Brief Summary of Minutes of Annual Meeting

Brief summary of minutes of annual meeting:

Current President Craig Landry called the meeting to order at 5:40 pm.

 

• First order of business was to determine a new Secretary, whose term begins in 2021, and who follows a three-year cycle continuing on to Vice-President and President in the two subsequent years.
  • Paul Jakus nominated Xiang Bi; seconded by Matt Interis and Craig Landry.
  • Xiang Bi agreed to stand.
  • There were no additional nominations and Xiang Bi was installed by unanimous vote.
• Paul Jakus notes format in 2019 was preferable - with 15 minutes discussion at end of each session. Klaus Moeltner suggests leaving it to President to decide format. Frank Lupi suggested 15 minute discussion session would need to be moderated well to succeed. Suggestions were noted by the group.
• Suggested that next meeting focuses on arranging talks and sessions according to project goals for re-charter year – priority for papers to match to project goals.
• Re-charter needs to begin next year.
• Current Vice-President Matthew Interis proposed Memphis, TN as the site of the 2021 meeting and others seemed agreeable to this suggestion.
• At the conclusion of this meeting, Craig Landry concludes his three-year officer rotation (thank you, Craig!), Matthew Interis rotates from Vice-President to President, Steve Dundas rotates from Secretary to Vice-President, and Xiang Bi begins her term as Secretary.

 

The meeting was adjourned at 5:55 pm.

Accomplishments

 

Objective 1

 

Colorado State University: In this area, we have completed projects examining the value of groundwater to agricultural producers across the US, the distributional costs of water infrastructure in the arid west and the role of the weather in influencing municipal water use. We have also collaborated with agronomists to create a biophysical-economic model that can describe the conditions in which deficit irrigation can be an optimal response to water scarcity. Finally, we have worked with engineers to examine household willingness to pay for improved water access in developing country settings, with an application in Rwanda. In addition to published papers, we have completed and submitted two journal articles in this area, both to the Journal of the Association of Environmental and Resource Economists. In the first, we examine how crop insurance subsidies have influenced groundwater use and levels in Kansas and Nebraska.  We find that subsidized irrigated insurance increases groundwater use, but that subsidizing non-irrigated production has the opposite effect.  This suggests that insurance pricing can be used to align with water conservation objectives. In the other submitted paper (R&R), we test for the existence of spatial spillovers from a land retirement program in Kansas (the Conservation Reserve Enhancement Program in the Upper Arkansas River Basin). We find that retiring nearby wells reduces competition and leads to lower groundwater use in the short-run from wells that continue to pump.

 

Oregon State University: Dundas and Lewis published a paper estimating non-market benefits for erosion protection and potential for spillover effects in Oregon’s coastal housing market that can help inform better decision-making and policies for communities to adapt to climate change. Lewis and a collaborator published a paper quantifying the effect of climate change and carbon pricing on adaptation behavior of private forest owners in US Pacific coast. The paper simulates land-use changes to the composition of forests and results suggest that climate change induces landowners to adapt away from current species to those more suitable for future climates. Lewis and collaborators have a paper forthcoming for publication that examines how climate adaptation using forest management will affect wildlife habitat for species of conservation concern along the Pacific coast states of Washington, Oregon, and California. The paper examines how adaptation to climate change and a carbon price alter wildlife habitat through the altering of forest harvest rotations and the types of forests that are replanted. Lewis and collaborators published a paper examining how economic loss from an aquatic species invasion of a freshwater lake is allocated between users of the lake itself and users of neighboring lakes in northern Wisconsin. Results suggest that coordinated management across lakes provides its highest economic value in the early years of an invasion, before high-value, high-traffic lakes are invaded, and drops quickly once the invasion claims these lakes.

 

University of Florida: Supervised one undergraduate student intern on publication of undergraduate research based on research supported by the W4133 project. 

• Hollander. 2020. “Understanding Public Attitudes towards Partial Restoration of the Ocklawaha River.” Journal of Undergraduate Research, University of Florida. Faculty mentor: Xiang Bi.

Presented research supported by W4133 project at academic conference:

• Pengfei Liu, Xiang Bi, Qi Luo, and John Whitehead. Paper. Impact of Policy Consequentiality and Voluntary Donation on Contingent Valuation: Structural Estimation on Preference Misrepresentation. Southern Economics Association, Fort Lauderdale, FL. Nov 23-25, 2019

 

University of Georgia: In a study of the demand for National Park visits in the U.S., we used a first-difference econometric model to estimate an aggregate demand model for assessing the determinants of the quantity of visits to 47 national parks in the continental United States. The estimated model was then used to project visitation to these parks from the 2016 base year to 2026. Studies were conducted on the economic effects of rising sea levels on growing coastal populations at the land-sea interface. To stabilize upland and protect human developments from coastal hazards, landowners commonly emplace hard armoring structures, such as bulkheads and revetments, along estuarine shorelines. The ecological and economic consequences of shoreline armoring have garnered significant attention; however, few studies have examined the extent of hard armoring or identified drivers of hard armoring patterns at the individual landowner level across large geographical areas. This study addresses this knowledge gap by using a fine-scale census of hard armoring along the entire Georgia U.S. estuarine coastline.  We developed a parsimonious statistical model that accurately predicts the probability of armoring emplacement at the parcel level based on a set of environmental and socioeconomic variables.

 

University of Illinois at Urbana-Champaign: Gramig published a national county-level open source data set with Prof. Seong Yun from Mississippi State for researchers and practitioners constructed from multiple publicly available datasets that are difficult for many practitioners and researchers to access unless they have technical computing and data processing skills. Agro-Climatic Data by County (ACDC) is available for download: dx.doi.org/10.4231/R72F7KK2

Ando and social scientists at UIUC worked with scholars at the Northern Research Station of the USDA Forest Service, the Center for Northern Forest Ecosystem Research in the Ontario Ministry of Natural Resources and Forestry, and other departments at UIUC on a co-authored paper published in Landscape and Urban Planning. Their work identifies the tradeoffs people are willing to make between elements of a community’s future growth trajectory in parts of Illinois and Iowa. They find that people are willing to accept more unemployment in exchange for protecting agricultural lands and opportunities for recreation, but respondents did not have strong preferences for increased bison populations in the grasslands nearby.

Ando and graduate student Liqing Li analyzed the impact of bison restoration on local economies and presented that work several times.

Gramig worked with doctoral student Hsin-Chieh Hsieh at UIUC, Prof. Michael Delgado at Purdue University and Prof. Shanxia Sun at Shanghai University to evaluate the impact of USDA conservation program expenditures by EQIP and CSP on ambient water quality in the Wabash (Indiana) and Illinois River basins. A working paper on the Wabash work is being finalized for submission, and different methods and empirical approaches are being explored for the Illinois work.

Gramig began new work with graduate student Menglin Liu and Prof. Nick Paulson at UIUC to investigate the relationship between adoption of precision agriculture technologies/practices and conservation practices.

Ando received an invitation to revise and resubmit a manuscript to Land Economics that informs management of flood hazards. She uses a contingent valuation survey to evaluate homeowner willingness to pay for a novel pre-flood agreement such that the homeowner pre-commits to relocating if a flood damages their home by more than 50% of its value, in exchange for which they gain an expedited and streamlined buyout process with payment equal to the full market value of their home. The study finds that nearly all homeowners would gain value from being able to enter into such a contract.

Ando worked with graduate student Liqing Li to estimate the impact of bison restoration on local economic activity in the U.S. They have drafted a manuscript on this research.

 

University of Maine: To improve understanding of land management decisions and conservation opportunities on private lands, economists from University of Maine continued to worked collaboratively with ecologists and stakeholders to research landowners’ land management actions, communities’ economic development plans, and the potential for improved vernal pool conservation outcomes. During this reporting period, we published research of these collaborations aimed at supporting future collaborative research efforts. By studying the development of a mechanism for conserving vernal pool ecosystems, we found that four factors helped overcome common challenges to acting upon new information: creating a culture of learning, coproducing policy simulations that acted as boundary objects, integrating research into solution development, and employing an adaptive management approach (Levesque, Calhoun, Bell, 2019). These results suggest economics-based policy simulations of land management decisions and landscape change can offer useful support to interdisciplinary and engaged research and policy initiatives. Working with researchers from The Ohio State University, University of Connecticut, and James Madison University, University of Maine economists also contributed to interdisciplinary research of forest management decisions. This ongoing work examines the potential importance of cross-scale (global, regional, state, local) interactions and regional context as mechanisms for enabling or constraining management decisions on private forest landholdings (Munroe et al., 2019).

 

University of Nebraska-Lincoln: Published paper “The impact of land cover on groundwater recharge in the High Plains: An application to the Conservation Reserve Program”. The paper analyzes net groundwater recharge from alternative land covers using data from Kansas and Nebraska. Results show that land cover associated with land retirement programs (e.g., grassland) are associated with lower groundwater recharge rates than crop cover in some locations.

 

Utah State University: Obj. 1, Task 1-1: A major study on the economic effects of landscape-scale national monuments across five western states was completed and published in a major environmental economics journal. The study's overall conclusion is that designation of large National Monuments (totaling 10 monuments in six western states) has resulted in no statistically measurable effect on per capita income in counties where NMs are located. This finding runs counter to the common economic arguments used in lobbying both for and against large NMs. Arguments for or against large NMs should not be based on economic outcomes and should be shifted to other concerns. 

Obj. 1, Task 1-2: a study of the effects of wildfire on Utah's five national parks was completed and published in a refereed journal. The study documented that sensitivity of national park visitation differs according to the timing of wildfires and the park itself. In Utah, visitation to Bryce Canyon National Park fell by only a small percentage in response to wildfire. However, BCNP has a large visitor base, so the drop in number of visits due to proximate wildfire was quite large.      

 

University of Wyoming:

Project: “Investigating Potential Impacts of Non-Attainment Risk on Conservation Exchange Outcomes.” Hansen, K. (PI), Co-PIs: C. Jones-Ritten, C. Bastian, A. Nagler.  Amount Requested: $74,317.  Submitted 9/30/2015.  Duration of Project: January 1, 2016 through December 31, 2018. (grant completed).

Milestones: Research completed for grant regarding habitat conservation markets using experimental economics methods.

Activities:

1. Economic Experiments conducted and analysis completed. Presentation made at Center for Behavioral, and Experimental Agroenvironmental Research Conference.  Paper submitted to Environmental and Resource Economics.  Published in spring 2019.

 

Lamb, K.*, K. Hansen, C. T. Bastian, C. Jones Ritten, and A. Nagler, “Investigating Potential Impacts of Credit Failure Risk Mitigation on Habitat Exchange Outcomes.”  Environmental and Resource Economics. 73,3(2019): 815-842. https://doi.org/10.1007/s10640-019-00332-z  Conference on Behavioral and Experimental Agri-Environmental Research Special Issue. 

Abstract:

 

Voluntary, market-based conservation programs are one tool available to land managers and regulators to maintain and enhance environmental resources. One such program type is a habitat exchange, through which a private landowner sells conservation to developers to offset a disturbance on the landscape. Since landowner participation is voluntary, price and contract terms must be sufficiently appealing to induce participation. Moreover, the post-production risk of credit failure— the risk that conservation credits fail to maintain measurable habitat improvements over their contract life—may be significant for landowners. In the absence of sufficient real-world data for conventional econometric analysis, we implement a laboratory market experiment to assess the impact of market structure, credit failure risk, and a potential reimbursement policy on habitat exchange outcomes (market price, quantity traded, earnings, and efficiency). Findings suggest that failure risk significantly reduces habitat credit production and trade in this market environment, putting the potential success of such emerging markets in question. A private party risk mitigation strategy of buyers reimbursing sellers for production costs on failed units could mitigate these impacts. Specifically, reimbursing sellers for production costs on credits that fail to maintain habitat quality for their contract life can significantly mitigate reductions in conservation production resulting from this risk.

2. A second outreach publication for this project has been drafted based on the research reported in the above article and has received reviews, been revised and is currently in press for publication in 2020.
   

