Benefits and costs of provision of post-cyclone emergency service in Cairns

Authors: Leo Dobes, Gabriela Scheufele and Jeff Bennett
Year: 2012

This report considers whether it would be socially desirable to provide enhanced post-cyclone emergency services in towns such as Cairns.While it is possible for government agencies to provide more resources, or to subsidise private enterprise, in order to restore basic services more quickly, this requires the use of more public resources, and this may in turn mean reductions in other publicly provided goods and services such as health services or education. If governments are to allocate resources efficiently, in a way that increases overall community well-being, then the social benefits of any policy or program must exceed the corresponding social costs. The social benefit of any change in the provision of emergency services needs to be based on estimates of individual households willingness to pay for improvements. A choice experiment indicated that Cairns households were on average prepared to pay about $124 per annum for faster resupply of fresh food, and almost three times more each year for faster reconnection of utilities, but only about $11 per annum for each additional day of police patrols. Residents expressed an average negative willingness to pay about -$99 per annum per household for accommodation of pets in a shelter after a cyclone. Except in the case of provision of post-cyclone shelter for pets, the net social benefit was positive for each of the services analysed. In broad terms, the results of the project suggest that the faster resupply of fresh food and the faster re-connection of utilities are two aspects of post-cyclone emergency services that are particularly valued by the residents of Cairns. Whether government assistance should be provided to facilitate faster provision of these two aspects will depend on a number of factor.

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