Duration: 10/01/2012 to 09/30/2017

Administrative Advisor(s):

NIFA Reps:

Non-Technical Summary

Statement of Issues and Justification

I. STATEMENT OF ISSUES AND JUSTIFICATION

Since its inception, W2133 has made substantive contributions to the theory and practice of valuation of ecosystem goods and services. These values are essential inputs to decision-making that attempts to balance sustainable economic growth, environmental quality, and natural resource use and conservation to support a variety of (sometimes conflicting) societal needs. The importance of this work influences the highest levels of decision-making, as evidenced by the President's Council of Advisors on Science and Technology report to President Obama on July 2011 (PCAST 2011). Two of the report's six summary recommendations include:

"Federal agencies with responsibilities relating to ecosystems and their services (e.g., EPA, NOAA, DOI, USDA) should be tasked with improving their capabilities to develop valuations for the ecosystem services affected by their decision-making and factoring the results into analyses that inform their major planning and management decisions."

The recommendations go on to elaborate that:

"This will entail expanding current efforts on ecosystem-service valuation in EPA, USDA, and other agencies, as well as generating new knowledge about the ecosystem-service impacts (in both physical and value terms) of activities taking place on both public and private lands. The Office of Management and Budget (OMB), OSTP, and CEQ should ensure that the methodologies are developed collaboratively across agencies."

The fact is that USDA, through its support of W2133 objectives, has been at the forefront in recognizing the need for improvement of valuation methods, increasing the range of ecosystem service applications, and development and testing of policy instruments that use valuation information in efforts to efficiently allocate non-marketed ecosystem goods and services.

Federal regulatory impact analyses use a benefit-cost analysis framework, which requires quantification of the monetary value of potential changes in ecosystem goods and services that result from economic activity and policies. The need for valid and reliable economic estimates of ecosystem services continues to grow as management philosophies and people's demands for environmental quality change. Federal land management agencies have adopted sustainable ecosystem management as a guiding principle, which requires information on the trade-offs among environmental, social, and economic aspects. The objectives of this regional research project are designed to provide this type of information for ecosystem services that are not valued directly by markets, as needed by decision makers in the public and private sectors.

The next five years of the W2133 project will be a period in which ecosystem services on public and private lands will experience increased pressure from changes in direct and derived demand for public lands uses, as well as possible ecosystem changes from increased variation in extreme weather events, invasive species, altered wildfire regimes and other natural hazards. In addition, federal agencies will require solid research findings that delineate the economic values of ecosystem services that are not priced in the market, in order to face possible challenges to regulatory regimes originally designed to conserve ecosystem service values, such as generation of renewable energy and possible new listings under the Endangered Species Act. Many policy issues revolve around the fact that so many of these values are public good in nature and are therefore subject to market failure in changing economic and natural environments. Public policy with regard to public land, water, air quality and other natural assets continues to evolve using more efficient economic incentive mechanisms; the success of these mechanisms lies in the ability to measure the value of natural assets and ecosystem services under changing economic and natural environments. The proposed objectives and sub-tasks for W2133 project research over the next five years directly address these challenges.

Proposed W2133 Objectives for Oct 1, 2012 through Sept 31, 2017:

Objective 1: Land and Water Resource Management in a Changing Environment

Task 1-1: Economic Analysis of Ag, Forest and Rangeland Resources,Open Space, and WUI Zones

Task 1-2: Economic Analysis of Natural Hazards (fire, invasive species, climate change)

Objective 2: Economic Valuation Methods

Task 2-1: Advances in Stated/Revealed Preference Methods

Task 2-2: Advances in Benefit Transfer Methods

Task 2-3: Advances in Spatial/Environmental Nexus

Objective 3: Integrated Ecosystem Services Valuation and Management

Task 3-1: Economic Analysis of Ecosystem Services Flows

Task 3-2: Economic Analysis of Recreation Services

Task 3-3: Economic Analysis of Water Quality

Public and private agencies and institutions express significant interest in the information provided through W2133. Stakeholders, such as the USDA Forest Service, the U.S. EPA and the DOI Bureau of Land Management participate in workshops on economics and social analyses organized with by W2133 members, and often request information on non-market valuation of wildlife and ecosystem goods and services. Stakeholder interest is directly evident from their frequent and extensive participation in W2133 annual meetings, including collaborators from the USDA Forest Service, USDA Economic Research Service, NOAA, U.S. Fish and Wildlife Service, U.S. Bureau of Reclamation, U.S. EPA, and private consultants, among others. W2133 research helps shape planning and policies (USDA Forest Service Strategic Plan and Resource Planning Act values, NOAA Type A damage assessments), and direct future grant solicitations (U.S. Environmental Protection Agency, 2005). Experiment Stations gain several advantages from participating in W2133. This project brings together experts from across the country while avoiding duplication of effort in the development, design, and application of statistical models and survey methods. W2133 combines complementary specialized expertise at different experiment stations and federal agencies to leverage advancements in methods and applications, such as integrating quantitative methods (for example, Nevada, New York, Virginia and Iowa) with empirical applications (Colorado, Georgia and Michigan).

The organizational infrastructure created by W2133 generates synergies in non-market valuation research, which would likely dissipate should this research project not be rechartered. Without a regional project, there will likely be duplication of research effort and fragmented gains in information due to limited resources at individual Experiment Stations. Failure to conduct proposed research would leave many federal and state agencies without information needed to evaluate the economic effects of natural resource policies and management plans for public and private lands.

Proceedings from W2133 annual meetings, agency publications, and co-authored journal articles document the sustained collaboration of and contributions by participating Experiment Stations. Prior advancements in theory and applications of environmental economics made by this project have built a sound foundation for important refinements and new empirical applications by this group and other Experiment Stations and agencies over the next five years. Since many members of participating Experiment Stations have formal extension appointments and work closely with collaborators within and outside of W2133, broad dissemination of research results to various stakeholders occurs through public and agency workshops and cooperative extension publications.

This regional research project creates and maintains human and network capital infrastructures that can rapidly respond to requests of local, state and federal resource managers and policy makers for evaluating emerging policy issues. Often similar management and policy issues arise in different states. The ability of each Experiment Station's scientists to leverage the expertise of their fellow members in W2133 enables their rapid response to emerging issues through applications of the methods, survey instruments, and information originally developed by other W2133 members to address similar issues in their states. Also of note is the fact that state membership has grown in the past decade, which indicates increasing interest in policy relevant non-market valuation and further expansion of the portfolio of researcher expertise.

