@article {bnh-8038, title = {Economic Analysis Screening Tool: Guidelines}, number = {665}, year = {2021}, month = {05/2021}, institution = {Bushfire and Natural Hazards CRC}, address = {MELBOURNE}, abstract = {

This document provides an overview of the Economic Analysis Screening Tool (EAST) and its development, as well as the instructions on how to use it and how to interpret the results derived from it. EATS was developed by researchers from the University of Western Australia as part of the BNHCRC funded project {\textquotedblleft}Economics of Natural Hazards.{\textquotedblright}

These Guidelines should be used in conjunction with EAST and should be considered an integral part of the Tool package. We recommend users read these Guidelines before using EAST.

}, keywords = {analysis, EAST, economic, guidelines, screening, tool}, issn = {665}, author = {Veronique Florec and Abbie Rogers and David J Pannell} } @article {bnh-8120, title = {Economics of natural hazards - final project report}, number = {666}, year = {2021}, month = {07/2021}, institution = {Bushfire and Natural Hazards CRC}, address = {Melbourne}, abstract = {

The key aim of our project was to provide evidence on the economic, social, and environmental impacts of natural hazards, in order to help hazard managers make better decisions about the allocation of resources for the mitigation of natural hazards impacts. Using the tools and materials we have created in this project, our end-users will be better equipped to estimate the tangible (market) and intangible (non-market) impacts of natural hazards and assess how mitigation investments may reduce those impacts.

With this aim in mind, our main focus has been the development of tools and materials that make it easier for natural hazards managers to estimate the value of mitigation, integrate intangible (non-market) values in economic analyses of mitigation, and evaluate the difference it makes to include non-market values. Our goal has always been to provide managers with the tools they need to be able to make better decisions and have the evidence to back up their decisions.

Our project delivered 5 key outcomes:

  1. We launched an online platform for the Value Tool for Natural Hazards (a searchable database of the best available non-market value estimates relevant to natural hazards).
  2. We conducted a non-market valuation study that filled a major knowledge gap identified in the non-market values literature (i.e. the values of cultural heritage, social disruption and mental health, and how these are affected by natural hazards) and updated the Value Tool with the data from this study.
  3. We developed the Economic Analysis Screening Tool (EAST) for the evaluation of the (market and non-market) costs and benefits of mitigation options.
  4. We created a Free Online Video Course on the economics of natural hazards, using drawings and simple examples to explain key economic concepts and how they are applied to evaluate different mitigation options.
  5. We conducted an online training course on how to use economics in natural hazards management and delivered it to 4 different groups of end-user managers and practitioners.

All outcomes of the project had a utilisation focus and were developed in conjunction with our end-users. We spent a significant amount of time understanding our end-users{\textquoteright} challenges in order to create products that can help them make better decisions using economic analysis. We used their feedback to improve the tools developed and make them more accessible.

The work from this project has been published in 4 peer-reviewed publications, 8 conference papers and technical reports, 3 posters presented at conferences, and 4 online resources (see Project Publications section in this report).

}, keywords = {analysis, EAST, economics, mitigation, Natural hazards, natural hazards management, Policy, Value Tool}, issn = {666}, author = {Veronique Florec and Abbie Rogers and David J Pannell} } @article {bnh-7753, title = {Economic analysis of natural hazard mitigation using the Quick Economic Analysis Tool}, journal = {Australian Journal of Emergency Management}, volume = {35}, year = {2020}, month = {10/2020}, pages = {48-55}, abstract = {

An effective way to reduce the impacts of natural hazards on communities is by mitigating the risks. However, mitigation requires time and resources, which are usually limited. To use resources effectively, planners and managers are best prepared when they know their options and which of these options provides the best value for money. When there is not enough information, or an analysis would take several months or years to complete, having access to quick economic analyses in weeks rather than months would be very useful. This paper describes a Quick Economic Analysis Tool, developed at the University of Western Australia, to conduct quick analyses. A case study is used of two prescribed burn annual rates and are compared with results of an in-depth analysis of the application of different prescribed burn annual rates over the long-term that took several years to complete. The results from the quick analysis, despite a few differences, were comparable to results from an in-depth analysis and provided enough information to determine the value for money that each prescribed burn annual rate generated. This study showed that the quick analysis tool would allow fire managers to identify options worthy of business cases and to capture the information needed to increase confidence in their decisions.

