The New South Wales Office of Environment and Heritage prepared a Business Case for a program of works to deliver 116 visitor infrastructure projects across a range of National Parks. As part of this Business Case, NineSquared was engaged to conduct an economic cost-benefit analysis and revenue analysis of each of the 34 precincts. This involves evaluating the increase in visitations to each of the precincts, the resulting consumer and producer surpluses, and additional revenue generated as well as the changes in capital and operating costs.
NineSquared used the NSW OEH Econometric Model to estimate the economic benefit associated with the addition of new park infrastructure throughout the state. This random utility model was used to estimate the total value of tourism and recreation in NSW National Parks. It estimates total expenditure, as well as consumer and producer surplus, for a range of referent groups. It is able to be used to link patterns of tourism and recreation to a range of underlying national park attributes, including park size, remoteness, natural values and the provision of recreational infrastructure. In doing so, the relative contribution of these selected attributes to tourism demand is able to be estimated. This, combined with estimates of changes in revenue, was used to estimate a benefit-cost ratio and net present value for each project.