W4133: Costs and Benefits of Natural Resources on Public and Private Lands: Management, Economic Valuation, and Integrated Decision-Making

(Multistate Research Project)

Status: Active

SAES-422 Reports

04/19/2018

Ando, A.W., A. Howlader, and M. Mallory. 2018. “Diversifying to reduce conservation outcome uncertainty in multiple environmental objectives.” Agricultural and Resource Economics Review. Forthcoming.

 

Ando, A.W. and N. Netusil. 2018. “Valuing the benefits of green stormwater infrastructure.” Oxford Encyclopedia of Water Resources Management and Policy. Forthcoming.

 

Ando, A.W. and C. Langpap. 2018. “The economics of species conservation.” Annual Review of Resource Economics. Forthcoming.

 

Bastian, C. T., C. M. Keske, D. M. McLeod, and D. L. Hoag. 2017. “Landowner and Land Trust Agent Preferences for Conservation Easements: Implications for Sustainable Land Uses and Landscapes,” Landscape and Urban Planning. 157:1-13. Lead article.

 

Bauer, D.M., Bell, K.P., Nelson, E.J. and A.J.K. Calhoun. 2017. “Managing small natural features: a synthesis of emergent economic issues and opportunities.” Biological Conservation 211:Part B:80-87, DOI: 10.1016/j.biocon.2017.01.001.

 

Behrer, A. Patrick*, Dale T. Manning, and Andrew Seidl. 2017. “The Impact of Institutional and Land Use Change on Local Incomes in Chilean Patagonia.” Journal of Development Studies. Forthcoming

 

Calhoun AJK, Mushet DM, Bell KP, Boix D, Fitzsimons JA, Isselin-Nondedeu F.  2017. “Temporary wetlands:  challenges and solutions for protecting a "disappearing" ecosystem.” Biological Conservation 211 (Part B):3-11, DOI:10.1016/j.biocon.2016.11.024.

 

Calvin, K., K. Fisher-Vanden, 2017. “Climate Change Impacts on Agriculture: The role of Integrated Assessment Models.” Environmental Research Letters, 12:115004, https://doi.org/10.1088/1748-9326/aa843c.

 

Davlasheridze, M., K. Fisher-Vanden, A. Klaiber, 2017. “The Effects of Adaptation Measures on Hurricane Induced Property Losses,” Journal of Environmental Economics and Management, 81:93-114.

 

Dundas, S. J., R. H. von Haefen, and C. Mansfield. 2018. “Recreation Costs of Endangered

Species Protection: Evidence from Cape Hatteras National Seashore,” Marine Resource Economics 33:1:1-25.

 

Dundas, S. J. 2017. “Benefits and Ancillary Costs of Natural Infrastructure: Evidence from the

New Jersey Coast.” Journal of Environmental Economics and Management 85:62-80.

 

Ehrlich*, O., X. Bi, T. Borisova, S. Larkin. 2017. “A Latent Class Analysis of Public Attitudes toward Water Resources with Implications for Recreational Demand.” Ecosystem Services, 28:A:124-132. https://doi.org/10.1016/j.ecoser.2017.10.019

 

Evans, K.S., Noblet, C.L., Fox, E., Bell, K.P., and A. Kaminski. 2017. “Public acceptance of coastal zone management efforts: The role of citizen preferences in the allocation of funds,” Agricultural and Resource Economics Review, 46:2: 268-295, DOI: 10.1017/age.2017.9

 

Favero, A., Mendelsohn, R. and Sohngen, B., 2017. “Using forests for climate mitigation: sequester carbon or produce woody biomass?” Climatic Change. 144:2:195-206.

 

Fortmann, L., Sohngen, B. and Southgate, D., 2017. “Assessing the Role of Group Heterogeneity in Community Forest Concessions in Guatemala’s Maya Biosphere Reserve.” Land Economics. 93:3:503-526.

 

Gopalakrishnan, S., Landry, C.E. and Smith, M.D., 2017. “Climate Change Adaptation in Coastal Environments: Modeling Challenges for Resource and Environmental Economists.” Review of Environmental Economics and Policy. https://doi.org/10.1093/reep/rex020

 

Gopalakrishnan, S., McNamara, D., Smith, M.D. and Murray, A.B., 2017. “Decentralized management hinders coastal climate adaptation: the spatial-dynamics of beach nourishment.” Environmental and Resource Economics67:4:761-787.

 

Haab, Timothy, and John Whitehead. 2017. “What do Environmental Economists Think? Results from a survey of AERE members.” Review of Environmental Economics and Policy, 11:1:43-58.

 

Hansen, K., C. T. Bastian, A. Nagler, and C Jones Ritten. 2017. “Designing Markets for Habitat Conservation: Lessons Learned from Agricultural Markets Research.” Bulletin. Cooperative Extension Service, University of Wyoming, B-1297.

 

Haruna, B., Sohngen, B., Yahaya, I. and Wiredu, A.N., 2017. “Effects of Weather-Index Insurance: The Case of Smallholder Maize Farmers in Northern Ghana.” International Journal of Food and Agricultural Economics. 5:3:75-85.

 

Hrozencik, Aaron*, Dale T. Manning, Jordan Suter, Christopher Goemans, and Ryan Bailey 2017. “The Heterogeneous Impacts of Groundwater Management Policies in the Republican River Basin of Colorado.” Water Resources Research. 53/12: 10757-10778.

 

Huanping, H., J. M. Winter, E. C. Osterberg, R. M. Horton, B. Beckage. 2017. “Total and extreme precipitation changes over the Northeastern United States.” Journal of Hydrometeorology. 18(6): 1783-1798. DOI: 10.1175/JHM-D-16-0195.1.

 

Hunter, M.L., Acuña, V., Bauer, D.M., Bell, K.P., Calhoun, A.J.K., Felipe-Lucia, M.R., Fitzsimons, J.A., González, E., Kinnison, M., Lindenmayer, D., Lundquist, C., Medellin, R., Nelson, E.J., and P Poschlod. 2017. “Conserving small natural features with large ecological roles: a synthetic overview.” Biological Conservation. 211:Part B:88-95, DOI: 10.1016/j.biocon.2016.12.020.

 

Irwin, NB, Klaiber, HA and Irwin, EG. 2017.  “Do Stormwater Basins Generate Co-Benefits? Evidence from Baltimore County, Maryland.”  Ecological Economics. 141:202-212.

 

Jarrad, M., N.R. Netusil, K. Moeltner, A.T. Morzillo, J.A. Yeakley. “Urban Stream

Restoration Projects: Do Project Phase, Distance, and Type Affect Nearby Property Sale Prices? “Land Economics.  Forthcoming.

 

Johnson, E., Bell, K.P., and J.E. Leahy. 2017. “Changing course: Comparing emerging watershed institutions in river restoration contexts.” Society & Natural Resources. 30:6:765-781, DOI:10.1080/08941920.2016.1239292.

 

Johnson, E.S., Bell, K.P., and J.E. Leahy. 2018. “Disamenity to amenity: spatial and temporal patterns of social response to river restoration progress.” Landscape and Urban Planning. 169: 208-219, DOI: 10.1016/j.landurbplan.2017.09.008.

 

Jones Ritten, C., C. T. Bastian, J. F. Shogren, T. Panchalingam, M. Ehmke, and G. Parkhurst.  2017. “Understanding Pollinator Habitat Conservation Under the Current Policy Using Economic Experiments,” Land. 6:57(2017):2-13.  Available online August 24.  doi:10.3390/land6030057.

 

Kaminski, A., Bell, K.P., Noblet, C.L. and K.S. Evans. 2017. “An Economic Analysis of Coastal Beach Safety Information-Seeking Behavior.” Agricultural and Resource Economics Review. 46:2:365-387, DOI: 10.1017/age.2017.17

 

Keiser, D.A., and N.Z. Muller. 2017. “Air and Water: Integrated Assessment Models for Multiple Media.” Annual Review of Resource Economics. 9:1:165-184.

 

Kim, J.B., E. Monier, B. Sohngen, G. Pitts, R. Drapek, J. McFarland, S. Ohrel, and J. Cole, 2017. “Assessing climate change impacts, benefits of mitigation, and uncertainties on major global forest regions under multiple socioeconomic and emissions scenarios.” Environmental Research Letters. 12:4:045001

 

Klaiber, HA, Abbott, JK and Smith, VK.  2017. “Some Like it (Less) Hot:  Joint Valuation of the Urban Heat Island and Cooling Vegetation in an Arid City.”  Journal of the Association of Environmental and Resoure Economists.  4:1053-1079.

 

Klaiber, A.H., Gopalakrishnan, S. and Hasan, S. 2017. “Missing the forest for the trees: balancing shale exploration and conservation goals through policy.” Conservation Letters. 10:1:153-159.

 

Klaiber, HA, Salhofer, K and Thompson, SR. 2017. “Capitalisation of the SPS into Farmland Rental Rates under the 2013 CAP Reform.”  Journal fo Agricultural Economics.  68:710-726.

 

Landry, C.E. 2017. “Experimental Methods in Economic Valuation” Chapter 10 in A Primer on Non-Market Valuation, 2nd Edition, Champ, P., K. Boyle, and T. Brown (Eds), Springer: New York, NY.

 

Li, J. and C.E. Landry. 2018. “Flood Risk, Local Hazard Mitigation, and the Community Rating System of NFIP” forthcoming Land Economics.

 

Landry, C.E., M. Ahmadiani, and G. Colson. 2017. “Structural Empirical Analysis of Decisions under Natural Hazard Risk” in The Future of Risk Management, University of Pennsylvania Press: Philadelphia, PA.

 

Lauer, Stephen, Matthew Sanderson, Dale Manning, Jordan Suter, Aaron Hrozencik, Bridget Guerrero, Karina Schoengold, and Bill Golden. “Values and Groundwater Management in the Ogallala Aquifer Region.”  Journal of Soil and Water Conservation.  Forthcoming.

 

Lieske S., R. Coupal and D. McLeod. “Political jurisdiction, reputation and urban form: a more complete specification of public service costs.” Submitted to Papers in Regional Science. In Review September 2017.

 

Maas, Alexander*, Christopher G. Goemans, Dale T. Manning, Stephan Kroll, Mazdak Arabi and Mariana Rodriguez-McGoffina. 2017. “Evaluating the Effect of Conservation Motivations on Residential Water Demand.” Journal of Environmental Management 196:July:394-401.

 

Maas, Alexander S.*, Christopher G. Goemans, Dale T. Manning, Stephan Kroll, Thomas C. Brown.  2017. “Dilemmas, Coordination and Defection: How Uncertain Tipping Points Induce Common Pool Resource Destruction.” Games and Economic Behavior. 104:760-774.

 

Maas, Alexander*, Dale T. Manning, Christopher Goemans, and Andre Dozier*. 2017. “Water Storage in a Changing Environment: The Impact of Allocation Institutions on Value.” Water Resources Research. 53:1:672-687.

 

Manning, Dale T., Christopher Goemans, and Alexander Maas*. 2017. “Producer Responses to Surface Water Availability and Implications for Climate Change Adaptation.” Land Economics. 93:4:631-653.

 

Manning, Dale T., Salvador Lurbé*, Louise H. Comas, Thomas J. Trout, Nora Flynn, and Steven J. Fonte.  2018. “Economic Viability of Deficit Irrigation in the Western US.” Agricultural Water Management. 196:114-123.

 

Markowski-Lindsay, M., Catanzaro, P., Bell, K.P., Kittredge, D., Leahy, J., Butler, B., Markowitz, E., Milman, A., Zimmerer, R., Allred, S. and M. Sisock. 2017. “Estate planning as a forest stewardship tool: A study of family land ownerships in the northeastern US.” Forest Policy and Economics. 83:36-44, DOI:10.1016/j.forpol.2017.06.004.

 

Mei, Y., Hite, D. and Sohngen, B., 2017. “Demand for urban tree cover: A two-stage hedonic price analysis in California.” Forest Policy and Economics. 83:29-35.

 

Mei, Y., Sohngen, B. and Babb, T., 2018. “Valuing urban wetland quality with hedonic price model.” Ecological Indicators. 84:535-545.

 

Miteva DA, Kramer RA, Brown ZS, Smith MD. 2017. “Spatial Patterns of Market Participation and Resource Extraction: Fuelwood Collection in Northern Uganda.” American Journal of Agricultrural Economics [Internet]. 2017;0(0):1–19. Available from: https://academic.oup.com/ajae/article-lookup/doi/10.1093/ajae/aax027

 

Monger, Randall*, Jordan F. Suter, Dale T. Manning, and Joel P. Schneekloth. 2018. “Retiring Land to Save Water: Participation in Colorado's Republican River Conservation Reserve Enhancement Program.” Land Economics 94:1:36-51.

 

Mueller, Julie M., Lima, Ryan, E., and Springer Abraham E. 2017. “Can Environmental Attributes Influence Protected Area Designation? A Case Study Valuing Preferences for Springs in Grand Canyon National Park.” Land Use Policy. 60:196-205.