Related, Current and Previous Work

The previous W2133 objectives were: Natural Resource Management under Uncertainty, Advances in Valuation Methods, and Valuation of Ecosystem Services. Members contributed articles featuring W2133 results in a special issue of Agricultural and Resource Economics Review (January 2010). Accomplishments are summarized below.

Objective 1: Natural Resource Management under Uncertainty

Task 1-1: Economic Analysis of Agricultural Land, Open Space and Wildland-Urban Interface Issues

Georgia investigated conceptual frameworks for defining multi-functional environmental benefits of agricultural land (Bergstrom 2009), and with Pennsylvania and Mississippi assessed the state-of-knowledge regarding economic values of these benefits (Bergstrom and Ready 2009). New York developed a GIS-based hedonic property model to examine the effect of agricultural land on housing prices (Suter et al 2008). California (Kovacs and Larson 2007) and Maine (Neumann et al 2009) estimated impacts of open space amenity and recreation benefits on housing values and residential development patterns. North Carolina, Illinois and Wyoming estimated benefits and costs of public and private green space (Braden et al 2010; Phaneuf et al 2010).

Georgia assessed the potential of markets for farmland preservation (Dorfman et al 2008). The USDA Forest Service, West Virginia and Oregon showed that federal wilderness designation has a statistically significant, but small effect on economic development in Appalachia (Rosenberger et al 2008). Wyoming and Colorado evaluated conservation easements as a means to protect rural amenity and farmland values. Wyoming assessed landowners' willingness to enter conservation easements, the volume of easements transacted, and the efficiency of conservation easement markets, and presented results to policy makers and land trusts (Cross et al 2011; Miller et al 2011; Keske et al 2009).

Michigan worked with land use planners to measure the efficacy of transfer of development rights, conservation banks, payment for environmental services, wetland mitigation banking, and other incentive-based agricultural land preservation programs (Deaton et al 2007; Kaplowitz and Witter 2008; and Kaplowitz et al 2008; Lupi et al 2008). They measured ecosystem service values to farmers and farmer cooperation (Swinton et al 2011; Swinton and Lupi 2007), use of social norms to enhance conservation (Chen et al 2009a, 2009b, 2010), and efficacy of tradable credits for biodiversity conservation (Bruggeman et al 2009). Results were covered in the Wall Street Journal.

Maine, Ohio, Virginia, Texas, Oregon and Kansas studied spatial patterns in public preferences, policy impacts, service flows and voting behavior regarding land protection programs; and the impacts of public lands on property values, and urban-rural land use dynamics. They developed an integrated economic-ecological model to support policy analysis (Freeman and Bell 2011; Baldwin et al 2007) and deal with spatial heterogeneity in economic analyses(Bell and Dalton, 2007; Bell, 2007; Irwin et al 2009; Bell 2010).

West Virginia, Oregon and USDA developed a multi-criteria analysis tool to aid in selecting private parcels for conservation in a watershed in West Virginia (Strager & Rosenberger 2007). The Center for Environmental and Resource Economic Policy (CEnREP) at NC State University created a tool to help planners manage growth and protect natural resources. The project compiled data to quantify economic and environmental spatial and temporal land use trends, and spatially explicit linkages among habitat, water quality, demographics and economic activity and indicators. The data and examples of its use is at: www.ncsu.edu/cenrep/projects/documents/Landdata_report_final.pdf

Delaware, Nevada, and Oregon (with Clark University) developed an econometric framework for Benefit Transfer of values for open land conservation, using choice experiment data (Moeltner et al., 2009).

19 states participated in this task: NC, GA, OR, WY, CO, PN, MI, MS, OH, KS, ME, VA, TX, WV, CA, NV, NY, IL, DE. Collaborations with non-member institutions that adopted W2133 objectives into their research programs, include agricultural preservation valuation work by Johnston and Duke (2009, 2007).

Task 1-2: Economic Analysis of Natural Hazards Issues (Fire, Invasive Species, Natural Events)

Texas, Nevada, Duke University, and Tennessee analyzed risk perceptions about hurricane strikes from a sample of Hurricane Katrina and Rita evacuees, and assessed how risk perceptions affect future residence decisions (Baker and Shaw 2010, Baker et al 2009, Baker et al 2009).

The USDA Forest Service, Montana, Arizona and Colorado provided fire managers with information on the economic values of avoiding wildfire, focusing on values to residents of wildland urban interface areas in California, Colorado and Montana, including Native American preferences (Kavel, et al 2007; Loomis et al 2007; Kaval and Loomis 2007; Walker et al 2007; Loomis and Gonzalez-Caban 2008; Rideout et al 2008; Mueller et al 2009). Nevada estimated residents' values for rangeland management programs to prevent increases in wilfdfire numbers and severity (Kobayashi and Rollins 2010). Nevada also determined that home-owners living in high fire-risk areas have non-linear preferences over probabilities which cause them to underestimate the expected cost of wildfire to their households; however, previous wildfire experience tends to mitigate undervaluation. Oregon, Idaho and the USDA Forest Service surveyed visitors to a wilderness area after a major wildfire, finding minimal visitor displacement and support for post-fire management alternatives varying across visitor groups (Brown et al., 2008).

Funding from Michigan State's Environmental Science and Policy program and collaboration from Delaware, Ohio, Minnesota, and the USFS, supported a workshop on waterborne invasive species and produced a special issue of Water Resources Research (Horan and Lupi 2010). Nevada and Kentucky estimated the numbers of trips and welfare losses under different regulatory control policies used to limit New Zealand Mud Snail impacts on recreational fishing in three Northern Nevada watersheds (Davis and Moeltner 2010).

Nevada and the Agricultural Research Service measured the costs of invasive annual weeds to rancher profits, the general public, and wildfire suppression. They found that the deviation between private and public costs results in under-provision of invasive weed treatments, and recommend that policy be designed to address this disparity. Nevada also developed a model to estimate benefits of rangeland fuel treatment programs that reduce wildfire threat and limit invasive weeds.

