Economics

Background Information Description of Major Characteristics
Fraser Island is located in Queensland s Southern coast in Australia and it is 300 kilometers North of Brisbane. In 1992, the island was identified as a world heritage site. Being the world s largest island with its 840 square kilometers, the area has a number of unique features which act as a source of income through tourism attraction (Mungatana and Navrud, 1994, pp. 13-149). Various natural and manmade features found at Fraser Island have for a very long time proved to be of great importance both socially and economically (Tisdell, 2001, pp. 3-79 Beckley and Adamowicz, 1998, pp. 43-69 Dixon and Carpenter, 1986, pp. 23-151).

To begin with, Fraser Island has large water bodies. The 100 lagoons, sand dune lakes, and the freshwater lake in the area underlie some of the unique characteristics of the area s ecosystem. Pearce (1997, pp. 13-42) describes most of the freshwater lakes in the area as being always clean. For instance, Lake McKenzie covers 150 hectares and yet it is only 100 meters above sea level. Fraser Island s Eli Creek also forms a superb feature on the island. It is the largest creek on the coastal part of the island due to its 80 million litres of water. In addition, the central station on the island is a renowned tourist destination. Gren and Folke (1994, pp. 34-74) elaborate on the fact that Fraser Islands area has various bushwalking tracks that enable individuals to fully appreciate its living plants. Some ferns normally grow along the rainforest (Huth and Holzworth, 2007).

Other economic values of Fraser Island, according to Mark (2004, pp. 56-145) and other related studies, include fishing, group camping and hiking, and mining of sand, gene pool games, and wheel driving. The island also has the potential of generating herbal medicines due to the unique indigenous plants that grow on it. Fraser Island s very beautiful 120-kilometer beach runs along most part of its East coast. The coastal beach consists of the Indian Head, the Eli wreck, various Champagne pools and the Maheno Wreck. The beach s hard packed sand that is below the normal tide mark enables the beach to be used both as a runway and as a highway. The rainforest of the island is a very vital feature due to its contribution to the island s cool climatic conditions (Mungatana and Navrud, 1994, pp. 13-149). On the other hand, tourism attraction at the site has been made better with the continued awareness creation of the various unique features found on the island. Features such as warm climatic conditions, recreational facilities, sports, long stretches of land for walking, wildlife, and the available forests provide good characteristics for attracting tourists and other economic benefits that increase the island s gross domestic product.

Types of Values related to Fraser Island
There exist a number of values which are closely related to Fraser Island (Gren and Folke 1994, pp. 34-74). Logging is one such value. Other types of values related to Fraser Island are the following
Camping, hiking, waterfalls, sand dunes
Climate control features
Cultural values at the Fraser island and four-wheel driving
Gene pool and the likely medical values in the near future
Hotels and the long 120-stretch of beach along the coastline
Recreational value of Lake McKenzie
The bequest significance and terrain and sunsets
Fishing and the ever growing industry in sand mining
The Fraser commando school and the Maheno Wreck
The proposed Naura resettlement and the pure Fraser Island dingoes
The unique subtropical forests that grow solely on sand such as the Wallum Forests and the value of scientific researches
Vicarious values to Fraser Island s non-visitors
Wildlife (unique group of mammals such as the swamp wallabies, the ringtail, the echidnas, the brush-tail possums, the bandicoots, the whales, dolphins, and dugongs.)

Classification of the Identified Values According to the TEV Scheme
According to Ruitenbeek (1992, pp. 52-78), Fraser Island s environment could be classified in a number of ways which are distinct. The values of the island could be categorized under both indirect and direct use values, the option values, and the non-option economic values. This categorization is based on the actual or perceived value of the environmental features and characteristics of the inhabitants of the Fraser Island s ecosystem.

Direct Use Values
Through the concept of total economic value scheme, Fraser Island has a number of direct value uses. Fishing activities in the area, for instance, are obtained through the natural fishing process from the lakes in the island and the surrounding great water body (Mendelssohn and Tobias, 2008, pp. 32-93). Fish caught are consumed by the inhabitants of the island and tourists while some are sold to the markets outside the island. On the other hand, the timber obtained from the Wallum and the rainforests provides a great variety of tree species resulting to valuable timber and herbal medicines to the people (Peter, Tisdell, and Thea, 2006, pp. 2-217). As indicated in Table 1, other direct use values include the sand and mining industry, the eucalyptus, grass trees, the banksias, and the acacias provide good quality timber, rain, and homes and food for the mammals which feed on nectar. Lake McKenzie and the numerous fresh water bodies available have very many direct uses. The water is used for recreation, farming, and other domestic purposes. Moreover, the vast stretches of beaches provide recreational facilities such as hotels, camping and hiking sites, and the gene pool which offer the desired direct use values.