Lamb, Karsyn, Kristiana Hansen, Christopher Bastian, Amy Nagler, and Chian Jones Ritten.  “Credit Failure Risk in Market-Based Conservation Programs: What is it and Can it Be Helped?”  pp. 1-16. Bulletin B-XXX. Cooperative Extension Service, College of Agriculture and Natural Resources, University of Wyoming, Laramie. (Currently in Press for 2020).

 

 

3. We have conducted an additional set of up experimental sessions investigating the potential for an insurance product to address landowner risk in the habitat exchange market. Those experiments should be finished this spring. 
   
4. Analysis of the data has been conducted, and a selected paper with these preliminary results was presented at the meetings 019 Western Agricultural Economics Association meetings held June 30-July2.
   
5. Hansen, C. Jones-Ritten, A. Nagler and C. Bastian, “A Laboratory Comparison of Risk Mitigation Strategies in Conservation Markets.” Selected Paper Presentation. 2019 Western Agricultural Economics Association Annual Meeting. June 30-July 2, 2019. Coeur d’Alene, ID (Presented by K. Hansen).
   
6. Further analyses were conducted and the presentation updated and presented at the W4133 meeting held February 12-14. K. Hansen, C. Jones-Ritten, A. Nagler and C. Bastian, “A Laboratory Comparison of Risk Mitigation Strategies in Conservation Markets.”

 

Project: “Incentivizing Open Spaces in Wyoming to Promote Pollinator Habitat: Applying Agglomeration Bonuses to Unite Fragmented Habitat”

Milestones: Research completed regarding pollinator habitat policy design using experimental economics methods.  Paper published in October of 2019.

Activities:

1. Panchalingam*, T., C. Jones Ritten, J. F. Shogren, M. D. Ehmke, C. T. Bastian, and G. M. Parkhurst. “Adding Realism to the Agglomeration Bonus: How Endogenous Land Returns Affect Habitat Fragmentation,” Ecological Economics. 164(October 2019): doi: 10.1016/j.ecolecon.2019.106371 .

 

Virginia Tech:

Bayesian Nonlinear Meta-Regression

I developed a new econometric approach to process meta-data on water quality and wetland conservation, as used by the EPA for decision-making. This mode satisfies important theoretical and practical considerations, such as sensitivity to scope (higher willingness to pay (WTP) for better quality), and adding-up (total WTP for the change is not sensitive to the number of increments for implementation.)  Over the last reporting year I applied this model to the valuation of wetland, and important component of the Clean Water Act. My modeling framework was subsequently used by the EPA to feed into the current revision of the CWA rule-making with respect to isolated wetlands across the nation's watersheds.

 

Coastal flood risk:

I developed a new econometric approach (Bayesian matching estimator) to estimate the loss in home values from being located in a special flood hazard area. This model is less sensitive to misspecification errors, and widely applicable to other real-estate valuation contexts. I am currently applying this framework to several counties in Massachusetts. Comparing interior to coastal flood risk effects for the same county will allow for the determination of coastal "amenity" effects, which are otherwise difficult to control for.

 

Free-form choice experiments:

I developed the econometric framework to analyze the data to be expected from the large-scale watershed improvement survey in New England. The highlight of the statistical model is that it allows for variable uncertainty and model-averaging. This is important given the large number of candidate explanatory variables that could explain a household's response to the binary (yes/no) willingness-to-pay question collected in the survey. Over this past project year I applied the model to actual watershed quality data, using simulated household locations. The model performed well in these simulations. It is ready to be applied to actual survey data, to be collected in spring 2020.

 

Objective 2

 

Colorado State University: We have completed a draft of a manuscript that proposes a stated preference method for linking a valuation function to a model of a natural system in order to examine the impacts of USDA policy on natural capital values. We apply this to the valuation of the CREP program in KS and its impact on market and non-market groundwater values.  The paper, currently resubmitted to the Journal of Environmental Economics and Management, proposes a method for using variation in starting-point exposure to an environmental good to estimate a marginal willingness to pay function.

 

Louisiana State University: In collaboration with Ohio State University, published a meta-analysis examining the efficacy of approaches to mitigate Hypothetical Bias, a common issue in Stated Preference studies. Advanced research examining pollinator conservation and its potential relationship to honey bees.

 

Mississippi State University:

Chen, B., S. D. Yun, and B. M. Gramig, 2020, “endoSwith: Endogenous Switching Regression Models (R-package),” (Version 1.0.0) available from R-Cran

https://cran.r-project.org/web/packages/endoSwitch/index.html. (project members involved: Yun and Gramig)

Two undergraduate students (Jessica Browne and Noel Irwin) at the Department of Agricultural Economics, Mississippi State University to collect data, analyze descriptive statistics and perform benefit transfer analysis from the grant of CALS/MAFES 2019 Undergraduate Research Scholar Program, “Measuring Non-Market Values of Agro-Ecosystem Services: A Benefit-Transfer Approach,” $6,000, 9/30/2019-8/31/2020. (project members involved: Yun and Interis)

Students trained:  Frederick Nyanzu, M.S., August 2019.  Agricultural Economics, Mississippi State University.  Thesis:  Optimal portfolio design to manage oyster resources.  Placement:  Ph.D. program, University of Illinois.

Petrolia, D.R., D. Guignet, J.C. Whitehead, C. Kent, and K. Amon.  "Applications, Trends, and Limitations of Nonmarket Valuation Methods for Policymaking."  Working Paper.

Caffey, R.H., D.R. Petrolia, I. Georgiou, M. Miner, H. Wang, and B. Kime.  "Economic and Geomorphic Comparison of Nearshore and OCS Sands for Barrier Island and Shoreline Restoration in Coastal Louisiana."  Working Paper.

 

Presentations:

Petrolia, D.  "A Look at the Use of Nonmarket Valuation in Federal Rulemaking."  Energy and Environmental Economics and Policy Seminar, Penn State University, January 29, 2020.

Petrolia, D.R., D. Guignet, J. Whitehead, C. Kent, and K. Amon.  "A Look at the Use of Nonmarket Valuation in Federal Rulemaking."  W-4133 Multistate Research Project Meeting, Athens, GA, February 13-14, 2020.

Hwang, J. and D.R. Petrolia.  " Revisiting Opt-out Responses in Contingent Valuation."  W-4133 Multistate Research Project Meeting, Athens, GA, February 13-14, 2020.

Petrolia, D.R., D. Guignet, J. Whitehead, C. Kent, C. Caulder, and K. Amon.  "Applications, Trends, & Limitations of Non-Market Valuation for Policymaking."  Southern Economic Association 89^th Annual Meeting, Fort Lauderdale, FL, Nov. 23-25, 2019.

Petrolia, D.R. and J. Hwang.  "Accounting for Attribute Non-Attendance in Three Previously-Published Choice Studies of Coastal and Marine Resources," CNREP 2019:  6^th National Forum on Socioeconomic Research in Coastal Systems, New Orleans, May 19-21.

Caffey, R., D.R. Petrolia, H. Wang, I. Georgiou, and M. Miner.  "A Geo-economic Framework for Examining the Benefits and Costs of Coastal Dredging Projects."  CNREP 2019:  6^th National Forum on Socioeconomic Research in Coastal Systems, New Orleans, May 19-21.

Caffey, R. C. Plummer, H. Wang, and D.R. Petrolia.  "Preferences and Values for the Gulf Coast Ocean Observing System."  CNREP 2019:  6^th National Forum on Socioeconomic Research in Coastal Systems, New Orleans, May 19-21.

Nyanzu, F., D.R. Petrolia, A. Harri, W. Walton, J. Cebrian, and S. Yun.  "Optimal Portfolio Design to Manage Oyster Resources," CNREP 2019:  6^th National Forum on Socioeconomic Research in Coastal Systems, New Orleans, May 19-21.

Penn, J., D.R. Petrolia, R. Caffey, and M. Fannin.  "Public Opinion of a Gulf-Wide Beach Conditions Reporting System."  CNREP 2019:  6^th National Forum on Socioeconomic Research in Coastal Systems, New Orleans, May 19-21.

Wang, H., R. Caffey, D.R. Petrolia, I. Georgiou, and M. Miner.  "Economic Comparison of OCS Sand vs. Nearshore Sand for Coastal Restoration Projects."  Poster presented at CNREP 2019:  6^th National Forum on Socioeconomic Research in Coastal Systems, New Orleans, May 19-21.

Petrolia, D.R., F. Nyanzu, J. Cebrian, W.C. Walton, A. Harri, J. Amato, J. Rider, G. Ramseur.  "Estimating Ecosystem Services for Oysters using Expert Elicitation."  Aquaculture 2019 Triennial Meeting, New Orleans, March 7-11.

 

North Carolina State University: Academic presentations were made at several conferences (European Association of Environmental and Resource Economists Annual Conference, EPA Workshop on the Benefits of Water Quality Improvements, USDA Conference on Measuring Ecosystem Services, W4133 Annual Meetings, ACES Annual Conference, LEEPin2019 Conference) and seminars (Mississippi State University, Cornell University).

Two Ph.D. students (Alexandra Naumenko and Jin Qin) graduated from NC State during the reporting period and are now employed at James Madison University and the College of William and Mary.

Two NC State press releases were circulated, which led to state-level coverage at WUNC and the Raleigh News and Observer. NC State's Center for Environmental and Resource Economic Policy (CEnREP) also disseminated research findings on its website (https://cenrep.ncsu.edu/).

 

Oregon State University: Dundas and collaborator (w4133 member Roger von Haefen) published a paper that estimates non-market recreation impacts of climate change. Our estimates suggest that extreme heat significantly reduces recreation participation in shoreline fishing and we find evidence of climate-averting behavior as anglers shift their activities to nighttime rather than fish less frequently to mitigate the negative impacts from extreme heat.

Lewis, Dundas, Kling and collaborators published a paper quantifying the non-market benefits for conservation investments aimed at threatened Pacific Coho salmon (Oncorhynchus kisutch) along the Oregon Coast. Results from a choice experiment survey suggest the public benefits from partial gains in species abundance that fall short of official recovery and from achieving gains in species abundance that happen earlier in time. Our results and approach can be used to price natural capital investments that lead to gains in returning salmon, and as inputs to evaluations of the benefits and costs from alternative conservation strategies.

 

University of Georgia: We conducted an empirical examination of wilderness demand and net economic value of wilderness access. The approach applies revealed preference modeling to wilderness trip demand by ecoregion type.  The analysis examined National Forest (NF) wilderness use (visits) and users (visitors) over a ten-year period from 2005 to 2014, segmented into two discrete periods. NF wilderness accounts for approximately one-third of the acreage, and 445 of 760 separate wilderness areas in the federal National Wilderness Preservation System (NWPS).  NF wilderness is administered across 113 different management units, ranging from the Tongass NF in Alaska containing 19 separate wilderness areas to Minnesota’s Superior NF contains only the Boundary Waters Canoe Wilderness Area. Some NFs, like the Wayne NF in Ohio, contain no designated wilderness.  Data for the analysis were obtained from the National Visitor Use Monitoring (NVUM) Program administered by the USDA Forest Service.

 

University of Illinois at Urbana-Champaign: Ando worked with W4133 coauthors (UIUC graduate student Bryan Parthum, former UIUC graduate student Catalina Londono Cadavid, and Reed College professor Noelwah Netusil in Portland, Oregon) to publish a paper in the Journal of Environmental Economics and Management that estimates the values that people in Chicago, Illinois and Portland, Oregon place on environmental improvements that can result from improved stormwater management. They find that the potential benefits of improved aquatic habitat, pollution reduction, and flood control are large, and that people may be willing to volunteer time to help produce these benefits in their own neighborhoods.

Gramig worked with doctoral student Seojeong Oh and interdisciplinary collaborators at UIUC to develop a choice experiment survey to be conducted in 2020 to estimate household willingness to pay to improve water quality (reduce nutrient pollution) in Illinois, Indiana and Iowa. This work is funded by the NSF.

Ando has collaborated with other researchers at UIUC and in Missouri on research to estimate the values of water quality improvements in the Corn Belt. She and UIUC graduate student Bryan Parthum completed a manuscript reporting on a choice experiment that finds that both urban and rural residents of the Upper Sangamon River watershed place large value on achieving nutrient reduction targets to stop Gulf hypoxia and reducing local algal blooms. This paper was has been revised and resubmitted to Land Economics.

