Private benefits of natural capital on farms across an endangered ecoregion

The conservation of natural capital on farms is being increasingly recognised as essential for addressing global biodiversity decline. At the same time, there is growing interest in the potential for natural capital on farms that generates high public benefits, to also generate private benefits, potentially fostering greater adoption of conservation practices on farms. Despite this, empirical analysis of private benefits of natural capital on farms remains limited. Addressing this gap can help in identifying conservation opportunities and selecting cost-effective policy mechanisms to deliver public good biodiversity conservation outcomes on private farmland. We present results from a hedonic model on private benefits associated with native woodland and bird biodiversity on commercial farmland in a critically endangered temperate woodland ecosystem in southeast Australia. Using quantile regression, we found significant heterogeneity in private benefits associated with such natural capital across farmland value quantiles. These private benefits increased from lower to upper land value quantiles, conditional on a range of attributes of the farmland parcel. In some instances, private costs were associated with enhancement of native woodland and bird biodiversity on farms, above even a very low baseline. We discuss the implications of these findings for targeting of investment and selection of policy mechanisms.