The Economic Effects in 2002 of Chronic Wasting Disease (CWD) in Wisconsin

Wisconsin's 600,000 deer hunters will bear the brunt of the economic losses from chronic wasting disease (CWD) in the Wisconsin deer herd. Though studies have not been done to pinpoint a precise value, preliminary estimates place the losses to deer hunters at between $70 million and$100 million this fall. CWD will also cause deer hunters to spend less on their sport this year than they have in the past. However, the impacts of reduced hunter spending on the Wisconsin economy should not be too large. Losses to the deer hunting economy will be counterbalanced as resident hunters spend their money elsewhere in the economy. Some spending by nonresident hunters will be lost, but deer hunting is a very small part of the tourist economy. Nevertheless, some people in rural areas will suffer economically as fewer urban deer hunters spend money on the services they provide. If additional bad news about CWD is forthcoming before fall, the losses could be much larger.

The Economic Effects of Chronic Wasting Disease (CWD) in Wisconsin

Wisconsin's 600,000 deer hunters will bear the brunt of the economic losses from chronic wasting disease (CWD) in the Wisconsin deer herd. Though studies have not been done to pinpoint these losses, under plausible assumptions, they could have amounted to between $58 million and$83 million in 2002. I would anticipate somewhat smaller losses in 2003, perhaps between $30 million and$53 million. CWD can also be expected to cause deer hunters to spend less on their sport than they have in the past. However, the impacts of reduced hunter spending on the Wisconsin economy should not be too large. Losses to the deer hunting economy will be counterbalanced as resident hunters who reduce expenditures spend their money elsewhere in the economy. Some spending by nonresident hunters will be lost, but deer hunting is a very small part of the tourist economy. Nevertheless, businesses that serve hunters are likely to feel the effects and this is especially true in rural areas as fewer urban deer hunters spend money on the services they provide. Additional costs are being borne by public agencies in Wisconsin as they try to cope with the disease. Little is known about impacts on deer and elk farms, on those who feed deer to facilitate viewing, and on feed businesses that cater to deer feeders.

Estimating the Value of Variations in Anglers' Success Rates: An Application of the Multiple-Site Travel Cost Method

An estimation method is presented to measure sport fishermen's valuation of exogenous changes in fishing quality (catch rates). A theoretical model is initially presented to show how variations in prevailing catch rates influence an angler's valuation of recreational fishing. A two-stage estimation approach is suggested that capitalizes on the notion that angler consumer surplus is sensitive to changes in success rates. The procedure entails first estimating sportfishing values at qualitatively different fishing sites using a multiple-site travel cost approach. Afterward, the sensitivity of estimated values to different success rate levels is measured using a separate regression procedure. An empirical application of this two-stage method to Lake Michigan sportfishing is given. It is estimated that for Lake Michigan anglers who fish for trout and salmon, a 10% increase in success rates will increase average trip values by SUS 0.30.Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Risk and Uncertainty,

Estimating Post-harvest Benefits from Increases in Commercial Fish Catches with Implications for Remediation of Impingement and Entrainment Losses at Power Plants

A variety of regulations may affect commercial fish catches. We take here as a case in point steps to reduce losses of aquatic organisms due to impingement and entrainment (I&E) at power plants. Methods to evaluate the benefits of such measures are needed for benefit-cost analysis. We use a new approach to estimating ex vessel demand by Holt and Bishop (2002) to address the portion of the benefits that occur post-harvest, that is, down the marketing chain after fishermen sell their catches. The model deals with the dockside prices and quantities for six major commercial species harvested from the U.S. Great Lakes. We use the model to explore the potential magnitude of post-harvest benefits for Great Lakes fisheries. We then turn to a possible approach to benefits transfer for cases where such a model is not available. A semi-realistic case example involving I&E losses to Great Lakes fisheries illustrates how benefits transfer would work.

SENSITIVITY TO SCOPE: EVIDENCE FROM A CVM STUDY OF WETLANDS

Wetlands valuation is a situation in which CVM studies might be expected to fail scope tests. This paper reports results from a split-sample CVM study of Wisconsin wetlands. The survey employed a multiple-bounded, polychotomous-choice format, and compared WTP distributions using the method of convolutions. The survey demonstrated sensitivity to scope.Resource /Energy Economics and Policy,

EVIDENCE ON THE ACCURACY OF EXPENDITURES REPORTED IN RECREATIONAL SURVEYS

This article discusses the results of four experiments to test the accuracy of recreational expenditures reported in survey relative to expenditures reported in dairies. We found few situations in which the reported expenditures in the surveys and diaries differ significantly. In general, we conclude that individuals are able to accurately report recreational expenditures in ex post mail surveys. Given the wide usage of survey expenditure data by economists, we find this results encouraging.Resource /Energy Economics and Policy,

Valuing a Spatially Diverse Non-Market Good: The Benefits of Reduced Non-Point Source Pollution in Green Bay, WI

This article presents an empirical approach to correcting for spatial interactions in stated preference data when valuing large-scale, spatially variable environmental improvements. This approach is presented in the context of a contingent valuation study estimating the benefits of reduced non-point source pollution in Green Bay, Wisconsin. The significant spatial variation of water clarity conditions in this large water body was captured using satellite-derived GIS data. This article focuses on two significant challenges: first, ensuring respondents are adequately informed of how the proposed change will impact their individual utility stream; second, dealing with the spatial effects within the estimation model. The GIS water clarity data were used to measure the initial conditions faced by each individual parcel. Including this information in the analysis significantly increased the estimated expected WTP of some individuals but decreased that of others. Some of the difference in aggregated benefits is likely due to issues of spatial correlation between properties that is unaccounted for in the simpler models.Water quality, non-point source pollution, contingent valuation, spatial correlation, Environmental Economics and Policy, Resource /Energy Economics and Policy,

Valuing a Spatially Variable Environmental Resource: Reducing Non-point Source Pollution in Green Bay, WI

This article investigates the value of reducing non-point source pollution in Green Bay, WI. Using stated preference methods, we find the lower bound on the benefits of reducing runoff enough to universally increase water clarity by four feet is greater than $9 million annually. Using a unique survey design, we show that because current water clarity in Green Bay is spatially variable, the value that a household places on this universal improvement depends on the distance of the household's residence from the Bay and on the particular geospatial location of the residence. This has important implications for estimating aggregate benefits.

A Comparison of Approaches to Mitigate Hypothetical Bias

We compare two approaches to mitigating hypothetical bias. The study design includes three treatments: an actual payment treatment, a contingent valuation (CV) treatment with a follow-up certainty question, and a CV treatment with a cheap talk script. Our results suggest that both the follow-up certainty treatment and the cheap talk treatment produce willingness-to-pay (WTP) estimates consistent with the actual payment treatment. However, the follow-up certainty treatment provides response distributions at all offer amounts that are statistically similar to the actual payment treatment, while the cheap talk treatment provides similar responses only at some offer amounts. Furthermore, the cheap talk treatment is effective only for inexperienced individuals. We conclude that the follow-up certainty approach is more consistent than the cheap talk approach for eliminating hypothetical bias.contingent valuation, hypothetical bias, follow-up certainty, cheap talk, nonmarket valuation, Environmental Economics and Policy, Public Economics, Research Methods/ Statistical Methods,