A study of invasive forest pests by Maine, North Carolina, and Tennessee showed that the estimated benefits of conserving the ecological services of hemlock stands on three public land units in the Southern Appalachians outweighed the cost of the mitigation programs by two orders of magnitude (Moore et al 2011) and that spatial spillovers are important when estimating impacts of invasive forest pests on property values (Holmes et al 2010; Holmes et al 2008).

North Dakota estimated the costs of an anthrax control program and the incentive structure in North Dakota's prevention and mitigation campaign, given that anthrax control has both private and public good characteristics (Ndiva Mongoh et al 2008a; Ndiva Mongoh et al 2008b, Ndiva Mongoh et al 2008c). Wyoming investigated the implications of land conversion to agricultural operators and resource managers and the determinants of conversion between uses and ecological regimes (Rashford, Walker and Bastian 2011).

Seventeen states (NV, CA, ID, CO, MT, DE, OH, MN, ND, MI, ME, TN, TX, OR, AZ, NC, KY) and two federal agencies (USFS, ARS) collaborated on this task. W2133 non-member participants estimated economic costs of invasive insect damage of trees (Kovacs et al 2011, Holmes et al 2010, and Kovacs et al 2010).

Task 1-3: Analysis of Climate Change Issues

Oregon with the USFS summarized social and economic issues of global climate change impacts in the western U.S., introduced a typology of values based on a synthesis of the current literature (Rosenberger 2007), and motivated the need for mitigation and adaptation strategies to minimize climate change impacts. Iowa, Illinois, and the National Center for Atmospheric Research analyzed climate change policies for greenhouse gas and nitrogen emissions from agriculture and urban stormwater management practices (Johnston and Braden 2008; Ren et al 2010, 2011; Mieno and Braden 2011, Braden and Ando 2011). Wyoming analyzed the fiscal shocks of federal carbon management policies, and evaluated impacts of federal regulation of greenhouse gas emissions on Wyoming's energy-derived tax revenue.

Texas and Colorado provided federal and state agencies with expected effects of climate change on recreation use and benefits (Shaw and Loomis 2008). Virginia and Nevada predicted how climate change might affect recreation demand at Lake Tahoe, using hourly recreation choice data from a 2004 visitor survey to quantify increases in crowding from increased demand for beach and boat ramp access.

Massachusetts and West Virginia assessed benefits to land owners participating in programs that address climate change. Data from Massachusetts private forestland owners was used to evaluate their probabilities of enrolling in carbon sequestration and conservation easement programs. The likelihood of enrollment was about 4% at current carbon prices (LeVert et al2009; Fletcher et al 2009).

Ten states (OR, IA, IL, WV, WY, TX, CO, MA, NV, VA) and two federal agencies participated in this task.

Objective 2: Advances in Valuation Methods

W2133 advanced the state-of-the-art in non-market valuation of ecosystem services to address concerns of stakeholders.

Task 2-1: Improving Validity and Efficiency in Benefit Transfers

In FY2010, the EPA-STAR competitive grants program conducted a major synthesis of benefit transfer research, relying heavily on W2133 output and expertise. W2133 evaluated several approaches to benefit transfers including meta-regression analysis and Bayesian methods to address bias, data aggregation, and efficiency, validity and efficacy of methods. Applications included valuation of recreation, wetlands, and USDA conservation practices and programs. The literature on theory, tests and applications was reviewed and synthesized, highlighting trends and issues (Rosenberger & Johnston 2009, 2011; Johnston & Rosenberger 2010; Rosenberger & Phipps 2007).

Members from several states collaborated on the use of meta-analysis for benefit transfer. Topics included small sample size and evaluation of optimal scope of metadata (Moeltner and Woodward 2009; Moeltner and Rosenberger 2008; Moeltner et al 2007); combining data from multiple primary studies (Moeltner et al 2009); the role of selection effects; and guidelines to improve benefit transfer practice (Rosenberger and Johnston 2009; Rosenberger and Johnston 2008). Applications were chosen to be relevant to the other W2133 objectives, including the impact of contaminated sites on property markets (Ren et al 2008; Braden et al 2008a; 2008b; Braden et al 2010; Braden et al 2010; Braden et al 2011), and recreational use values (Shreshta et al. 2007).

Task participants represented six states (OR, VA, CO, NV, IL, ME) with contributions from the National Center for Atmospheric Research, the EPA, and Clark University.

Task 2-2: Improving Valuation Methods and Technology

Accomplishments included: use of spatial regression techniques with higher resolution land cover layers; a payment card approach to robustly estimate WTP while reducing protest response bias in contingent valuation (Collins & Rosenberger 2007); methods to more efficiently use stated preference data with certainty levels (Kobayashi and Rollins 2010, Kobayashi et al. 2011); a new approach for combining stated and revealed preference data (Phaneuf et al 2010); development of multiple-method approaches (Frank et al 2010; Kaplowitz et al 2009; Fenichel et al 2009; Hanson, et al 2008; Kaplowitz et al 2007); approaches to reduce hypothetical bias (Murphy et al 2010); a review of the role of consequentiality in contingent valuation (Poe and Vossler 2011); the effects of information and choice sets in stated preference methods (Bateman et al 2008); and evaluation of factors affecting contingent values when culpability is an issue (Suter et al 2008).

North Carolina and Iowa expanded the scope of count data models for recreation demand through the development of a Bayesian simulator (Herriges et al 2008), and applied it to individuals' demands for 29 Iowa lakes. This work also produced a test for the extent to which hypothetical biases shape stated preference responses (Liu et al 2010; Herriges et al 2010; Jeon and Herriges 2010).

W2133 collaboration developed tests for systematic biases in valuation estimates, including: using time per survey response to detect systematic patterns in respondents' choices (Vista and Rosenberger 2009); incorporating local values into choice experiments in less developed countries (Hearne and Binebe 2010); measurement of preference asymmetries in stated preference data (Johnston and Cullen 2008); exploration of other-regarding preferences such as altruism, fairness, and reciprocity in public goods (Messer et al 2010; Schulze et al 2002); and split sample empirical tests of stated preference methods (Hoehn et al 2010; Fenichel et al 2009).

Iowa developed approaches to quantify differences between partial and general equilibrium welfare measures in valuing congestion in recreation demand, confirming that substantial differences can exist. Associated conceptual and computational challenges were assessed and solution avenues identified (Jeon and Herriges 2010).