}, keywords = {economic analysis, economics, Natural hazards, Prescribed burning, risk mitigation}, url = {https://knowledge.aidr.org.au/resources/ajem-october-2020-economic-analysis-of-natural-hazard-mitigation-using-the-quick-economic-analysis-tool/}, author = {Veronique Florec and Abbie Rogers} } @article {bnh-5420, title = {Economics of Natural Hazards Annual Report 2017-2018}, number = {455}, year = {2019}, month = {02/2019}, institution = {Bushfire and Natural Hazards CRC}, address = {Melbourne}, abstract = {

Our project aims to provide information on the economic, social and environmental impacts of natural hazards (tangible and intangible), in order to help hazard managers in their decision making. The purpose of our research is to help emergency service and land management agencies better prioritise their investments in mitigation. Using economic tools and expertise, we assess the impacts of hazard mitigation on intangible (non-market) values, in order to shed light on the real (total) costs and benefits of natural hazards (tangible and intangible) and help agencies better allocate their resources for mitigation.

}, keywords = {economics, environment, Multi-hazard, Natural hazards}, author = {Veronique Florec and Abbie Rogers and Atakelty Hailu and David J Pannell} } @article {bnh-5929, title = {Economics of natural hazards annual report 2018-2019}, number = {512}, year = {2019}, month = {09/2019}, institution = {Bushfire and Natural Hazards CRC}, address = {Melbourne}, abstract = {

Our project aims to provide information on the economic, social and environmental impacts of natural hazards (tangible and intangible), in order to help hazard managers in their decision making. We investigate the impacts of hazard mitigation on intangible (non-market) values, to shed light on the real (total) costs and benefits of natural hazards.

Our main focus is on developing tools and materials that will provide natural hazards managers with information on the value of mitigation and how intangible (non-market) values affect the costs and benefits of mitigation activities.
Our project will have 4 key outcomes:

  1. Provide an online platform for the intangible values database (called the Value Tool for Natural Hazards). The tool will be updated and maintained beyond the project so that managers can easily integrate intangible values in their analyses.
  2. Fill major knowledge gaps identified in the literature on intangible values that are affected by the management of natural hazards and improve the value tool with this new knowledge.
  3. Develop a Quick Economic Analysis Tool for the evaluation of the (tangible and intangible) costs and benefits of mitigation options that enables managers to conduct economic analyses in weeks rather than months.
  4. Create a Free Online Course on the application of economics to the assessment of natural hazard management options.

This year, we have progressed in the 4 outcomes outlined above:

  1. A website has been created for the Value Tool. Both the database and the guidelines can now be downloaded from http://valuetoolnaturalhazards.com. As per the agreement between UWA and BNHCRC, the tool will be freely accessible to end-users and external users. The website also includes the relevant disclaimer information and instructions that users of the tool must agree to comply with.
  2. A survey instrument has been designed and road-tested in a focus group for the original non-market valuation study. The next step in this process will be to test the survey in the Shire of York (WA), where we will estimate non-market values associated with cultural heritage and mental health.
  3. The draft (Beta) version of the Quick Economic Analysis Tool (QEAT) has been completed. QEAT is currently being improved to include an easy-to-use sensitivity analysis, to be able to perform the analysis of several management options concurrently and to include a summary dashboard where all results are summarised in an easy-to-read manner. These additions are key aspects that our end-users have mentioned in the past as important to include in a tool such as this one. The Tool now needs to be validated with case studies.
  4. Equipment for creating the online videos is being purchased (e.g. green screen for background, microphone and tripod for computer). Filming of the videos will commence in July 2019.

The utilisation outputs from our project this year involved the development and distribution of tools that help natural hazard managers integration intangible (non-market) values in their decision making. The Value Tool for Natural Hazards and the accompanying guidelines are now available online and can be easily downloaded by end-users of the BNHCRC or other organisations. The Beta version of the Quick Economic Analysis Tool (QEAT) is in the process of being improved to include key aspects that were highlighted by end-users as important to include in a tool as this one.