 

Ando advised graduate student Liqing Li in research to understand how early life experience influences the values people have for nature when they are adults. The conducted a choice experiment survey eliciting peoples values for grassland restoration in Illinois, Minnesota, and Iowa. Preliminary results show that willingness to pay for grasslands is higher for people who grew up near them. Additionally, people have higher value for specific recreational attributed such as trails and fishing ponds if they learned how to do those activities as children.

Ando started research with W4133 participant Dale Manning at Colorado State to estimate the benefits of pest control services by bats. This research uses the spread of white-nose syndrome to quantify the impact of bat population reductions on acres of crops planted and the net surplus gained by producers on the acres they do plant.

 

University of Rhode Island: We conducted a non-market valuation survey to gauge the public preference and perception of wind power using as a case study the first wind farm established within the United States, near the cost of Block Island, Rhode Island.  Our survey consisted of three parts. In the first part, we asked respondents questions about the characteristics of their trip(s) to Block Island. The second part of our survey included questions about knowledge and perceptions of the wind farm off of Block Island shores.  This section also included Willingness to Pay questions for fishing, boating, sightseeing, beach, and bird and whale watching sites with and without a view of the turbines or without them. In the third and final section of the survey, we ask respondents to provide some basic demographic details such as age, household income and educational qualification. We also capture respondents' environmental attitudes by incorporating questions from the New Environmental Paradigm (NEP) (Dunlap and Liere 1978; Dunlap et al. 2000). We disseminated our survey in August 2018 through the Qualtrics platform to residents 18 years of age and above who reside in the states of California, Connecticut, Florida, New Jersey, New York, Maine, Maryland, Massachusetts, Michigan, Pennsylvania or Rhode Island.

The purpose of this investigation was to examine tourist preferences for offshore wind turbines when participating in a suite of recreational activities (sightseeing, fishing, boating, beach visitation, and bird or whale watching). Specifically, we examine whether (i) prior knowledge and (ii) the sight of the turbines affect their preferences. The relationship between tourist activities and offshore turbines has not yet been studied in the context of the establishment of an actual offshore wind farm in the US. We contribute to the literature by exploring the heterogeneity in respondents’ preferences for an offshore wind farm and analyzing its impact on their willingness to pay (WTP) for these recreational activities at locations with a view, and without a view of the wind farm. By examining the impact of having seen the turbines on WTP, we also test whether the tourists at Block Island consider the wind farm to be a visual disamenity, a result which will provide some insight into future offshore wind developments in the US. 

To meet these objectives, we design an original survey within the context of the Block Island Wind Farm. The survey asks about recreational activities, trips to Block Island, and a broad range of socioeconomic characteristics. The sample consists of 263 people who have been to Block Island at least once in the years between 2013 – 2018.

The main focus of the survey is to analyze the impact of the knowledge and sight of the Block Island wind farm on respondents’ WTP for choice activities and locations. Across recreational activities, we find that 46-56% of the respondents are indifferent to turbine presence; that is, they are unwilling to pay anything for their choice. Though there is heterogeneity in WTP by activity, the average WTP is positive across all activities.

Using Ordinary Least Squares (OLS) regression using an Inverse Hyperbolic Sine (IHS) transformation, we estimate models that seek to understand the determinants of WTP. Our results indicate that respondents with prior knowledge of the turbines are willing to pay between 59% - 97% ($17.68 - $50) more, on average, for locations with a view of the turbines, across all activities. However, prior knowledge has no significant impact on WTP for any activity at locations without a view of the turbines. We find that having seen the turbines in person during the trip has a positive impact on the WTP for fishing, with respondents willing to pay on average, 63% ($19) more for fishing routes with a view of the turbines. This result suggests that the turbines are visually pleasing to people engaged in fishing activities at Block Island, a finding that is contrary to the conclusions of Ladenburg and Dubgaard (2009). Seeing the turbines has no impact on the WTP for any other activities at locations without turbine presence. We also find limited evidence of differences in WTP by partisanship: Democrats have a lower WTP for sightseeing compared to Republicans, but this result does not hold for boating and beach recreation. Independents, however, have a lower WTP for all activities with a view of the turbines. Socio-economic factors have a weak impact on both WTP. Environmental attitudes have no association with the respondents’ WTP for choice activities at locations with a view of the turbines, but a weak association with the WTP for sightseeing and birding activities at locations without their view.

A survey was designed to understand the impact of different community benefits agreement schemes on public acceptance of large scale solar farms in the U.S. One focus group with eight participants was conducted and the team is now in the process of refining or redesigning the survey. The survey will be administered using Qualtrics, a professional survey platform, to residents of the New England and New York regions.

We have completed analysis of 2016 exit poll data and aggregate precinct election results to assess bias resulting from use of aggregate data. Results demonstrate importance of individual data in this context.

We have begun analysis that examines whether voters correctly understand prices they are paying for public good referendums and what effect misperceptions have on vote choice and implied willingness to pay estimates.

Lang and a co-author published a paper that uses econometric methods to estimate the non-market valuation of offshore wind by tourists. They examined the short-term vacation rental market and found that tourism increased in Block Island, Rhode Island following the construction of the Block Island Wind Farm.

Received grant: Lang, Corey (PI) and Venturini, Kate (Co-PI) “Solar Energy Siting Conflicts with Farm and Forest Lands,” USDA-AFRI, $300,000, 2019-2021. This award will fund original non-market valuation research on solar siting preferences and externalities, and we will conduct outreach before and after research with the goal of influencing ongoing policy development.

 

Aversion to environmental risk in stated preference: Implications for benefit transfer and scope response (with Ben Blachly)

The goal of this study is to learn about the relationship between environmental risk preferences and scale as it applies to stated preference research. This study builds on the limited literature on environmental risk preferences and makes three key contributions. First, we perform an explicit test of whether environmental risk aversion increases with scale. This is a well-known result in the financial domain, and some research suggests that a similar relationship exists in an environmental setting.  Second, we compare the ability of different approaches to modelling the risk preference-scale relationship to reduce between-scale transfer errors. Preferences for environmental goods tend to be dependent on the scale at which they are elicited, so errors are likely when transferring values between scales. Finally, we explore how understanding the relationship between environmental risk preferences and scale can refine our interpretation of scope response. Scope response, the idea that willingness to pay should increase with the amount of good on offer, has evolved into a major test of theoretical consistency. Choice experiments, which are constructed to exhibit built-in (internal, or within-sample) scope response, have been subjected to few external (between-sample) tests of scope. We subject a choice experiment to an external scope test and explore risk aversion as a determinant of the degree of scope response.

 

Willingness-to-pay for water filters and water quality testing services in Guatemala (with Todd Guilfoos, Sarah Hayden, Vinka Oyanedel-Craver

We conduct a contingent valuation study to estimate the willingness to pay for a point-of-use water quality technology and water quality testing services in the highlands of Guatemala. This study is unique in two ways: we measure drinking water quality at the household level through water samples collected at the household and we elicit the willingness to pay for water quality testing services. We find a significant divergence in subjects’ perceptions of water quality and the measured bacteria counts in their household water. This divergence is economically important as perceptions may play a significant role in willingness to pay for water quality improvements.

 

University of Wyoming: Resource Valuation Using Secondary Sources: A Watershed Case Study

1. Balint, Kyle, D., Economic Assessment of Nonpoint Source Pollution Management in the Tongue River Basin, WY, MS, Department of Agricultural and Applied Economics, Summer 2019.

Nonpoint source (NPS) pollution remains the largest source of water quality impairment in the United States.  Management of NPS pollution requires incentive based programs for voluntary adoption at local levels.  Best management practices (BMPs) undertaken by private landowners generates private and public benefits.  Determining a payment above project costs to incentivize voluntary adoption is vital for land managers going forward as public funding decreases and climate change stresses our water supplies.  In the Tongue River Basin, WY, excellent water quality provides trout habitat and related ecosystem goods and services.  Tourism and agriculture are two of the largest industries in the area- yet one contributes to NPS pollution while the other relies on clean water for recreational opportunities.  We conducted a meta-analysis to determine willingness to pay for water quality improvements.  We then built a ranch model to determine willingness to accept payment for best management practices.  With these two estimates, we assessed the zone of potential contract agreement for adoption of BMPs in the Tongue River Basin, WY.  

2. February 13-14, 2020. “Baseline Values for Erosion Mitigation in Small Watersheds.” K. Balint, R. Coupal, D. McLeod, K. Hansen and G. Paige. W-4133 Meetings: Benefits and Costs of Natural Resources Policies Affecting Ecosystem Services on Public and Private Lands.  Athens, GA.

    

Objective 3

 

Colorado State University: In collaboration with engineers at CSU and others at UN-R, we have begun to build alternative water institutions within a linked water supply and allocation model.  This model will allow us to examine the impact of alternative water allocation mechanisms under climate change.  Our research examines the importance of the change in timing of surface water flows as snowmelt occurs at different times of the year. We have completed a hydro-economic model of Finney County, Kansas that allows groundwater managers to examine the impact of alternative policies on agricultural groundwater use over space and time.  This work is currently under review at Agricultural Water Management. We published two articles on wildfire suppression in the US.  In “Resource Allocation Under Fire”, we estimate the influence of threatened homes on the number of resources sent to a fire and show that growth in the wildland urban interface could increase future wildfire suppression costs.  In “Weather, Risk, and Resource Orders on Large Wildland Fires in the Western US,” we show that incident commanders order resources in anticipation of changing weather conditions rather than merely reacting to current or past fire behavior.

 

University of Georgia: A study was conducted to examine subjective probabilities of exposure to catastrophic risks posed by natural hazards (e.g., floods, hurricanes, tornadoes).   Sophisticated computer models are often used to estimate “objective” probabilities of exposure to natural hazard risks.  However, previous theoretical and empirical studies suggest ordinary people have limited access to and understanding of objective risk probabilities and instead base choices on their own subjective risk probabilities.  Thus, in this study we focus on classes of economic models that employ subjective assessments of risk probabilities.  We review some of the pitfalls encountered in previous work on natural hazard risks and explore empirical approaches that could be pursued to incorporate structural parameters or estimate structural models of individual choice under risk of natural hazard. In a study of increasing the use of renewable resources (e.g., wind, solar) to generate electricity distributed by the national grid, we combined the economic and engineering literatures to empirically investigate whether increasing the net capacity of electricity supplied by renewable resources negatively impacts power system reliability. We measure disruptions in power system reliability by the frequency or duration of power system disruptions experienced by end-consumers.  We measured power system interruptions using values of the system average interruption duration index (SAIDI), and the system average interruption frequency index (SAIFI) collected by the U.S. Energy Information Administration.  We estimated the statistical relationships between the SAIDI and SAIFI indices and explanatory variables including increasing the capacity of renewable resources used to generate power using a linear random-effects econometric model.  To provide insight into the policy implications of our results, we used our econometric model to forecast disruptions in power system reliability assuming different renewable energy policy scenarios for sixteen different states. We then estimated the economic costs of our forecasted disruptions using an open-source, interruption cost estimate calculator. 

 

University of Illinois at Urbana-Champaign: Gramig mentored with post-doctoral associate Bowen Chen at UIUC and both worked together with Prof. Seong Yun at Mississippi State University to launch a project for USDA-NRCS to quantify the on-farm benefits of agricultural conservation practices that are subsidized by federal agri-environmental programs (i.e. EQIP). This work also involves USDA-ERS through the use of data from the Agricultural Resource Management Survey (ARMS) administered by NASS for ERS. This work will quantify how NRCS conservation practices economically impact farms that adopt them, and will be used to provide economically relevant information about these practices to NRCS customers evaluating alternative conservation strategies. This work is funded by NRCS.

Ando and W4133 partner Sahan Dissanayake in Oregon entered into a cooperative agreement with the USDA to do a choice experiment survey of the values of different kinds of grassland restoration that is carefully tailored to inform legislative and agency decisions about the size and administration of the Conservation Reserve Program.

