligible cetacean conservation areas in the Northern Ionian Sea (Central Mediterranean Sea)

The assessment of the spatial overlap between eligible cetacean conservation areas (CCAs) and fishing grounds could be a strategic element in the implementation of effective conservation measures in the pelagic offshore areas. A multi-species bio-economic modelling approach has been applied to estimate the fishing traits in eligible CCAs in the Northern Ionian Sea (NIS, Central Mediterranean Sea) between 10-800 m of depth, adopting the Spatial MAnagement of demersal Resources for Trawl fisheries model (SMART). Four possible CCAs were defined according to the distribution of cetacean species, their bio-ecological needs, as well as socio-economic needs of human activities, identifying a Blue, Red, Orange and Green CCAs in the NIS. SMART spatial domain was a grid with 500 square cells (15×15 NM). The analysis was conducted for the period 2016-2019, considering the Otter Trawl Bottom (OTB) fleet activities in the study areas through the Vessel Monitoring System. The spatial extension of fishing activities, hourly fishing effort (h), landings (tons) and economic value (euros) for each CCA and the NIS were estimated as yearly median values. Fishing activities were absent in the Blue CCA, where the presence of the submarine canyon head does not offer accessible fishing grounds. The hourly fishing effort in the Green area accounted for about 22% (3443 h) of the total hourly effort of the NIS, while the Orange and Red areas were about 8% (1226 h) and 2% (295 h), respectively. The Green CCA corresponded to about 14% (36 tons) of the total landings in the NIS, whereas the Orange and Red areas represented about 9% (22 tons) and 6% (16 tons), respectively. The Green CCA accounted for about 13% (156 thousand euros) of the total economic value of the NIS, while the Orange and Red areas represented about 6% (69 thousand euros) and 4% (44thousand euros), respectively. Results showed no or negligible negative effects on trawl activities by potential spatial restrictions due to the establishment of CCAs highlighting the importance to consider spatially integrated information during the establishment process of conservation areas for cetacean biodiversity according to the principles of Ecosystem Based Management.

Direct and Indirect Contributions of Forest to the Other Sector of Economy Ethiopia: Review

The forest sector contributes to economy beyond itself and extends to other sectors through direct and indirect effects. Insufficient identification of forest contribution to other sector of economy can result in the underestimation of the sector and leads to poor policy priority. The main objective of this study is to identify the contribution of forest to other sector of economy in Ethiopian. For this study both quantitative and qualitative secondary data were used. The result study showed that forest resources add different values to other sector of economy such as agriculture, food security, health, construction, energy and water, tourism, employment and income generation. However, the current system of national accounts does not fully capture the direct and indirect forest contribution to the other sector of economy. The study recommends that forest sector needs to adopting the concept of total economic value and adequately identifying both direct and indirect contribution of forest to other sector of economy. Furthermore, develop and use updated socioeconomic data, forest specialized surveys to better understanding the contributions of forests to other sector and national economy. Keywords: Forest Contribution, Other sector Economy, TEV Methodology, Ethiopia DOI: 10.7176/JRDM/88-01 Publication date: October 31 st 2022

Water allocation using ecological and agricultural value of water

Although wetlands are among the most diverse and productive ecosystems in the world, they are under threat due to human activities and agricultural developments. The economic value of ecosystem services, including provisioning, regulating, supporting, and cultural services, provides a quantitative basis for the sustainable management of water resources systems. Moreover, ignoring the economic value of ecosystem services in the management of water resources systems can lead to a critical degradation not only in the ecosystem health but also in the long-term agricultural production. In this study, the total economic value of the water resources system is calculated as the summation of the economic value of the wetland's ecosystem services and agricultural production. A simulation-optimization approach is developed for hydro-economic planning at basin scale and designing environmental flow based on wetland's ecosystem services. The objective function is the total economic value of the system and the design variables include the cultivation area of agricultural sectors and environmental flow for the wetland. The optimal water allocation solution would result in 2048 billion rials that is 67 % from agriculture and 33 % from wetland ecosystem services. The results show that considering the value of wetland ecosystem services along with economic water use such as agriculture, in addition to increasing the total economic value, can result in an effective water allocation that satisfies the wetland's environmental requirements and leads to healthy and optimal planning at the basin.

