Assessing social values for water allocation with the contingent valuation method

Since the 1994 COAG agreement on water reform there have been moves in Australia to apply economic principles more rigorously to water development and allocation issues. Among the criticisms that have been levelled at the economic reform process are ones that economic efficiency measures, including water trading, have negative consequences on social equity. For example, competitive pressures might shift water allocations away from smaller farmers and some rural communities. In this paper, the results of a contingent valuation survey assessing community values for avoiding these social impacts in the Fitzroy Basin of Queensland are reported. A sample of Brisbane households was asked in a referendum format whether they would support proposals to purchase water entitlements and grant them to small farmers, small townships, environmental groups or Aboriginal communities.