 

Oakleaf JR, Matsumoto M, Kennedy C, Baumgarten L, Miteva DA, Sochi K, Kiesecker J.  2017.  “LegalGEO: Conservation Tool to Guide the Siting of Legal Reserves under the Brazilian Forest Code.” Applied Geography. 86, 53e65. Available here:  http://www.sciencedirect.com/science/article/pii/S0143622816306658

 

Robinson BE, Masuda Y, Kelly A, Holldand M, Bedford C, Childress M, Fletschner D, Game E, Ginsburg C, Hilhorst T, Lawry S, Miteva DA, Musengezi J, Naughton L, Nolte C, Sunderlin W, Veit P.  2017. “Incorporating land tenure security into conservation.” Conservation Letters. (June 2017):1–12. Available here: http://onlinelibrary.wiley.com/doi/10.1111/conl.12383/full

 

Sills E, Sassi C de, Jagger PA, Lawlor K, Miteva DA, Pattanayak SK, et al.  2017. “Building the evidence base for REDD+: Study design and methods for evaluating the impacts of conservation interventions on local well-being.” Global Environmental Change [Internet]. 2017;43:March:148–60. Available from: http://dx.doi.org/10.1016/j.gloenvcha.2017.02.002

 

Steinman, AD BJ Cardinale, WR.Munns,Jr ME Ogdahl, JD Allan; T Angadie; S Bartlett; KBrauman; M Byappanahallih; M Dossi; D Dupont; A Johnsk; D Kashian; F Lupi; P McIntyre; T Miller; M Moore; RL Muenich; RPoudel; J Pricer; B Provencher A Reat; J Read S Renzetti; B Sohngen; and E Washburn. 2017. “Ecosystem services in the Great Lakes.” Journal of Great Lakes Research. 43:3:161-168. http://doi.org/10.1016/j.jglr.2017.02.004

 

Towe, C, Klaiber, HA and Wrenn, D.  2017. “Not My Problem: Growth Spillovers from Uncoordinated Land Use Policy.”  Land Use Policy.  67:679-689.

 

van Berkel, D.B., Rayfield, B., Martinuzzi, S., Lechowicz, M.J., White, E., Bell, K.P., Colocousis, C.R., Kovacs, K.F., Morzillo, A.T., Munroe, D.K., Parmentier, B., Radeloff, V.C., and B.J. McGill. 2017. “Recognizing the ‘sparsely settled forest’: Multi-decade socioecological change dynamics and community exemplars.” Landscape and Urban Planning. DOI: 10.1016/j.landurbplan.2017.10.009.

 

Winter, J. M., B. Beckage, G. Bucini, R. M. Horton, and P. J. Clemins. 2016. “Development and evaluation of high-resolution climate simulations over the mountainous northeastern United States.” Journal of Hydrometeorology. 17:3:881-89.

 

Wrenn, DH, Klaiber, HA and Newburn, DA.  2017. “Confronting Price Endogeneity in a Duration Model of Residential Subdivision Development.”  Journal of Applied Econometrics.  32:661-682. 

 

Wolf*, D and Klaiber, HA.  2017.  “Bloom and Bust: Toxic Algae’s Impact on Nearby Property Values.”  Ecological Economics.  135:209-221.

 

Wolf*, D, Georgic*, W and Klaiber, HA. 2017.  “Reeling in the Damages: Harmful Algal Blooms’ Impact on Lake Erie's Recreational Fishing Industry. Journal of Environmental Management. 199:148-157.

 

Yoder, Jonathan, Jennifer Adam, Michael Brady, Joseph Cook, Stephen Katz, Shane Johnston, Keyvan Malek, John McMillan, and Qingqing Yang. 2017. “Benefit-Cost Analysis of Integrated Water Re- source Management: Accounting for interdependence in the Yakima Basin Integrated Plan.” Journal of the American Water Resources Association 53:2:456-477. DOI: 10.1111/1752-1688.12507.

 

Papers, Presentations, and Reports

Ahmadiani, M and C.E. Landry. 2017. “Economic Value of Multi-peril Coastal Hazard Insurance” Working Paper University of Georgia: Athens, GA; SSRN: http://ssrn.com/abstract=2907033

 

Arbogast1, Alan F., Brad Garmon2, Jonathan Jarosz3, Alek Kreiger4, Sarah Nicholls1, Clayton Queen1, Robert B. Richardson1, Elaine Sterrett Isely5. 2018. Valuing Michigan’s Coastal Dunes: GIS Information and Economic Data to Support Management Partnerships. Report submitted to the Michigan Coastal Zone Management Program, Office of the Great Lakes, Michigan Department of Environmental Quality.  (1Michigan State University, 2Michigan Environmental Council, 3Heart of the Lakes, 4Ducks Unlimited, 5West Michigan Environmental Action Council)

 

Borisova, Tatiana, Xiang Bi, Alan Hodges and Stephen Holland. 2017. Is the Tide is Changing? Accessing Costs and Benefits of Dam Removal and River Restoration: a Case Study in Florida. Selected paper, Southern Agricultural Economics Association, Mobile, AL, Feb 4-7, 2017. Available at http://ageconsearch.umn.edu/bitstream/252833/2/Borisova-et-al-SAEA-2017.pdf

 

Borisova, Tatiana, Xiang Bi, Alan Hodges, and Stephen Holand. Paper. Economic Importance and Public Preferences for Water Resource Management of the Ocklawaha River. University of Florida Water Institute Symposium, Gainesville, FL. Feb 6-7. 2018.

 

Griscom B, Adams J, Ellis P, Houghton RA, Lomax G, Miteva DA, Schlesinger WH, Shoch D,  Woodbury P, Zganjar C, Blackman A, Campari J, Conant RT, Delgado C, Elias P, Hamsik M,  Kiesecker J, Landis E, Polasky S, Putz FE, Sanderman J,  Siikamäki J, Silvius M, Wollenberg, L,  Fargione J. 2017. Natural pathways to climate mitigation. Proceedings of the National Academy of Sciences 114:44:11645-11650. Available here: http://www.pnas.org/content/114/44/11645.full

 

Kriesel, W.,  C.E. Landry, and M. Ahmadiani. 2017. “Are Some Natural Amenities as Good as Gold?  Evidence from Coastal Real Estate and Marshlands” Working Paper University of Georgia: Athens, GA, SSRN: https://ssrn.com/abstract_id=2885909.

 

Laird, H., C.E. Landry, S. Shonkwiler, and D. Petrolia. 2017. “Riders on the Storm: Hazard Insurance and Mitigation” Working Paper University of Georgia: Athens, GA; SSRN: http://ssrn.com/abstract=2957192

Landry, C.E. presentation on risk management, Center for Coastal Physical Oceanography and the Resilience Collaborative, Old Dominion University: Norfolk, VA

 

Landry, C.E. presentation on risk management, American Agricultural Economics Association Annual Meeting: Chicago, IL

 

Landry, C.E. presentation on risk management, Department of Agricultural Economics, University of Kentucky: Lexington, KY

 

Landry, C.E. presentation on risk management, SEC Academic Conference, The Future of Water: Regional Collaboration on Shared Climate, Coastlines, and Watersheds: Starkville, MS

 

Landry, C.E. and J.C. Whitehead. 2017. “Estimating Willingness to Pay with Referendum Follow-up Multiple-Bounded Payment Cards” Working Paper University of Georgia: Athens, GA.

 

Landry, C.E. and T. Allen. 2017. “Hedonic Property Prices and Coastal Beach Width” Working Paper University of Georgia: Athens, GA; SSRN: http://ssrn.com/abstract=2474276

 

Landry, C.E., J.S. Shonkwiler, and J.C. Whitehead. 2017. “Economic Values of Coastal Erosion Management: Joint Estimation of Use and Passive Use Values with Recreation Demand and Contingent Valuation Data” Working Paper University of Georgia: Athens, GA.

 

Miao H., Trandafir, S., Uchida, E., Price, M., 2018. "The Effect of Informational Nudges to Promote Voluntary Behavior to Reduce Nonpoint Source Pollution: A Randomized Controlled Trial in the Field",  Paper presented at the 6th World Congress of Environmental and Resource Economists (WCERE), Gothenburg, Sweden.

 

Miao H., Trandafir, S., Uchida, E., Price, M., 2017.  "The Effect of Informational Nudges to Promote Voluntary Behavior to Reduce Nonpoint Source Pollution: A Randomized Controlled Trial in the Field", Paper presented at the Conference on Behavioral and Experimental Agri-Environmental Research: Methodological Advancements and Applications to Policy (CBEAR_MAAP), Shepherdstown, West Virginia.

 

Miao H., Trandafir, S., Uchida, E., Price, M., 2017.  "The Effect of Informational Nudges to Promote Voluntary Behavior to Reduce Nonpoint Source Pollution: A Randomized Controlled Trial in the Field", Paper presented at the 19th BIOECON conference, Tilburg University, the Netherlands.

 

Padowski, Julie C., Michael P. Brady, Eric Jessup, Qingqing Yang, Jonathan K. Yoder. 2016. Coordinating Mitigation Strategies for Meeting In-Stream Flow Requirements in the Skagit River Basin, WA. American Geophysical Union Conference, Dec 12-16, San Francisco, CA.

 

Qianyan Wu(g), Xiang Bi, Tatiana Borisova, and Kelly Grogran. Valuing the Recreation Benefits of Springs in North Central Florida. Spring Protection Forum, Gainesville, FL., U.S. Feb 15, 2018.

 

Richardson, Robert B. 2017. “Characterizing ecosystem services of freshwater coastal dunes.” Presented at the biennial meeting of the U.S. Society for Ecological Economics, Saint Paul, Minnesota, July 27, 2017.

 

Yoder, Jonathan. 2017. Economic Assessment of Integrated Water Resource Management. The Yakima Basin Integrated Plan. October 18. Invited Lecture, Oregon State University, Corvallis.

05/08/2019

Publications:

Ahmadiani, Mona, Susana Ferreira, and Craig E. Landry. 2019. “Flood Insurance and Risk Reduction: Market Penetration, Coverage, and Mitigation in Coastal North Carolina” Southern Journal of Economics. DOI: 10.1002/soej.12332

Ando, A.W., A. Howlader, and M. Mallory. 2018. “Diversifying to reduce conservation outcome uncertainty in multiple environmental objectives.” Agricultural and Resource Economics Review 47(2): 220–238. doi.org/10.1017/age.2018.7.

Ando, A.W., J. Fraterrigo, G. Guntenspergen, A. Howlader, M. Mallory, J. Olker, and S. Stickley. 2018. “When portfolio theory can help environmental investment planning to reduce climate risk to future environmental outcomes – and when it cannot.” Conservation Letters. http://dx.doi.org/10.1111/conl.12596.

Ando, A.W. and N. Netusil. 2018. “Valuing the benefits of green stormwater infrastructure.” Oxford Encyclopedia of Environmental Science. doi: 10.1093/acrefore/9780199389414.013.605.

Ando, A.W. and C. Langpap. 2018. “The economics of species conservation.” Annual Review of Resource Economics 10: 445-467. doi.org/10.1146/annurev-resource-100517-022921.

Balukas, J.E., Bell, K.P., and D.M. Bauer. 2019. Classifying private landowners to improve understanding of management decisions and conservation opportunities in urbanizing forested landscapes, Journal of Environmental Management, 232: 751-758, DOI: 10.1016/j.jenvman.2018.11.128.

Bell, K.P., Markowski-Lindsay, M., Catanzaro, P., and J.E. Leahy. 2018. Family-forest owner decisions, landscape context, and landscape change, Landscape and Urban Planning, DOI: 10.1016/j.landurbplan.2018.08.023 (posted online 2018 October).

Bi, Xiang, Tatiana Borisova, and Alan Hodges.  2019. Economic Value of Visitation to Free-Flowing and Impounded Portions of a River: Implications for Management River Flow.  Forthcoming. Review of Regional Studies.

Byrd, ES, NJO Widmar, BM Gramig. "Presentation Matters: Number of Attributes Presented Impacts Estimated Preferences." Agribusiness: an International Journal, 34(2):377-389, 2018.

Cho, S., S. Moon, B. English, T.E. Yu, C. Boyer. 2019. “Targeting Payments for Forest Carbon Sequestration Given Ecological and Economic Objectives.” Forest Policy and Economics 100:214-226.

Doering, OC, BM Gramig and D Jeong. “Economic and Policy Implications of Nitrogen Management.” Soil Nitrogen Uses and Environmental Impacts, Advances in Soil Science: Soil Nitrogen volume, eds. R. Lal and B.A. Stewart. CRC Press, Taylor & Francis Group: 2018.

Dundas, S. J., R. H. von Haefen, and C. Mansfield. 2018. Recreation Costs of Endangered Species Protection: Evidence from Cape Hatteras National Seashore, Marine Resource Economics 33(1): 1-25.

English, E., Roger von Haefen, J. Herriges, C. Leggett, Frank Lupi, K. McConnell, M. Welsh, A. Domanski, N. Meade. 2018. Estimating the value of lost recreation days from the Deepwater Horizon oil spill. J. Environmental Economics and Management. 91:26-45.

Fu, Guanlong, Muna Shah, Emi Uchida, Xiangzheng Deng. (2018) “Impact of the Grain for Green program on forest cover in China.” Journal of Environmental Economics and Policy. https://doi.org/10.1080/21606544.2018.1552626

Gramig, BM and NJO Widmar. "Farmer Preferences for Agricultural Soil Carbon Sequestration Schemes." Applied Economic Perspectives and Policy, 40(3):502-521, 2018.

Jakus, Paul M., and Sherzod B. Akhundjanov. 2018. “Neither Boon nor Bane: The Economic Effects of a Landscape-Scale National Monument.” Land Economics, 94(3):323-339.

Jakus, Paul M. 2018. “A Review of Economic Studies Related to the Bureau of Land Management’s Wild Horse and Burro Program.” Human-Wildlife Interactions, 12(1):58-74.

Johnston, R., K. Moeltner (published online Jan. 2019). Special Flood Hazard Effects on Coastal and Interior Home Values: One Size Does Not Fit All, Environmental and Resource Economics.

Lang, C., & Cavanagh, P. (2018). Incomplete Information and Adverse Impacts of Environmental Cleanup. Land Economics, 94(3), 386-404. Lang, C. (2018). Assessing the efficiency of local open space provision. Journal of Public Economics, 158, 12-24.