Calculating Economic Valuation of Mangrove Forest in Bengkalis Regency, Indonesia

This research aims to determine the total economic value of mangrove forests on Bengkalis Island, Bengkalis Regency, Indonesia. Data collection in the field was done through observation and interviews. The research was carried out from October 2020 to March 2021. The results showed that the total economic value of mangrove forests was US$ 5.8 million per year. This study uses Total Economic Value (TEV) as a framework for estimating the value of the benefits of mangrove forests in Bengkalis. In addition, another value taken into account in this study is the function of mangroves as abrasion barrier, barrier to seawater intrusion, and a provider of nutrients for marine biota. The results of this study underscore the importance of mangrove ecosystems for the economy of coastal areas.

Economic Valuation of Landscape in Marinas: Application to a Marina in Spanish Southern Mediterranean Coast (Granada, Spain)

Assigning a monetary value to a landscape improves its importance. It helps to realize the magnitude of the benefits that can be obtained and represents the basis for applying protection and improvement policies. As a case study, we considered Marina del Este, located on the Spanish Southern Mediterranean coast, characterized by the presence of protected natural areas of great value and a rugged coastline beautiful to sailors. This study applies the analytic multicriteria valuation method (AMUVAN) to estimate the landscape’s economic contribution. This method combines the analytic hierarchy process and discounted cash flow analysis. A total of 16 participants were considered, all with knowledge about the marina, which included areas of the marina management, management organizations with competencies in the marina environment, commercial operation, and university professors. They weighted the importance of landscape concerning the rest of the marina activities, use versus non-use values, and the components of the total economic value (TEV) of the landscape within marinas as a natural asset. Results expressed that the landscape may reach a value of around 16.3 million euros. It represents more than 3000% of the value of the marina’s profit and loss account. A detailed analysis of the components of the TEV makes it possible to propose strategies to improve the economic value of the landscape.

Factors That Affect Hydropower Flexibility

Flexibility in power systems is the potential to increase or decrease generation relative to scheduled generation or when most valuable. Increased penetration of variable renewable energy sources such as wind and solar increases the need for flexibility. Conventional hydropower plants are an important source of flexibility due to their ability to shut down and start generation units at short notice. However, there are not metrics or standards for hydropower managers to measure or quantify the potential flexibility of their systems. This novel study identifies key hydro system characteristics—physical and operational factors as well as the power markets—that, in our experience with real hydro systems, affect flexibility. A realistic but fictional system is analyzed that includes operating policies, deployment of reserves, physical aspects such as size of reservoirs, network configuration and power markets. The system is first modeled per “business as usual” operating rules to maximize total economic value of generation. The flexibility analysis measures the generation that can be increased or decreased in a single day by either maximizing the total on-peak generation in the upward direction or minimizing the total nadir generation in the downward direction. Results show the effects of each factor on both upward and downward flexibility.

Coral diversity matches marine park zonation but not economic value of coral reef sites at St. Eustatius, eastern Caribbean

Stony corals play a key role in the marine biodiversity of many tropical coastal areas as suppliers of substrate, food and shelter for other reef organisms. Therefore, it is remarkable that coral diversity usually does not play a role in the planning of protected areas in coral reef areas. In the present study we examine how stony coral diversity patterns relate to marine park zonation and the economic value of reefs around St. Eustatius, a small island in the eastern Caribbean, with fisheries and tourism as important sources of income. The marine park contains two no-take reserves. A biodiversity survey was performed at 39 sites, 24 inside the reserves and 15 outside; 22 had a maximum depth >18 m and 17 were shallower. Data on economic value per site were obtained from the literature. Corals were photographed for the verification of identifications made in the field. Coral species richness (n = 49) was highest in the no-take reserves and species composition was mainly affected by maximum depth. No distinct relation is observed between coral diversity and fishery value or total economic value. Based on the outcome of this study we suggest that in future designs of marine park zonation in reef areas, coral diversity should be taken into consideration. This is best served by including reef areas with a continuous depth gradient from shallow flats to deep slopes.

