Second Best Beach (B) Demand Curve
T ABLE 7.3 E VALUATION OF SELECTED RESTORATION PLANS WITH THE E VERGLADES MULTIATTRIBUTE MODEL
Net
Percent Willingness
Plan Description in Favor Ranking to Pay
Full Restoration Without Costs 71.7% 1 $58.78
Lake Okeechobee = 90% Cost = 0
Water Conservation Areas = 90% Farmland = 0
Everglades National Park = 90% Water Restrictions = 0
Partial Restoration With No Costs, Minor Restrictions 54.3% 2 $ 6.42
Lake Okeechobee = 60% Cost = 0
Water Conservation Areas = 75% Farmland = 100,000 acres Everglades National Park = 75% Water Restrictions = 2 days/25%
Full Restoration With Low Cost, Minor Restrictions 54.3% 3 $15.59
Lake Okeechobee = 90% Cost = $ 25
Water Conservation Areas = 90% Farmland = 100,000 acres
Everglades National Park = 90% Water Restrictions = 2 days/25%
Partial Restoration With Low Cost, Minor Restrictions 44.3% 4 –$ 8.90
Lake Okeechobee =75% Cost = $ 25
Water Conservation Areas = 75% Farmland = 100,000 acres
Everglades National Park = 75% Water Restrictions = 2 days/25%
Full Restoration With High Cost, Major Restrictions 31.1% 5 –$61.10
Lake Okeechobee = 90% Cost = $ 50
Water Conservation Areas = 90% Farmland = 200,000 acres Everglades National Park = 90% Water Restrictions = 1 day/40%
garner a majority (44.3 percent) of respondents. Moreover, the net willingness to pay for this plan would be negative indicating no positive economic benefits. These results suggest that restoration planners should carefully consider the potential loss of public support for any plan that imposes high costs or major water use restrictions on Floridians.
CONCLUSIONS
Ecosystem restoration planning and decision making for the Everglades/South Florida region is complicated by both scientific and social questions. Decisions about what and how much to restore must consider the social tradeoffs inherent in alternative restoration plans. Multiattribute utility analysis provides a flexible tool to frame the decision problem, evaluate public preferences for alternative plans and develop mea- sures of the economic value of alternative plans.
Results from this survey of Floridians about preferences for restoration of the Everglades/South Florida ecosystem demonstrate some of the possible uses of the MAU approach. These survey results suggest that a strong desire by Floridians for restoration of the Everglades/South Florida ecosystem is tempered by the potential consequences of restoration decisions on municipal water users and agricultural inter- ests in South Florida. For example, the net willingness to pay for a full restoration plan with no direct costs to Floridians is $58.78 per household per year (Table 7.3).
Extrapolating this value to the population of 5.7 million Florida households (as of 1997) would result in an aggregate net willingness to pay of $335 million per year for this plan.10Over a ten-year period, this would amount to $3.35 billion.11
Alternatively, a full restoration plan that imposes direct costs on Floridians in the form of a $25 annual cost per household, minor water use restrictions, and a 100,000 acre decrease in farmland would have a net willingness to pay of $15.59 per household per year (Table 7.3). The aggregate net willingness to pay over a ten-year period for this plan would be $889 million. Comparable aggregate values could be constructed in a similar fashion for other plans described in Table 7.3 or for additional plans that could be described by different combinations of the attributes.
Additional analyses of the multiattribute utility survey results could be used to show how these preferences differ across socioeconomic groups and different regions of the state. Estimates of willingness to pay for alternative plans can then be derived for
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10The survey was designed to be representative of the population in the five counties described previously
and was not intended to be representative of the Florida population. Since the five counties included in the survey account for a large share of the total Florida population south of Orlando (Orange county), the primary differences in preferences and willingness to pay for Everglades restoration would likely occur in North Florida.
11Expressed in real 1998 dollars. Growth in the number of households in Florida or changes in preferences
different socioeconomic groups or regions of the state (see Milon et al. 1999, Section 6). This kind of analysis highlights differences in the intensity of preferences that may exist for various groups and their willingness to pay for specific restoration actions. An application of decision making tools such as MAU analysis in ecosystem restoration planning offers the promise of better information for resource managers and the public. REFERENCES
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Historically, management actions to protect aquatic ecosystems have often been done in reaction to serious deterioration or on a piecemeal basis; this may be especially so in regions where natural resources are important features of an economy that depends on recreational use of natural resources by residents and large numbers of nonresidents. In the central Florida region of the Indian River Lagoon, concern over environmental degra- dation and its implications for the economy led to a management plan for restoration and conservation. In order to put the plan into action, it was necessary to develop a firm basis for financial support by residents and visitors. A first step was to determine the economic value associated with various uses of the resources, a value that could not be measured directly but required the use of non-market tools for making such an assessment. The next step was to determine how much residents and visitors were willing to pay to meet the needs of a healthy ecosystem.