Ando teamed up with researchers at places including UIUC, CUNY, and Argonne National Lab, to secure $2.5 million in funding for a project from the NSF-INFEWS program for a project that will integrate ecosystem service valuation and physical/climatological modeling to study “Climate-induced extremes on the food, energy, water nexus (C-FEWS) and the role of engineered and natural infrastructure.”

 

University of Rhode Island: Decision support modeling for multi-attribute water quality in the Narragansett Bay watershed (with Robert Griffin)

In this study, we develop an integrated assessment model for spatially simulating water quality changes and social welfare effects for recreational use and non-use as a function of common point and non-point source pollution management interventions. This extends prior modeling by incorporating a broader suite of water quality characteristics beyond phosphorus and nitrogen that are known to affect water quality. Beyond demonstrating the feasibility of such a model, we show the implications of omitting water quality factors on model estimates and find that in some cases a smaller set of water quality attributes may not significantly impact estimates of willingness to pay. We derive these lessons in a case study of Narragansett Bay, a coastal estuary that has recently experienced significant changes in nutrient loading due to a combination of point and non-point source changes and find that recent wastewater treatment upgrades are providing millions in annual value to adjacent residents.

Narragansett Bay Watershed Economy

The Narragansett Bay Watershed (NBW) is the land area that drains into the Narragansett Bay, including rivers and streams that eventually flow into it. Its natural capital, comprised of 1,700 square miles of land and 420 miles of coastline, supports the economy and the quality of life of millions of people. But climate change and expanding development are already affecting the natural capital base, in turn making the future of our economy and people’s quality of life vulnerable to future threats.

The goal of this project is to quantify the benefits we derive from NBW’s natural capital so, in turn, we can inform and improve decision-making policy regarding the management and protection of the watershed’s environment. Decisions we make in the NBW every day—e.g., land use and management, wastewater management, subsidies for economic development—can have direct and indirect impacts on the watershed, its natural capital, and the economy and quality of life that it supports. We also uncover the history of the NBW through the lens of the long-term changes to our economy and the environment to understand how we got to where we are now and to learn from the past decisions.

This project encompasses several major studies involving multiple research teams and complements the Narragansett Bay Estuary Program’s 2017 State of the Bay and Its Watershed, which documented present and potential future threats that may impact its health. It is hoped that these studies will enable more informed decisions by government agencies, the private sector, nonprofit and community organizations, and others.

Publications

 

Objective 1

 

Ahmadiani, Mona, Susana Ferreira, and Craig E. Landry. 2019. “Flood Insurance and Risk Reduction: Market Penetration, Coverage, and Mitigation in Coastal North Carolina” Southern Economics Journal 85(4): 1058-1082, DOI: https://doi.org/10.1002/soej.12332

 

Bollinger, B., Burkhardt, J., Gillingham, K. Peer Effects in Residential Water Conservation: Evidence from Migration. Forthcoming: American Economic Journal: Economic Policy (2020).

 

Dundas, S.J., and D.J. Lewis. 2020. “Estimating Option Values and Spillover Damages for Coastal Protection: Evidence from Oregon’s Planning Goal 18.” Journal of the Association of Environmental and Resource Economists (Forthcoming).

 

Foelske, L, CJ Van Riper, W Stewart, A Ando, P Gobster, L Hunt. 2019. “Assessing preferences for growth on the rural-urban fringe using a stated choice analysis.” Landscape and Urban Planning 189: 396-407.

 

Hashida, Y., and D.J. Lewis. 2019. “The Intersection between Climate Adaptation, Mitigation, and Natural Resources: An Empirical Analysis of Forest Management.” Journal of the Association of Environmental and Resource Economists, 6(5): 893-926.

 

Hashida, Y., Withey, J., Lewis, D.J., Newman, T., and J. Kline. 2020. “Anticipating changes in wildlife habitat induced by private forest owners’ adaptation to climate change and carbon policy.” PLOS ONE (In Press).

 

Hodde, W, JP Sesmero, BM Gramig, TJ Vyn, O Doering. "The effect of projected climate change on the economics of conservation tillage." Agronomy Journal 111(6):1-11, 2019.

 

Jakus, Paul M. and Sherzod B. Akhundjanov. 2019. “The Antiquities Act, Large National Monuments, and the Regional Economy.” J. Environmental Economics and Management, 95(May):102-117. https://doi.org/10.1016/j.jeem.2019.03.004

 

Kim, Man-Keun, and Paul M. Jakus. 2019. “Wildfire, National Park Visitation, and Changes in Regional Economic Activity.” J. Outdoor Recreation and Tourism, 26(June):34-42. https://doi.org/10.1016/j.jort.2019.03.007

 

Levesque, V., Calhoun, A. and K.P. Bell. 2019. Actions speak louder than words: Designing transdisciplinary approaches to enact solutions, Journal of Environmental Studies and Sciences, 9(2):159-169, DOI: 10.1007/s13412-018-0535-0.

 

Meunier, Simon, Dale T. Manning., Dan Zimmerle, Loic Queval, Judith Cherni, and Philippe Dessante (2019).  Determinants of the marginal willingness to pay for improved domestic water and irrigation in partially electrified Rwandan villages.  International Journal of Sustainable Development and World Ecology.

 

Moeltner, K., J.A. Balukas, E. Besedin, and B. Holland (published online Aug. 2019). Waters of the United States: Upgrading Wetland Valuation via Benefit Transfer, Ecological Economics.

 

Munroe, D.K., Crandall, M.S., Colocousis, C., Bell, K.P., and A.T. Morzillo (2019). Reciprocal relationships between forest management and regional landscape structures: applying concepts from land system science to private forest management, Journal of Land Use Science, DOI: 10.1080/1747423X.2019.1607914.

 

Netusil, N.R., K. Moeltner, M. Jarrad, K. Moeltner (published online Aug. 2019). Floodplain

Designation and Property Sale Prices in an Urban Watershed, Land Use Policy.

 

Opalinski, Nicole, Aditi Bhaskar and Dale T. Manning (2019). Response of Municipal Water Use to Weather across the Contiguous US, JAWRA.  https://doi.org/10.1111/1752-1688.12801.

 

Peterson, Nicole E., Craig E. Landry, Clark Alexander, Brian Bledsoe, and Kevin Samples. 2019. “Socioeconomic and Environmental Predictors of Estuarine Shoreline Hard Armoring” Nature: Scientific Reports, 9, 16288, DOI: doi:10.1038/s41598-019-52504-y

 

Petrolia, D.R., J. Penn, R. Quainoo*, R.H. Caffey, and J.M. Fannin.  2019.  "Know Thy Beach: Values of Beach Condition Information."  Marine Resource Economics 34(4): 331-59.

Penn J, Hu W, and H Penn. 2019. Support for Native, Solitary Pollinator Conservation among the Public versus Beekeepers. American Journal of Agricultural Economics, ASSA invited paper. 101(5): 1386-1400.

 

Riley, D., Mieno, T., Schoengold, K., & Brozović, N. (2019). The impact of land cover on groundwater recharge in the High Plains: An application to the Conservation Reserve Program. Science of the Total Environment, 696, 133871.

 

Scyphers, Stephen B., Michael W. Beck, Kelsi L. Furman, Judy Haner, Lauren I. Josephs, Rebecca Lynskey, Andrew Keeler, Craig E. Landry, Sean P. Powers, Bret M. Webb, and Jonathan H. Grabowski.^. 2019. “A Waterfront View of Coastal Hazards: Exploring Relationships among Exposure, Shoreline Type, and Hazard Concerns” Sustainability 11(23), 6687, DOI: https://doi.org/10.3390/su11236687

 

Suter, Jordan, Mani Rouhi Rad, Dale Manning, Chris Goemans, and Matthew Sanderson (forthcoming). Groundwater Depletion, Climate, and the Incremental Value of Groundwater.  Resource and Energy Economics.

 

Trout, Thomas J. and Dale T. Manning (2019). An Economic and Biophysical Model of Deficit Irrigation.  Agronomy Journal. doi:10.2134/agronj2019.03.0209

 

Yun, S. D. and B. M. Gramig, 2019, “Agro-Climatic Data by County (ACDC): A Spatially and Temporally Consistent U.S. Dataset for Agricultural Yields, Weather and Soils,” Data, 4(2): 66.

Nyanzu, F.  2019.  Optimal portfolio design to manage oyster resources.  Master's thesis, Agricultural Economics, Mississippi State University.

 

Zhong, Hua, Michael Taylor, Kimberly Rollins, Dale Manning, and Chris Goemans (2019). Who Pays for Water Scarcity? Evaluating the Welfare Implications of Water Infrastructure Investments for Cities.  The Annals of Regional Science.  The Annals of Regional Science, 63(3), 559-600.

 

Zipp, K.Y., Lewis, D.J., Provencher, B., and J. Vander Zanden. 2019. “The Spatial Dynamics of the Economic Impacts of an Aquatic Invasive Species: An Empirical Analysis.” Land Economics, 95(1): 1-18.

 

Objective 2

 

Ando, AW, Cadavid, CL, N Netusil, and B Parthum. 2020. “Willingness-to -volunteer and stability of preferences between cities: Estimating the benefits of stormwater management.” Journal of Environmental Economics and Management, 99: 102274.

 

Bi, X., T. Borisova, and A. Hodges. 2019. “Economic Value of Visitation to Free-Flowing and Impounded Portions of a River: Implications for Management River Flow.”  Review of Regional Studies (49): 244-267.

 

Boslett, A., Guilfoos, T., & Lang, C. (2019). Valuation of the external costs of unconventional oil and gas development: The critical importance of mineral rights ownership. Journal of the Association of Environmental and Resource Economists, 6(3), 531-561.

Prendergast, P., Pearson-Merkowitz, S., & Lang, C. (2019). The individual determinants of support for open space bond referendums. Land use policy, 82, 258-268.

 

Bowker, J. Michael, Ashley E. Askew, Craig E. Landry, Alexis Hedges, and D.B.K. English. 2019. “Wilderness Use, Users, Preferences, and Values: A Look at the National Forest System from 2005 to 2014” In, A Perpetual Flow of Benefits: State of Knowledge Report on the Economic, Social, and Tribal Values of Wilderness in
America, (Ed.: T.P. Holmes, S.  Fox), Southern Research Station General Technical Report, US Forest Service, Asheville, NC.

 

Carr-Harris, A., & Lang, C. (2019). Sustainability and tourism: the effect of the United States’ first offshore wind farm on the vacation rental market. Resource and Energy Economics, 57, 51-67.

 

Dahal, R.P., R.K. Grala, J.S. Gordon, I.A. Munn, D.R. Petrolia, and R. Cummings.  2019.  "A hedonic pricing method to estimate value of waterfront in the Gulf of Mexico."  Urban Forestry & Urban Greening 41(May): 185-94.

 

Dundas, S.J. and R. von Haefen. 2020. “The Effects of Weather on Recreational Fishing Demand and Adaptation: Implications for a Changing Climate,” Journal of the Association of Environmental and Resource Economists 7(2): 209-242.

 

English, Eric, Ted McConnell, Joseph Herriges, Frank Lupi and Roger H. von Haefen. "Fixed Costs and Recreation Value," American Journal of Agricultural Economics, 101(4): 1082-1097, July 2019.

 

Klaiber, H. Allen & Roger H. von Haefen. "Do Random Coefficient and Alternative Specific Constants Improve Policy Analysis? An Empirical Investigation of Model Fit and Prediction," Environmental and Resource Economics, 73(1): 75-91, May 2019.

 

Landry, Craig E., Andrew G. Keeler, and Stephen Scyphers. 2019. “Household Preferences for Post-storm Coastal Adaptation: An Application of Choice Experiments” Southern Economics Association 89^th Annual Conference: Fort Lauderdale, FL

 

Landry, Craig E., Andrew G. Keeler, and Stephen Scyphers. 2019. “Household Preferences for Post-storm Coastal Adaptation: An Application of Choice Experiments” Forum on Challenges in Natural Resource Economics & Policy, Louisiana State University, 6^th National Forum on Socioeconomic Research in Coastal Systems: New Orleans, LA

 

Lewis, D.J., Dundas, S.J., Kling, D.M., Lew, D.K., and S.D. Hacker. 2019. “The non-market benefits of early and partial gains in managing threatened salmon.” PLOS ONE 14(8): e0220260.