W2133 collaboration produced valuation technology such as benefit transfer data platforms linked to policy and management needs for agency use, to provide efficient access to valuation data for a variety of policy and management issues. An example is the decision framework for state and federal agencies to determine whether benefit transfer is preferable to performing an original valuation study. Criteria include the variance in estimates from benefit transfer, the monetary magnitude of the decision to be made, and the cost of performing an original study (Allen and Loomis 2008). Another example is the Benefit Transfer Toolkit, developed by the Defenders of Wildlife and Colorado State University (Loomis et al 2008) for valuing fishing, hunting, wildlife viewing, wetlands and threatened and endangered species. The Tool Kit is posted at the websites of Colorado State University and Defenders of Wildlife, and is being used by federal and state agencies and universities to locate studies for benefit cost analysis and benefit transfers, saving significant amounts of money and time. Colorado provided agencies with an updated meta-analysis of threatened and endangered species values that can be used in benefit transfer for critical habitat decisions (Richardson and Loomis 2009).

Eleven states (IL, NV, ND, NH, OR, MI, ME, IA, CO, NY, TN) and several institutions (NOAA, EPA, Clark University, Defenders of Wildlife) participated in this task.

Objective 3: Valuation of Ecosystem Services Ecosystem management integrates biophysical, social, and economic components in a holistic approach to managing natural resources with a focus on the quality and quantity of ecosystem goods and services, which include recreation, wetlands, clean air and water, wildlife habitat, wilderness, forage, timber, and ecological functions such as nutrient cycling and climate regulation. Ecosystem management is endorsed by federal land management agencies (USDA Forest Service, U.S. Fish and Wildlife Service, Bureau of Land Management and the National Park Service). Task 3-1: Valuing Changes in Recreational Access W2133 valued costs and benefits of changes in recreational access and use for a variety of recreational activities that occur on public and private lands throughout the U.S. Michigan valued public access to recreation lands for deer hunting, game bird hunting, beach uses, public boat ramps, and public access to fishing sites. The hunting research has been referenced in several Midwestern newspapers, on-line sites and local television stations. Results on the recreational value of public lands and public access were presented to Michigan legislators (Knoche and Lupi 2011). W2133 projects estimated the value of recreational access to user groups for swimming and boating in the Red River Basin (Hearne and Torpen 2010); the value of nature trails, bike trails, and tours of a bison herd within the Standing Rock Sioux Tribal Reservation to tourists and locals (Hearne and Tuscherer 2008); impacts of fees for recreational fishing in in the Gulf of Mexico (Hwa et al 2007); the value of backcountry wilderness access for hiking and canoeing under a variety of site conditions (Rollins et al 2008); the economic value and impacts of rail-trails (Bowker et al 2007; Gil et al 2010); the value of changing lake and reservoir levels in the Tennessee Valley (Jakus et al. 2011); and the economic impacts of human-powered outdoor recreation (bicycling, hiking, paddling) on the U.S. economy (Southwick et al 2009). Colorado estimated the economic value of hiking peaks of over 14,000 feet and provided information to the USDA Forest Service and county and city planners to aid these groups in purchasing easements to reopen access to these peaks (Keske and Loomis 2007, 2008; Loomis and Keske 2009a, 2009b). W2133 research estimated the economic value of maintaining recreational access for OHVs in Colorado, providing information to the USDA Forest Service (Deisenroth et al 2009). A related Wyoming study considered the implications of OHV management on multiple activities when OHV usage is a joint activity with other recreational activities (Foulke et al 2008). The economic losses associated with more restrictive access to BLM lands in Utah under proposed BLM Resource Management Plans were estimated and reported to federal and state officials (Jakus et al. 2010). W2133 members collaborated with the U.S. Forest Service and the Oregon Parks and Recreation Department to estimate the contributions of outdoor recreation to the physical health of Oregon residents using a model that links recreation supply and demand with county-level measures of physical activity (Rosenberger et al. 2009). A related study calculated the benefits of recreation in national forests as the net energy expenditure (289 billion kcals annually) for all visitations (Kline et al. 2011). Methodological advancements were provided to the USDA Forest Service for river recreation on the Caribbean National Forest to improve procedures for estimating values associated with changes in recreational access (Santiago and Loomis 2009; Gonzalez et al 2008; Martinez-Espineira et al 2008). Eight States (TX, OR, CO, ND, NV, WY, GA, MI) and the U.S. Forest Service participated in this task. Task 3-2: Valuing Changes in Ecosystem Services Flows W2133 work made significant contributions to the understanding of how the public values ecological goods and ecosystem services, and how these services are produced by mixed public and private land ownership at the landscape scale. W2133 research has resulted in a framework that has led to standardized concepts and definitions for valuing ecosystem goods and services, and provides a basis for testing theory and methods for valuing multi-attribute ecosystem services and for assessing the likelihood of private provision services through market and extra-market mechanisms in an open economy (Brown et al 2007; Volinskiy et al 2010). This information has been provided to federal agencies that are interested in valuation of ecosystem services. A number of W2133 studies used this framework to measure the values of specific ecosystem services; including ecosystem services provided by wetlands, floodplains, and moving water of the Red River Basin in North Dakota (Hearne and Torpen 2010); changes in watershed and wetland ecosystem services in Michigan, Ohio, Missouri, Georgia and Costa Rica (Kaplowitz and Lupi. 2010; Hoehn et al 2010; Kaplowitz and Bergstrom 2010; Ortega-Pacheco et al 2009; Glicken et al 2007);water quality, fish, wildlife, and climate (Knoche, and Lupi 2007). Three states (CO, GA, MI) and the U.S Forest Service contributed to this task. Task 3-3: Valuing Changes in Water Quality W2133 investigated several water contaminants and affected populations. Loomis et al (2000) estimated the economic values to parents and non-parents for reducing infant exposure to nitrates in ground water. Oregon and West Virginia valued options for restoring streams contaminated by acid mine drainage in West Virginia (Collins et al 2009). Maine, Virginia, Utah and Texas (Boyle et al 2010) identified the interrelationships between household decision-making and spatial and temporal patterns in property value reductions due to arsenic contamination of drinking water. Other research focused on perceived risks of arsenic contamination (Nguyen et al. 2010) and how perceived risk affects averting behavior (Jakus et al. 2009). W2133 work assessed policy mechanisms for maintaining surface and drinking water quality, including stakeholder preferences for water quality control programs in the Red River Basin of North Dakota (Hearne and Torpen 2010); land and water use planning in Wyoming (Cooke et al 2008); and payment mechanisms, ecosystem banking and other institutions for environmental service provision (Kaplowitz and Lupi 2010; Ortega-Pacheco et al 2009; and Kaplowitz et al 2008). North Carolina Research Triangle Institute and Duke developed a generic platform for monetizing the benefits of nutrient management strategies in the Southeastern U.S. (Phaneuf et al 2011), and convened an EPA-sponsored workshop to demonstrate how the spreadsheet-based program they developed could be used in policy contexts to generate benefit estimates for alternative policy scenarios. Iowa analyzed data from a data collection effort funded jointly by the Iowa Department of Natural Resources and the EPA. The project surveyed 8,000 households between 2002 and 2009 about visitation patterns to the 132 recreational lakes in Iowa. This data provides a cross section and time series of visits combined with detailed water quality for the same time frame. The team has published several papers showing the effect of water quality on households recreation decisions. The data have been used extensively by the Iowa Department of Natural Resources in program planning. A website was developed to assist in disseminating this information to stakeholders (Egan et al 2009). W2133 members and friends from eight states co-authored an article in the journal Water Resources Research to advance the case for increased collection of social science data on the value of water resources (Braden et al 2009). With funding from Michigan State's environmental science and policy program, MSU organized an on-site and off-site workshop and set of papers for a special issue of Water Resources Research. Michigan (Kaplowitz and Levine 2007) studied stakeholder preferences for watershed and water quality improvements. North Dakota assessed the value of efforts to preserve riparian ecosystems and fish populations in the Red River Basin (Hearne and Tuscherer 2008; Hearne and Torpin 2010). Fourteen states (OR, WV, TX, AZ, CA, IA, CO, MI, NB, WY, ME, VA, ND, UT) and the EPA collaborated on this task.

