Valuing Ex Ante Changes in Water Quality for the Marine Environment: A Hybrid Method Applied to Bass Straight, Victoria, Australia

Abstract: Water quality changes from reduced wastewater outfall are likely to favourably impact on the enjoyment of recreational beach users. The value of recreation at urban beaches in Australia is significant, valued at between $200 million to $600 million annually using the Individual Travel Cost Method (ITCM), and is larger than terrestrial recreation at National Parks (Blackwell 2007). Revealed preference methods such as ITCM are useful in observing people's recreational behaviour in the past. In contrast, stated preference methods, such as contingent valuation and choice modelling, are used to predict behavioural responses in the future. How do we estimate recreational behavioural responses for changes in environmental quality that are looming? Having a mix of both the travel cost method and the contingent valuation method may prove to be useful in such situations. This paper presents the results of a pilot test using such a method, the Contingent Travel Cost Method, for capturing changes in environmental quality ex ante at Gunnamatta beach on Bass Straight, Victoria from the closure of a wastewater outfall. Estimates of gains in recreation at Gunnamatta beach alone, not the entire southern Mornington Peninsula, from closing the outfall are found to be in the order of tens of millions of Australian dollars annually. Areas for future research are also considered.