Economic valuation of Pade'an Hamlet mangrove forest, Jarangan Village, Rejoso District, Pasuruan Regency, Indonesia

The mangrove ecosystem has enormous benefits for the community, especially for people who live on the coast, including the mangroves in the Pade'an Hamlet, Jarangan Village, Rejoso District, Pasuruan Regency. This study aims to determine the economic value of mangrove forest in Pade’an Hamlet area using total economic value approach. This study used descriptive analysis to explain the activity of utilizing the natural resources of the mangrove ecosystem and quantitative analysis to calculate the total economic value of the mangrove ecosystem. The economic value of mangrove forests in the Pade'an Hamlet area per year is IDR 10,092,881,400.00. The total economic value obtained from the direct-use value (utilization of the fisheries sector) amounted to IDR 7,593,550,000.00/year, indirect-use value (abrasion restraints) amounted to IDR 2,335,952,000.00/year, option value (biodiversity) amounted to IDR 13,379,400.00/year, and existence value calculated from the willingness to pay of the local community is IDR 150,000,000.00/year. The magnitude of the total economic value of the mangrove ecosystem in Pade’an Hamlet area indicates that the mangrove ecosystem provides huge of essential benefits to the community.

Benefit Value of Mangrove Forest in Sarawet Village, Likupang Timur, Minahasa Utara

The purpose of this study is to: 1) identify various types of direct and indirect benefits of mangrove forests, and 2) estimate the total economic value of the mangrove forest in Sarawet Village. This type of research is descriptive and quantitative using survey methods. Data analysis in this study uses descriptive and quantitative analysis. Descriptive analysis is used to explain the activities of utilizing natural resources of mangrove ecosystems, while quantitative analysis is used to calculate the total economic value of mangrove ecosystems. The selection of respondents used the purposive sampling method, with a total of 76 respondents. Analysis of the total economic value for the value of direct benefits using market prices, and the value of indirect benefits using replacement costs. The results showed that the people of Sarawet Village use the mangrove forest ecosystem directly in the form of mangrove wood used as firewood and fence stakes, leaves Nipah are made with roofs, and the community carries out fishing and crab activities around mangrove waters.Analysis of the total economic value of the mangrove forest in Sarawet Village amounted to Rp. 6.884.344.178,-/year. The total economic value is obtained from the value of direct benefits including utilization as firewood Rp. 4,160,000,- /year; fence pegs Rp. 87.500,-/year; roof of the house Rp. 330.000,-/year; fishing Rp. 769.174.000,-/year; crab fishing is Rp. 190.320.000,-/year, and the value of indirect benefits is as a barrier to abrasion and seawater waves Rp. 5.920.272.678,-/year. The large economic value of the total mangrove forest ecosystem in Sarawet Village shows that the mangrove ecosystem provides great benefits to the community.Keywords: direct benefit value, indirect benefit value, total economic value, MangroveAbstrakThe purpose of this study is to: 1) identify various types of direct and indirect benefits of mangrove forests, and 2) estimate the total economic value of the mangrove forest in Sarawet Village. This type of research is descriptive and quantitative using survey methods. Data analysis in this study uses descriptive and quantitative analysis. Descriptive analysis is used to explain the activities of utilizing natural resources of mangrove ecosystems, while quantitative analysis is used to calculate the total economic value of mangrove ecosystems. The selection of respondents used the purposive sampling method, with a total of 76 respondents. Analysis of the total economic value for the value of direct benefits using market prices, and the value of indirect benefits using replacement costs. The results showed that the people of Sarawet Village use the mangrove forest ecosystem directly in the form of mangrove wood used as firewood and fence stakes, leaves Nipah are made with roofs, and the community carries out fishing and crab activities around mangrove waters.Analysis of the total economic value of the mangrove forest in Sarawet Village amounted to Rp. 6.884.344.178,-/year. The total economic value is obtained from the value of direct benefits including utilization as firewood Rp. 4,160,000,- /year; fence pegs Rp. 87.500,-/year; roof of the house Rp. 330.000,-/year; fishing Rp. 769.174.000,-/year; crab fishing is Rp. 190.320.000,-/year, and the value of indirect benefits is as a barrier to abrasion and seawater waves Rp. 5.920.272.678,-/year. The large economic value of the total mangrove forest ecosystem in Sarawet Village shows that the mangrove ecosystem provides great benefits to the community.Keywords: direct benefit value, indirect benefit value, total economic value, Mangrove.

