Review of the Registered Clubs Industry in NSW - Clubs NSW

4 Measuring and reporting on club contributions
ClubsNSW argued that clubs’ indirect (or intangible) contributions should be
measured quantitatively through a ‘willingness to pay’ approach rather than
qualitatively. It put the view that this approach (which would involve a choice
modelling exercise) can accurately capture the value of club-provided indirect
benefits as well as highlight the club services that are most highly valued by the
community. 71
However, IPART considers that qualitative statements are more appropriate for
identifying and recording this component of clubs’ social contribution. IPART
acknowledges that a choice modelling exercise might be useful for estimating the
economic benefit communities derive from club-provided community services. But
IPART considers that this approach is not appropriate for estimating the value of
clubs’ indirect social contributions, as its terms of reference ask it to do. In particular,
IPART considers that:
Calculating the value of something requires a different approach to calculating the
benefit derived from something. In economics, the calculation of a benefit
involves estimating the consumer and producer surplus for a good or service. But
the calculation of a value requires a valuation, which usually involves some form
of market- or cost-based approach.
To use the choice modelling technique to measure the indirect contributions of
clubs you would need to be able to measure consumers’ willingness to pay for
different levels of outcomes that are difficult for them to identify (such as safe
environments for families and quality of life for the elderly). Unlike choices
between specific products, it is unclear what is meant by increasing these
outcomes by, say, 10 per cent.
Using the choice modelling technique would also implicitly assume that clubs are
best placed to deliver these outcomes (as opposed to the Government or the
private sector), which may not necessarily be the case. The community may be
willing to pay for these indirect, intangible benefits, regardless of how they are
delivered. (Further information about the choice modelling approach is provided
in Appendix F.)
71 ClubsNSW submission, 4 April 2008, p 14.
72 IPART Review of the Registered Clubs Industry in NSW