Environmental Engineering Reference
In-Depth Information
3.2.5.1 Cost-benefit analysis
Another kind of model-based analysis assesses the economic costs and benefits of
an activity such as hunting.
Cost-benefit analysis
calculates all the different
components of costs and benefits that the activity entails, and weighs them against
each other to see if the activity produces a net benefit. The analysis is usually done
in monetary terms for the sake of convenience, although this is not strictly neces-
sary. Some components of the model are easy to get values for by direct observation
or by survey methods (for example, revenues from selling bushmeat, costs of buy-
ing cartridges, snare wire or a boat). These tend to be direct costs and benefits, that
are already expressed in monetary terms.
Estimates of the monetary value of other costs and benefits must be obtained indir-
ectly. The most important of these is
opportunity costs
. These are the benefits that
would have been obtained from the activity that the natural resource user has had to
forego because they have limited time. So, for example, many bushmeat hunters are
primarily farmers who snare around their fields. In this case, the opportunity costs of
hunting are very low, because it is taking very little time away from their other
activities. Other people, such as full-time fishers, may be obtaining revenues from fish-
ing at the expense of getting a job in another sector. Opportunity costs are calculated
as the wage obtainable in the most lucrative alternative profession. For example, if a
hunter is full-time and people of comparable standing and education in the village are
farmers or labourers, the profits made by these individuals would be a good estimate
of opportunity costs. It can be quite difficult to find a reasonable estimate of
opportunity costs in some cases; for example if the hunter is only hunting at night,
and the cost is more in terms of reduced productivity in his daytime job. One way to
address this is to see if hunting households have a lower agricultural production than
non-hunting households, and use this difference as a measure of opportunity cost.
Another cost that must be indirectly obtained is the
cost of being caught
and
receiving a fine or a prison sentence. This is made up of two components; the
chance of being caught and prosecuted, and the penalty that you are likely to be
given if you are prosecuted. Milner-Gulland and Leader-Williams (1992) did a
cost-benefit analysis for elephant and rhino poaching that included this cost of
illegal hunting, and showed that it was a significant factor in deterring small-scale
local poachers from hunting, but it was not significant for the commercial gangs
who were most responsible for killing the elephants and rhinos in the area.
Indirect benefits
include the cost savings from eating meat from a hunt, when
otherwise food would have had to be bought with cash. This can be estimated by
calculating how much it would cost a household to buy that amount of meat of
comparable quality. Other costs and benefits are more difficult to calculate,
because they have no clear monetary value. These include the cultural importance
of hunting, or the enjoyment that the person obtains from being out in the
wilderness. Conversely, hunting may have a non-monetary cost if people perceive
it as dangerous, difficult or lonely. There is a huge literature in
environmental
economics
on how to put a value on goods that have no market, and on how to
