The quantification of indirect benefits from flood protection in the lower Waikato : a thesis presented in partial fulfilment of the requirements for the degree of Masters of Applied Economics in Natural Resources at Massey University
Flood protection schemes provide a wide range of benefits to people living in the immediate floodplain area and to those living further away from the floodplain area. Since such schemes are public goods, they are often provided and managed by the government or local bodies. According to the Local Government Act (No.3) of 1996, the community based funding of such works are to be allocated purely according to benefit received. In other words, those who benefit from the works are required to contribute towards the costs of the works, in proportion to the benefits they received. Hence the need for the quantification of benefits. The Rating Powers Act of 1988 requires the rating of flood protection schemes to take into account direct and indirect beneficiaries. In this research the aim was to quantify the indirect benefits from flood protection in the Lower Waikato, using the non-market valuation technique of Contingent Valuation. In particular the study focused on the indirect beneficiaries of the Lower Waikato Waipa Flood Control Scheme (LWWCS). A total of 800 households in the indirect benefit area of the LWWCS were sent a mail questionnaire to elicit their willingness to pay for indirect flood protection. A return rate of 31 percent was obtained. The results obtained indicated that 56.8 percent of the respondents perceived to benefit from the LWWCS, and 65.3 percent respondents believed that flood protection was worth paying for. The dollar value allocated to indirect flood protection in the Lower Waikato was estimated at $21.40 per year per household.