Objectives

1. Obj 1: Land and Water Resource Management in a Changing Environment<p>Task 1-1: Economic Analysis of Ag, Forest and Range Land Resources, Open Space, and WUI Zones<p>Task 1-2: Economic Analysis of Natural Hazards (fire, invasive species, climate change)
   
2. Obj 2: Economic Valuation Methods<p>Task 2-1: Advances in Stated/Revealed Preference Methods<p>Task 2-2: Advances in Benefit Transfer Methods<p>Task 2-3: Advances in Spatial/Environmental Nexus
   
3. Obj 3: Integrated Ecosystem Services Valuation and Management<p>Task 3-1: Economic Analysis of Ecosystem Services Flows<p>Task 3-2: Economic Analysis of Recreation Services<p>Task 3-3: Economic Analysis of Water Quality, Quantity and Flow
   

Methods

WORK DESCRIPTIONS (2012-2017)

We have refined our objectives for the next five years to (a) build upon progress from the last five years; and (b) address newly emerging natural resource issues of growing importance to our stakeholders in state and Federal agencies, with continued emphasis on valuation of non-market ecosystem services (particularly objective 3). Methods with collaborating members' responsibilities are provided below, organized by objective and subtasks within each objective.

Obj 1: Land and Water Resource Management in a Changing Environment

Task 1-1: Economic Analysis of Ag, Forest and Range Land Resources, Open Space, and WUI Zones

Members from Maine and Ohio State and collaborators from Oregon and the USDA Forest Service Pacific Northwest Research Station will conduct economic analysis of urban-rural land use dynamics, forest land management and policy interactions, and open space protection programs. Maine participants will collaborate with the USDA Forest Service Pacific Northwest Research Station to estimate models of land-use change, to simulate the impacts of alternative forest management policies, and to investigate patterns in land conversion along the urban-rural gradient in Western Oregon.

Oregon participants will continue work on land cover patterns, with a focus on urban areas. Oregon State members will collaborate with the Oregon Department of Forestry and the USDA Forest Service to evaluate amenity benefits of urban forests (groves and street trees) for residences in three urban areas in Oregon for incorporation into urban land use planning.

Wyoming and Maine members will collaborate with co-operators from Colorado and Oregon to investigate the spatial implications of open space conversion, loss and value. They will use hedonic property value models to investigate the impacts of open space on property values. Preferences for land use policies will continue to be studied using statistical analyses of voting results on open space referenda.

Colorado members, in collaboration with the USDA Forest Service Rocky Mountain Research Station, will estimate the economic values of federal lands as open space in Colorado Springs. This area includes the Pike National Forest and military lands such as Fort Carson. On the Pike they will use the Hedonic Property Method to look at the influence of timber harvesting, OHV use, and hiking trails on property values.

Illinois members will estimate the value of restored grassland ecosystems. This research will use choice experiment methodology, and will explore how the econometric specification can be tailored to yield in-depth understanding of consumer preferences over multiple elements of conservation success, enabling restoration ecologists to design projects that maximize the value of such projects to society.

Obj 1: Land and Water Resource Management in a Changing Environment

Task 1-2: Economic Analysis of Natural Hazards (fire, invasive species, climate change)

Colorado members will work with the USDA Forest Service Rocky Mountain Research Station and Virginia Tech to measure economic consequences of health effects of wildfire smoke. Epidemiological, revealed preference (cost of illness and averting behavior), and stated preference methods (CVM) will be used. Illinois will measure how climate-change probability distributions with heavy weight on large temperature changes reduce the value of conservation returns that are possible for the same level of outcome uncertainty. This research will develop new portfolio tools to help conservation agents choose spatial portfolios of protected and managed lands given climate-change related uncertainty in future spatial patterns of biophysical outcomes (such as species locations) and quantify the importance of having accurate value estimates for the ecological benefits that are the target of such analysis.

Colorado and Texas will work with economists and staff at USDA Forest Service Research Stations in North Carolina and California on testing expected utility approaches to analyze landowners' decisions regarding (a) wildfire risk and housing decisions, and (b) landowners' decisions to undertake defensible space on their properties, as well as fund community and county-wide fuel reduction projects. This work will empirically test consistency with and deviations from expected utility of landowners. Nevada members are developing a model that explains landowners' lack of investment in defensible space in terms of non-expected utility theory and are gathering survey data to implement the model. In addition, Nevada members are incorporating uncertainty about success rates of fuels treatments and the risk of fire into models to value rangeland management alternatives. The results of the Colorado-North Carolina work will be compared to Nevada to see if general insights about landowner behavior can be arrived at that would be transferable to other states dealing with wildfire in the wildland land urban interface.