 

Mueller, Julie M., Soder, Adrienne B. and Springer, Abraham E. (2019). “Valuing attributes of restoration in a semi-arid watershed.” Landscape and Urban Planning 184: 78-87.

 

Mueller, Julie M., Lima, Ryan E., Springer, Abraham E. and Schiefer, Erik. (2018). “Using matching methods to estimate impacts of wildfire and post-wildfire flooding on house prices.” Water Resources Research 54(9):6189-6201.

 

Mutandwa, E., R.K. Grala, and D.R. Petrolia.  2019.  “Estimates of willingness to accept compensation to manage pine stands for ecosystem services.”  Forest Policy and Economics 102(May): 75-85.

Naumenko, Alexandra. "Three Essays on the Nonmarket Valuation of the Air and the Sea," Ph.D. Dissertation under the direction of Roger H. von Haefen, Economics Program, North Carolina State University, September 2019.

 

Penn J and W Hu. 2019. Cheap Talk Efficacy under Potential and Actual Hypothetical Bias: A meta-analysis. Journal of Environmental Economics and Management. 96: 22-35.

Penn JM, Hu W, and LJ Cox. 2019. Forced Choice with Constant Choice Experiment Complexity. Journal of Agricultural and Resource Economics. 44(2): 439-455.

 

Petrolia, D.R. and J. Hwang.  "Accounting for Attribute Non-Attendance in Three Previously-Published Choice Studies of Coastal Resources."  Forthcoming, Marine Resource Economics.

 

Qin, Jin. "A Test of the Relationship between Air Pollution and Exports: The Case of China," Ph.D. Dssertation under the direction of Ivan Kandilov and Roger H. von Haefen, Economics Program, North Carolina State University, January 2019.

 

Trandafir, S., Gaur, V., Behanan, P., Lang, C., Uchida, E., and Miao, H. “Impact of offshore wind turbines on preferences for recreational activities”, submitted on 02/03/2020 to Marine Resource Economics

 

Yehouenou, L., K. Grogan, X. Bi, and T. Borisova. “Improving BMP Cost-Share Enrollment Rates: Insights from a Survey of Florida Farmers”. Agricultural and Resource Economics Review. Accepted.

 

Objective 3

 

Bayham, Jude, Erin J. Belval, Matthew P. Thompson, Christopher Dunn, Crystal S. Stonesifer, and David E. Calkin. 2020. “Weather, Risk, and Resource Orders on Large Wildland Fires in the Western US.” Forests 11 (2): 169.

 

Bayham, Jude and Jonathan K. Yoder.  2020.  “Resource Allocation Under Fire” Land Economics. 96 (1): 92-110.

 

Guilfoos, Todd, Sarah Hayden, Emi Uchida, Vinka Oyanedel-Craver. (2019) WTP for water filters and water quality testing services in Guatemala. Water Resources and Economics. In Press.

 

Khanna, M., BM Gramig, EH DeLucia, X Cai, P Kumar. "Harnessing the Potential of Emerging Technologies to Mitigate the Hypoxia Challenge." Nature Sustainability 2:889-891, 2019.

 

Landry, Craig E., Mona Ahmadiani, and Gregory Colson. 2019. “Structural Empirical Analysis of Decisions under Natural Hazard Risk” in The Future of Risk Management, University of Pennsylvania Press: Philadelphia, PA.

 

Margenot, A, D Kitt, BM Gramig, T Berkshire, N Chatterjee, A Hertzberger, S Aguiar, A Furneaux, N Sharma, R Cusick. "Toward a regional phosphorus (re)cycle in the U.S. Midwest." Journal of Environmental Quality, 48(5):1397-1413.

 

Prokopy, LS, K Floress, JG Arbuckle, SP Church, F Eanes, Y Gao, BM Gramig, P Ranjan, AS Singh. "Adoption of Agricultural Conservation Practices in the United States: Evidence from 35 Years of Quantitative Literature." Journal of Soil and Water Conservation 74(5):520-534, 2019.

 

Roy, Samuel G., Emi Uchida, Simone P. de Souza, Ben Blachly, Emma Fox, Kevin Gardner, Arthur J. Gold, Jessica Jansujwicz, Sharon Klein, Bridie McGreavy, Weiwei Mo, Sean M. C. Smith, Emily Vogler, Karen Wilson, Joseph Zydlewski, David Hart. A multiscale approach to balance trade-offs among dam infrastructure, river restoration, and cost. Proceedings of the National Academy of Sciences Nov 2018, 115 (47) 12069-12074; DOI: 10.1073/pnas.1807437115

 

Steele, Amanda Harker, John C. Bergstrom, and J. Wesley Burnett. “Examining the Regional Economic Costs of Electric Power Grid Interruptions Associated with Increased Intermittent Renewable Resource Capacity”, Selected Paper, 2019 North American meetings of the Regional Science Association International, Pittsburgh, PA, November, 2019.

 

Uchida, E., Mead A., Giroux, A., & Hayden, S. (2019). Narragansett Bay Watershed Economy: The ebb and flow of natural capital. Narragansett, R.I.: Coastal Institute at the University of Rhode Island. Available for download https://www.nbweconomy.org/

 

Zia, A., Ding, S., Messer, K. D., Miao, H., Suter, J., Fooks, J. R., Guilfoos, T., Tranda.r, S., Uchida, E., Tsai, Y., Merrill, S., Turnbull, S., and Koliba, C. (2020). Characterizing Heterogeneous Behavior of Non-Point Source Polluters in a Spatial Game under Alternate Sensing and Incentive Designs.  Journal of Water Resources Planning and Management. Accepted.

 

 2020 Meeting Abstracts

 

Title: Do ecological-economic tradeoffs change by types of budget distribution options for forest carbon sequestration in the Central and Southern Appalachian region?

Authors: Cho, Seong-Hoon; Sharma, Bijay P.; Lee, Young Gwan

W4133 task: 1-1

Presenter: Young Lee

Presenter email: ylee51@vols.utk.edu

Abstract:

 

Providing direct payments to landowners is a well-known strategy to preserve and restore ecosystem services (ES). A literature gap dealing with payments for ES is manifest in the lack of attention given to spatial and temporal aspects of cost efficiency in the context of the ecological-economic tradeoff relationship. The purpose of this research is to fill the literature gap by evaluating how different optimal spatial and temporal budget distribution options for protecting ES result in different ecological-economic tradeoffs. As a case study, we develop an empirical framework for the optimal distribution of a given budget for direct payments to forestland owners for forest carbon sequestration in the Central and Southern Appalachian Region in 2001 and 2006. We consistently find concave efficient frontiers between carbon storage and total value-added and also differences in ecological-economic tradeoffs for the three distribution options (i.e., spatially-varying and temporally-fixed distribution options in 2001 and 2006, and a spatially-temporally-varying distribution option for which data are pooled for the two years). The former confirms previous findings of a concave tradeoff relationship, while the latter new finding suggests that balancing weights between the two objectives with preferences of decision makers can be effectively done depending on distribution options.

 

Title: Evidence of Extremeness Aversion in Preferences for Public Park Attributes

Authors: Lendie Folletta and Brian Vander Naald

W4133 task: 2-1

Presenter: Brian Vander Naald

Presenter email: brian.vandernaald@drake.edu

Abstract:

 

Methods for exploring the so-called “compromise effect" in discrete choice experiments was first introduced in the context of brand choice (Simonson 1989). Also termed extremeness aversion in the transportation literature, there does not appear to be much evidence of it in the environmental economics literature, so we explore it here. In November 2012, residents of Polk County, Iowa passed the ten-year, $50 million Polk County Water and Legacy Bond. The goal of the bond was to protect water quality around the two largest watersheds converging in Des Moines. One projected outcome was an improvement in recreational opportunities at watershed dependent public parks in Polk County. Using data from a discrete choice experiment, we estimate willingness to pay for improvements in different public park amenities. Surveys were administered at three different Polk County Parks during the summers of 2017 and 2018 examining preferences for different attributes at public parks. 937 surveys were completed.

Three groups of respondents saw three different sets of attribute levels. Preliminary estimates indicate that users are WTP between $100 and $240 per year for a 100% increase in water clarity, and between $106 and $163 per year for a 100% increase in good game fish at Polk County Parks. Smaller, but still positive, WTP estimates were found for increases in park land and bird diversity. We use a Bayesian Error Components Model to explore the presence of extremeness aversion in responses. We find preliminary evidence of extremeness aversion, wherein WTP values for identical attribute levels are different across

groups who saw different sets of attribute levels.

 

Title: WTP for biodiversity protection: Evidence from Waikamoi Preserve

Authors: Sonja Kolstoe, Brian Vander Naald, and Alison Cohan

W4133 task: 2-1

Presenter: Sonja Kolstoe

Presenter email: shkolstoe@salisbury.edu

Abstract:

 

In Hawai'i, the `Ohi'a tree makes up approximately 80% of the native forests, and serves as

critical habitat for the state's native forest birds. An immediate potential threat to these forests is

Rapid `Ohi'a Death, or ROD, a introduced fungal disease. First found on the Big Island of Hawai'I in 2014, ROD is responsible for killing off large quantities of `Ohi'a trees. ROD has also been found on the island of Kaua'i and, more recently, on Maui and Oahu. The Nature Conservancy manages several land parcels in the state of Hawaii to include Waikmaoi Preserve which is located on the island of Maui. Waikamoi is the single-largest privately held nature preserve in the state and the Nature Conservancy is responsible for protecting the fragile ecosystem per their conservation easement agreement.

Waikamoi Preserve's vast `Ohi'a-dominant forest is the last stronghold for 63 species of rare

plants and 10 species of birds, five of them endangered. These species are threatened by the introduction of invasive species and climate change. Visitors to Waikamoi Preserve mostly commonly come to see Hawai'i's rare and endemic forest bird species, including the `akohekohe or Crested Honeycreeper (endangered), kiwikiu or Maui Parrotbill (critically endangered), i`iwi or Scarlet Honeycreeper (threatened), and the endemic `alauahio or Maui creeper (not currently listed as threatened). ROD has not yet been found near Waikamoi Preserve, but there is concern that it could be introduced in the future. Due to the heightened concerns of introducing ROD or some other introduced species or disease, access to Waikamoi has been limited since in order to reduce risk of introducing new invasive species such as ROD.

In 2016, the American Birding Association added Hawaii to its North American Birding List,

which served as a large and positive demand shock for access to Waikamoi Preserve and The

Nature Conservancy is seeking a long-term solution about how to provide access. We use a discrete choice experiment (DCE) to collect preference data from Qualtric's national sample in Fall 2019 to investigate the following questions: (1) how much are people willing to pay for expanded access to the Preserve and (2) how much they are willing to pay to mitigate the risks to the Preserve posed by invasive species and climate change. The DCE is designed to estimate willingness to pay (WTP) both for expanded access, as well as for di_erent bird abundances and levels of risk of a new invasive species or disease. We will gather preference responses from over 1000 respondents using Qualtrics. We will explore average WTP and how it varies systematically based on observable characteristics.

 

Title: Making sense of applying herbicide in forest

Authors: Yukiko Hashida and David Kling

W4133 task: 1-1

Presenter: Yukiko Hashida

Presenter email: yhashida@uga.edu

Abstract:

 

Meeting human needs for natural resources while conserving biodiversity is one of the critical challenges. Addressing the challenge requires understanding trade-offs between the economic value of commodity production and biodiversity; as many resource management worldwide has intensified and accelerating biodiversity loss, it is becoming increasingly essential to understand the trade-offs that landowners face in determining the management decisions. On the other hand, some argue for harnessing the potential of higher-yield production to make space for nature and free up land for conserving biodiversity and ecosystem services (Phalan et al., 2016). On private industrial forestland, diverse early-seral ecosystems have continued to decline because of intensive forest management practices that convert hardwoods and shrubby areas to conifers, suppress hardwoods in plantations, and accelerate canopy closures (Phalan et al., 2019). Private industrial forest landowners commonly apply herbicide to reduce competing vegetation, even though the application has been controversial from both human and ecosystem health perspectives (Rolando et al., 2017). Because of the substantial opportunity costs associated with forest management (e.g., it takes a long time to establish forest), landowners base their herbicide application decision on the assumption that the profit gain from an increased volume from herbicide outweighs the costs.