LaRiviere, Jacob, David M. Kling, James N. Sanchirico, Charles Sims, and Michael Springborn. 2018. "The treatment of uncertainty and learning in the economics of natural resource and environmental management." Review of Environmental Economics and Policy 12(1): 92-112.

Lewis, D.J., and S. Polasky. 2018. “An Auction Mechanism for the Optimal Provision of Ecosystem Services under Climate Change.” Journal of Environmental Economics and Management, 92: 20-34.

Li, Jingyuan, Craig E. Landry. 2018. “Flood Risk, Local Hazard Mitigation, and the Community Rating System of NFIP” Land Economics 94(2): 175-198 doi: 10.3368/le.94.2.175

Liu, Tingting, James Opaluch, Emi Uchida. (2017) “The impact of water quality improvement in Narragansett Bay on housing prices.” Water Resources Research 53, doi:10.1002/2016WR019606.

Liu, Y, MR Langemeier, IM Small, L Joseph, WE Fry, JB Ristaino, A Saville, BM Gramig, PV Preckel. "A Risk Analysis of Precision Agriculture Technology to Manage Tomato Late Blight." Sustainability 10(9), 3108, 2018.

Markowski-Lindsay, M., Catanzaro, P., Bell, K.P., Kittredge, D., Markowitz, E., Leahy, J.E., Butler, B., Milman, A., and S. Allred. 2018. In Forest and Intact: Designating Future Use of Family-Forest-Owned Land, Journal of Forestry, 116(4):357–366, DOI: 10.1093/jofore/fvy015.

Moeltner, K., (2019). Bayesian Nonlinear Meta Regression for Benefit Transfer, Journal of Environmental Economics and Management, 93, 44-62.

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

Nohner, J., Frank Lupi and W. Taylor, 2018. Lakefront property owners' willingness to accept easements for conservation of water quality and habitat. Water Resources Research. 54(3):1533-48.

Netusil, N.R., M. Jarrad, K. Moeltner (2019). Research Note: The Effect of Stream Restoration Project Attributes on Property Sale Prices, Landscape and Urban Planning 185, 158-162.

Penn J, and W Hu. 2018. Understanding Hypothetical Bias: An Enhanced Meta-Analysis. American Journal of Agricultural Economics. 100(4): 1186-1206.

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.

Penn J, Penn H, and W Hu. 2018. Public knowledge of monarch conservation in Kentucky. Sustainability. 10(3). doi:10.3390/su10030807

Sullivan, Karen, Thomas Sproul, Emi Uchida, and Jintao Xu. (2018) “Prospect theory and tenure reform: Impacts on forest management”. Land Economics 94(3): 405-424.

Swallow, S, C Anderson, Emi Uchida. (2018) The Bobolink Project: Selling Public Goods From Ecosystem Services Using Provision Point Mechanisms. Ecological Economics 143: 236-252.

Trull N, Penn J, and W Hu. 2018. Public Support for Growth and Funding in Built Environments: Case of an Arboretum. Journal of Housing and the Built Environment. 33(4): 829-841.

Uchida, Emi, Stephen Swallow, Arthur Gold, James Opaluch, Achyut Kafle, Nathaniel Merrill, Clayton Michaud, and Carrie Gill. (2018) “Integrating watershed hydrology and economics to establish a local market for water quality improvement: A field experiment.” Ecological Economics 146: 17-25.

Wu, Qianyan, Xiang Bi, Kelly Grogan, and Tatiana Borisova.  2018. Valuing Recreation Benefits of Natural Springs in Florida.  Water.  10(10): 1379. https://doi.org/10.3390/w10101379.

Yang, H., Frank Lupi, J. Zhang, X. Chen and J. Liu, 2018, Feedback of telecoupling: The case of a payment for ecosystem services program, Ecology and Society. 23(2):45.

Zhong H, Hu W and J Penn. 2018. Farmers’ Willingness and Expected Economic Benefit to Adopt BMPs: An Application of Multivariate Imputation by Chained Equation Method. Journal of Agricultural and Resource Economics. 43(1): 78-102.

Forthcoming

Hess, Joshua, Dale Manning, Terry Iverson, and Harvey Cutler (forthcoming). Uncertainty, Learning, and Local Opposition to Hydraulic Fracturing. Resource and Energy Economics.

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. Conference on Behavioral and Experimental Agri-Environmental Research Special Issue.  (Currently in Press).

Maas, Alexander, Chris Goemans, Jesse Burkhardt, and Mazdak Arabe (forthcoming). Complements of the House: Estimating Demand-side Linkages between Residential Water and Electricity, Water Resources and Economics.

Manning, Dale, and Jordan Suter (forthcoming). The Role of Well Capacity Constraints in Determining Gains from Groundwater Management. Journal of Agricultural and Resource Economics.

Mutyasira, Vine, Dana Hoag, Dustin Pendell, and Dale Manning (forthcoming).  Sustainable Intensification in Ethiopian Smallholder Farming Systems. Sustainability.

Mutyasira , Vine, Dana Hoag, Dale Manning, and Dustin Pendell (forthcoming). Assessing the Relative Sustainability of   Smallholder Farming Systems in Ethiopian Highlands, Agricultural Systems.

Shepler, Ryan, Jordan Suter, Dale Manning, and Chris Goemans (forthcoming).  Private Actions and Preferences for Coordinated Groundwater Conservation in Colorado’s Republican River Basin, Journal of the American Water Resource Association.

Soh, M., S. Cho. 2019. “Spatial Targeting of Payments for Ecosystem Services to Achieve Conservation Goals and Promote Social Equity and Economic Impact.” Natural Resource Modeling, In press.

Other Publications

Barfield, Ashley and Craig E. Landry. 2018. “Valuation of Beach Quality” in Oxford Encyclopedia of Environmental Economics, Oxford University Press, Earth & Environmental Science.

Miao, Haoran. 2017. Three Essays on the Impact of Information on Nonpoint Source polluters’ Behavior. Ph.D. Dissertation, Department of Environmental and Natural Resource Economics, University of Rhode Island.

Jakus, Paul M., Commentary, “Large National Monuments Don’t Damage Rural Economies--But They Don’t Help Either”, Deseret News (40,000 weekday circulation), August 23, 2018.

Jakus, Paul M., Radio Interview, “Large National Monuments Don’t Damage Rural Economies--But They Don’t Help Either”, KNRS 105.9 (Salt Lake City—125,000 drive time listeners), August 23, 2018.

Von Haefen. NC State University Press Release, “What’s the Value of Lost Recreation Days from the Deepwater Horizon Oil Spill?” August 2018.

Von Haefen. Extension article (with Steven Dundas), “Conflicts on Public Lands: The Case of Off-Road Vehicle Restrictions on Cape Hatteras National Seashore,” NC State Economist, Summer 2018.

Von Haefen. Interview, “Costs and Benefits of Cape Hatteras ORV Restrictions,” WUNC Radio, January 2018.

Von Haefen. NC State University Press Release, “Benefits of Off-Road Vehicle Restrictions May Outweigh the Costs,” January 2018.

Von Haefen. Extension article (with Steven Dundas), “Conflicts on Public Lands: The Case of Off-Road Vehicle Restrictions on Cape Hatteras National Seashore,” NC State Economist, Summer 2018.

Von Haefen. Interview, “Costs and Benefits of Cape Hatteras ORV Restrictions,” WUNC Radio, January 2018.

Von Haefen. NC State University Press Release, “Benefits of Off-Road Vehicle Restrictions May Outweigh the Costs,” January 2018.

Papers, Presentations, and Reports

Ando, A. “Environmental Economic Approaches to Soil Health as a Capital Stock.” Soil Health on Rented Lands in Indiana: A Workshop for Agricultural, Conservation and Landowner Service Professionals to Explore Potential Solutions convened by The Nature Conservancy at the NCAA Hall of Champions, Indianapolis, IN. March 23, 2018.

Jakus, Paul M. and Sherzod B. Akhundjanov. 2018. “The Antiquities Act, Large National Monuments, and Regional Income.” Presentations at Colorado State University (September), University of Tennessee (October), and Weber State University (November).

Penn J, and W Hu. 2018. Understanding Hypothetical Bias in Willingness to Accept: A Meta-Analysis and Experiment. Accepted presentation, SEA, Nov 18-20, Washington DC.

Penn J, and W Hu. 2018. Cheap Talk, Consequentiality, and Certainty Follow-up as Hypothetical Bias Mitigation Techniques: A Cross Country Comparison. Accepted presentation, AAEA, Aug 5-7, Washington DC.

Penn J, Hu W, and H Penn. 2019. Support for Native, Solitary Pollinator Conservation Among the Public Versus Hobby Beekeepers. Invited track presentation, ASSA, Atlanta, GA.

Sardana, Kavita, John C. Bergstrom, and Oleksiy Tokovenko. “A Latent Class Approach for Modeling Arbitrariness in the Definition of ‘Visitors’ for Individual Trip Behavior”, Selected Paper, 6th World Congress of Environmental and Resource Economists, Gothenburg, Sweden, June, 2018.

Steele, Amanda Harker and John C. Bergstrom. “Investigating the Effects of Energy Efficient Technology on Household Energy Security: A Stochastic Production Frontier Approach”.  Selected Paper to be presented at the 6th World Congress of Environmental and Resource Economists, Gothenberg, Sweden, June, 2018.

Steele, Amanda Harker and John C. Bergstrom. “Does Energy Efficiency Affect Energy Security? An Analysis of Energy Efficient Upgrades and Household Energy Security”.  Selected Paper to be presented at the Annual Meetings of the Agricultural and Applied Economics Association, Washington, D.C., August, 2018.

Steele, Amanda Harker and John C. Bergstrom. “Tackling Wicked Problems when Teaching Applied Economics: An Application to the Bears Ears National Monument”.  Invited Case Study and Selected Poster to be presented at the Annual Meetings of the Agricultural and Applied Economics Association, Washington, D.C., August, 2018.

Steele, Amanda Harker and John C. Bergstrom. ”Tackling Wicked Problems when Teaching Applied Economics: An Application to the Bears Ears National Monument”.  Selected Poster Presentation, University System of Georgia Teaching and Learning Conference, Athens, GA, April, 2018.

von Haefen, Roger H. “Weather Effects on the Demand for Coastal Recreational Fishing: Implications for a Changing Climate,” World Congress of Environmental and Resource Economists, Gothenburg, Sweden, July 2018.

von Haefen, Roger H. “Weather Effects on the Demand for Coastal Recreational Fishing: Implications for a Changing Climate,” Appalachian State University Experimental and Environmental Policy Workshop, Blowing Rock, NC, April 2018.

von Haefen, Roger H. “The Natural Resource Damages from the Deepwater Horizon Oil Spill,” Duke Kunshan University, July 2018.

von Haefen, Roger H. “Weather Effects on the Demand for Coastal Recreational Fishing: Implications for a Changing Climate,” Arizona State University, Tempe, AZ, April 2018.

von Haefen, Roger H. “The Natural Resource Damages from the Deepwater Horizon Oil Spill,” University of Alberta, Edmonton Alberta, February 2018.

2019 MEETING ABSTRACTS

Title: The Impact of Bison Reintroduction on the Local Economy

Authors: Liqing Li and Amy W. Ando (University of Illinois Urbana-Champaign)

W4133 task: 1-1

Presenter: Amy Ando

Presenter email: amyando@illinois.edu

Abstract:

This paper contributes to W4133 Task 1-1 by estimating the economic impact of changing rural environments by reintroducing bison.

Government agencies and non-profit conservation groups are restoring prairies and reintroducing bison to facilitate ecological restoration and reclaim this iconic mammal from the brink of extinction in the wild (Zumbach, 2015). Currently, there are forty-eight bison herds exist in the U.S., including both wild and non-wild bison herds. Bison reintroduction provides chances to help local tourism through wildlife marketing (Vasile, 2018). However, there is an opportunity cost to land dedicated to bison and ranchers have expressed concern about disease spreading from bison to cattle. Thus, the net economic impact of bison reintroduction on rural communities is unclear. This paper conducts a nation-wide assessment of the economic impacts of bison reintroduction so rural communities can take economic well-being into account when considering their future decisions regarding bison restoration.

Previous research has studied the effects of protecting nature on local economic activity Early studies raised concern that protected areas can be a threat to local economic well-being (Rasker,1993). Later research shows that it is possible that protected areas can change the structure of local economies in a positive way. For example, increased tourism can provide more employment opportunities (Andam et al. 2008; Andam et al. 2010). However, most of these studies focus on conservation and reintroduction of wildlife in developing countries. A study focuses on the northern forest region in the U.S. shows that conservation land has no significant impact on employment growth. (Lewis et al. 2002) and a small amount of work has studied the impact of bison or wolf populations on the desirability to visit particular recreational sites in the U.S. (Loomis & Caughlan, 2010; Duffield et al. 2008). There has been no nation-wide evaluation of how the reintroduction of bison into grassland areas affect the economic well-being of the residents. This paper fills this gap by providing a descriptive analysis of the presence of U.S. bison herds and estimating the causal relationship between bison reintroduction and local economic health.

First, we use a probit model to show correlations between the presence of bison herds in a county and the county’s physical and socioeconomic characteristics. Results indicate that the presence of bison herds is positively correlated with a county’s per capita income and (for non-wild bison herds) negatively correlated with unemployment rates. In this naïve analysis, bison herds are linked to economic prosperity.

Because correlation is a poor measure of causality, we carry out other analyses to estimate the impact of bison reintroduction on local employment, population, and per capita income. We use cross-sectional propensity score matching (PSM), matching with difference-in-difference (DD), and the synthetic control method (SCM).