Nevada members will develop models to estimate the costs of wildfire and invasive annual grasses on rangelands in terms of wildfire suppression costs (this work will be conducted in part as a cooperative research agreement with the ARS), lost ecosystem services, and ranch losses. They also will gather stated preference data to continue work on modeling risk and preferences over probabilities for wildfire threat reduction by western homeowners in fire-prone areas.

Virginia Tech and Utah State (with participation of the USDA Forest Service Rocky Mountain Research Station) will study the economic impact of forest damage caused by the Mountain Pine Beetle via losses in property values in WUI communities. This study will be conducted at a large spatial and inter-temporal scale. A related focus will be how these pest-induced economic losses compare to losses from wildfire. Virginia(with participation of the USDA Forest Service Southern Research Station) will conduct similar research with focus on the Hemlock Woolly Adelgid.

In related work, Oregon State (with participation of the USDA Forest Service Rocky Mountain Research Station) will synthesize the literature on nonmarket values associated with native and non-native insects impacts on forested landscapes in the United States. They also will use this information in a case study of Mountain Pine Beetle damage for residents and visitors to an area with substantial beetle impacts.

Obj 2: Economic Valuation Methods Task 2-1: Advances in Stated/Revealed Preference Methods

Iowa, Illinois and North Carolina will work together on advancements in combining revealed and stated preference data. Applications will include General Method of Moments (GMM) estimators for data integration and Bayesian tools. Iowa has a number of projects underway using a Bayesian approach to consider competing recreation demand models (choice of which variables to include in a model and which functional forms to employ), and therefore will have the lead on Bayesian tools. They are also revisiting the problem of site aggregation in models of rivers and beaches at the collaborating states (e.g., North Carolina for beaches). For these types of sites, travel costs are traditionally difficult to calculate, since it is usually not known where the individual enters the beach or river system.

Michigan State members will continue work on development of multiple-method approaches for design and implementation of nonmarket valuation methods. They will also examine approaches for correcting for endogeneity in travel cost models using both empirical datasets and Monte Carlo analyses. They will also test the performance of latent class models for Stated Preference and Revealed Preference models, using actual data and Monte Carlo datasets.

Cornell members with collaborators will continue investigation of causes of hypothetical bias and use of oaths to eliminate bias in Stated Preference Surveys. Virginia and North Carolina members will develop and apply recreational sorting models to better evaluate recreation benefits. Oregon members will incorporate spatial regression techniques into valuation research.

Illinois members with Oregon colleagues will work on choice-experiment methodology that allows survey respondents to express value for a choice scenario in terms of time spent physically contributing to the creation of the public good, in addition to the conventional measure of dollars spent. They will test whether this approach permits more comprehensive measures of benefits in communities where people vary in whether they are more time- or budget-constrained. This research will also test whether people gain utility or disutility from contributing directly (rather than just financially) to public good provision. Cross-region comparisons will be used to evaluate how benefits depend on familiarity with programs that can generate them and on the current magnitude of fees related to those benefits.

Obj 2: Economic Valuation Methods Task 2-2: Advances in Benefit Transfer Methods

W2133 members from Oregon, Virginia, Colorado, Georgia, and North Carolina will conduct a substantial amount of work on benefit transfer (BT) methods and meta-analysis. This work will involve collaboration with Clark University, the USGS, the USDA Forest Service, as well as other institutions and agencies. The primary themes of this research will include development and testing of new econometric tools; addressing heterogeneity (including spatial issues) and selection through advances in deriving and using weights in meta-analyses; and developing new and expanding existing meta-data. These advancements are primarily focused on improving benefit transfer performance.

One focus will be on the efficient combination of WTP estimates from diverse recreational activities via Bayesian Model Averaging to develop individual model weights, based on a model's predictive ability for the transfer context, as opposed to its fit with the full set of heterogeneous data. This is expected to lead to marked improvements in transfer accuracy and increased flexibility in combining original data with a broader scope than the transfer context. A second emphasis will be on an empirical investigation of the importance of "welfare consistency", i.e. including only utility-theoretic welfare measures in a BT model, on transfer accuracy. This will require similar Bayesian Model Averaging methodologies as those mentioned above. Another focus will be on developing BT and meta-analysis guidelines and protocol, including strategies to correct for selection biases that affect original data and reporting of research and its outcomes. This includes the development of a metric for evaluating the efficacy and accuracy of meta-analysis derived BT functions for environmental policy assessment.

Colorado will work with Oregon and USGS to update the values for fishing, wildlife viewing and hunting in the current benefit transfer toolkit (http://dare.colostate.edu/tools/benefittransfer.aspx). In addition, Colorado, Oregon and USGS will add valuation of new activities to the benefit transfer toolkit, with emphasis on river based recreation such as rafting, and possibly reservoir recreation. The development of databases (see for example http://recvaluation.forestry.oregonstate.edu/) and advances in BT toolkits (see for example http://dare.colostate.edu/tools/benefittransfer.aspx; and http://www.naturalcapitalproject.org/InVEST.html) will increase the availability of valuation information and BT tools. Database development and expansion is anticipated for recreation, wetlands, property values (focusing on positive amenities), and water quality, to name a few.

Obj 2: Economic Valuation Methods Task 2-3: Advances in Spatial/Environmental Nexus

Colorado, Wyoming, Maine and Oregon with collaborators from Northern Arizona University will investigate the use of spatially explicit hedonic models in valuation, and particularly explore the sensitivity of results to alternative assumptions about spatial dependence. By working in a coordinated fashion across multiple data sets we can determine the sensitivity of economic values across different housing markets (e.g., rural in Maine and Wyoming and urban in Colorado) and different resources (e.g., public lands in western states and private natural resources in Maine). From this analysis we expect to determine if there are sensitivities in economic values arising from different spatial weights and spatial models, and if so, whether there are discernible patterns based on land use setting (e.g., urban vs. rural and public vs private land). Colorado and Northern Arizona University will develop a spatial Contingent Valuation (CVM) willingness to pay model as a prototype for review and comment by Wyoming, Maine, and Oregon. The resulting consensus will be given further testing in Wyoming, Maine and Oregon. The outcome will be a standardized protocol for spatial CVM models that can be used by other states. North Dakota members will develop an integrated economic-environmental model that includes advances in spatial assessment of land use change and water quality impacts as a prototype for review and comment by Colorado, Maine, Oregon and Wyoming. Illinois, Michigan and Texas collaborators will investigate uses of spatial integration of economic, ecological, hydrologic, physical, and social data.