Indirect Use Values
Fraser Island s indirect use values are numerous. They include the water falls associated with the lakes and rivers found in the area, the flood protection systems and technologies that have been put in place, climate control efforts through forest and land conservation efforts constantly being made by the relevant authorities in the area (Mungatana and Navrud, 1994, pp. 13-149). Even though it may go unnoticed, sunset is another vital indirect use value that is available in the area.

Option Use Value
Under this category are a number of natural features and animals that have been conserved in Fraser Island with the core intention of exploiting their potential usage in the future for social and economic gains (Pearce, 1997, pp. 13-42). The pure Fraser Island dingoes, which resemble the domestic dogs and have continued to be isolated, are some of the indirect use values in the area. The dingoes have been conserved due to their continued decrease in number. The authorities have the opinion that dingoes may in future represent the culture, heritage and the natural values of the land. The reptiles, amphibians, fish, the proposed Naura resettlement, the gene pool, and forests, are preserved with the belief that they potentially would be of importance in the future (Adams, 2001, pp. 19-217).

Non-Use Values
It is very evident from the research carried out that Fraser Island has minimal existence and bequest non-use related values as shown in Table 1. The Fraser Commando School, the environmental bequest significance, the unique terrain of the island, and the Great Walks are some of the scarce non-use values that are found on the Fraser Island (Environmental Department, 2008). Whether or not the resources will ever be used is hardly known to the people. However, from the outlook, there are hardly any indications that these features on Fraser Island are currently of any significance to the people within and outside the island (Gren and Folke, 1994, pp. 34-74).

Table 1 Table of Use and Non-Use Values of Fraser Island (Source Mark, 2004, pp. 56-145)
Value Things on Fraser island (Both Direct and Indirect Use Values)Non-value Things on Fraser IslandBeaches along the coastlineThe Fraser Commando SchoolTimber Environmental bequest significanceLake McKenzie and other fresh water lakesUnique terrain of the islandFish and other reptiles and amphibiansThe Great WalksHotels, camping, and hiking sitesMaheno WreckGene PoolFraser Island Dingoes

Economic Valuation Techniques for Fraser Islands TEV
The travel cost, the contingent, and the hedonic pricing methods are very appropriate for use in the evaluation of the Fraser Island s TEV. The travel cost evaluation technique estimates the diverse values that would be associated with the Fraser Island s ecosystems such as fishing, forests, waterfalls, the unique pure dingoes, Lake McKenzie, and the value of hiking and four-wheel driving. The cost of traveling and the amount people are willing to pay to travel using the available means could best be estimated using this method. According to Anderson (2005), this method is crucial since it bases the value of the ecosystem on the amount that people are willing and ready to spend on them and it is not costly its results are easy to interpret while it also encourages more individuals to actively participate, hence large sample sizes that increase the authenticity, reliability, and cost effectiveness of the method.

Since Fraser Island typically has a great value and unique opportunity to attract more tourists, the travel cost technique could be used in determining the actual total economic value of the island. In most cases, no payment is made for watching the species and ecosystem which means that cash which could otherwise be used to develop the area normally is  wasted  due to ignorance and poor management of the resource (Pearce, 1997, pp.13-42).  The amount spent by both local and international tourists in transport, food, time, equipment, accommodation, among other expenditures can best be calculated using the total economic value travel cost technique.

This technique would best be used to evaluate the most appropriate economic value of the of the Fraser Island. In addition to the travel cost evaluation method, the hedonic economic evaluation technique could best be employed in the island s TEV process. The cost of fishing, camping and hiking facilities available and their standards, travel costs, bequest significance and terrain, the Naura resettlement, the mining industry, hotels, and the gene pool and the likely medical values in the near future values could best be evaluated using this technique especially in price-related matters. The technique is relevant in determining the diverse economic benefits of the values and the costs associated with them. This method is quite relevant since it also ensures that the goods and services relate to their actual characteristics, thus the property records are normally reliable (Barbier and Acreman, 1997, pp. 26-312). The method is also versatile, and hence could best be utilized in the consideration of several interactions.

Other than the travel cost method and the hedonic evaluation technique, the contingent valuation method would be a very crucial technique for evaluating the total economic value of the underdeveloped Fraser Island resource. The technique of TEV evaluation would play a very fundamental role in evaluating the various economic values associated with the Fraser Island, being a resource with many dynamic resources. The contingent evaluation technique, according to Gren and Folke (1994, pp. 34-74), is very appropriate in evaluating the economic benefits of virtually all ecosystems. Since the above methods do not give a lot of emphasis on the non-use values, the various non-use values of the island which include the Fraser Commando School, the environmental bequest significance, the unique terrain of the island, and the Great, Walks would be adequately evaluated using this technique. Through this technique, people on Fraser Island resource would be asked directly whether or not they would be willing to pay for the environment services that are available on the island. This technique is normally based on an identified hypothetical scenario of the environment in case (Ruitenbeek, 1992, pp.52-78).