We use cross-sectional PSM to evaluate the effects of bison reintroduction by comparing economic prosperity in the counties with bison herds to those of similar counties without bison herds. We match counties based on county characteristics that are fixed over time and unlikely to have been affected by bison reintroduction. Such variables include geographic and climate characteristics like elevation, precipitation, mean temperature, county size, the percentage of grassland in a county, and protected areas under different conservation mechanisms in a county. Then we compare the average outcomes from the treatment and control counties measured after bison reintroduction. We choose the year 2016 for our analysis since it is the year in which we can include the largest number of bison herds in the regression with the latest available county characteristics data. In the cross-sectional matching analyses, fifty-five counties with bison herds are considered as treatment counties. Different matching specifications, including nearest neighbor (NN) matching with caliper and kernel matching, are applied to identify the impact of bison reintroduction on local economic health.

One limitation of the PSM comes from matching on observables. If unobserved factors confound both bison reintroduction decisions and outcomes, the estimated impact of bison reintroduction gained by cross-sectional PSM is biased.  Applying PSM with DD can control for unobserved factors that are time-invariant. When we use 1980 as the baseline year and 2016 as the endline year, 24 counties that have bison herds established between 1980 and 2016 are included in the treated group. PSM is first applied to find controls for the treated counties, and DD is applied on the matched sample after matching to generate the causal estimates of bison reintroduction on local employment, population, and per capita income.

The SCM introduced by Abadie et al. (2010) extends the traditional DD framework by allowing for the presence of time-varying unobserved variables and constructs a better counterfactual for each of the treated counties. The basic idea behind the SCM is to construct a synthetic control unit as the counterfactual of the treated county by weighting average of several untreated counties (Abadie and Gardeazabal, 2003; Abadie et al., 2010). The weight of each control county is determined based on how closely the characteristics of the control match those of the treated counties in the pre-treatment period. As a comparative case study approach, this method provides more informative results not only on how bison reintroduction affects the local economy in each treated county, but also the trend of effects on outcome variables during the post-treatment period.

We find little evidence of a significant impact of bison reintroduction on local economic activity. Results from the cross-sectional PSM show that the effects of bison reintroduction on income, population, and the total number of jobs are positive in sign but insignificant, while bison reintroduction has a negative and significant impact on the unemployment rate. Results from our DD analysis show that bison reintroduction has a positive but insignificant impact on the total number of jobs, while the impact of reintroduction on the per capita income and the population are negative and insignificant. Results from the SCM are consistent with the findings of the DD analysis; for each county with bison herds, bison reintroduction has an insignificant impact on local economic health. Naïve cross-sectional analysis might imply that bison reintroduction is good for the local economy, but causal inference methods find no significant effect.

Title:  The Inefficiencies in Wildfire Suppression Resource Allocation

Authors: Jude Bayham

W4133 task: Task 1-2: Economic Analysis of Natural Hazards

Presenter: Jude Bayham

Presenter email: jbayham@colostate.edu

Abstract:

Federal, state, and local expenditures on wildfire suppression are reaching unprecedented levels.  While the underlying causes include climate change, a growing wildland urban interface, and historical management practices, the way in which wildfire suppression resources are allocated may also contribute to rising cost.  Economists are well aware of the problems that arise with common pool resources.  An analogous problem exists in the allocation of wildfire suppression resources.  Individual fire managers do not directly bear the cost of the resources they use, nor do they realize the opportunity costs imposed on other fire managers when resources are unavailable.

We develop a dynamic economic model to demonstrate the divergence between the incentives of individual fire managers and a social planner.  The model generates an important hypothesis: fire managers have an incentive to behave strategically by pre-emptively requesting resources to maintain excess suppression capacity in anticipation of increased fire activity.  We test this hypothesis using data compiled from several sources.  We collect daily data on the quantity and type of wildfire suppression resources ordered and assigned to fires from the federal Resource Ordering Status System (ROSS).  We also collect data on the so called preparedness level, which is a rating on a five point scale to indicate the level of suppression capacity in a region given expected fire behavior.  We integrate this data with fire conditions, weather, and other environmental conditions.  We test the hypothesis that fire managers strategically order resources and declare less suppression capacity when they believe that other managers competing for the same resources are likely to do the same.  We then use the empirical results to simulate the economically efficient allocation of suppression resources to demonstrate the consequences of ignoring opportunity costs.

This work addresses Task 1-2: Economic Analysis of Natural Hazards by studying inefficiencies in how federal agencies respond to wildfire.

Title: Environmental change and recreation demand: Assessing interactions between beach width and beach recreation demand

Authors: Kathleen P. Bell (University of Maine)

W4133 task: Task 3-2: Economic Analysis of Recreation Services

Presenter: Kathleen P. Bell

Presenter email: kpbell@maine.edu

Abstract:

In coastal areas of the US, where beaches serve as prominent recreation and tourism resources, mounting vulnerabilities to environmental change make the sustainability of recreation services uncertain. As natural resource managers face intensifying disturbances, multifaceted policy challenges, and, in some instances, shrinking budgets, numerous questions arise about the impacts of environmental change on coastal recreation services and the implications of these impacts for management strategies, communities, industries, and individuals. In this paper, we summarize the results of an economic analysis of the impacts of shoreline change on coastal beach recreation services (W4133 Task 3-2) at Popham Beach State Park, Maine. Our empirical analysis includes visual and statistical summaries of survey responses collected from beach visitors and recreation demand modeling of their beach day-trips. Working collaboratively with regional coastal manager, we designed our research to align with identified knowledge gaps about the impacts of shoreline change on visitors’ recreation experiences, awareness of changing shorelines, and attitudes’ about alternative management responses.

Our analyses of respondent survey responses provide insights about how visitors conceptualize shoreline change and assess distinct alternative management strategies. The majority of our survey respondents noted recognizing changes to the beach and shoreline at Popham Beach State Park. Notably, respondents acknowledged different types of change and offered diverse explanations for these changes. Further, analysis of open-ended responses revealed varied interpretations of the impacts of beach narrowing on recreation experiences as well as varied levels of support for alternative future management strategies. When asked about potential future management responses at Popham Beach State Park, respondents were split, with forty-nine percent of participants reporting a desire for the state to take management action, forty percent of respondents indicating the state should let nature take its course, and eleven percent of respondents uncertain about the state’s preferred strategy. Our findings have implications for how coastal managers in Maine and beyond engage with visitors about and respond to environmental change, and offer insights for recreation demand modelers interested in simulating visitor responses to different types of change.

Our recreation demand modeling of beach day-trips complements the descriptive and exploratory components of our work by simulating and quantifying the impacts of environmental change on coastal recreation services. We estimate a series of single-site, quasi-panel recreation demand models of day-trips to Popham Beach State Park to assess changes in beach recreation that might occur from beach narrowing and shoreline change. We integrate stated and revealed preference data collected onsite from visitors in August 2016, and intentionally follow conventions assessing trip responses to changes in beach width to bolster comparison with prior work. For example, our base model run produced a mean per-trip consumer surplus estimate or access value per trip of approximately $53.30 and predicted a mean loss per trip of $11.25 if the beach width at Popham Beach State Park were to be reduced by one half. Comparing the consistency of modeling and consumer surplus estimates from our Maine site with prior results, we found that our per-trip consumer surplus estimates fell in between estimates from Delaware Bay and North Carolina and that our predicted mean loss per trip exceeded prior estimates. We are investigating the sensitivity of model performance and valuation estimates to different modeling choices and assumptions, including the robustness of findings to different corrections for onsite sampling bias, measures of travel costs, and alternative treatments of heterogeneous recreation preferences.

In summary, by sharing insights about how coastal recreationists respond to changing beach width and other forms of environmental change, this work helps support management decisions and guide advances in economic analysis of recreation services.

Title: The Effect of Pollution on Aggressive Behavior: Evidence from Wildfire Smoke and Crime

Authors: Jesse Burkhardt, Jude Bayham, Ander Wilson, Ellison Carter, Katelyn O’Dell, Bonne Ford, Emily Fischer, Jesse Berman, Jeffery Pierce

W4133 task: Task 1-2: Economic Analysis of Natural Hazards (fire, invasive species, climate change)

Presenter: Jesse Burkhardt    

Presenter email: jesse.burkhardt@colostate.edu

Abstract: We estimate the effect of short-term air pollution (PM2.5) exposure on several categories of crime with a particular emphasis on aggressive behavior. To identify this relationship, we combine detailed daily data on crime, PM2.5, and satellite-derived smoke plumes for an eight-year period across the United States.  We develop two methods to correct measurement error in satellite-based wildfire smoke plume data and use the remaining exogenous variation as an instrument for overall changes in PM2.5. Our findings indicate a strong and robust positive effect of increased PM2.5 on violent crimes, and specifically assaults. However, we find no statistical relationship between increases in PM2.5 and property crimes or other non-violent crimes. The results suggest that a 1μg/m3 reduction in daily PM2.5 could save $1 billion in crime costs per year, a previously overlooked cost associated with pollution.

Title: TRAVEL COST MODELS USING CONTINUOUS NON-NEGATIVE DISTRIBUTIONS AND MEASURING OUT OF SAMPLE PERFORMANCE

Authors: Jeffrey Englin, Thomas Holmes and Octavio Valdez Larfarga

Presenter: Jeffrey Englin

Presenter email: jenglin@asu.edu

Abstract:

Big data is becoming more prevalent in the valuation of non-market goods. This is partly due to large environmental events with widespread impacts such as Deepwater Horizon, partly due to the ability to merge large detailed ecological data sets onto behavioral datasets but also due to the realization that administrative data can be used to infer environmental values. This analysis uses both large ecological and administrative data sets. The econometric analysis introduces the excess zero exponential and excess zero log normal distributions to travel cost modeling. Traditional excess zero count models are also employed for comparative purposes. The new distributions allow large national data sets to be applied to specific areas, in this case wilderness areas, and derive nationally valid welfare estimates. In particular, they allow for extremely high usage counts (popular sites) while dealing effectively with an excess number of zeros as well.

The data is driven by wilderness back country permits and the Environmental Protection Agency Level III ecosystem map. The wildernesses are located in the Cascades, Sierra Nevada, Rocky Mountains and the High Plains of the Midwest. The ecosystems studied include the Blue Mountain, Cascades Central Cascades and High Plains. The analysis proceeds by using five stratified sampling without replacement from a 70 million observation data set to repeated samples of 700,000 observations. The samples are stratified based on wilderness and year so as to retain a representative subsample.

Models using the new continuous distributions and the classic count models are estimated in the conventional way on one subsample. The estimated parameters are then applied to the remaining samples to analyze the potential of over fitting the models to first sample. It also allows the generalizability of the original set of estimates to be assessed. Finally, model averaging is applied since one cannot be sure of the correct distribution. The welfare results for the averaged model are also presented.

The performance of each model and method is analyzed and compared. This analysis works to achieve Objective 2 Task 2-1 and Objective 3 Tasks 3-1 and 3-2.

Title: Estimating Preferences for Water Quality when Water Quality Data is Scarce

Authors: Caroline Kelsoe, Matt Interis, & Seong Yun

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

Presenter: Caroline Kelsoe

Presenter email: caroline.kelsoe13@gmail.com

Abstract:

In its 2012 National Lakes Assessment, the EPA determined that nutrients are the most widespread stressor of US Lakes, with one-third of US lakes containing excess nitrogen and/or phosphorus. In response, states are developing Numeric Nutrient Criteria to regulate the allowable amount of nutrients in surface waterbodies. Our study fits into the larger benefit-cost assessment of this policy in Mississippi as we attempt to estimate the benefits of improved water quality in Mississippi lakes. A major challenge, however, is the lack of water quality data for many Mississippi lakes. 

We present estimates of the benefits from improved water quality in Mississippi lakes based on travel cost data from Mississippi residents and introduce possible solutions to potential choice set specification issues caused by a lack of water quality data for Mississippi lakes. Specifically, respondents recorded trip information for over 100 lakes in Mississippi, but only 17 of those lakes have water quality data for the year the respondents reported trip information. In order to understand the extent to which a constrained choice set from inadequate data affects welfare estimates, we introduce a water quality prediction model from water science literature. Using a panel dataset of water quality data from Mississippi lakes both included and excluded from the choice set, we estimate a regression model to predict water quality in the 80+ lakes that lack water quality data. We then compare welfare estimates from a full and constrained choice set to determine evaluate the extent to which inadequate data could affect policy-making decisions.

Title: Hold the Line: Modeling Private Coastal Adaptation through Shoreline Armoring Decisions 

Authors: W. Jason Beasley, Steven J. Dundas

W4133 tasks: Task 1-2: Economic Analysis of Natural Hazards (fire, invasive species, climate change) Task 2-3: Advances in Spatial/Environmental Nexus Task 3-1: Economic Analysis of Ecosystem Services Flows

Presenter: Steven J. Dundas

Presenter email: steven.dundas@oregonstate.edu

Abstract

Managing and preparing for risks presented by sea-level rise (SLR) is an emerging issue of primary importance for coastal climate adaptation globally. Recent research suggest the majority of the expenditure on coastal adaptation in the U.S. by 2100 will be through private investments in shoreline armoring. Yet, decisions about public adaptation to coastal risk through beach nourishment has garnered most of the attention in the economic literature to date. This gap is significant because there are key differences between the public adaptation decision of nourishment and private shoreline armoring decisions.