Maine and Colorado with collaborators will continue to examine the spatial aspects of decision-making/behavior, policy impacts, and service flows and explore potential advances in valuation methods due to improved recognition of these spatial processes and patterns. They will develop and test alternative valuation methods that address explicitly the spatial/environmental nexus

Obj 3: Integrated Ecosystem Services Valuation and Management

W2133 members from states (Nevada, Utah, Colorado, Oregon) that are affected by changes in high mountain snowpack, precipitation and run-off (Sierra Nevada Mountains, the Cascades, the Wasatch Range and the Rocky Mountains) will collaborate to determine the costs and benefits of efforts that respond to increased variation in timing and quantity of snow pack versus water flow from the higher elevations to lower elevations, in order to create more resilient economic and societal responses to these variations. This work will involve activities in all three of the subtasks under this objective.

Members from Oregon State, Virginia and a collaborator from Clark University will focus on valuation of ecosystem services generated from the Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST) tool, which will also involve all three tasks within this objective.

Obj 3: Integrated Ecosystem Services Valuation and Management Task 3-1: Economic Analysis of Ecosystem Services Flows

Michigan and Ohio State members will continue work on valuation of ecosystem service flows in the Great Lakes and elsewhere. They plan to continue research on ecosystem service indicators for lakes, rivers, and wetlands. Public support for programs such as conservation incentives, payments for environmental services will be evaluated. The work will examine the consistency of public perceptions of services with technical measures of ecosystem services. Valuation functions will be estimated to test the degree of complementarity and substitutability between different services.

Nevada will refine a model for rangeland ecosystem services valuation based on stated preference methods. The model accommodates "State and Transition"ecological models of rangeland ecosystem change brought about by interactions between wildfire, invasive grasses, and grazing. Uncertain and potentially irreversible changes are valued, along with uncertainty about effectiveness of programs that would prevent transitions to less desirable rangeland states. The valuation work is part of a larger collaboration with a USDA Agricultural Research Service project to develop and disseminate ecological-based Invasive Plant Management methods on western rangelands. The results from this project are to be inputs into a landscape-level benefits-cost analysis support tool that is being developed with support from an EPA/NIFA STAR grant. The application to rangeland ecosystem services will be unique and an important contribution for the BLM, the USDA Forest Service, and other agencies with western rangeland management responsibilities.

Members from Georgia, Michigan the USDA Forest Service Southern Research Station and other collaborators will continue to work on developing theory and techniques for integration of ecology and economics to value ecosystem goods and services provided by various natural environments including amenities that attract new migrants to a region (e.g., moderate temperatures).

Oregon members will collaborate with the Oregon Department of Fish and Wildlife and Clark University participants to develop and implement an ecological-indicator based choice experiment for evaluating ecosystem services flows from marine reserves, and deriving preference weights for marine ecosystem services for use in marine spatial planning along the Oregon coast.

Obj 3: Integrated Ecosystem Services Valuation and Management Task 3-2: Economic Analysis of Recreation Services

Oregon members are conducting a statewide participation survey and needs assessment for Oregon. They will continue to measure the health benefits of outdoor recreation, including comparing self-reported physical activity levels across different activity types and non-participants. They will develop travel cost models for high-use overnight and day-use state parks across Oregon. They will conduct economic impact analyses by state park in Oregon. This work will be done in conjunction with Oregon Parks and Recreation Department and the USDA Forest Service

A collaboration between Georgia, Colorado, Virginia and Oregon will continue to work with the USDA Forest Service, U.S. Fish and Wildlife Service, and US Army Corps of Engineers to estimate the economic value and impacts of outdoor recreation supported by the National Forests, National Wildlife Refuges, and Federal reservoirs. Colorado plans to value recreation services to be analyzed include reservoir fishing and whitewater river sports such as kayaking using both the travel cost and contingent valuation methods.

Michigan, Cornell, Ohio State, Penn State, North Carolina State members plan to further develop efforts to estimate Great Lakes recreation demand models for beach uses, for fishing site choices, and for hunting site choices. Additional collaborations on recreation demand models are under discussion with participants from North Carolina State University.

Obj 3: Integrated Ecosystem Services Valuation and Management Task 3-3: Economic Analysis of Water Quality, Quantity and Flow

Michigan members plan to collaborate with Ohio State to continue work on Great Lakes basin water quality. This collaboration will likely extend to other Great Lakes states, including W2133 members at Cornell, Penn State, Ohio to investigate values of changes in water quality due to changes in land use, nutrient, microbial. and invasive species pollution using stated and revealed preferences. This work will include beach recreation models and fishing demand models.

Members from Maine, Utah and Texas plan to research decision-making regarding conservation practices adoption by lake-front households and testing and treatment of private well water by rural households, blending economic and psychological models of decision-making.

Members from Utah, Colorado, and Wyoming plan to estimate the recreational and passive use values of reducing nutrients in rivers and lakes in Utah. This will involve original survey work and estimation of revealed preference and stated preference models in Utah and potential benefit transfer methods to Colorado. Results between the three methods in the two states will be compared in terms economic values of water quality improvements.

Iowa members will continue their analysis of the Iowa Lakes and Rivers database, to better understand how water and site characteristics impact recreational choices made by households. They are particularly interested in the stability of consumer preferences over time and in the interaction between lake and riverine recreation activities. A total of 2,500 households were sent both the Rivers and Lakes Survey in 2009, providing a dataset and unique opportunity to examine whether or not these activities serve as substitutes or complements.

North Dakota members expect to assess water quality issues in the Bakken oil production area and in the Devils Lake Basin.

