- 4.1 The Survey
- 4.2 Number of Surveys
- 4.3 Lot Size
- 4.4 Information Requested
- 4.5 Categories
- 4.6 Gross Margin Analysis
4. Methodology
4.1 The Survey
The study is based on a sample survey of titles created since January 1995 to January 2000. The survey took the format of a telephone questionnaire conducted in August 2000 (see Appendix 3). No work was done to validate the answers given to the questionnaire. Subdivision files were reviewed prior to the survey being undertaken to assess previous land use then this was validated by the questionnaire.
The survey was drafted and administered by National Research Bureau (NRB)3.Gross margins for the various land uses were estimated by Agriculture New Zealand Ltd consultants. This gross margin information was forwarded to NRB who used the survey responses and the gross margin detail to calculate the economic impact of subdivision. The initial tabulation of the data was conducted by NRB. Analysis of the data was conducted by Agriculture New Zealand Ltd.
4.2 Number of Surveys
The survey started with a random sample of 400 owners to achieve a final sample of 300 from a total of 3,613 lots created over the five years. From the sample of 400 there were 25 refusals, 63 people were uncontactable for a variety of reasons and 8 samples were not used, giving a total of 304 respondents.
This sample of the Western Bay of Plenty is sufficient to provide a 95% confidence level that the responses given to the questions reflect what is happening on all the land that has been subdivided since January 1995.
4.3 Lot Size
The size range of lots sampled was restricted to less than 20 hectares size post subdivision. The reason was that larger lots are considered to be `parent' lots that are unlikely to experience any significant change, unlike the smaller lot(s) that had been subdivided off.
4.4 Information Requested
The people surveyed were asked to provide information on what the land was used for prior to subdivision and what it is used for now. The survey questions are appended (Appendix 3). Respondents during this survey were asked about the use of their land for commercial primary production. This differs from the 1995 survey in that it excludes those who use stock simply to control grass growth and provide food for home consumption.
4.5 Categories
The categories listed are essentially self explanatory. The one that requires further explanation is non-productive. This includes all land that in the landowners view cannot be used for production and would include areas of native bush and gullies too steep to be farmed.
4.6 Gross Margin Analysis
Gross margin analysis was used to compute the change in the value of primary production before and after subdivision.
A gross margin looks at the total income from a particular operation and then subtracts from this the direct costs of generating that income. Gross margins are a standard way in which incomes of different land uses can be compared. The analysis does not take into account any costs that are not directly related to the particular operation. For example, it does not take into account any capital expenditure, rates, drawings or debt servicing a person may have to pay associated with owning the enterprise. The assumption is that these costs will or may be incurred irrespective of what is done with the land and they are personal to the landowner.
The gross margins were applied to the land use specified at average prices and yields for the 1999/2000 year for the Bay of Plenty region. These figures reflect the most likely average yield and price figures for the Western Bay of Plenty District. It was assumed that all area in production was fully mature. That is, no information was provided on the stage of development of the property.
The exceptions to the use of gross margin analysis were with forestry and some very specialised businesses. In forestry, the gross margin was converted to an annuity and applied to the area of land. With some businesses, applying a generalised gross margin to the land use was inappropriate because of the nature of the enterprise (eg horse breeding and ornamental nursery production). Where this was the case, the land owner was contacted again by telephone to determine more specifically the gross margin they generate from their business.
Where land was used for an economic activity other than primary production (eg a business depot) the value of this 'production' was not computed. No information was collected on what type of other business activity was undertaken on the property.
3 Land Use Pre and Post Subdivision, National Research Bureau, September 2000
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