This paper explores the economics of private coastal adaptation to climate change by modeling shoreline armoring decisions. We develop an analytical framework that suggests that negative spatial externalities, peer effects and neighbor interactions may lead to the oversupply of coastal protection when these decisions are made by individuals. To test our framework empirically, we assemble a parcel-level panel dataset of oceanfront land in Oregon from 1990 to 2015 where we observe the location and 1 timing of each armoring decision. For each parcel, we construct a detailed set of highresolution variables characterizing the geomorphological risk profile of land, peer effects of adjacent and proximate armoring of neighboring parcels, and indicators for seasonal shocks (El Ni˜no–Southern Oscillation) likely to impact armoring decisions. We use a correlated random-effects approach to estimate our econometric model to overcome endogeneity concerns related to modeling repeated decisions over time and unobserved time-invariant parcel level characteristics, while also allowing credible identification of the impact of neighboring land-use (i.e., peer effects) and land characteristics (i.e., risk conveyance) on the armoring decision over time. Our results show that land characteristics, peer effects and cost-sharing coalition effects increase the probability of observing an installation decision. Importantly, we show peer effects tend to dominate the impacts of risk characteristics of land.

We then construct Monte Carlo landscape simulations that capture the dynamic nature of the armoring decision. We first compare total armoring counts and spatial densities between a pure risk model (baseline model) and model that includes peer effects. Results suggest that the inclusion of peer effects leads a 93 percent increases in armoring counts and a five-fold increase in clustering of shoreline armoring. Then, using the peer effects framework as our preferred specification, we simulate a counterfactual policy that relaxes armoring restrictions under Oregon’s Goal 18. We find this policy change could result in an additional 350 parcels choosing to armor over the next 40 years. This suggests the current policy may be an effective tool to preserve the public good (beach access and natural landscapes) but highlights a growing tension between coastal preservation and risk to private property. Lastly, we run a SLR simulation by varying parcel elevation, distance from the parcel structure to the shoreline, and erosion rates based on NOAA projections of SLR. Our results indicate that under a moderate (worst-case) SLR scenario, we would expect a statistically significant 16 (26) percent increase in the count of armored parcels within three decades. Importantly, we find that the relaxation of current land-use policies combined with modest (worst-case) SLR predictions has potential to increase armoring in excess of 200 (230) percent over the same time period – highlighting the critical role policy is likely to have in shaping our future coastlines.

Title: “Preliminary Results from a Meta-analysis of US Farmer Adoption of Agricultural Best Management Practices”

Authors: B.M. Gramig (UIUC), K. Floress (USFS), L.S. Prokopy (Purdue), A. Singh (CSU-Sacramento), F. Eanes (Bates College), S. Church (Purdue), P Ranjan (Purdue), Y Gao (UC-Berkeley), and J. Arbuckle (Iowa State)

W4133 task: Task 1-1: Economic Analysis of Agriculture, Forest, and Rangeland Resources, Open Space, and WUI Zones

Presenter: Gramig

Presenter email: bgramig@illinois.edu

Abstract: We construct a database of 35 years (1982-2017) of agricultural conservation practice adoption studies to perform a quantitative meta-analysis of the determinants of adoption findings published in the academic literature. The database contains all reported model statistics and estimated parameters, including dependent and independent variable descriptions, from 171 separate quantitative studies conducted by economists and non-economists. Preliminary results of a statistical meta-analysis of these data are presented, and ideas for further and more refined analysis will be solicited from meeting participants. We apply conventional statistical methods to analyze study-level determinants of conservation practice adoption behavior under Hatch Multi-State project W-4133 Task 1-1.Co-authors Arbuckle, Floress, Gramig and Prokopy are also members of the NC-1190 multi-state Hatch project. Researchers from California, Illinois, Indiana, Iowa and Maine are engaged in this research, as well as one researcher from the US Forest Service’s Northern Research Station.

Title: Has the “Mighty 5” Ad Campaign Boosted National Park Tourism in Utah?

Tatiana Drugova, Man-Keun Kim, and Paul M. Jakus
Abstract:

Utah’s “Mighty 5” ad campaign was designed to attract out-of-state visitors to Southern Utah’s five National Parks (NP). Using the synthetic control method, we find the campaign to have been effective in raising visitation at three of Utah’s five NPs: Arches, Canyonlands, and Capitol Reef. No ad campaign effect was found for Bryce Canyon and Zion NP which implies that recent increased visitation in Bryce Canyon and Zion NPs has been driven by the national trends and not the promotional effects of the Mighty 5 campaign. Arches, Bryce Canyon, and Zion NPs currently suffer from excess demand (congestion), and the US National Park Service (USNPS) is actively engaged in visitor management efforts to mitigate the environmental pressures associated with over-visitation. This study provides evidence that an opportunity exists for state and federal officials to craft a coordinated “demarketing” campaign that relieves congestion at overcrowded sites, allows the USNPS to relieve pressure on sensitive ecological systems, and promote tourism to high quality alternative sites.

Title: Low snowpack and Wildfires: A Welfare Double-Edge Sword for Hikers

Author: Sonja Kolstoe

W4133 task: Objectives 1 (Task 1-1 & 1-2) & 3 (Task 3-2)

Presenter: Sonja Kolstoe

Presenter email: shkolstoe@salisbury.edu

Abstract:

The first decade of the 21st century provides us with early examples of the weather anomalies to expect in the future under climate change and thus a unique opportunity to look at the early-onset effects of climate change (Obj. 1, Task 1-2) on outdoor recreation such as hiking (Obj. 3, Task 3-2). Historically large wildfires were infrequent but have in recent times become the new normal in the western part of the United States (Barbero et al., 2015; Flannigan et al., 2013). Earlier studies have looked at how outdoor recreationalists’ value of forests and their attributes change in the presence of wildfires; however, they are looking at time periods with more infrequent wildfires and use a limited amount of spatial data (Englin et al., 1996; Loomis et al., 2001; Hesseln et al., 2003; Englin et al., 2006; Simões et al., 2013). I seek to address this void in the literature using data from the first decade and a half of the 21st century that captures this shift in the frequency and intensity of wildfires. I also incorporate temporally varying spatial data to more accurately capture the state of the site attributes. In addition, I compare how the timing and magnitude of the fire changes hiker welfare, by estimating both monthly and yearly repeated count models.

I use U.S. Forest Service wilderness permit data from three wilderness areas, Indian Heaven, Mount Adams and Trapper Creek, located in the Gifford Pinchot National Forest and managed by the Mount Adams Ranger station, to explore how visits and hikers’ willingness to pay (WTP) change for forests and hiking trails as a result of wildfires in the study area (Obj. 1, Tasks 1-1 & 1-2, Obj. 3 Task 3-2). The permit data starts in 2001 when hikers were first required to fill out a wilderness permit to hike within these three wilderness areas. I include spatial data on land cover from the USGS, trail attribute data from the U.S. Forest Service through their FSGeodata Clearinghouse as well as monthly data on burned areas from MCD45A1, a dataset on Google Earth Engine. I look at how WTP changes over time as my analysis includes hiking trips from 2001-2014, a time period which includes three smaller fires (less than 500 acres) and two large-scale wildfires (approximately 8,000 acres and 20,000 acres) which occurred in 2008 and 2012. The 2008 wildfire was one of the largest of 29 major fires in the area since 1970 per the National Interagency Fire Report, Cold Springs Fire Long Term Suppression Strategy and Implementation Plan (2008).

The absence of a large wildfire (500+ acres) in any of these areas until July 2008, when the smaller of the two larger wildfires occurred, and then a subsequent larger wildfire affords me the unique opportunity to look at how the scale and intensity difference of wildfires change hikers’ welfare. Their welfare is affected through two different channels: site-closures during the wildfire, as well as long-term alternation of the landscape due to the significant resulting burn scars after each of the large wildfires. Results suggest hikers’ WTP decreased for trails along areas of timber affected by the wildfires while hikers’ WTP does not change for trails through alpine meadows within the area affected by the wildfires.

Title: Measuring Risk Preferences and Perceptions in the Field

Authors: Craig E. Landry, Department of Agricultural and Applied Economics, University of Georgia; Dylan Turner, Department of Agricultural and Applied Economics, University of Georgia

We devise an experimental design that should permit assessment of risk preferences within the context of a mail or internet survey, while allowing further exploration of risk perception. Utilizing historical weather data, we present mail survey respondents with information about rainfall and temperature probabilities. We then allow them to “gamble” their $5 incentive payment on one of four possible weather outcomes, each designed to bracket a range or risk preference parameters (via Constant Relative Risk Aversion formulation of Expected Utility). Responses permit inference on risk tolerance in the context of weather, which is relevant for the survey subject matter – flood risk and climate change. We also assess subjective beliefs about historical weather outcomes to produce information that is useful for Bayesian updating of weather beliefs. Lastly, we utilize novel instruments to assess subjective perceptions of risk (likelihood of hurricane strike) and outcome (conditional damage to structure in hurricane). We present empirical results to explore the utility and limitations of these approaches to assessing decision making under natural hazard risk.

Title: Biases of using aggregate data to infer individual voting preferences 

Authors: Corey Lang and Shanna Pearson-Merkowitz
W4133 task: Task 2-1: Advances in Stated/Revealed Preference Methods
Presenter: Corey Lang
Presenter email: clang@uri.edu
Abstract:
Voting is one of the main determinants of public good provision (Fischel 2001) and an important source of data for examining revealed preferences for environmental goods. Economists have often used aggregated voting data matched with aggregate census data to estimate demand for various environmental goods (e.g., Deacon and Shapiro 1975, Kahn and Matsusaka 1997, Kotchen and Powers 2006, Banzhaf et al. 2010, Holian and Kahn 2015, Burkhardt and Chan 2017).

The purpose of this paper is to assess the extent and causes of bias when using aggregate data to understand individual determinants of voting decisions. This research improves methods of using voting data as a measure of revealed preferences (4133 Task 2.1). Two distinct factors complicate the analysis of aggregate voting data. First, the voting population is fundamentally different than the non-voting population (Leighley and Nagler 2013), and using aggregated population characteristics essentially introduces systematic measurement error due to this mismatch. Second, analysis of aggregate voting data necessarily uses only spatial variation (i.e., between-precinct variation), whereas analysis of individual voting can use both within- and between-precinct variation. In the presence of omitted spatial variables, exclusively using spatial variation can lead to biased coefficient estimates. Monte Carlo analysis identifies conditions when mismatched population data and omitted variables lead to biased inference and the direction of bias.

To empirically assess biases of using aggregate data to infer individual voting preferences, we collect two datasets related to voting on a statewide environmental referendum in Rhode Island called the Green Economy Bonds (GEB). The first dataset mirrors prior studies; we match precinct-level, aggregate voting outcomes to demographic information from the American Community Survey. Second, to obtain individual voting data, we completed a statewide exit poll on Election Day. We enlisted 80 undergraduate and graduate student volunteers who surveyed at 37 sample precinct locations and collected over 2,000 surveys. We treat the individual data and the results that stem from them as correct, and compare the aggregate data and results against this baseline to assess bias.

From basic summary statistics, we find support for conditions leading to the two sources of bias. First, there are statistically significant and large differences among census and voting population. For example, while 22.4% of Rhode Island’s population has a college degree, 34.6% of our exit poll sample was at that education level. Second, there is a large degree of within-precinct variation among the voting and socioeconomic variables. On average, about 95% of variation is within precinct, meaning that aggregate models are using only 5% of total variation to estimate coefficients.

We estimate identical models of voting preferences for GEB using the aggregate data and the individual exit poll data, regressing GEB vote on presidential vote and a large set of socioeconomic characteristics (education, income, race, etc.). We find strong differences between the two models. Coefficients on presidential vote are substantially different: the aggregate model’s coefficient on Voted for Clinton is 28% larger than the individual model, and voting for third party candidates is off by orders of magnitude. The coefficient on college degree is 0.039 for the individual model and 0.073 for the aggregate. The upward bias of the aggregate model is consistent with the simulation finding that groups more likely to vote will have inflated coefficients, though the bias could also be a result of an omitted variable. In additional specifications, we are able to demonstrate the presence of spatial omitted variables and the biasing effect of a mismeasured voting population. However, no adjustment can mitigate the bias of the aggregate model. The conclusion of this paper is that aggregate data cannot infer unbiased individual voting preferences and should be used only with this caveat.

Title: Early Exposure to Nature and Willingness-To-Pay for Conservation

Authors: Liqing Li (University of Illinois at Urbana-Champaign); Amy Ando (University of Illinois at Urbana-Champaign);

W4133 task:

Task 3-2: Economic Analysis of Recreation Services

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

Presenter: Liqing Li

Presenter email: lli40@illinois.edu

Abstract:

[Include reference to w4133 task]

Current urban spatial structures reduce the interaction between nature and human beings. However, it is unclear how changes in people’s exposure to nature affect people’s preference for nature. Based on the standard assumption in neoclassical economics that individual preferences are fixed over time, the marginal value of nature increases with its scarcity. However, this pattern may not hold true if the changes in an individual’s interaction with nature affect his/her preference for nature. A negative change in an individual’s preference for nature shifts the demand curve to the left. People’s marginal value for nature may stay the same or even decrease with scarcity of nature. This paper uses a choice experiment (CE) and data on individuals’ childhood experiences with nature to evaluate which pattern holds true.  

An individual’s demand for local amenities affects people’s location choice decision. Existing research has examined factors that affect an individual’s demand for different types of local amenities (Bishop et al., 2018; Isen et al., 2017). Nature has been found to be an important amenity, but the drivers of people’s demand for nature amenity has been little examined. Childhood plays an important role in building up an individual’s experience with nature. Current urban spatial structures can affect the next generation’s interaction with nature and thus affect the individual’s willingness to pay (WTP) for nature via experience. This paper quantifies how the current generation’s early-life experience with nature affects their current WTP for nature.