Previous ecological study (Newton, 2019; paper is still under review) confirms that without herbicide, we need to spread out forestry operations to get the same amount of lumber, indicating the above trade-off of intensive management and economy of scale. It also states that spraying herbicide does not always generate additional financial values, especially for landowners with higher discount rates (>7%). This finding raises a question of the economic rationale of herbicide application. The fact that private landowners almost exclusively apply herbicide despite the potential financial loss creates an interesting research opportunity to verify it using the empirical herbicide application data and coupling it with the biodiversity species metrics.

This study spatially quantifies the biodiversity-yield tradeoffs with empirical herbicide application data in Oregon. We have privately obtained plot-level herbicide application data from the Oregon Department of Forestry that includes about 100,000 records of herbicide application between 1990 and 2014. The data includes a method of application, acreage of herbicide applied, locations up to PLSS quarter-quad level, owner type (federal, state, private, corporate etc.), and owner names etc. Almost 90% of the areas applied with herbicide are private industrial forestlands, and 60% of the application is done by helicopters (average 100 acres each application). The application has sharply increased until 2006 followed by a sharp decline in usage among private industrial owners.

The study aims to address: 1) identifying the economic factors that drive herbicide applications based on the past application behaviors and 2) linking the economic values from commodity production and negative impact on biodiversity, with the aim to provide policymakers evidence-based rationales to convince landowners where and when herbicide application might not make economic sense.

 

Title: Effects of Stated Attribute Non-attendance and Attribute Importance in Nonmarket Valuation

Authors: Qianyan Wu, Xiang Bi, and Zhifeng Gao

W4133 task: 2-1

Presenter: Xiang Bi

Presenter email: xiangbi@ufl.edu

Abstract:

 

Valuation of complex ecosystems through survey is often confounded with attribute non-attendance (ANA) behaviors in which respondents simplify choices by ignoring one or more attributes of the ecosystem to be valued in discrete choice experiments (DCE). The observed ANA behavior is often assumed to be a heuristic thus should not influence willingness to pay. However, if ANA actually reflects genuine preference instead of a heuristic, this might result in misleading welfare estimates and thus suboptimal policy advice (Heidenreich et al. 2018). Choosing the appropriate method to distinguish ANA heuristic vs. true preference and examining the impacts of treating ANA as heuristic or preference can significantly affect welfare estimates.  Specifically, DCEs in environment and natural resources may be prone to the use of this ANA processing strategies. When experiments include a strong attribute, especially familiar one, individual may be more likely to consider this attribute at the expense of others to overcome some cognitive burden and avoid unfamiliar attributes.

 

One approach to address ANA is to use additional information from the respondents by asking follow-up questions on whether specific attributes are ignored (Cameron and DeShazo, 2010; Alemu et al., 2013; Colombo and Glenk, 2014; Glenk et al., 2015). Then zero impact is assigned to the ignored attributes on the likelihood assuming that self-reported ANA statements is accurate, and the ANA behavior is uniform across choices. However, this might cause measurement errors problems in stated ANA when respondents that state ignoring specific attributes actually do not fully ignore it and put a different importance on it instead. Carlsson et al. (2010) suggest that instead of ignoring attributes completely, respondents may put less weight on attributes they claim to have not pay attention to. For example, they find that the most often ignored attribute is also the attribute that receives the lowest preference ranking. Other empirical studies also find that even though respondents state they ignore specific attributes, this might not be totally true (e.g. Campbell and Lorimer, 2009; Hess and Hensher, 2010). Hence, the conventional method by fixing ignored attribute coefficient to zero is inappropriate. Incorrectly constraining ignored attributes to have a zero coefficient could result in a mis-specified model (Hole et al., 2013). Recently, Scarpa et al. (2012) proposed a tool to validate self-reported stated ANA statements by specifying an indirect utility function with partitioned coefficients for each of the attributes, depending on whether the respondent identified the attribute as considered or ignored when making their decision.

 

In this paper, we propose an extension of the ANA validation approach proposed by Scapa et al (2012) by using additional information on stated importance for each attribute.  Following Scarpa et al. (2012), we validate the ANA statements in which two coefficients for each attribute are estimated (one for the self-reported considered attributes and one for the self-reported ignored attributes). We then partition the ignored attribute into three additional categories: not important, very important, and neither important nor unimportant.  We compare the willingness to pay estimates and model performance using conventional models, ANA models assuming ignored attributes to have zero impact, Scapa’s model, and our proposed model.

 

We find that the conventional approach of fixing ignored attributes to zero may not be appropriate since attributes claimed to have been ignored are actually not completely ignored according to the conditional logit model, which confirm the findings of Hess and Hensher (2010) and Carlsson et al. (2010). In mixed logit models, we find that ignore attributes coefficients are insignificant, indicating to some extend of appropriateness of standard ANA approach. Our extension with stated attribute importance has some bearings on the appropriateness of the standard ANA approach. For those respondents who stated they ignored specific attributes and also think this attribute is not important, our model confirm that these respondents actually have zero preference for these ignored attributes. For attributes that are important, our preference parameter estimates are found to be significant different from zero even if the respondents stated that they are ignored.

 

Title: Estimating Willingness to Pay with Referendum Follow-up Multiple-Bounded Uncertainty Choice Questions

Authors: Craig Landry and John C. Whitehead

W4133 task: 2-1

Presenter: John C. Whitehead

Presenter email: whiteheadjc@appstate.edu

Abstract:

 

The hypothetical referendum is considered to be incentive compatible and has become the preferred question format for contingent valuation studies. Yet, it provides a minimal amount of information with which to estimate willingness-to-pay and its determinants. This tends to lead to wide confidence intervals and at times limited evidence of theoretical validity of referendum responses. Follow-up referendum questions have been used to increase statistical efficiency and conduct internal scope and other validity tests but these have been prone to anchoring and incentive incompatibility. Using data from a survey of North Carolina residents about coastal erosion policies we present respondents with a multiple bounded payment card question that explicitly addresses the uncertainty inherent in any hypothetical scenario and allows for the expression of respondent uncertainty. We find that the resulting willingness to pay estimates are not biased when compared to those from the single bound dichotomous choice and they are more efficient, finding scope effects where the single model data does not.

 

Title: Revisiting Opt-out Responses in Contingent Valuation

Authors: Joonghyun Hwang and Daniel R. Petrolia

W4133 task: 2-1

Presenter: Joonghyun Hwang

Presenter email: Joonghyun.Hwang@MyFWC.com

Abstract:

 

This paper revisits the topic of opt-out responses in contingent valuation from a fresh perspective.  We test if opt-out is similar to yes or no based on two criteria: the vector of beta estimates and variances using the nested logit model.  We examine effects of discarding opt-out responses from estimation based on two criteria: the vector of beta estimates and the vector of sample means, given that willingness to pay calculation is based on the two.  This is important because comparing willingness to pay estimates directly may result in a false conclusion if differences in some elements in either beta or sample means vectors between samples are offset by differences in some other elements.  We find evidence that welfare estimates may be affected by discarding opt-out responses. 

 

Title: Price Perception and Willingness to Vote for Public Goods

Authors: Corey Lang, Casey Wichman, and Shanna Pearson-Merkowitz

W4133 task: 2-1

Presenter: Corey Lang

Presenter email: clang@uri.edu

Abstract:

Direct democracy is an important determinant of local public goods; US voters annually authorize billions of dollars in public spending through bond and tax referendums. In theory, referendums set a price and quantity for public goods and allow voters to do a cost-benefit analysis when deciding how to vote.

The purpose of this paper is to assess how well voters understand referendum costs and the implications of misperceived costs. We conducted exit polls in three municipalities and directly asked voters how much in additional taxes they would pay if a municipal referendum appearing on their November 2018 ballot passed. The referendums varied in terms of targeted public goods (open space, smart growth, road repairs), funding mechanisms (property taxes, bonds), and total costs. Household specific costs varied based on the specifics of the referendum and the respondent’s housing value. We incentivized accuracy and truthful responses by paying respondents for correct answers. Additionally, the survey was self-administered and anonymous, which mitigates social desirability bias.

Basic summary statistics from the survey clearly indicate that voters do not understand the financial consequences of their vote. 59% of respondents did not even guess at the referendum cost. Of those that did register a guess, there is evidence of a common heuristic; distributions are similar across the three municipalities despite one being substantially cheaper than the others. Lastly, there is near-zero correlation with actual cost.

We estimate models of willingness to vote (approve) and include stated cost or actual cost as independent variables, similar to the analysis of a binary contingent valuation choice experiment. Results suggest that stated cost has a negative and statistically significant impact on approval, as would be expected for the cost parameter, but actual cost has a statistically insignificant effect and the coefficient is positive. These results suggest that voters are responsive to price, but are responding to incorrectly perceived price. The implications are that 1) demand modeling using voting data may be biased due to voters misunderstanding of prices and 2) improved understanding of prices may have a substantial impact on which voters approve and the aggregate approval.

 

Title: Status Quo Bias and Public Policy: Evidence in the Context of Carbon Mitigation

Authors: Corey Lang, Michael Weir, and Shanna Pearson-Merkowitz

W4133 task: 1-4, 2-1

Presenter: Michael Weir

Presenter email: michaeljweir@uri.edu

Abstract:

 

Carbon mitigation policy is necessary for managing climate change. Despite broad beliefs in climate change and the need for action (Pew 2019), there have only been two referendums seeking to establish a carbon policy (both in Washington State) and both have failed by large margins. In contrast, New England states and California have created successful carbon mitigation policies through their legislature, and California voters overwhelmingly voted down a measure to scrap their policy when given the option.

What can explain this divergent experience? In this paper, we explore the possibility of status quo bias in public policy preferences. That is, do people prefer policies that are already in place to identical policies that are being proposed? The status quo bias/endowment effect literature is rich, but primarily focuses on private goods (Adamowicz et al. 1993), but also some public goods (Banford et al. 1980). To the best of our knowledge, this is the first paper to look specifically at policy and the context of a ballot referendum for policy.

We conduct a survey of people’s preferences for carbon mitigation policy in Rhode Island. The context of our research is the Regional Greenhouse Gas Initiative (RGGI), which was implemented in 2008 by ten states in the Northeast and Mid-Atlantic. RGGI established a regional cap on CO2 emissions electric generating facilities that use fossil fuels and required all power plants to purchase permits when they produce CO2. Despite this success and prominence, the reality is that few people know about this policy. We use this ignorance to our advantage to be able to ask the same population questions about approval of a hypothetical carbon mitigation policy that under one frame does not exist and under a second frame already does. To avoid deception, we additionally ask a qualifying question to ensure that anyone that actually knows about RGGI only sees the frame that the policy exists. We build on Kotchen et al. (2017), who conduct a referendum-style, contingent valuation survey to measure willingness to pay (WTP) for a carbon tax.

Preliminary analysis indicates that 70.1% of those in the existing policy frame want to stay in the program versus only 59.6% of those in the new policy frame want to join the program. Further, results suggest a WTP/WTA discrepancy in carbon mitigation policy. For those given the new policy frame, we calculate average WTP is $170 more each year in electric bills to join the initiative (quite comparable to Kotchen et al.’s estimate of $177). For those given the existing policy frame, we calculate average WTA is $427 to leave the policy.

These results extend prior evidence that discrepancies between WTP and WTA should be accounted for in both economic models and policy design. Further, this may provide guidance for states seeking to enact policies that voters would not approve of at the ballot box, but would support once in place.

