The economic contribution of Ordnance Survey - Benefits

OXERA (Oxford Ecomomic Research Associates Ltd) Final Report (public version)

9. Intangible Benefits

9.1 The social value of geographic information

The economic gains from the use of GI are not limited to gains made in the commercial sphere. There are wider societal benefits arising from the role that OS plays in contributing to:

• national security and defence; education;
• the rights of ordinary citizens to access basic
• locational information; and leisure pursuits.

Some of these benefits are reflected in people's purchases of maps and other data. However, there are wider social gains from the universal coverage of OS data. The national interest can be seen to have three components:

• coverage of areas which would be ignored if commercial considerations alone held sway;
• consistency in the content and the presentation of data collected across the nation as whole; and maintenance of a mapping infrastructure for use by key public bodies³⁴.

Many users, including public-sector bodies, value the access to the OS database, even though in any one year they may only use OS products and services occasionally. These option values, coupled with the broader national interest in having an accurate and up-to-date understanding of patterns of settlement, etc, lie behind the NIMSA (the contract OS has agreed with the government to cover the national interest in OS activities).

These wider benefits also lie behind the various campaigns for cheaper access to the geographic datasets maintained by the UK government-most notably the Friends of the Earth complaint to the European Commission about OS pricing policy35. This report does not address this issue. However, the pricing of OS products must clearly affect their use by some people and organisations, and therefore influence the overall social benefit derived from the existing data. This report on the current position takes the existing structure of prices as given.

One current indication of the wider social value of OS is the annual government NIMSA contract with OS, plus the direct expenditures on OS products by social and leisure users. There are also techniques that can be used to establish monetary values for benefits which are social or environmental in nature, rather than commercial, but such work is inevitably difficult and time-consuming. The analysis in this section is, therefore, primarily of a qualitative nature.

9.2 OS and leisure activities

A qualitative assessment of the value of OS's services should not overlook the substantial value attached by the general public to its traditional map-making and publishing services. OS maps are a familiar and well-respected feature of British cultural life. In the 1930s they were described as 'old friends who guided you to unknown places³⁶' , and the British public is fortunate to have such a detailed and useful series of maps to guide its leisure. In 1994, there were some 5.2 billion leisure day visits from home made in Great Britain: 13% of these visits were for walking or rambling.³⁷

A minimum estimate of the value which people place on maps is to total the annual expenditure on leisure maps, but the overall benefit is larger than this, since some people's WTP exceeds the cover price.

There have been attempts to attach a value to the pleasure that people derive from the outdoors, and significant totals can be obtained. Although the benefits of outdoor recreation are subjective, values can be attached to this experience. The valuation of recreational opportunities by reference to people's willingness to incur travel costs and travelling time, or by the use of questionnaire-based studies, is needed if the benefits gained from these leisure activities are to be assessed against the value of other land and water uses³⁸. The Environment Agency uses a rather conservative value of £2.50/visitor/day for the benefit of informal bankside recreation (walking, picnicking and bird watching)³⁹. It is likely that an equivalent informal recreation experience in an area of outstanding natural beauty would reveal higher WTP values. There seem to have been no surveys to assess the contribution of quality maps to the experience.

9.3 The environmental value of geographic information

GI is a necessary component of Environmental Impact Assessment (EIA) studies, although the actual use has been sparingly documented⁴⁰. Joao and Fonseca found that GIS has been applied to a wide range of EIA projects (35 different projects in total), the most common being the impact evaluation of roads, pipelines, housing developments, costs and flood-protection works, and dams and tourism-related projects⁴¹. The survey also discovered that GIS is currently being used by environmental consultancies for all EIA stages, from the preliminary stages of screening and scoping to the final stages of monitoring and auditing.

There is a wider social interest in the better use of natural and man-made physical resources. OS can play a central role in this understanding by providing the necessary GI. OS products and services can generate environmental benefits in several ways:

reduced road congestion and improved transport planning (both of which result from the use of OSCAR products, or similar) reduce noxious emissions; given the government's policy of building 60% of new homes on previously developed land⁴², the use of OS products to secure the more effective use of existing 'brownfield' sites, and to avoid the need to take more green fields, provides a considerable environmental benefit.

Although no attempt has been made to assign an absolute value to the social and environmental improvements produced by the use of OS products and services, some indication of their potential scale can be gained by examining related estimates of the benefits of reducing environmental exposure.

• There is a widely accepted estimate that the total cost of traffic congestion to the economy is £21 billion a year (1998 prices); clearly, even a 10% improvement could yield substantial economic gains⁴³;
• The Royal Commission on Environmental Pollution lists all the environmental and social costs of road transport that would be reduced with less congestion⁴⁴. These costs range from £2 billion to £19.7 billion for air pollution, £0.1 billion to £3.1 billion for climate change damage, and £0.6 billion to £4.6 billion for noise pollution. Again, therefore, if OS products helped to cut pollution, the savings could be large.
• Hanley and Knight provide an estimate of people's WTP for greenbelt preservation of between £3 and £72 per person per year⁴⁵. The value which the UK population places on the green belt could then be calculated by multiplying these values by the population, and the imputed benefits of preserving the green belt would then range from £145m to £4 billion per annum.
• The targeted application of pesticides provides a further example of the potential social and environmental benefits from the use of GI. Foster and Mourato carried out a contingent valuation study of the effects of pesticide use on health and bird life⁴⁶. They estimated that reduced pesticide use would produce gains of £2.40 per year for each case of ill health avoided, and £16.30 per year for each bird species safeguarded.