A concept of amenity capital (human capital) (Krupk, 2009) may be used to explain the relationship between nature amenity and experience. The first generation’s choice of residential location affects the following generation’s ability to build up amenity capital by experience. Children build up nature related amenity capital through experiencing nature, and this amenity capital helps them enjoy nature more as it generates higher utility when visiting nature.

In our hypotheses, we expect that childhood experience with nature affects respondents’ WTP for open space conservation. Respondents’ early-life experiences are measured in different dimensions, including: how often the individual visited nature and engaged in nature-related recreational activities, how often the individual received environmental education, and how easy it was for an individual to interact with nature (measured by the percentage of land that was developed in respondents’ hometowns). To test our hypotheses, we carry out a CE in three states - Illinois, Iowa, and Minnesota - to estimate individuals’ WTP for different features and recreational activities of a hypothetical restored grassland. We also gather data on respondents’ early-life experience with nature and test whether those features of individuals affect their current WTP for preserving nature. We conduct this study in the context of hypothetical grassland restoration. Thus, this paper also expands our understanding of the values people place on preservation of grassland ecosystems; only Dissanayake and Ando (2014) have estimated the social value of grassland ecosystems and that work did not estimate values of recreation attributes.

To examine the relationship between early-life experience and individual’s WTP, we use a mixed multinomial logit model with interaction term to analyze responses from the choice experiment. We also use a random parameter latent class model as an alternative perspective to study the effects of childhood experiences on value for grassland.

The results reveal whether the demand of environmental goods is affected by an individual’s childhood experience and whether the impact of current urbanization on the next generation’s valuation for nature needs to be taken seriously (Task 1-1). Our findings also estimate respondents’ average WTP for the availability of different recreational activities of a hypothetical restored grassland (Task 3-2). That information can guide policymakers by indicating which recreational activities of a restored grassland should be prioritized.

Title: Estimating the Impact of Fires on Recreation in the Angeles National Forest Using Combined Revealed and Stated Preference Methods

Authors: Sophia Tanner, Frank Lupi*, Cloe Garnache

W4133 task: fits any of Obj 1-1, 1-2; 2-1 or 3-2.

Presenter: Frank Lupi

Presenter email: lupi@msu.edu

Abstract:

Wildfire frequency and severity are increasingly important issues in the western United States, as fires threaten lives, properties and outdoor amenities. This paper uses a novel combination of revealed preference data from site intercepts and stated preference data from online surveys to estimate the welfare impacts of different fire scenarios at recreation sites within the Angeles National Forest, which is a popular recreation destination on the outskirts of the Los Angeles metropolitan area. In 2016, we collected onsite visitation data at 32 sites in the Angeles National Forest. Site visitation was measured by randomly sampling recreation sites within three strata defined by expected use level (high or low), weekend or weekday, and morning or afternoon. The on-site visitation data includes on-site counts and short intercept interviews of 2,266 visitors. Next, we followed up with an online survey to collect contingent behavior data. Under eight different fire history scenarios which corresponded to the vegetation at the site they visited, respondents were asked contingent behavior questions to ascertain if they would still make the same trip as before. Our empirical strategy exploits both the onsite and contingent behavior data to estimate welfare effects of fires. The sampling design weights and site counts allow us to estimate total visits to each site as well as the number of visits a site receives from each origin zip code. With the zonal visitation data, we estimate a multi-site zonal travel cost model following the approach developed by von Haefen et al. for the Deepwater Horizon oil spill. The zonal model uses on-site sampling and intercept probabilities to estimate rates of visitation from each origin zip code, allowing us to estimate a multi-site recreation demand system with a full set of alternative specific constants (ASCs). This model provides estimates of visitation to each site under unchanged conditions which are then calibrated via contraction maps to estimates of the percentage of visitors who would have still visited the site at which they were intercepted under alternate fire history scenarios. The contingent behavior responses are thus embedded within the demand system and the implied fire preference parameters are estimated using contraction maps. This novel RP/SP estimation procedure allows us to value both site closures and the impacts of fire history on sites after they reopen. Results contribute to forest management when facing increasing threats of site closures by providing insight into potential impacts during and after closures in a popular urban national forest. Of the fire scenarios presented, recent forest fires are the costliest, causing estimated welfare losses of over $2.2 million per summer season for an average affected site. We find that recent forest fires cause larger trip and welfare losses than less recent forest fires or shrub fires, with forest fires decreasing welfare by roughly $29 per lost trip. Applying this method to a large fire that affected many sites in our study area, we illustrate how losses decrease over time, but can continue well after sites are re-opened due to lasting effects on the landscape.

Author: Taro Mieno 

Abstract:
In this study, we will seek to understand the how crop insurance and groundwater allocation limits with temporal flexibility affect agricultural producers’ groundwater use. Groundwater is a vital resource for high-productivity agriculture in U.S. Due to ever growing demand for water in the competing sectors, agricultural producers are under increasing pressure to conserve water. One of the popular policy tools to limit groundwater use is groundwater use quota: allocation limits. Several Natural Resources Districts (NRD) in Nebraska and LEMA region in Kansas has adopted allocation limits to conserve groundwater. Given the high annual variability in precipitation and evapotranspiration, major determinants of crop water demand, allocation limit policies typically have temporal flexibility. That is, instead of setting a hard groundwater extraction cap each year, farmers have a flexibility to satisfy allocation limits over multiple years. For example, Upper Republican NRD has a total of 65 inches per acre over 5 years. Producers are allowed to use however much water they would like in a year as long as the total groundwater extraction does not exceed 65 inches per acre. The problem producers face under such a policy is a dynamic optimization of groundwater use. Presumably, producers should save some water in early years so that they would have enough water to avoid a catastrophic crop failure in later years when a severe drought hits. While it is straightforward to imagine how producers behave under allocation limits with temporal flexibility, it is hard to imagine how allocation limits interacts with crop insurance to affect groundwater use behavior by agricultural producers. Since producers are safeguarded by catastrophic profit loss by crop insurance even when producers run out of allocation in a dry year in the later years, it seems that producers can behave more similarly to the case when there is no allocation limits.

The objectives of this study is two-fold: we will seek to examine (1) how irrigation pattern changes within an allocation period and (2) if total water use within an allocation period is greater under crop insurance compared to the case without crop insurance. To achieve this goal, we will employ a numerical dynamic simulation approach based on crop water production function generated by AquaCrop, a crop simulation model. Our preliminary results indicate that producers use more water in early years, and gradually reduces water use on average over the allocation period under crop insurance. On other hand, producers use less water in early years, and gradually increases water use on average over the allocation period without crop insurance. That is, water use pattern within an allocation period reverses when producers are under crop insurance. The impact of crop insurance on water use is mixed: it could either increase or decrease total water use.

This study contributes to the literature of crop insurance and water resource economics. Crop insurance is typically evaluated by itself without its potential interactive impacts with other resource use policies. This study is innovative in that we are the first to explore the interaction of a water resource use policy and crop insurance.

Waters of the United States: Upgrading wetland valuation via benefit transfer

Klaus Moeltner, Jessica Balukas, Elena Besedin, Ben Holland

W4133 Objectives:

Objective 2-2: Advances in BT Methods

Objective 3-3: Economic Analysis of Water Quality

Abstract:

With this study we respond to the ongoing debate on the legal protection of wetlands, and the concurrent need to understand the societal benefits created by them. Using updated meta-data on wetland valuation we illustrate how a state-of-the-art meta-regression framework that is consistent with economic theory can be adapted to generate benefit transfer predictions for incremental changes in wetland acreage over space and time. We apply this framework to estimate losses in benefits for realistic changes in wetland acreage for some sub-watersheds, as can be expected under the proposed re-definition of the “Waters of the United States” to be protected under the Clean Water Act.

Title: Spatial Leakages from Conservation Policies: An Application to the Kansas Conservation Reserve Enhancement Program

Authors: Mani Rouhi Rad, Dale Manning, Jordan Suter, Chris Goemans, and Zaichen Xiang

W4133 tasks: Task 1-1: Economic Analysis of Agriculture, Forest, and Rangeland Resources, Open Space, and WUI Zones

Task 2-3: Advances in Spatial/Environmental Nexus

Presenter: Dale Manning

Presenter email: dale.manning@colostate.edu

Abstract:

Conservation incentive programs provide a vital tool for federal policymakers to encourage the country’s agricultural producers to adopt practices and strategies consistent with local and national objectives.  For example, the Conservation Reserve Enhancement Program (CREP) partners with local managers and regulators to achieve local conservation goals.  CREP in the Arkansas River Basin (ARB) of Kansas aims to reduce groundwater use by paying producers to retire irrigated land.  While the policy prevents GW pumping at the retired wells, the responses of active neighboring wells determine the final impact of the program. In this paper, we examine the spatial leakages around this program, and how they affect the program’s impact over time.  Theoretically, a retired well leads to fewer competitors and decreased pumping at neighboring wells, conditional on water availability.  Yet, less pumping means that more water becomes available over time, leading to an increase in pumping.  Finally, as neighbors adopt conservation behavior, this may lead to a behavioral leakage as others become more conservation minded. 

The relative magnitudes of these effects determine the net impact of the program over time.  Therefore, to resolve the theoretical ambiguity, we use well-level data on pumping in the ARB to econometrically identify the spatial leakages associated with CREP.  We begin with a difference -in-difference specification to estimate the impact of CREP enrollment on pumping at wells that remain active.  Next, a model with well fixed effects and time controls allows us to explore the mechanisms driving the spatial leakages.  Finally, to examine the net impact of CREP on GW use over time, we link a MODFLOW model of the ARB with a water demand function to simulate the impact of well retirement on neighboring wells’ water availability and pumping.

We find that CREP enrollment causes neighboring wells to pump less water on average, and this holds conditional on water availability.  Further, we find no evidence of a move towards conservation-mindedness.  This suggests that the CREP impact is driven by changes in pumping resulting from fewer competitors using the common property resource.  Simulations using the linked model suggest that the competition effect dominates for X years, beyond which more water availability leads to more pumping than would have happened without the CREP program.

This result relates to the W4133 task 1-1 because it provides an economic analysis of agricultural use of a common property resource that creates substantial value for landowners and well operators.  Spatial spillovers from resource management policies has important implications for users of many public and private natural resources, including forests, rangeland, and residential development.  The spatial nature of aquifer resources means that modeling its uses also requires innovations at the spatial/environmental nexus (task 2-3).  Important policy implications include the potential for positive conservation spillovers from programs that reduce competition for shared resources.  In this case, policy goals may be reached at a cheaper cost than anticipated, as private responses have synergies with the direct impact of management programs.

Title:  Assistance Needed?  The Willingness to Pay for Flood Insurance

Authors:  Noelwah R. Netusil, Carolyn Kousky, and Howard Kunreuther

W4133 tasks: Task 1-2; Task 2-1

Presenter: Noelwah R. Netusil

Presenter email: netusil@reed.edu

Abstract:

Flooding is the natural disaster that causes the most property damage in the United States. Federal disaster aid for victims is currently limited, so to rebuild or replace damaged property without either incurring additional debt, drawing down savings, or diverting current consumption, those at risk need flood insurance.  Yet, nationwide, many people forgo flood coverage.  High premiums are likely a key driver of this decision, but the price elasticity of flood insurance has been difficult to estimate empirically due to a number of challenges. These include the following factors: homeowners in high risk areas are mandated to purchase a flood policy if they have a federally insured mortgage, premiums are correlated with risk, and price is not observed for the uninsured. This study draws on contingent valuation methods to elicit willingness-to-pay (WTP) for flood insurance from a sample of residents in two Portland, Oregon neighborhoods at risk of flooding.  We examine how WTP varies with income, risk perceptions, objective risk, previous experience with flooding, and the length of time residing in one’s current home and neighborhood, which relates to W4133 Task 2-1.  We also investigate how participant uncertainty about their responses influences their overall WTP for flood insurance.  Results from this study can inform the ongoing policy debate about whether and how premium assistance should be provided to help encourage the purchase of flood insurance for residents in hazard-prone areas, which is related to W4133 Task 1-2.

Title: The Price of Powder: Evidence on the demand for snow from short term property rentals 

Authors: Bryan Parthum, Peter Christensen
W4133 tasks:

  • 2-1: Advances in Revealed Preference Methods
    • 1-2: Economic Analysis of Natural Hazards (climate change)
    • 3-2: Economic Analysis of Recreation Services

Presenter: Bryan Parthum

Presenter email: parthum2@illinois.edu

Abstract: We estimate structural demand parameters for wintertime recreation in 31 destination markets across the contiguous United States. Our first stage introduces a highfrequency hedonic method to instrument for the endogenous price of a short term property rental. By exploiting short-run shocks in weather and recreation demand, we derive hedonic price schedules for 237 ski resort towns and estimate daily state-specific implicit prices for mountain snowpack. We then estimate utility functions for snow tourists in each state. These resulting demand parameters allow us to project damages under two future climate scenarios, RCP4.5 and RCP8.5. We incorporate snow tourist information to map estimates of willingness to accept to each U.S. state and show that significant heterogeneity exists across states. Lastly, we estimate a lower-bound on total willingness to accept across the U.S. to be between $5.9 to $8.09 billion per snow season due only to reductions in mountain snowpack.