Usage of the TEV Information for Fraser Island s Decision Making and Management
The core ways through which the TEV information could be utilized in the management and the decision making process is through conducting a cost benefit analysis. There are a number of value-related fields in the Fraser Island which, if accorded a lot of consideration, could result into a lot of benefits to its fauna, flora, and human population. Since the total economic value of any economy does not only comprise of the use values, but also the non-use values, a lot of consideration always ought to be accorded to the diverse challenges which would then result into benefits that accrue from the combined value benefits. The areas in the ecosystem which are considered more beneficial could be accorded more preference in resource allocation investment compared to the less promising ones. In the documentation Heritage, Water, and Arts (Environmental Department 2008), it is evident that Fraser Island demands close monitoring to ensure that its environment is adequately managed. Indeed the availability of this information would facilitate proper planning on how to best manage its resources and ensure the coexistence of people and the environment.

Being an underdeveloped environmental resource, the total economic value information could be used in a number of ways to better the island s economic status. To begin with, more investments could be done in research in areas identified as economically promising. The research would focus on establishing the different ways through which the values could be put into more economically productive usage. Second, rather than the people continuously depending on donor funding, the TEV information could be utilized in establishing the uniqueness of the available resource of the Island (Pearce, 1997, pp. 13-42). The information could then be used to ensure that the available resources are taken good care of. The unique long beaches, forests, and wildlife which help attract tourism could then raise cash which cater to the needs of the people. The residents of the island could also be encouraged to participate in fish farming which could then raise more funds to support their lives.
It is evident from the case study of the Fraser Island, based on the total economic value done, that certain economic values of the island are more productive and economically important than others. For instance, the recreational value of Lake McKenzie, the benefits of hotels and motels along the coastline, fish farming, and the benefits derived from the wildlife are more crucial to the people when compared to the economic and social benefits of the Fraser Commando School and the Maheno Wreck on the island (Dixon and Carpenter, 1986, pp. 23-151). The total economic value information for Fraser Island resource would be vital in determining which values to invest more cash in and which ones not to. Value environmental characteristics that seem more endangered on the Fraser Island could also be classified under the protected area category and then conserved so as not to be extinct or totally eradicated (Ruitenbeek, 1992, 52-78). The management could use the TEV information in ensuring proper conservation of the environment.

Figure 1 How to Make Fraser Island Resource Better

According to Mungatana and Navrud (1994, pp. 13-149), Figure 1 above demonstrates the manner in which an increase investments in the value items should be done, thus increasing their demand while at the same time decreasing the investment in the non-value items. This includes the need for decreasing the supply and hence low demand of the values of the Fraser Island resource.

Discussion
Underdeveloped natural resources always have very great potential to develop if proper planning and management is put in place. Fraser Island s potential to become more developed is very evident in its unique values. In order to attain maximum benefits from the island, both the non-use and the use values ought to be studied and fully understood before investments of any sort are done. By employing the contingent valuation technique, the responses of the Fraser Island people on their willingness to pay for the services available and the outcome used in managing the resource would then be analyzed. Mendelssohn and Tobias (2008, pp. 32-93), in their valuation of ecotourism in the cool tropical rainforest, indicate that even though the valuation of Fraser Island s total economic value is very possible, it is evident from the research and the case study analysis that the valuation techniques are normally limited by the fact that evaluating distributional and social issues is very challenging. The valuation processes are also normally influenced by the diverse intended purposes. The range of economic values found on the underdeveloped Fraser Island, if proper TEV valuation is done to it, could result into the island being more beneficial to its inhabitants and the citizens than it is at the moment (Pearce 1997, pp. 13-42).

Conclusion
Total economic value concept helps us understand the economic value of different resources better. Understanding the value of the available resources helps the management and decision makers in understanding better the diverse values associated with the resources at their disposal. Techniques such as the travel cost method, the contingent evaluation method and the hedonic pricing technique could play a very crucial role in evaluating the TEV of Fraser Island, thus facilitating efficient and cost effective management of this underdeveloped resource. The three techniques are very appropriate for evaluating the various available values on the basis of supply and demand of the services and goods available. From the Fraser Island case study, Pearce (1997, pp. 13-42) explains that the relatively underdeveloped island inhibits very unique characteristics which if properly utilized and managed could result in rapid growth and coherent existence of its ecosystem, hence making the underdeveloped resource very productive.