9.4 The economic value of quality

OS has adopted the discipline set out in BS EN ISO 9001 to ensure the delivery of top-quality products and services. No provider of GI can sell grossly inaccurate information, but there are degrees of accuracy and reliability. A distinct advantage of OS data over other GI is the use of a standard national grid. This guarantee of accuracy and consistency is an essential element of quality provided, and the majority of those interviewed consider this to be the key advantage to using OS products rather than those of competitors. Consistency also avoids the duplication of costs and makes it easier to deal with copyright infringement. The consultation exercise carried out by OS and the Department of the Environment in 1996 found that the vast majority of all those interviewed believed that national coverage in the National Topographic Database and national consistency in mapping are essential.

The growth in the use of GIS and the associated integration of datasets increases the importance of standardisation and quality in the baseline geographic data. In particular, OS maps are now frequently used as the framework or template for additional information, and, as such, users require maps that are consistent and compatible with other datasets. Masser notes that:

the economic significance of GI lies in the general referencing framework that it provides for integrating large numbers of different data sets from many application fields in both the public and private sectors⁴⁷.

OS provides both the raw data and a common framework, based on a unique national referencing system, within which this data can be integrated and analysed.

Two other aspects of quality are that the data should be both current and complete. Many of those interviewed noted that only OS provides a complete national coverage at a large scale, with competitors tending to focus on urban areas and small-scale rural maps. Even so, OS products and services may not provide all the information needed; for example, a particular problem of out-of-date information about railway property has been noted. The 1996 consultation exercise confirmed this, with 38% of those interviewed arguing that updating was too infrequent. Since then, however, OS has increased the rate at which the National Topographic Database is updated. By contrast, some users who add their own data to base maps seem to find that there is too much information in some OS products and services.

The timetable for updating OS data is wholly driven by the needs of customers. Major changes (new motorways, extensive development, etc.) are updated within six months of their completion, wherever they may be. All urban areas are updated for significant change every six months. There is a rolling five-year update of all rural areas and a rolling five-year update for mountain and moorland areas. The first five-year rural revision cycle will be completed in September 2000. More frequent updating is available if customers demand it. Some interviewees noted, however, that OS rural information was not always up-to-date. In comparison, OS Ireland updates its urban dataset annually, small-scale tourist maps are updated every five years, rural areas near towns and cities are updated every two to three years, and other areas are updated every five years. Institut Geographique National (IGN) has a rolling five-year plan for the complete coverage of France using aerial photography. The 1:25 000 series is updated every seven years, and the 1:100 000 series is updated every one to two years. OS-equivalent small-scale products have similar revision cycles.

The cost of imperfect information and working with an out-of-date map varies between users and types of user. A report for the US Geological Survey provides a useful means of assessing the basic cost-benefit choice⁴⁸ -is the expense of acquiring new information worthwhile? The examples given relate to geological not geophysical information, but the analytic technique has a wider relevance. The report considers two cases (the siting of a landfill site and the siting of a new bypass road), and assesses the costs avoided by using a new and more up-to-date geological map. This approach could be used more widely. In the cases considered, the net benefits significantly exceed the costs of producing new geological maps, although, clearly, this need not always be the case⁴⁹.

34 Masser, I. (1998), based on the results of the consultation exercise on the 'National Interest in Mapping', OS and DEtr joint publication, 1996.
35 Friends of the Earth (1996), 'Insisting on our Right to Know: Friends of the Earth's Analysis and Experience of the Law on Access to Environmental Information'.
36 Sven Berlin quoted in John Paddy Browne, Map Cover Art, OS (no date).
37 'UK Day Visits Survey 1994', reproduced in Social Trends, 27, The Stationery Office, 1999.
38 See Knetsch, J. L. and Davis, R. K. (1966), 'Comparisons of Methods for Recreation Evaluation', Water Research, Chapter 20, Pergamon; and Smith V. K. and Kaoru, Y. (1990), 'Signals or Noise? Explaining the Variation in Recreation Benefit Estimates', American Journal of Agricultural Economics, May, 419-33.
39 See Benson, J. F. and Willis, K. G. (1990) 'The Aggregate Value of the Non-priced Recreation Benefits of the Forestry Commission Estate, Newcastle, University of Newcastle upon Tyne. 40 Joao, E. (1998), 'GIS, Environmental Impact Assessment and Scale Issues', Proceedings of the GIS Research UK 1998 Conference.
41 Joao, E. and Fonseca, A. (1996), 'The Role of GIS in Improving Environmental Assessment Effectiveness: Theory vs Practice', Impact Assessment, 14:4, 371-87.
42 DEtr (1998), 'Planning for the Communities of the Future', White Paper, The Stationery Office.
43 Newbery, D. M. (1995) 'Royal Commission Report on Transport and the Environment: Economic Effects of Recommendations. Economic Journal, 105, September.
44 Royal Commission on Environmental Pollution (1997), 20th Report.
45 Hanley, N. and Knight, J. (1992), 'Valuing the Environment: Recent UK Experience and An Application to Green Belt Land', Journal of Environmental Planning and Management, 35:2.
46 Foster, V. and Mourato, S. (1996) 'Behavioural Consistency, Statistical Specification and Validity in the Contingent Ranking Method: Evidence from a Survey on the Impacts of Pesticide Use in the UK', CSERGE.
47 Masser, I. (1998), Governments and Geographic Information, Taylor & Francis Group.
48 Berknopf , R. L. et al. (1993), 'Societal Value of Geological Maps', US Geological Survey Circular 1111.
49 The economics of the choice between making do with inexact maps and investing in revised maps is considered in some detail in Didier, M. (1990), 'Utilité et Valeur de l'Information Géographique', Economica (Paris).