Title: Meta-Analysis to compare Certainty Follow-up and Cheap Talk to Reduce Hypothetical Bias

Authors: Jerrod Penn-Louisiana State University and Wuyang Hu-Ohio State University

W4133 Task: 2-Economic Valuation Methods

Presenter: Jerrod Penn

Presenter email: jpenn@agcenter.lsu.edu

Abstract: Hypothetical Bias (HB) continues to be a major concern among stated preference practitioners (Task 2). Two of the earliest and most popular methods to reduce HB are certainty follow-up and cheap talk. Certainty follow-up reduces HB by asking respondents how certain they are of their answer to the valuation question. Cheap Talk works by explicitly warning respondents about HB and to answer as if it were a real purchase decision. A number of studies have implemented either technique, a hypothetical control elicitation to establish their efficacy relative to an uncorrected hypothetical welfare estimate, as well as a real elicitation to demonstrate their efficacy to reduce actual HB. We use meta-analysis to investigate and compare the relative ability of both approaches using both sets of measures, the ability of certainty follow-up and cheap talk to alter welfare estimates relative to hypothetical control and real welfare estimates. At present, 19 studies certainty follow-up and 30 cheap talk studies meet the requisites for inclusion. Preliminary analysis shows that certainty follow-up is more effective than cheap talk at reducing the welfare estimate relative to hypothetical controls and correspondingly, the extent of HB when comparing against the real elicitation welfare estimates.  

Title: WATER AND CONCRETE: COMPLEMENTARITY (NOT SUBSTITUTION) BETWEEN NATURAL AND PRODUCED CAPITAL

Authors: Mani Rouhi Rad, Wiktor (Vic) Adamowicz, Alicia Entem, Eli P. Fenichel, and Patrick Lloyd-Smith

W4133 Task: Task 2-1: Advances in Stated/Revealed Preference Methods

Presenting author: Mani Rouhi Rad

Presenting author email: mani.rouhi_rad@colostate.edu

Estimating the substitutability of natural capital is important for the valuation of natural capital and the ecosystem services provided. The existing theoretical and empirical literature in natural capital focuses on the substitutability of natural capital and other forms of capital (Hartwick 1977) or the flows of ecosystem services and materials (Cohen et al. 2018) rather than the stock of natural capital.

We contribute to natural capital theory and derive conditions under which produced and natural capital are complements. In short, produced capital investment often occurs following a short-run cost curve, because market forces do not lead to increased production of natural capital in order to reach a new point on the long-run cost curve. Natural capital remains quasi-fixed - a defining feature of nature capital and short-run cost curves. This holds despite produced capital investments being made with a relatively long-term planning horizon. We then provide empirical evidence on complementarities between natural capital (fresh water) and produced capital (a new lock system) in the case of the Panama Canal expansion.

The Panama Canal consists of two sets of locks (produced capital) that connect Gatun Lake to the Pacific and Atlantic oceans. The depth of Gatun Lake provides clearance for ships’ draft and serves as the natural capital for ships passing through the canal. Passage of ships through the locks requires the release of water from the lake (utilization of natural capital). Under the pressure of increasing cargo ship sizes and investments by competitors such as the Suez Canal, the Panama Canal Authority invested in a new path including six new locks that opened in June 2016 to allow the transit of larger ships and water saving basins which reduce the release of water from the Gatun Lake per transit (investment in conservation).

We contribute to the literature on the complementarity or substitution between natural and produced capital in two ways. First, we distinguish between the capital space and the utilization space. The literature mostly considers utilization (or flows) of inputs and does not distinguish capital levels (stocks) from flows. We show that stocks and flows may not have the same relationship. We also show that the substitution or complementarity relationship depends on the type of investment. The nature of the relationship is not clear ex-ante. The observed construction of water saving basins leads the water and locks to be complements. We show that without these water saving basins, the natural and produced capital would have been substitutes in capital space.

Second, we provide empirical evidence of the complementarity between natural capital and produced capital. The main focus of the natural capital literature has been on substitutability of natural capital and other forms of capital, and Van den Bergh (1999) suggests that finding complementarity will be “very difficult to impossible”. We show that while the investment in produced capital has resulted in substitution in the utilization space, there is complementarity between produced capital and natural capital.

Our study contributes to the valuation of natural capital and ecosystem services provided using revealed production decisions of the firm (Task 2-1). Substitution or complementarity of natural and produced capital are critical for such valuations. Our theoretical analysis derives conditions for complementarity and substitution of these two forms of capital and our empirical analysis provides evidence for existence of complementarity between them. Importantly, our study finds that distinction between capital space and flow space is critical for valuation of natural capital and ecosystem services. Investments in produced capital in the form of infrastructure are often used for resource management. Our study sheds light on their effects on the value of natural capital and ecosystem services.

Title: Feeling the Burn: The Optimal Timing of Prescribed Fires for Recreational Benefits

Authors: Katherine Zipp, Pennsylvania State University; Yau-Huo (Jimmy) Shr, Iowa State University

W4133 task: 1-1: Economic Analysis of Agriculture, Forest, and Rangeland Resources, Open Space, and WUI Zones; 3-2: Economic Analysis of Recreation Services

Presenter: Yau-Huo (Jimmy) Shr, Iowa State University

Presenter email: yhshr@iastate.edu

Abstract:

Prescribed fire is getting more widely recognized and used in many parts of the United States. Although prescribed fire is an effective approach for fuel reduction and ecosystem restoration, it also comes with concerns such as (short-term) limited forest access and accidental spread. When making decisions about how often to use prescribed fires, public forest managers balance desired ecological and recreational outcomes. However, little is known about the optimal use of prescribed fires to achieve recreational outcomes.

In this paper, we fill this gap and make two contributions to the literature in answering the research question: how often should forest managers use prescribed fires to maximize recreational benefits? Our first contribution is that we use a Faustmann model, a long-standing dynamic optimization model for maximizing timber harvest profits, to estimate the optimal prescribed burn interval for maximizing recreational benefits. Our model builds on previous literature, such as Yoder (2004), that considers prescribed fire being used to maximize timber harvest conditional on the potential damage from wildfire. However, we recognize that the majority of prescribed fires occur on public land that is not managed for timber production but rather managed for recreational benefits. Our second contribution is that we estimate a recreational benefit function over time after a fire by coupling recreational welfare estimates with ecological estimates of forest dynamics after a fire. By using an ecological understanding of how various attributes of a forest change over time after a fire, we are able to improve estimation of the benefits that recreationalists receive from forests after a fire (Boxall, Watson, & Englin, 1996; Englin, Boxall, & Hauer, 2000). With these two contributions we are able to better inform management of forest and wildland urban interface (WUI) areas in terms of improving recreation services.

In 2017-2018, we conducted intercept surveys of 302 forest users in Central Pennsylvania and the New Jersey Pine Barrens. These two areas provide similar recreation services but have drastically different wildfire hazard. The survey includes a choice experiment to estimate the willingness-to-pay for different forest attributes including wildfire hazard, visibility in forest, and wildlife habitat quality. Travel time required to forest area is used as the cost attribute. To translate travel time into monetary cost, we adopt the approach proposed in Lloyd-Smith, Abbott, Adamowicz, & Willard (2017) to estimate the individual value of leisure time. Using a panel of ecological experts, we model how the three forest attributes change over time after a fire. The net benefit function in the Faustmann model is constructed using the information of individual benefits and the dynamic of forest attributes. The personal discount rate is estimated following the standard approach (Coller & Williams, 1999).

Under different model and parameter specifications, the optimal burn intervals are between 5 – 16 and 19 – 33 years in New Jersey and Pennsylvania, respectively. These estimates are in line with the optimal burn interval when solely considering ecosystems (5 – 10 years for NJ and 20 – 30 years for PA), but are greater than the optimal interval considered by fire managers. The results also shed light on the willingness-to-pay for the selected forest conditions and associated heterogeneity between two regions. In addition, our survey results provide one of the first assessments of the citizen perceptions of prescribed fires in the Mid-Atlantic region.

Title: A Physical Input-Output Table (PIOT) model of Illinois for estimating Life Cycle Environmental Impacts of Nitrogen Emissions

Authors: Shweta Singh

W4133 task: 2-1: Advances in Stated/Revealed Preference Methods

Presenter: Shweta Singh

Presenter email: singh294@purdue.edu

Abstract: Input-Output (IO) models allow to calculate total life cycle economic and environmental impacts of production in an economic region. Current methods of economic evaluation fail to capture the full cost of ecosystem services contribution due to limited models that capture the interdependence of economic sectors in physical units. Developing physical input-output table (PIOT) based models allow to capture this physical interdependence between economic sectors in a region. In this work, a PIOT model for Illinois capturing the interactions between agrobased sectors has been developed. The PIOT model captures the physical interactions between sectors in terms of Nitrogen flows. An environmentally extended PIOT is also developed that connects the production in sectors with nitrogen emissions in the state, thus allowing to calculate the total direct and indirect impact of production in the state of Illinois on nitrogen emissions. This physical model can form a basis of economic valuation of nitrogen related ecosystem services using cost of nitrogen emissions in the region. The reliability of the direct and indirect impact estimation is improved as the physical model is based on mass balances that ensures the accuracy of intersectoral dependence. Hence, PIOTs can provide an advancement to improve the accuracy of economic valuations.

Title: Assessing the private and social benefits of forest concessions in the Maya Biosphere Reserve

Authors: Corinne Bocci, Brent Sohngen and Daniela Miteva

W4133 task: Task 2-3: Advances in Spatial/Environmental Nexus

Presenter: Brent Sohngen

Presenter email: Sohngen.1@osu.edu

Abstract:

While forests provide multiple ecosystem services, it is often difficult to measure their amenity and private values. If land markets are efficient and property rights are well-defined, the private benefits of maintaining forest cover, such as harvesting timber and non-timber forest products, will be captured through market transactions.  In many developing regions, however, property rights are not well-defined and there is limited information on private forest values. Additionally, the value of the many ecosystem services that forests provide to the benefit of society is often not quantified and monetized. To promote local conservation of forest stocks, some developing country governments have provided local community groups with property or land-use rights if they agree to manage forest resources sustainably. Community-based common-property resource (CPR) management systems follow the advice of Gordon (1954) and Scott (1955), who recommended privatizing the resource to reduce over-extraction, but rights are vested with groups rather than single individuals or entities.

Most efforts to date to assess community-based tropical forest management strategies have focused on whether the projects have physically reduced deforestation.  Few studies have evaluated whether households involved in managing the resource benefit from the arrangement, and whether there are tradeoffs with providing other ecosystem services, such as carbon sequestration. To address this issue, this study evaluates whether households benefit from community-based forest concessions in the Maya Biosphere Reserve in Guatemala, and whether the arrangement increases carbon in the foersts. The household-level benefits are measured as the increase in income gained by community members involved in managing the concessions when their efforts to exert property rights and manage the landscape sustainably are successful.  The broader global benefits are the gains in carbon stored due to avoided deforestation. To calculate the household-level benefits, we use a dataset collected from households in the Maya Biosphere Reserve in 2012 and 2017 and a two-stage least squares, instrumental variable approach to estimate the effect of concession membership on household income.  We calculate the gains in carbon sequestration using a matched panel of concession areas and similar non-concession areas within the reserve. The results show that the value of forest concession management in the Maya Biosphere Reserve from 2012 to 2017 is about $17,166,005.  Most of this benefit is obtained privately by households, which suggests that common-property resource management systems can result in significant welfare gains for households that manage forests.

This study advances the literature in Task 2-3, Advances in Spatial/Environmental Nexus, in the W4133 project by developing methods to value the private and public benefits of a common-property resource management system. One contribution is that we use rigorous impact evaluation methods to determine whether the concessions are effective at reducing deforestation and increasing household income and compare the value of the additional forest carbon sequestered as a result of deforestation reduction and household income benefits to an estimate of concession implementation costs. Another contribution is that we highlight where trade-offs and complementarities between the ecosystem services exist and whether this effect varies based on the characteristics of the concession communities.  We find that, for households with forest-based histories, concessions increase the amount of forest carbon sequestered and increase concession member income.  However, for concessions managed by households from larger towns and cities, our results show that they are receiving the largest income benefit, but are deforesting areas with higher carbon sequestration values.  Nevertheless, our overall results suggest that the community-based forest management in the Maya Biosphere Reserve is an effective conservation and development strategy.

Title: Pursuit of Independence: A study into the households’ willingness to pay for reducing dependence on the local grid for electricity. 

Authors: Dilek Uz, Katie Champaigne
W4133 task: Task 2-1: Advances in Stated/Revealed Preference Methods
Presenter: Dilek Uz
Presenter email: dilekuz@unr.edu
Abstract

Deployment of residential solar photovoltaic (PV) panels have skyrocketed in the recent years in the US. In 2016 alone, PV market grew by 97 %, with more than 370,000 individual installations. Currently more than 40 states have regulatory settings in which a utility customer can get compensated for their exports into the electricity grid (unused portion of their electricity generation sourced by their rooftop solar panels.) Also in many states with renewable portfolio standards (RPS) customers get rebates on solar panel purchases while the local utility gets to count the generated electricity towards RPS compliance. At the federal level, residential solar panels are incentivized by a 30% investment tax credit. The justification for these policies is the public good nature of the environmental services associated with reducing consumption of electricity from the local grid, the majority of which is sourced from fossil fuels.

Having rooftop solar panels also provide various private benefits to the owners. They include savings on power bill, warm-glow, signaling environmental preferences (due to the conspicuous nature of owning solar panels), and the feeling of reduced dependence on the grid.

In this study, we design an online choice experiment to measure the willingness to pay for each of these attributes. Respondents, who are chosen from certain demographic groups, are offered a set of binary and trinary choices. Options are (i) “Default option” (i.e. fully relying on the local electricity supplier with the conventional fuel mix); (ii)“Green pricing” (i.e. still purchasing all electricity from the grid but paying a premium for an increased share of renewables); and (iii) “Solar panels” (i.e. installing a rooftop solar panel and using the electricity generated by the panel and supplementing from the grid when necessary).

