The Axford Debate Revisited: A Case Study Illustrating Different Approaches to the Aggregation of Benefits Data

Recent debate following the rejection of the Environment Agency case regarding an application for water abstraction at Axford on the River Kennet has focused upon the benefits procedure employed for aggregating non-user benefits which underpinned the economic case put forward by the Agency (although this was not the reason cited by the inquiry for rejection of the case). Commentators have seen this case as setting an unfortunate precedent for the use of economic assessments in such resource management issues. The paper presents a number of highly tractable alternative methods for the aggregation of benefits estimates designed to address the central problems of the definition of a relevant aggregation population and a potential decay of values with increasing distance from a given valuation site. These methods are tested using data obtained from a national survey of non-users of a specific natural area. Results from this application indicate that simpler approaches such as that used at the Axford inquiry may result in aggregate benefits estimates which are very substantially larger than those produced by our proposed alternative approaches to aggregation.