This year there were 4 publications from the project: 3 peer-reviewed and one non-peer reviewed (see Project Publications 2018-2019 section below).

}, keywords = {Bushfire, cost-effective, cyclone, earthquake, economics, Emergency management, Flood, Natural hazards, risk management}, issn = {512}, author = {Veronique Florec and Abbie Rogers and Atakelty Hailu and David J Pannell} } @article {bnh-6168, title = {Valuing non-market economic impacts from natural hazards}, journal = {Natural Hazards}, volume = {99}, year = {2019}, month = {08/2019}, pages = {1131-1161}, abstract = {

Prioritising investments to minimise or mitigate natural hazards such as wildfires and storms is of increasing importance to hazard managers. Prioritisation of this type can be strengthened by considering benefit and cost impacts. To evaluate benefits and costs, managers require an understanding of both the tangible economic benefits and costs of mitigation decisions, and the often intangible values associated with environmental, social and health-related outcomes. We review the state of non-market valuation studies that provide monetary equivalent estimates for the intangible benefits and costs that can be affected by natural hazard events or their mitigation. We discuss whether managers can usefully call upon these available estimates, with a view to using the benefit transfer approach to include non-market values in economic decision frameworks. Additional context-specific non-market valuation studies are required to provide a more accurate selection of value estimates for natural hazard decision making. Decision making would benefit from considering these values explicitly in prioritising natural hazard investments.

}, keywords = {Non-market values; Intangible values; Willingness to pay; Natural hazard mitigation; Prioritising investments}, doi = {https://doi.org/10.1007/s11069-019-03761-7}, url = {https://link.springer.com/article/10.1007/s11069-019-03761-7}, author = {Abbie Rogers and Fiona Dempster and Jacob Hawkins and Robert Johnston and Peter Boxall and John Rolfe and Marit Kragt and Michael Burton and David J Pannell} } @conference {bnh-4773, title = {Filling the gaps: how economics can help make important decisions when information is missing}, booktitle = {AFAC18}, year = {2018}, month = {09/2018}, publisher = {Bushfire and Natural Hazards CRC}, organization = {Bushfire and Natural Hazards CRC}, address = {Perth}, abstract = {

When natural hazard managers need to make decisions about the allocation of resources, there is often information missing that cannot be rapidly obtained. In many cases, these decisions have to be made without waiting for the information to become available. But how can natural hazard managers know that their chosen allocation of resources generates good value for money when there is data missing? There are economic tools available that can support decision making in such cases. We explain how economic analyses cope with missing data and uncertainty. Through case studies, we illustrate how economic tools are used to rank the importance of different pieces of information and to find thresholds where the optimal decision changes. We also demonstrate how these tools can fill-in the gaps when there is little knowledge about a topic, for example, how to explicitly represent intangible values in decision making. The ability of economic tools to manage missing data and uncertainty can provide a wealth of information to natural hazard managers that can help them make better decisions.\ 

}, author = {Veronique Florec and Abbie Rogers and Atakelty Hailu and David J Pannell} } @article {bnh-8039, title = {Value Tool for Natural Hazards: Guidelines}, number = {361.2018}, year = {2018}, month = {06/2018}, institution = {Bushfire and Natural Hazards CRC}, address = {MELBOURNE}, abstract = {

The {\textquotedblleft}Value Tool for Natural Hazards{\textquotedblright} comprises of a Value Tool Database, which provides a collection of non-market value estimates relevant to natural hazards, and these Value Tool Guidelines, which describe how to use the values collated in the Database. The purpose of the Value Tool is to provide an accessible list of non-market value estimates for policy makers to use in decision making about natural hazard management.

