Daniel Gregg

The Economic Contribution of the Resources Sector by Regional Areas in Queensland

Although it is widely accepted that the resources sector makes a significant contribution to national and state economies, information about how it impacts on local and regional economies is much scarcer. Understanding the spread of economic stimulus and subsequent indirect business and consumption effects is important because of the changing patterns of business operations, employment and supply chains in the resources sector. The focus of the research reported in this paper was to identify the geographical spread of economic impacts from the resources sector across Queensland. The results of the analysis demonstrate that incomes and expenditures from the resources sectors are widely distributed across the state, and generate significant flow-on effects. It is notable that the industry makes a strong direct contribution in many of the more remote areas of Queensland, helping to underpin economic conditions in those regions. Expenditure from the resources industry has indirect impacts on the business environment in many areas, and generates substantial levels of production in south-east Queensland and central Queensland in particular.

Factors affecting adoption of improved management practices in the pastoral industry in Great Barrier Reef catchments.

Substantial efforts are being made by industry and government in Australia to reduce adverse impacts of pastoral operations on water quality draining to the Great Barrier Reef. A key target is to achieve rapid adoption of better management practices by landholders, but current theoretical frameworks provide limited guidance about priorities for improving adoption. In this study information from direct surveys with landholders in the two largest catchments draining into the Great Barrier Reef has been collected and analysed. Study outcomes have important implications for policy settings, because they confirm that substantial variations in adoption drivers exist across landholders, enterprises and practices. The results confirm that the three broad barriers to adoption of information gaps, financial incentives and risk perceptions are relevant. This implies that different policy mechanisms, including extension and incentive programs, remain important, although financial incentives were only identified as important to meet capital and transformational costs rather than recurrent costs.

Identifying sources and trends for productivity growth in a sample of Queensland broad-acre beef enterprises

The research reported in this paper considers the question of the possible sources of productivity change in the broad-acre beef sector in northern Australia over the last decade. Analysis is conducted over the components of total factor productivity growth for a subset of broad-acre beef production enterprises in Queensland. Specifically we consider the contributions of technological progress, scale changes (changes in the ‘size’ of an enterprise), and technical efficiency (how efficiently an enterprise combines their inputs to produce output) changes to total factor productivity growth using an index based on a decomposition of productivity change. The analysis employed a form for the production technology, which allowed for linear technological progress over time, accounted for rainfall and differences in land types and allowed for the testing of a range of sources of efficiency change. Results suggested that productivity growth within the sample was strong between 1999 and 2008 averaging 3.8% per year. The majority of this growth appeared to originate from technological progress (average growth of 2.7% per year) but there is the possibility that sample-leakage effects caused relatively low estimated contributions from technical efficiency growth (averaged 1.2% per year). Participation in a privately operated farm-business auditing program appeared to have a positive influence on enterprise technical efficiency.

Risk Behaviours and Grazing Land Management: A Framed Field Experiment and Linkages to Range Land Condition

We use a framed field experiment considering hypothetical stocking rate decisions made by grazing enterprise managers and estimate non-linear multinomial logit models for a range of nested non-expected utility and expected utility models. The risk and decision-bias parameters for five models estimated for individual responses are shown to be significantly related to land condition but in ways which suggest behavioural aspects of decision making are critical in understanding land management and stocking rate decisions. Our results show that individual heterogeneity in decision making amongst farming groups is likely to be a significant source of variation in farming intensity and technology adoption decisions. This heterogeneity does not appear to be a reflection of socio-demographic characteristics. Furthermore, decision functions appear to be biased toward selection of simpler representative functions (e.g. Expected Utility) for sample averages. This suggests that experimental findings that Expected Utility is representative for actual decisions may be due to sample averaging rather than reflect actual behaviour.

How can we value an environmental asset that very few have visited or heard of? Lessons learned from applying contingent and inferred valuation in an Australian wetlands case study

To date, the majority of environmental assets studied in the economic valuation literature clearly have high amenity and recreational use values. However there are many cases where small, but nevertheless unique and important, ecosystems survive as islands amongst large areas of modified, productive, or urban, landscapes. Development encroaches on the landscape and as urban landscapes become more concentrated these types of conservation islands will become increasingly more important. Previous experience with economic valuation suggests that lower total values for smaller contributions to conservation are more liable to be swamped by survey and hypothetical bias measures. Hence there needs to be more understanding of approaches to economic valuation for small and isolated environmental assets, in particular regarding controlling stated preference biases. This study applied the recently developed method of Inferred Valuation (IV) to a small private wetland in South-East Australia, and compared willingness to pay values with estimates from a standard Contingent Valuation (CV) approach. We found that hypothetical bias did seem to be slightly lower with the IV method. However, other methods such as the use of log-normal transformations and median measures, significantly mitigate apparent hypothetical biases and are easier to apply and allow use of the well-tested CV method.

Myopia and saliency in renewable resource management

An important challenge in managing renewable resources is to understand why owners and managers sometimes make decisions that deplete resources and future earnings, such as when graziers allow pastures and land condition to be degraded. In this paper, we test two potential reasons for unsustainable management practices, myopia and salience, with each explaining why resource managers may exhibit impatience in harvest decisions. Myopia is associated with decision makers placing lower weight on future outcomes than would be implied by their pure time preference. Salience is associated with overweighting of consumption ‘now’, implying inconsistency in time preferences. To test for these effects on renewable resource management, an incentivised, dynamic field experiment was carried out with rangeland grazing enterprise owners in north‐eastern Australia that related management choices with uncertain rainfall events to both profits and land condition over time. Results demonstrate that respondents exhibiting myopia/salience in their choices tended to achieve lower cumulative scores in the experiment, as well as lower land conditions on their properties as measured with remote sensing data. Our results explain why there may be persistent optimisation failures by resource owners that reduce both profits and environmental outcomes.