Environmental budget allocation : public preferences

Abstract

It is important for central government to have good information about public preferences regarding budget allocations. Consumer sovereignty, government popularity, and efficiency are all dependent on clear articulation of community preferences. The paper draws upon information gathered as part of a large-scale survey to identify community perceptions about the state of the New Zealand environment (Hughey et al., 2002) to identify public preferences for allocation of government monies. Methods entailed survey participant statements of preferences for spending on specified environmental and conservation items, a balanced macro-budget reallocation exercise, and a choice modelling exercise to reveal willingness to trade-off expenditures on particular budget items. The environmental budget allocation exercise provides little guidance on which aspects of environmental spending would provide the greatest benefits at the margin. For most items the modal response was no change in current spending. However, more than 50% of respondents indicated they preferred increased spending on pest & weed control, air quality and fresh waters. The macro-budget reallocation and choice modelling exercises provide similar results. They both indicated that people obtain negative utility from allocating money to income support, and desire cuts to spending on superannuation and income support. Older respondents are not as averse to spending on income support, but are still generally in favour of cuts in spending on this item. Spending on health, education, and the environment all yield positive benefits. Respondents see significantly more benefits from spending on health, than on education or the environment. Willingness to spend on health is not affected by respondent age, but willingness to spend on education and the environment both decline with age.