There are many studies in the environmental economics literature that study the willingness to pay for renewable energy (e.g. (e.g. Roe et al. (2001), Borchers et al. (2007), Scarpa and Willis (2010)). Recent studies that review the literature include Oerlemans et al. (2016) and Sundt and Rehdanz (2015). A small share of this literature focuses on rooftop solar panels (e.g. Soskin and Squires (2013), Su et al. (2018)) To our knowledge, this is the first study that looks at willingness to pay for reduced dependence on the local electric grid as an attribute. Rooftop solar companies’ sales pitches are known to include the rhetoric that utility companies are monopolies who overcharge for their services and owning solar panels will deliver redemption from them.4 . According to Triandis et al. (1990), being independent is one of the top American values and the solar rooftop sales people seem to be appealing to that. The goal of this study is to quantify this value. Additionally, we look at the heterogeneity of this value with respect to demographic variables as well as political affiliation.

The results of this study will inform policy makers on the appropriate incentive levels for rooftop solar panel deployment. High willingness to pay for private benefits would imply that consumers would still purchase with lower incentives which would save tax payer money.

Title: Estimating a Demand Curve for Land Conservation

Authors: Alex Blanchette, Corey Lang, Michelle Peach, Jarron VanCeylon
W4133 task: Task 1-1: Economic analysis of Agriculture, Forest, and Rangeland Resources, Open Space, and WUI Zones
Presenter: Jarron VanCeylon
Presenter email: jvanceylon@uri.edu

Abstract:

Long periods of urban expansion have resulted in the significant loss of open space (US Forest Service 2019). Open space provides benefits to individuals and neighborhoods, from recreational and visual amenities to other ecosystem services like air and water quality (Irwin 2002, Anderson and West 2006, US Forest Service).  As a result, permanently protecting open space is a priority for local, state, and federal governments and NGOs. However, conserving land is costly, and in many cases the benefits of conservation are unknown or are imprecise.

In this paper we examine the effects of open space on housing values across numerous markets in an effort to construct a demand curve for protected open space. Several studies (e.g., Boyle et al. 1999, Netusil et al. 2010, Mei et al. 2017) have used multiple markets to estimate a demand function for an environmental amenity. However, the geographic scale of our data is considerably larger than prior work. We collect housing and population data and land cover data from 214 metropolitan statistical areas (MSA) in the Eastern half of the United States. Housing and population data come from the American Community Survey and are collected at the census block group level, the finest scale publicly available. Land cover data come from the USGS Land Use Land Cover database, USGS elevation rasters, and USGS Protected Areas Database. From these data, we discern protected and unprotected open space, steeply sloped land, and natural inland water features.

Our method involves a two stage framework. The first stage estimates marginal willingness to pay (MWTP) of protected open space for each MSA separately using hedonic valuation. Our specification controls for unprotected open space, a large number of housing and demographic variables, and county fixed effects and quadratic functions of latitude and longitude to guard against spatial unobservables that could be correlated with housing prices and open space. In the second stage, we estimate an inverse demand curve for protected open space by comparing MWTP estimates and geographic and population characteristics across all MSAs. Specifically, we regress estimated MWTP on the quantity of protected open space, average income, and geographic determinants of undevelopable land.

Our first stage results are consistent with previous literature and indicate positive housing premiums associated with proximity to open space. For example, a 1% increase in protected open space is associated with a 0.18% increase in housing prices in the New York City MSA. However, there is considerable heterogeneity in valuation, the 25th and 75th percentiles for estimated MWTP are about $100 and $1000, respectively. In the second stage, we seek to explain that variation in valuation by estimating an inverse demand curve and including multiple shifters of demand. Consistent with expectations, we find that demand slopes downward: a one standard deviation increase in protected open space decreases MWTP $42. We also find that protected open space is a normal good, a one standard deviation increase in average income increases MWTP by $134. Lastly, we include undevelopable area as an additional demand shifter, with the idea that naturally occurring undevelopable area is a substitute to preserved open space. We split undevelopable area into steeply sloped land and water/wetlands, and find that these geographic features have opposite effects on MWTP – steeply sloped land does act as a substitute, but water and wetlands act as a complement.

Title: A Bayesian Model for Small Discrete Choice Samples 

Authors: Lendie Follett, Brian Vander Naald
W4133 task: 2-1
Presenter: Brian Vander Naald
Presenter email: brian.vandernaald@drake.edu
Abstract
Task 2-1: Bayesian estimation has been used in the environmental economics literature to analyze discrete choice data. Train (2003) popularized the Bayesian technique for choice data. Rigby and Burton (2006) employed a Bayesian bounded logit model with an inverse Wishart prior on the variance to estimate a WTP value for genetically modified food. Balcombe et al. (2009) also use an inverse Wishart prior to investigate attribute non-attendance using choice experiment data examining beef produced from stem cell technology. Recently, Akinc and Vandebroek (2018) developed a Bayesian mixed logit model in which they noted that choice of prior in Bayesian estimation is important. They note that use of the inverse Wishart prior on the variance is inappropriate because it exerts too much influence on the results. They use an uninformative prior (LKJ) developed by Lewandowski et al. (2009), which has desirable properties. While they test this model with a large simulated dataset, they do not test it with actual data. We extend their work here, developing a Bayesian mixed logit model using the LKJ prior on the variance to extract inference from a small dataset from choice experiment data gathered in 2015. We estimate posterior probabilities for willingness to pay for reducing the rate of glacier recession, and examine variation in WTP based on sociodemographic differences. To our knowledge, this is the first Bayesian study in the WTP literature to focus on extracting inference from small discrete choice samples. This model is potentially very useful, as it could reduce the cost of conducting discrete choice studies.

We develop a data driven Bayesian framework for the estimation of mixed logit models for small discrete choice samples. In this framework, we build upon past research by incorporating demographics into the mean of the distribution of individuallevel preferences. For the covariance matrix on individual-level preferences, we note issues with the traditionally used inverse Wishart prior. We instead propose a prior on the covariance matrix that allows one to specify independent prior distributions on the correlation matrix and the standard deviations. We propose the use of the LKJ prior for correlation matrices in conjunction with the half Cauchy distribution for standard deviations as a way to be able to accommodate a wide variety of data-generating patterns.

We test the model using choice experiment data gathered in 2015 examining preferences for reducing the rate at which glacier ice is disappearing. 166 surveys were administered, 149 were completed, and after quality control measures were taken, 126 usable surveys remained. Of the 126 reliable surveys, 37 saw four choice scenarios and 89 saw two choice scenarios. Respondent characteristics were similar to those of other visitors during that time. To examine WTP differences along sociodemographic margins, the sample was further limited to those who provided answers for political preferences, sex, and environmental organization membership. After this final sample reduction, we are down to 98 respondents.

Results indicate that the mean monthly WTP for 0.15km3 rate of glacier loss is substantially higher than the WTP for 0.20km3 rate of glacier loss ($149 versus $24). Further, there is a 90% posterior probability that WTP for 0.15km3 rate of glacier loss exceeds zero, compared to a 63% posterior probability that WTP for 0.20km3 rate of glacier loss exceeds zero. These WTP values differ by political preference, membership in an environmental organization, and sex. Females are WTP more for both rates of glacier loss than their male counterparts, regardless of political preference, environmental organizational membership status. On the other hand, females are substantially less likely than their male counterparts to choose an alternative if it uses an insulated ice blanket to achieve a given level of glacier loss.

Title: Spatial and Temporal Dimensions of the Value of Coastal Recreational Fishing in US Waters

Authors: Alexandra Naumenko and Roger H. von Haefen, North Carolina State University

W4133 Objectives: Obj 2: Economic Valuation Methods, Task 2-2: Advances in Benefit Transfer Methods, Task 2-3: Advances in Spatial/Environmental Nexus; Obj 3: Integrated Ecosystem Services Valuation and Management, Task 3-2: Economic Analysis of Recreation Services

Presenter: von Haefen

Presenter Email: rhhaefen@ncsu.edu

Abstract:

The Bureau of Economic Analysis recently estimated that the outdoor recreation economy contributed 2.2% to Gross Domestic Product and was growing slightly faster than the overall U.S. economy.  Similarly, Siikimaki (2007) found that outdoor recreation time use has roughly doubled over the past four decades but has remained relatively flat in the 21st century.  However, how the nonmarket value, or consumer surplus, of outdoor recreation has changed over time as well as across space remains poorly understood.  The current paper aims to fill this gap in the literature by examining trends in the per trip value of coastal recreational fishing over a thirteen-year period from Maine to Louisiana (Task 2-3).  Leveraging data from NOAA’s Marine Recreational Information Program (MRIP) for approximately 300,000 shoreline angling trips to sites along the Atlantic and Gulf Coasts from 2004 to 2016 (Task 3-2), we estimate how the value of a coastal recreational trip varies across time and space.  A repeated discrete choice model of recreational participation and site choice is estimated separately by region (New England, Mid-Atlantic, Southeast, Florida and Gulf Coast) and two-month period, and per trip values of lost trips are calculated.  Our results suggest considerable within-year heterogeneity, but surprising homogeneity across years.  The per trip value of recreational fishing was largely unaffected by the Great Recession, although using an internal meta-regression analysis, we find suggestive evidence that per trip values have increased modestly during the recent expansion.  Further, our results reveal substantial spatial heterogeneity across the United States, with angling trips in the Southeast having the highest economic value.  Collectively, these results deepen our understanding of the temporal and spatial dimensions of recreational angling and may assist government agencies working in sparse data environments when transferring benefit estimates from one region and point in time to another (Task 2-2).

Title: The Impact of Drought on Crime in South Africa

Authors: Kyle Wilson

W4133 task: Task 1-2: Economic Analysis of Natural Hazards (fire, invasive species, climate

change)

Presenter: Kyle Wilson

Presenter email: kylew@uoregon.edu

Abstract

All societies rely on water as an essential input for life and economic activity. Droughts and other negative shocks to the water supply may contribute to negative societal outcomes such as crime. This paper tests one channel through which drought affects social outcomes: crime. Specifically, I estimate the effect of South Africa’s recent extreme drought (2015–2018) on crime. Using a police-station by year panel, I exploit variation in the timing of droughts and water management policies to explain changes in crime. I find that violent crimes increase by 10%, police-detected crimes fall by 20%, and that there is no discernible impact on sex crimes or property crimes. These findings suggest that in the future, especially as severe droughts become more prevalent due to climate change, crime prevention may be an important component of climate policy.

Title: Groundwater Use in Agriculture Accounting for Aquifer Flow Dynamics: An Analytical Model of Mississippi Delta

Authors: Kalyn Coatney, Department of Agricultural Economics, Mississippi State University;

Seong Yun, Department of Agricultural Economics, Mississippi State University

W4133 task: Obj 1: Land and Water Resource Management in a Changing Environment, Task 1-1: Economic Analysis of Agriculture, Forest, and Rangeland Resources, Open Space, and WUI Zones

Presenter: Seong Yun, Department of Agricultural Economics, Mississippi State University

Presenter email: seong.yun@msstate.edu

Abstract:

Irrigation is becoming increasingly important to Southeastern crop production. The increased demand and high prices for water-intensive crops (i.e., corn and soybeans) have led more irrigation and higher competition for groundwater. Unlike drylands in the US, the Southeast regions are known for abundant rainfalls. While annual rainfall totals are relatively high in the Southeast, most of the rainfall occurs during the winter months while precipitation during the growing season is often inadequate. Besides, the Mississippi River Valley Alluvial Aquifer (MRVAA) covering the large portion of the Southeast is shallow and has long been observed that the water level of MRVAA is steadily declining. Some Southeast regions have been experienced depletion of groundwater and the tragedy of commons in groundwater is expected to be worsened under climate change and variability.

Due to high concern on efficient groundwater management, economic models of groundwater management including aquifer flow dynamics have been studied well in the regions such as Ogallala Aquifer or aquifers in California. These models are, however, not sufficient enough to explain groundwater issues in MRVAA due to the two significant differences in groundwater flow dynamics. First, the MRVAA is a shallow aquifer with a relatively fast recharge rate. Because of the soils in MRVAA are composed of heavy clay, relatively little recharge can be attributed to percolation. Instead, rivers and streams provide most of the recharge relatively quickly from the side of this shallow aquifer. Second, the MRVAA is not a static aquifer, but appears to have some flow dynamics. From geo-survey, it turns out that the MRVAA generally flows from north to south. Because of the spatial and flow dynamics, producer wells located sequentially along the general flow creates an assignment problem. Producers located at the northern end of the MRVAA’s natural recharge entry point experience higher recharge rates than those to the south and central regions.

Reflecting these flow dynamics specific to the MRVAA, this study contributes to the literature by suggesting a bathtub model with spatially varying recharge rate with shallow aquifer structure. The proposed model is a discrete space and time dynamic optimization model to maximize the net benefit of agricultural production with irrigation subject to the flow dynamics of groundwater. The state equation of water level includes the unidirectional spatial dependence (North to South) recharge rate and extraction. This study first derived the analytical solution and economic implication of the given structure. Using the six producers’ simulation, this study numerically demonstrated how the downstream producers are disadvantageous in groundwater use due to their location. Also, this study showed how cheap altruism or falsely targeted regulation reached to faster and more worsened over-extraction.

01/01/1970

03/17/2020

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 Environment696, 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 Economists6(3), 531-561.

Prendergast, P., Pearson-Merkowitz, S., & Lang, C. (2019). The individual determinants of support for open space bond referendums. Land use policy82, 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 Economics57, 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 89th 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, 6th 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.

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