 

Title: Projecting Irrigation Water Demand

Authors: Jeff Mullen

W4133 task: 1-1

Presenter: Jeff Mullen

Presenter email: jmullen@uga.edu

Abstract:

 

Future climatic conditions are anticipated to have profound effects on agricultural productivity and the demand for irrigation water that vary by location depending on resource endowments and economic conditions. Crop growth simulation models such as DSSAT can offer powerful insight into the effects of weather and management practices on agricultural production. One of the fundamental questions that must be addressed during a simulation exercise, however, is “What is the producer’s objective function?” A researcher’s choice of objective function can significantly affect the predictions derived from a modeling exercise as well as the prescriptive policy recommendations based on those predictions. The economic literature has identified numerous possible objective functions for agricultural producers, the two most prominent of which are yield maximization and profit maximization.

We have currently modeled four crops– corn, cotton, peanut, and soybean – in Georgia. For each crop, we simulate county-level yield and irrigation water use for 7 irrigation management strategies under 4 future climate scenarios through the year 2100. For each year, 100 county-level weather files are developed using MarkSim for 4 representative concentration pathways (RCPs) – RCP 2.6, RCP 4.5, RCP 6.0, and RCP 8.5 – to simulate crop production. Coupling the production simulations with projected water prices and crop prices allows us to generate county-level distributions of yields, net returns, and water use for each RCP and irrigation management strategy.

With our county-level distributional results for each of the nine crops, we are able to estimate the following for each of the 4 RCPs, over both time and space: 1) the economic (crop price and water price) conditions under which yield maximization and profit maximization lead to the same “optimal” irrigation management strategy; 2) thresholds for the economic parameters above which the optimal strategies for the two objective functions diverge; 3) the water price threshold above which profits under rainfed production exceed those of irrigated production; 4) expected yield impacts of climate change under optimal irrigation management; 5) expected irrigated water demand as a function of water price; and 6) the relative profitability of crops.

 

Title: Fall in the Sea, Eventually? A Green Paradox in Climate Adaptation for Coastal Housing Markets

Authors: Lee C. Parton, Steven J. Dundas

W4133 task: 1-2, 3-1

Presenter: Lee Parton

Presenter email: leeparton@boisestate.edu

Abstract:

 

Integration of science into policy is a primary challenge for climate change adaptation. Yet, when communication of climate science results in a policy signal without concurrent political action, the economic incentives created by the expectation of policy change may have unintended consequences. We examine the effect on new housing development resulting from a scientific report by a regulatory agency mandating coastal communities in North Carolina (NC) consider sea-level rise when developing new land-use policies. Estimates from our preferred triple-differences model suggest the policy announcement increased building permits by 32% in coastal NC counties. This result is supported by numerous robustness checks, including alternative controls, placebo tests, and a parcel-level model in Dare County, NC. This green paradox in coastal climate adaptation implies that hundreds of millions of dollars in additional unregulated housing was constructed in NC locations vulnerable to sea-level rise likely due incentives generated by the policy signal.

 

Title: Estimating preservation values for brown bears in Katmai National Park: when the marginal value of an individual matters

Authors: Lynne Lewis and Leslie Richardson

W4133 task: 2-1, 1-3

Presenter: Lynne Lewis

Presenter email: llewis@bates.edu

Abstract:

 

The economic benefits supported by healthy wildlife populations is important in a variety of decision-making contexts on our public lands. This has led to a number of studies examining the direct use values associated with consumptive uses of wildlife, such as fishing and hunting, non-consumptive uses of wildlife, such as wildlife viewing, as well as total economic values derived from the preservation of species, particularly rare and endangered species. The vast majority of this literature has focused on large percentage gains or avoided losses in the population of a particular species or a recreational outcome, such as hunting success. However, there are many contexts in which the estimation of marginal values is more useful for policy. For instance, questions about the benefits of increasing species population numbers above some minimum viable population requires information on incremental values. Further, land management agencies such as the National Park Service often have to determine the value the public places on an individual animal that is poached or accidentally killed. These values are used in the damage assessment and restoration process in an effort to make the public “whole” for such injuries. However, the lack of relevant economic studies on the topic often leads to a reliance on state restitution values or some sort of replacement value, which may not adequately compensate the public for the loss of wildlife resources in national parks and other federal lands. Further, questions often arise as to what sort of value people place on these animals in unique situations where visitors or the general public are able to identify and connect with individual animals through mediums like online webcam viewing, books, or symbolic adoption programs.

 

This research explores various approaches that can be used to determine the marginal value of an iconic individual animal, focusing on both use and passive use values. A case study utilizing unique survey data from viewers of the popular Katmai National Park & Preserve bear webcams is discussed. Using webcam survey data, we explore the contributions to value of a unique individual of a species. Much has been written about charismatic wildlife influencing conservation motivations, but almost nothing has been written about whether certain individuals within subpopulations of species have more influence on conservation motivations, willingness to pay for conservation and/or willingness to pay for viewing privileges of that individual. 

 

We present the results of an on-line survey of bear cam viewers from the summer of 2019. As part of that survey we ask stated preference willingness-to-pay questions focused on the total economic value held for an individual bear at Katmai. In addition, we examine various factors that could influence this value, such as the ability to view the animals off-site through webcams and the ability to identify and connect with individual animals. This research has significant implications for policy and land management decisions related to wildlife. Results of this survey will also inform the design of an on-site visitor survey we expect to implement in the summer of 2020.

 

Title: Wildfire Smoke Avoidance Behavior

Authors: Jude Bayham, Jesse Burkhardt, Christine Dimke, Kevin Berry

W4133 task: 1-1, 1-3, 2-2

Presenter: Jude Bayham

Presenter email: jude.bayham@colostate.edu

Abstract:

 

Each year, hundreds of wildfires bellow smoke into the air exposing millions of people to harmful pollutants, especially in the Western US. Nationwide, wildfire smoke is responsible for over 30% of PM2.5 emissions (EPA 2016). Public health recommendations include foregoing outdoor activities and particularly strenuous activities. While there exists evidence from targeted surveys that individuals do comply with some forms of public service announcement (Sugerman et al. 2012), there is little nationwide evidence that people engage in costly avoidance behavior during smoke events (although, there is evidence that people are willing to pay to avoid smoke exposure (Richardson, Loomis and Champ 2013; Kochi et al. 2016; Jones and Berrens 2017;

Jones 2018) ). We address this gap in the literature by compiling a novel dataset of daily time-use data, smoke plumes, and fine particulate matter (PM2.5) to investigate whether people spend less time on outdoor activities during wildfire smoke events.

Our data come from multiple sources. The American Time Use Survey (ATUS) asks a nationally representative sample of people how they spent 24 hours of their day minute by minute (ATUS 2017). The replies are coded into one of over 400 activity codes and one of 25 activity codes, which allows us to create activity categories such as recreation activities occurring outdoors. We merge the activity data with energy expenditure data to quantify the level of vigor for each activity. The ATUS is a subsample of the Current Population Survey and therefore contains detailed socioeconomic and demographic data including weekly earnings. Satellite-derived

daily smoke plume data is published by the NOAA Hazard Mapping System (HMS 2018). We integrate these data with daily PM2.5 data krigged across the continental US at 15km resolution (Brey et al. 2018). We link individual ATUS respondents to smoke plume and PM2.5 data based on the county (or core-based statistical area) and the date of their diary. Our dataset spans 2006-2017 and includes 114,602 respondents.

Despite the increasing frequency of large wildfires, smoke events are a fairly rare phenomenon for most US residents. Therefore, we use matching methods to estimate the effect of smoke plume exposure. Individuals are matched based on observable demographics. Individuals may avoid fire smoke by reducing the time spent on outdoor activities (intensive margin) or foregoing the activity altogether (extensive margin). We investigate avoidance behavior on the extensive margin.

We estimate the model for a broad definition of outdoor activities as well as specific activities to investigate the heterogeneity in response. We use a similar specification to test our hypothesis of avoidance behavior on the intensive margin where the dependent variable is the number of minutes spent doing the activity conditional on spending at least one

minute. Preliminary estimates suggest that people are 3% less likely to engage in outdoor activities when smoke plumes are present. We plan to investigate the policy-relevant question of which activities are perceived as substitutes when smoke plumes are present. We will also investigate the extent to which people substitute intertemporally. People may delay outdoor exercise until air quality improves. If smoke plumes are present for extended durations, people may become impatient or acclimate to the poor air quality and continue outdoor activities.

We conclude the analysis with a partial analysis of the cost of avoidance behavior. Since the ATUS is a subsample of the CPS, we observe the weekly earnings of employed individuals at the time of the survey. We develop a quasi-travel cost method to estimate the economic damages of wildfire smoke. This paper makes several contributions to the literature on wildfire policy and economics. First, we provide nationwide evidence of smoke avoidance behavior, which implies that exposure to smoke is endogenous and empirical models associating smoke-induced emissions with health outcomes are likely underestimating the true effect (Neidell 2009; Moretti and Neidell 2011). Second, we contribute to the literature on avoidance behavior by studying a visibly salient risk. In contrast to information treatments such as the Air Quality Index

used in (Ward and Beatty 2016), fire smoke can be seen, smelled, and felt in the respiratory system. Lastly, we document the challenge of working with satellite-derived smoke plume data as a source of ground-level air pollution. Many smoke plumes travel and ultimately dissipate in the upper atmosphere having little to no impact on ground-level air pollution. This caution is particularly important given the increasing popularity of satellite-derived smoke and air quality products as sources of exogenous variation.

 

Title: A Laboratory Comparison of Risk Mitigation Strategies in Conservation Markets

Authors: Kristi Hansen, Chian Jones Ritten, Amy Nagler, Chris Bastian

W4133 task: 1-1, 3-1

Presenter: Chian Jones Ritten

Presenter email: chian.jonesritten@uwyo.edu

Abstract:

 

Interest in market-based conservation programs has been growing among public land management agencies and stakeholders (Hansen et al. 2013). One such program type is habitat exchanges, which are designed to provide market-based incentives for landowners to implement science-based conservation without undergoing the relatively onerous process of establishing a conservation bank. Habitat exchanges are under development for greater sage-grouse (Centrocercus urophasianus) and other species of interest in several western U.S. states. Through a habitat exchange, buyers and sellers trade quantifiable, third-party verified units of conservation, called credits. Landowners generate credits by implementing practices that produce measurable conservation outcomes to maintain or enhance habitat for sage-grouse habitat or other species. Initial credit buyers will likely be energy companies seeking off-site compensatory mitigation for impacts from development activities that cannot be avoided, minimized, or reclaimed.

Habitat exchanges are an innovative but largely untested idea. Many issues remain regarding their structure and performance. Trading institution structure coupled with risks faced by conservation providers will affect the quantity of conservation produced and the distribution of benefits between buyers and sellers. To create a successful exchange, it is crucial to establish trading institutions and incentives appropriate to the resource from program inception. Yet many questions regarding efficient market institutions for exchanges remain unaddressed.

In particular, we know from agricultural market research that the various risks borne by sellers in the production of conventional agricultural commodities impact market outcomes (Menkhaus et al. 2007; Phillips et al. 2014). How does the post-production risk of credit failure—the risk that conservation credits fail to maintain measurable habitat improvements over their contract life—further impact market outcomes? In cases where this credit failure risk is significant, how should a market-based conservation program be structured to both encourage landowner participation and increase measurable conservation?

Lamb et al. (2019) find that credit failure risk significantly reduces habitat credit production and trade in this market environment. They further find that a private party risk mitigation strategy of buyers reimbursing sellers for production costs on failed units could mitigate these impacts. Specifically, reimbursing sellers for production costs on credits that fail to maintain habitat quality for their contract life can significantly mitigate reductions in conservation production resulting from this risk. In this study we build on their findings to explore whether an insurance instrument could further improve market efficiency.

We compare the relative market efficiency of two mechanisms for mitigating the risk of post-production credit failure in habitat exchanges: cost reimbursement (buyers automatically reimburse sellers when credits fail post-transaction) and insurance (where participants choose ex ante whether to buy insurance). We also explore whether market efficiency improves more if sellers versus buyers bear the risk of credit failure (and thus choose whether to buy insurance); and how buyers and sellers respond to an actuarially fair versus subsidized insurance premium.