The non-market or intangible benefits and costs of natural hazards are large in many cases, and should be accounted for in prioritising investment in natural hazard mitigation. We recommend that non-market values should be considered in natural hazard decision making as follows:

The Guidelines provide an overview of non-market values and benefit transfer for natural hazard decision making as follows:\ 

The Value Tool Database and Guidelines provide guidance on how the non-market value estimates should be used, and the policy contexts under which they are best suited for use. We recognise that the non-market valuation literature is incomplete with respect to providing highly accurate value estimates for all of the value types that might be affected by a natural hazard (see Section 3). However, we advocate that the use of an approximate number is usually better than no number, when it comes to decision making. It is better to have some information about the intangible benefits of a decision, than to ignore them completely: the error, and decision bias, resulting from the latter is likely to be far greater than the error from using an inaccurate number.

Provided the policy maker is aware of the potential for this error, uses a conservative approach for transferring values, and undertakes appropriate sensitivity analysis in analyses that use those values, then the values can provide useful, quantitative information for decision making. As noted above, in some cases, where a value transfer is too unreliable, we don{\textquoteright}t recommend using the values in a quantitative analysis, but suggest using them in a qualitative manner to inform thinking about particular policies.

}, keywords = {guidelines, hazards, natural, tool, Value}, issn = {361}, author = {Abbie Rogers and Fiona L Gibson and Peter Boxall and Michael Burton and Jacob Hawkins and Robert Johnston and Marit Kragt and John Rolfe and David J Pannell} } @article {bnh-4209, title = {Economics of natural hazards: annual project report 2016-17}, number = {322}, year = {2017}, month = {09/2017}, institution = {Bushfire and Natural Hazards CRC}, address = {Melbourne}, abstract = {

To make natural hazard mitigation efforts efficient and equitable, it is important to understand the full range of costs and benefits and how these costs and benefits are distributed among different segments of the community. However, economic assessments of flood mitigation benefits generally tend to be incomplete and focused on tangible and direct benefits only. Indirect and intangible costs are rarely included in this type of assessments. In reality,
intangible values can be large and, in some cases, they can be the most dominant component. The purpose of the Economics of Natural Hazards project is to address this shortcoming by, first, developing a Value Tool that help decision makers estimate intangible values and, second, by undertaking integrated economic modelling of mitigation options in ways that allow for the integration of intangible values. This annual report provides details on the Value
Tool developed by the project and the results from the first case study investigating flood mitigation options for the Brown Hill Keswick catchment of Adelaide. The report also summarises the projects engagement activities over\ the year.

}, issn = {322}, author = {David J Pannell and Atakelty Hailu and Veronique Florec and Abbie Rogers and Fiona L Gibson} } @conference {bnh-3880, title = {Including the intangible benefits of bushfire mitigation in economic analyses: a {\textquoteright}value tool{\textquoteright} for informed decision making}, booktitle = {AFAC17}, year = {2017}, month = {09/2017}, publisher = {Bushfire and Natural Hazards CRC}, organization = {Bushfire and Natural Hazards CRC}, address = {Sydney}, abstract = {

Understanding the costs and benefits of bushfire mitigation is imperative for governments to be able to prioritise the strategies that provide the best value for money. The economic damages caused by bushfires and the costs of mitigation are relatively well documented and can be large. But the social and environmental benefits of bushfire mitigation, which can potentially be even larger, have not been well documented. As a result, these types of intangible benefits are often neglected in decision making. We have created a {\textquoteleft}value tool{\textquoteright} that makes information about these intangible benefits accessible to decision makers for use in economic studies such as benefit-cost analyses.

The value tool identifies the types of intangible values that might be affected by bushfires or their mitigation, in terms of health, environmental and social effects. We have compiled a database of different studies that have measured these values in dollar terms reflecting how much they are worth to the community. This means they can be directly compared with other monetary estimates of costs and benefits related to bushfire mitigation. The database comes with a set of user-friendly guidelines that illustrate how the intangible values can be used to make decisions and prioritise bushfire mitigation strategies. For example, a bushfire manager will be able to use the value tool to identify the types of intangible values that might be affected by a prescribed burning plan, such as protecting wildlife and minimising distress to local communities, and find dollar estimates for each of these values. The value tool also provides estimates of intangible values relevant to other types of natural hazards.