VALUASI NILAI EKONOMI FUNGSI HIDROLOGIS CAGAR ALAM BUKIT BUNGKUK DI DESA MERANGIN KABUPATEN KAMPAR

One of the causes of forest destruction by humans is their lack of understanding of the economic value of forest ecosystem services. One of the forest ecosystem services is water management services. In order to encourage people to protect forests, they need to be given knowledge about the economic value of forest water that is used daily. The Bukit Bungkuk Nature Reserve is a conservation area in Riau Province. From this area flow three tributaries to the Merangin Village area. This study aims to calculate the economic value of the hydrological function of the Bukit Bungkuk CA area as a provider of household water for the Merangin Village community. The research was conducted by measuring river water discharge and using a questionnaire to calculate household water use. Based on the results of the study, it is known that the amount of water used is 125.0015 m3/day. The price of PDAM Tirta Kampar water is Rp. 4.500/m3, the economic value of water from Bukit Bungkuk Nature Reserve in Merangin Village is Rp. 562,506.72/day or Rp. 205,314,953/year. While the total economic value of water is Rp. 536,371,015,5 /day or Rp. 195,775,420,657/year.

Economic Value of Environmental Services of Swamp Land Ecosystem (A Case Study in the Hulu Sungai Utara Regency, Kalimantan Selatan)

About 22,000 hectares are planned to be converted to oil palm plantations by the local government. However, this area has been the source of livelihood for the Banjar people for generations. This economic-environmental services valuation was carried out using a total valuation approach. Previous studies have shown that swamps have economic benefits as a source of water for rice farming (Oryza sativa), timber (Melaleuca cajuputi), fisheries, handicraft crops (Eleocharis dulcis), and for drinking water. They also have ecological benefits in biological functions such as fish feed and breeding grounds, Galam (Melaleuca leucadendron) breeding, water storage, carbonate stocks, and biodiversity value. The total economic value was 21.3 million IDR per ha, with a ratio of the economic value of 7.15% and the value of ecosystem services (ecological) of 92.85%.

Improving allocative efficiency from network consolidation: a solution for the health workforce shortage

BackgroundPublic hospitals are facing a critical shortage of health workers. The area-based network consolidations could be the solution to increase the system capacity for human resources by improving local allocative efficiency.MethodsThis study develops counterfactual simulations for area-based network allocations for the health workforce in 10500 public hospitals in Thailand and examines improvements in allocative efficiency from the health workforce redistribution at different administrative levels such as sub-districts, districts, provinces, and health service areas. The workload per worker is calculated from the output measured by numbers of outpatient and inpatient cases and the input measured by numbers of health workers. Both output and input are weighted with their economic values and controlled for heterogeneity through regression analysis. Finally, this study compares the workload per worker and economic valuation of the area-based networks or ex-ante scenarios with the hospital-level or status quo scenario.ResultsNetwork consolidations of the sub-district primary-level hospitals within the same district could reduce workload per worker by seven percentage points. Another practical policy option is to consolidate similar hospital levels such as primary, first-level secondary, and mid-level secondary hospitals altogether within the same province which could result in the reduction of the workload per worker by 6–7 percentage points. The total economic value gained from consolidating similar hospital levels within the same province is about 15–18 percentage points of total labor cost in the primary hospitals.ConclusionThis study illustrates the improvement in allocative efficiency of the health workforce in public hospitals from the area-based network consolidations. The results provide an insightful example of economic gains from efficiently reallocating the medical workforce within the same local areas. Major reforms are required such that the health care delivery units can automate their resources in corresponding to the population's health needs through a strengthening gatekeeping system.