Quantifying intangible benefits of water sensitive urban systems and practices: an overview of non-market valuation studies

ABSTRACT

The positive impacts of water sensitive urban investments on the environment, community well-being, and lifestyles are widely recognised, but the process of formally quantifying these intangible benefits remains an underdeveloped research area. The monetary value of intangible benefits can be estimated using non-market valuation techniques. Here, we provide a review of over 190 existing non-market valuation studies related to water sensitive urban systems and practices that have reported dollar value estimates for intangible benefits. The empirical evidence suggests that communities are willing to make financial contributions towards projects that deliver intangible benefits. As such, incorporating the intangible benefits of water sensitive urban systems and practices into project evaluation processes is important. Unfortunately, attempts to evaluate water-sensitive urban projects based on both tangible and intangible benefits are rare. The summary and synthesis of existing research in this area is presented in the hope that it will facilitate greater use of intangible benefits in project evaluations.

KEYWORDS:

• Non-market valuation
• water sensitive urban designs
• benefit-cost analysis

Acknowledgments

We acknowledge the support of the Cooperative Research Centre for Water Sensitive Cities (CRCWSC) for the financial support to carry out the study. M S Iftekhar acknowledges funding support from the Australian Research Council’s Discovery Early Career Researcher Awards grant (ARC DECRA grant number DE180101503). An earlier version of the paper was presented in the 10th International Conference on Water Sensitive Urban Design. Crown Tower, Perth, Western Australia in 2018. The authors are grateful for the comments received from the audience. The paper has been substantially improved due to comments from two anonymous reviewers and the editor.

Supplementary Materials

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Notes

1. There is also a large body of literature on integrated water systems in Australia (Coombes and Barry 2015; Coombes 2005; Coombes and Kuczera 2002), as well as studies on cost savings due to interventions at household level, such as rainwater tanks of regional water systems (Coombes 2007; Coombes et al. 2002; Coombes, Barry, and Smit 2018). The focus of this paper, however is the non-market valuation literature.

2. The themes are interconnected and some studies provide values for several themes. Here we considered the themes which are most relevant to the majority of non-market values.

3. This adjustment was done using the consumer price index of survey year and the consumer price index of 2017.

4. Further information could be found in https://watersensitivecities.org.au/research/our-research-focus-2016-2021/integrated-research/irp2-wp2/.

Additional information

Funding

This work was supported by the Cooperative Research Centre for Water Sensitive Cities [IRP2-55001600], Australia; Australian Research Council’s Discovery Early Career Researcher Awards grant [DE180101503].

Notes on contributors

Asha Gunawardena

Dr. Asha Gunawardena is a Postdoctoral Research Fellow in the Centre of Environmental Economics and Policy (CEEP) at the UWA School of Agriculture and Environment, University of Western Australia. Her research interests are in the fields of agricultural, environmental and resource economics. She obtained her Ph.D. from the University of Western Australia in 2016. Prior to Ph.D., she worked as a researcher in agriculture, environmental and development economics in Sri Lanka. Her current research is related to water resource economics and economics of threatened species management in Australia.

Sayed Iftekhar

Dr Sayed Iftekhar is an environmental and resource economist with broad interests in the interactions between humans and nature. He works on urban and groundwater management, conservation auctions, fisheries quota allocation, networks and group formation, mechanism design, intergenerational equity and risk aversion, sustainable forest management, ecosystem services, protected areas, and environmental conservation. He uses different economic tools such as non-market valuation techniques, agent-based modeling, laboratory experiments, and simulations to study these issues.

James Fogarty

James Fogarty is an applied microeconomist, and part of Agricultural and Resource Economics, UWA School of Agriculture and Environment, University of Western Australia.  His primary research interests are alcohol markets, water economics, waste management and meta-analysis.  At the University of Western Australia, James teaches topics in applied agricultural economics, environmental management, and applied statistics.