We implement a simplified private negotiation laboratory market to assess the relative impact of seller cost reimbursement and an insurance instrument on market outcomes (quantity traded, price, overall earnings, distribution of earnings between buyers and sellers) in the presence of credit failure risk. Our questions and objectives suggest six treatments (all in the presence of credit failure risk) that vary by who bears credit failure risk (buyer versus seller), risk mitigation policy (reimbursement versus insurance) and, for the insurance treatments, whether the premium is actuarially fair or subsidized.

Experimental procedures follow standard practices (Davis and Holt 1993) and relate to previous research (Menkhaus et al. 2007; Phillips et al. 2014; and others). Our experimental market consists of a private negotiation setting, where subjects participate as randomly selected buyers or sellers and trade a commodity referred to as a “unit.” Each unit represents a conservation credit traded in a conservation market setting.

We conducted 5 experimental sessions for each of the treatments in our design. Participants receive an average of approximately $40 in compensation for a two-hour time commitment, depending on their performance. Preliminary results show that seller earnings are higher with reimbursement than an actuarially fair insurance policy. This is true whether they bear the risk of credit failure or not. Of the reimbursement and actuarially fair insurance treatments, quantity traded, quantity produced, and seller earnings are all highest when buyers reimburse sellers for the production costs of failed units. Earnings are more evenly distributed between buyers and sellers, and prices are lower, when buyers bear the risk of credit failure, regardless of whether a reimbursement or insurance policy is implemented. Ongoing data analysis includes regressions using convergence analysis (see for example Noussair et al. 1995), allowing us to test the significance of market outcome differences across treatments.

Without mechanisms in place to mitigate credit failure risk, habitat exchanges and other market-based environmental programs could result in much less conservation than hoped for. In the extreme, habitat exchanges could fail to attract sufficient landowners to supply credits, ultimately dooming them to fail. We will discuss the implications of our results regarding the relative merits of reimbursement insurance in the real-world conditions likely to prevail in habitat exchanges across the western U.S.

 

Title: Congestion Pricing for Outdoor Recreation: An Application to Shoreline Recreation in the Gulf Coast

Authors: Roger H. von Haefen and Frank Lupi

W4133 task: 1-3, 3-1

Presenter: Frank Lupi

Presenter email: lupi@msu.edu

Abstract:

 

Coastal beaches are generally maintained in public trust around the world.  As such, recreational access is typically free to all, and overuse and congestion often result.  This paper estimates efficient congestion prices for coastal beaches in the U.S. Gulf Coast region.  Following Timmins and Murdock (JEEM, 2007), we model congestion as the outcome of a Nash bargaining game in which individuals make choices given expectations about the decisions that others make.  We employ a novel panel data, instrumental variable estimator that leverages the properties of the equilibrium sorting process and one of the largest and most detailed recreational data sets ever assembled.  After simulating the optimal congestion prices for the Gulf region that are either uniform throughout the year and Gulf Coast or varying by quarter and year, we evaluate their efficiency and distributional properties as well as their revenue-raising potential. 

 

Title: Estimating the value of threatened species abundance dynamics: a structural econometric approach using choice experiment data

Authors: David M. Kling, David J. Lewis, Steven J. Dundas, and Daniel K. Lew

W4133 task: 2-1, 2-2

Presenter: Steven J. Dundas

Presenter email: steven.dundas@oregonstate.edu

Abstract:

 

Natural capital valuation is a rapidly-growing area of economics. For extracted resources, like ground water, recent methodological advances account for the influence of stock dynamics on value (e.g., Fenichel and Abbot 2016). Bringing the same dynamic perspective to value forms of natural capital with primarily non-consumptive benefits remains a significant gap in the literature. Threatened species are one economically-significant example. Most research apply non-market valuation methods, typically based on stated preference data, to value outcomes for threatened species abundance at some future date (Lew 2015). These outcomes are typically either a non-marginal population change , or the attainment of official recovery status (e.g., de-listing under the U.S. Endangered Species Act) (Lew et al. 2010). One recent study investigates whether the public values differences in the path taken by threatened species abundance along the way to a final outcome, for example a quick versus slow rebuilding trajectory (Lewis et al. 2019). None of these approaches provide information on the flow of non-consumptive value provided by threatened species at the level of detail needed to be included alongside market values in benefit-cost and capital valuation studies.

We introduce a method for estimating parameters of an intertemporal non-consumptive benefit function from choice experiment data. To illustrate our approach, we draw on a recently-completed choice experiment survey of household preferences for recovering Oregon Coast Coho (OCC) salmon, a species listed as threatened under the Endangered Species Act (Lewis et al. 2019). A key feature of the experimental design is that households were shown the time path of expected OCC salmon abundance under different alternative management scenarios in each choice card. These paths were generated using a known functional form. As a result, we observe preferences for management options that vary in salmon abundance over time (i.e., annually) instead of only the end result. Other attributes of the experiment include the official recovery status of OCC salmon, recreational fishing limits, and management program cost. Importantly, Lewis et al. (2019) find that respondents to the general population survey did not value changes in recreational limits, suggesting that non-consumptive values were a primary driver of the social benefits derived from increases in salmon abundance.

We fit a non-linear random utility model that includes the present value of utility accumulated at the individual-level from dynamic changes in abundance, along with other OCC salmon outcome attributes. To address household-level discounting, we compare results from estimating the average discount rate jointly with other indirect utility parameters with specifications where we fix the rate at a level elicited separately for each household in the original survey. We then scale up our preferred specification for households to a social non-consumptive benefit function by adjusting for survey non-response and then applying a conservative bound on the extent of the market (the U.S. Pacific Northwest and parts of Northern California). The result is a money-metric social non-consumptive benefit function over OCC salmon abundance, recovery status, and other attributes, which we view as being suitable for inclusion in natural capital valuation and policy analysis. We find evidence that survey respondents have strong time preferences for achieving gains in salmon abundance gains quicker.

Our method for integrating non-market valuation and capital theory provides a roadmap for bringing non-consumptive value into the contemporary economics of natural capital (e.g. such as Fenichel et al. 2016). An important feature of our approach is the addition of credible counterfactual paths of expected stock abundance to widely-used choice experiment designs for threatened species valuation. Applications to other ecosystem service flows are possible.

 

Title: Variable uncertainty in free-form environmental valuation models

Authors: Rob Johnston, Klaus Moeltner, Zhenyu Yao

W4133 task: 1-1, 2-1, 3-2

Presenter: Klaus Moeltner

Presenter email: moeltner@vt.edu

Abstract:

 

In this EPA-funded work on water quality in New England we introduce a novel valuation

methodology that allows survey respondent to examine water quality across a large watershed via an interactive map, in addition to receiving summary statistics on cleanup outcomes for a given policy scenario. Respondents then answer a standard referendum-style question if they would be willing to pay a specified bid to achieve the water quality outcomes shown on the map.

Concurrently, we developed a Bayesian econometric model search approach that determines

which of the many possible choice heuristics (e.g. conditions at a specific location or overall for a variety of quality indicators) is the main driver of respondents' choices. We show the significant improvements in the accuracy and efficiency of predicted WTP the model search algorithm brings over a \kitchen sink" approach that estimates a single model with all possible variables included.

We believe that this econometric framework will be useful for many modern, GIS-intensive

stated preference applications, where respondents are given considerable freedom and flexibility to apply spatially informed choice heuristics.

 

Title: The Value of Ecosystems: Bat Population Crashes and Agriculture in the US

Authors: Dale T. Manning and Amy Ando

W4133 task: 2-1

Presenter: Dale T. Manning

Presenter email: dale.manning@colostate.edu

Abstract:

 Ecosystems, or ecological capital, supply valuable natural inputs to many sectors of production. Despite creating economic value, ecosystems often lack a market price while providing public goods and services. As a result, private decision-makers underinvest in their maintenance. In this paper, we estimate the ow value of an underappreciated service provided by a non-market ecological capital. Specifically, bat populations supply agricultural producers with unpriced pest control. Using the sudden arrival and spread of White-nose Syndrome (WNS), which nearly extinguishes infected bat populations, we quantify the impact of bat population collapse on agricultural land rents in US counties and find that rents after a WNS outbreak fall by nearly 4%. We also find that corn yields fall while agricultural input expenses increase. This suggests that producers can imperfectly substitute for the loss of unpriced capital by investing in costly alternatives. We use the reduced form estimate to calculate a welfare cost as producers lose the unpriced natural input. Allowing total acres to be endogenous, we find that economic surplus falls in WNS-infected counties by nearly $600,000 per county-year. This implies that if WNS arrives to all counties in the analysis (n = 2,328), annual costs to the agricultural sector could reach $1.4 billion.

Results are robust across specifications and have important policy and economic implications. First, many bat populations roost on public lands and measures exist to control the spread of WNS. Therefore, public land managers can play a role in preventing or slowing the spread of WNS. More generally, the economically significant value suggests that economists should continue to explore how market economic value depends on unpriced natural inputs. Further, spatially linking ecosystem and economic data provides a fruitful avenue for estimating the importance of ecosystems to the market economy.

This work contributes to w4133 Task 2-1 because it provides an example of combining agricultural data with ecosystem data to estimate a non-market value. It also has implications for Task 1-2 (Economic Analysis of Natural Hazards (_re, invasive species, climate change)) because ecosystem management on public lands will become increasingly challenging in the face of climate change.

 

Title: Wildfire Threatens Outdoor Recreation in the Western US

Authors: Jacob Gellman, Margaret Walls, Matthew Wibbenmeyer

W4133 task: 1-3, 2-2

Presenter: Matthew Wibbenmeyer

Presenter email: wibbenmeyer@rff.org

Abstract:

 

Outdoor recreation provides considerable economic surplus to participants, and contributes substantially to overall US GDP. In the western US, outdoor recreation on public lands has increased in recent years. However, this growth in outdoor recreation has coincided with increasing prevalence of wildfires and wildfire smoke within western states. In many areas, wildfire season overlaps with peak outdoor recreation season, potentially disrupting recreation activity and hurting communities dependent on recreation-related tourism.

In this paper, we combine administrative data on outdoor recreation on federal lands in the western US with spatial data on wildfires and wildfire smoke to study how wildfires are affecting outdoor recreation in the region. Our recreation data are daily campground reservation data collected from Recreation.gov, a website through which campers can make reservations to approximately 3,700 federally-managed facilities across the US. The data include nearly 25 million transactions from 3.1 million unique users of 1,000 facilities within the western US from 2008 to 2016. We merged the camping data with daily spatial data from NOAA describing the extent of wildfire smoke, and daily data from NASA describing areas with actively burning wildfires.

Wildfires and wildfire smoke negatively affect the welfare of outdoor recreationists in two ways. First, campers may be directly harmed by exposure to smoke. Second, campers may decide to cancel or change their plans in response to fire and smoke, or be forced to cancel due to closures. Our paper provides results that address both channels. First, we document the extent to which wildfires and smoke affected campers on public lands in the western US between 2008-2016. Second, we identify effects of wildfire and wildfire smoke on avoidance behavior. We aggregate daily camping reservation records by facility (i.e., individual campground) and estimate panel fixed effects regressions of measures of campground use as a function of measures of nearby wildfire and smoke conditions.

We find that within the western U.S., an average of approximately 400,000 campground visitor-days—approximately 5% of all visitor-days—were affected by moderate to high density smoke over the course of our study period, while 1.5 percent of visitor-days during our study period were within 20 km of an actively burning fire. Both smoke and fire lead to averting behavior. For example, presence of a wildfire burning within 20 km of a campground increased cancellations by 22%, while Smoky conditions increase cancellations by 4.4 percent. Some of the decrease in campground use may be due to campground closures, especially in the case of nearby fires. Regardless, campers displaced by fire—whether through closures or by choice—are likely to incur welfare losses.

Climate change is expected to increase the frequency and severity of wildfires in the western US. Much attention is being paid to potential property damages from wildfires and problems associated with continued development in the wildland-urban interface. Our results suggest that there may also be negative impacts to outdoor recreation. This research contributes to a growing body of literature using “big data” to examine how climate and climate-related outcomes affect outdoor recreation.