}, author = {Abbie Rogers and Fiona L Gibson and Veronique Florec and Atakelty Hailu and David J Pannell} } @article {bnh-2923, title = {Economics of natural hazards: Annual project report 2015-2016}, number = {177}, year = {2016}, month = {08/2016}, institution = {Bushfire and Natural Hazards CRC}, address = {Melbourne}, abstract = {

The project tackles from an economics perspective issues relating to non-financial benefit estimation, risk analysis, and development of decision-making frameworks that would help deliver value for money from public investments in natural hazard management. It has a broad scope in terms of natural hazards, including fires, earthquakes, floods, cyclones and tsunamis. It aims to improve the management of bushfires and other natural hazards by delivering the following outcomes:

The research team has extensive experience in non-market valuation, integrated modelling and the economics of environmental and natural resource management and policy. The team has also recruited four outstanding environmental economists with extensive experience in.\ The project has continued to engage well with the end user community and other potential collaborators. Project staff have been keen to help identify research priorities and deliver research outcomes that are based on a broader analysis of the costs and benefits of mitigation options and inform management and policy choices accordingly. The project{\textquoteright}s major accomplishements for the year include the following:

}, issn = {177}, author = {David J Pannell and Atakelty Hailu and Fiona L Gibson and Veronique Florec and Morteza Chalak and Abbie Rogers} } @conference {bnh-2934, title = {Non-market valuation in the economic analysis of natural hazards}, booktitle = {AFAC16}, year = {2016}, month = {08/2016}, publisher = {Bushfire and Natural Hazards CRC}, organization = {Bushfire and Natural Hazards CRC}, address = {Brisbane}, abstract = {

To achieve value for money from investments in management of natural hazards (including mitigation, emergency response and clean up) economists advocate the use of tools like Benefit: Cost Analysis (BCA) to evaluate actions or policies (e.g. Milne et al. 2015). Many governments worldwide encourage the use of BCA for policy evaluation. For example, according to its Best Practice Regulation Handbook, {\textquoteleft}The Australian Government is committed to the use of cost{\textendash}benefit analysis to assess regulatory proposals to encourage better decision making{\textquoteright} (Australian Government 2010, p. 61).


Some of the relevant benefits and costs related to natural hazard management are relatively difficult to quantify, particularly in financial-equivalent terms. There are a number of advantages from expressing non-financial impacts in financial-equivalent terms: to compare the benefits and costs of policy or management actions in order to evaluate whether they are worthwhile policies or actions; to rank alternative investments in terms of value for money; and to make rigorous business cases for investment.\ Economists have developed a range of techniques to do so, known as {\textquoteleft}non-market valuation{\textquoteright}, but they remain underutilized in the natural hazard sector. The first purpose of this presentation is to identify the methods available to quantify non-market values in financial-equivalent terms. Non-market valuation techniques use empirical evidence about human behaviour or statements in surveys to quantify preferences for the provision of a public good or service.

}, author = {Fiona L Gibson and David J Pannell and Abbie Rogers and Marit Kragt and Atakelty Hailu} } @article {bnh-4116, title = {Non-market valuation in the economic analysis of natural hazards}, number = {1604}, year = {2016}, month = {05/2016}, institution = {School of Agricultural and Resource Economics, Unviersity of Western Australia}, type = {Working Paper}, address = {Crawley}, abstract = {

Natural hazards have a wide range of impacts, including on factors that are normally unpriced because they are not bought and sold in markets. Key examples include impacts on human health, the environment, ecosystem services and other outcomes relevant to social welfare. Economists seek to quantify these impacts in financial-equivalent terms in order to be able to compare them with market impacts and include them in Benefit: Cost Analysis (BCA) of policies and strategies to mitigate risks. Estimating these so-called non-market values can be difficult. This paper reviews the methods available for doing so, presents a comprehensive list of the non-market values that might be affected by natural hazards and reviews the existing literature that estimates non-market values relevant to natural hazards. We find that there are few applications specifically in a natural hazard context. We conclude with a discussion on the limitations of non-market valuation in the natural hazard context.

}, issn = {1604}, url = {http://ageconsearch.umn.edu/record/236941}, author = {Fiona L Gibson and David J Pannell and Peter Boxall and Michael Burton and Robert Johnston and Marit Kragt and Abbie Rogers and John Rolfe} }