Measurement of Progress and Results

Outputs

• Improved methods to estimate values for ecosystem goods and services that are of concern to agencies tasked with managing public lands and preserving flows of environmental services from private and public lands
• Collection of a large amount of data that will support the use of ecosystem valuation methods, with collection being organized across W2133 member states to represent a variety of land types, services, and user groups.
• The analysis of collected data, using a variety of methods developed, with an emphasis on validating estimates of ecosystem values
• Completed estimates of ecosystem values, with information about their limitations, applications, and implications for land management policy, to be disseminated to decision-makers
• Development of tools that can be used by practitioners to match data collected, with methods and policy issue so that valuation estimates can be continued to be generated from previous outputs

Outcomes or Projected Impacts

• Better decision-making support to weigh trade-offs between non-market valued ecosystem goods and services, and market-values / a greater amount of ecosytem values provided to members of society
• Improved ability to take into account spatial spill-over effects from public land management policies / reductions in external costs that are generated by spill overs from actions in one region into another
• Improved ability to estimate expected losses from natural hazards / reductions in losses from natural hazards through improvemnets in mitigation policies
• Improved ability to measure the value of preserving open lands and restoring ecosystem function / greater value to society from services provided by these ecosystems

Milestones

(2013): Theoretical models will be developed through member collaboration and shared for review at the annual meeting in February. A significant portion of this research project across all objectives will rely on extensive data collection. Data collection methods will be designed through collaboration among members and participating organizations and agencies. An annual meeting report along with a proceeding from presentations at the meeting will be provided, each detailing work-in-progress, accomplishments, and areas for further research.

(2014): Theoretical models and advancements on empirical methods will be finalized. Focus groups, where needed, will be conducted to test data collection instruments, and pilot tests completed. Data collection methods will also be tested and finalized. Secondary data sources will be identified and much of it collected and shared among collaborators. Preliminary findings from modeling and pilot data will be shared at the annual meeting. Suggestions from members and stakeholders to enhance valuation models, applications, and data collection will be discussed for inclusion in final models and data collection efforts. An annual meeting report along with a proceeding from presentations at the meeting will be provided, each detailing work-in-progress, accomplishments, and areas for further research.

(2015): Collaborators will continue with data collection. Preliminary data will be used to prepare conference papers for presentation at scholarly conferences for wider review. Collaborating members aand stakeholders will continue to discuss findings at the annual meeting. We anticipate that by the end of the third year, several co-authroed manuscripts will have beens sent to peer-reviewed outlets for review.

(2016): Years 4 and 5 will emphasize dissemination of results to a broader audience, including scholarly venues, stakeholders, agency decision-makers. Outcomes from this research will be detailed in documents in the form of reports, submitted manuscripts, workshops for agencies, professional meetings, and extension publications by participating members available via links on the W2133 website. One goal of these documents will be to share our consensus protocols for survey design and economic modeling with other states, both those participating and those not participating in this project. We anticipate continuing the trend of developing a network of websites to provide access to tools developed by W2133 for the use of practitioners. Analysis will continue. An annual meeting report along with a proceeding from presentations at the meeting will be provided, each detailing work-in-progress, accomplishments, and areas for further research.

(2017): By the fifth year, several manuscripts will have been accepted for publication for each of the objectives and sub-tasks. Many more will be in various stages of revision for publication. Feedback from the privious year's workshops for stakeholders and agencies will be incorporated into workshops held in the fifth year. An annual meeting report along with a proceeding from presentations at the meeting will be provided, each detailing work-in-progress, accomplishments, and areas for further research.

Projected Participation

View Appendix E: Participation

Outreach Plan

An annual meeting of W2133 members and collaborators provides an ideal opportunity to share results with each other including member and partner universities, personnel from several federal agencies (USDA Forest Service, USDA Economic Research Service, U..S Bureau of Reclamation, U.S. Environmental Protection Agency, U.S. Fish and Wildlife Service, National Marine Fisheries Service, USDA Agricultural Research Service, among others), state agencies and consulting firms. The papers from this meeting are published electronically in an annual proceeding that is made available to all attendees, Agricultural Experiment Stations, agricultural economics departments at land grant universities, and anyone else that is interested. An annual report including minutes of our business meeting is posted on the NIMSS website. Joint research between W2133 members and USDA Forest Service personnel is expected to continue to be published through USDA Forest Service publications (e.g., General Technical Reports, Research Notes, and Research Papers) that are made available through the USDA Forest Services web sites and publicized as USDA Forest Service new publications outlets. Members of W2133 have a long tradition of publishing their research in peer-reviewed journals. This outlet will continue to be utilized as a means of verification through the review process and dissemination to other researchers and practitioners. These journals include not only economics and agricultural economics journals (such as American Journal of Agricultural Economics, Journal of Environmental Economics and Management, Environmental and Resource Economics, Ecological Economics, Agricultural and Resource Economics Review, Journal of Agricultural and Resource Economics, etc.), but many natural resource journals (such as Journal of Forestry, Water Resources Research, North American Journal of Fisheries Management, Journal of Environmental Management, Journal of Leisure Research, among many others), for which many of our members serve on the editorial boards and provide peer-reviews of submitted manuscripts. The results of the research proposed in this project also will be presented by W2133 members and collaborators at various professional meetings and workshops. W2133 members routinely provide training workshops for USDA Forest Service personnel as a means to provide guidance and technical skills necessary to transfer research results to field applications. W2133 members and collaborators also disseminate their research results through various economics workshops including Illinois's Heartland Environmental and Resource Economics Conference, Ohio's Annual Workshop on Benefit Cost Analysis, Colorado's Environmental Economics Workshop, Washington's Forest Ecosystem Management Mini-Course, North Carolina's Camp Resources and California's Occasional Conference on Environmental Economics. Audiences for these various workshops include state and local policy makers, graduate students, and research scientists.

Organization/Governance

We will follow revised standard NIMSS governance procedures. W1133 elects a secretary/treasurer, who in the following year becomes the Vice-President, and the following year the President. Secretary/Treasurer is responsible for meeting registration and minutes of the meeting. The Vice President and President help to coordinate research of participating schools and agencies among the objectives. The Vice President and President arrange the annual meeting location and agenda with input from participants at the business meeting to facilitate achievement of the objectives.

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Land Grant Participating States/Institutions

AL, AR, CA, CO, CT, DE, GA, IA, IL, KY, MA, ME, MI, MS, NC, ND, NV, NY, OH, OR, PA, RI, TN, UT, VA, VT, WA, WV, WY

Non Land Grant Participating States/Institutions

Colby College, Northern Arizona University, U.S. Government Accountability Office, University of Maine, University of Montana, USDA/ERS