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,

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,

A Comparison of Methodologies for Valuing Decreased Health Effects from Wildfire Smoke

Wildfire seasons are becoming longer and more intense throughout the world, making it increasingly important to monetize the full damages caused by wildfires when analyzing various fire management policies. We estimate the economic costs of the health effects associated with exposure to wildfire smoke using a simple cost of illness approach and for the first time to our knowledge we estimate willingness-to-pay (WTP) for a decrease in symptom days from wildfire smoke using the contingent valuation method and the averting behavior method. Comparing estimates across all three common approaches for estimating the economic cost of exposure to an air pollutant is an important contribution to the literature. This study uses data from the largest wildfire in Los Angeles County’s modern history, the Station Fire of 2009. Our results show that a simple cost of illness estimate is about $3 per day of symptoms, the averting behavior method results in a WTP value of$43 or $94 to avoid one day of wildfire-smoke induced symptom days, depending on the model used, and the contingent valuation method results in a WTP estimate of$74 - $98 to avoid one day of wildfire-smoke induced symptom days, depending on model specification.averting behavior method, contingent valuation method, cost of illness, wildfire smoke, health, morbidity, Environmental Economics and Policy, Health Economics and Policy, Q,

Accounting for Respondent Uncertainty to Improve Willingness-to-Pay Estimates

In this paper we develop an econometric model of willingness to pay that integrates data on respondent uncertainty regarding their own willingness to pay. The integration is utility consistent and does not involve calibrating the contingent responses to actual payment data, and so the approach can "stand alone". In an application to a valuation study related to whooping crane restoration, we find that this model generates a statistically lower expected WTP than the standard CV model. Moreover, the WTP function estimated with this model is not statistically different from that estimated using actual payment data, suggesting that when properly analyzed using data on respondent uncertainty, contingent valuation decisions can simulate actual payment decisions. This method allows for more reliable estimates of WTP that incorporates respondent uncertainty without the need for collecting comparable actual payment data.

Proactive or Reactive? Optimal Management of an Invasive Forest Pest in a Spatial Framework

This paper offers a preliminary investigation into the conditions under which it might be optimal to engage in proactive management of a non-timber forest resource in the presence of an invasive species whose spread is unaffected by management action. Proactive management is defined as treating an uninfected area in order to encourage healthy ecosystem function, given that the arrival of the invasive is inevitable. Inspired by the problem of white pine blister rust in the Rocky Mountain west, the model was solved under varying assumptions concerning the scale of management action, benefit and costs, the discount rate, and uncertainty of spread. Results showed that proactive strategies tended to be optimal when, ceteris paribus, a) more resources are available for treatment; b) the costs of treatment are rapidly increasing in forest health, or conversely, the benefits of healthy and unhealthy stands are relatively similar; and c) the discount rate is low. The introduction of uncertainty did not significantly affect the likelihood of a proactive management strategy being optimal, but did show that the conditional probabilities of infection play important role in the decision of which uninfected stand should be treated if a choice is available to the manager.Crop Production/Industries, Resource /Energy Economics and Policy,

Interactions between Resident Risk Perceptions and Wildfire Risk Mitigation: Evidence from Simultaneous Equations Modeling

Fire science emphasizes that mitigation actions on residential property, including structural hardening and maintaining defensible space, can reduce the risk of wildfire to a home. Accordingly, a rich body of social science literature investigates the determinants of wildfire risk mitigation behaviors of residents living in fire-prone areas. Here, we investigate relationships among wildfire hazards, residents’ risk perceptions, and conditions associated with mitigation actions using a combination of simulated wildfire conditions, household survey responses, and professionally assessed parcel characteristic data. We estimate a simultaneous model of these data that accounts for potential direct feedbacks between risk perceptions and parcel-level conditions. We also compare the use of self-reported versus assessed parcel-level data for estimating these relationships. Our analysis relies on paired survey and assessment data for approximately 2000 homes in western Colorado. Our simultaneous model demonstrates dual-directional interactions between risk perceptions and conditions associated with mitigation actions, with important implications for inference from simpler approaches. In addition to improving general understanding of decision-making about risk and natural hazards, our findings can support the effectiveness of publicly supported programs intended to encourage mitigation to reduce society’s overall wildfire risk

Cost Shared Wildfire Risk Mitigation in Log Hill Mesa, Colorado: Survey Evidence on Participation and Willingness to Pay

Wildland–urban interface (WUI) homeowners who do not mitigate the wildfire risk on their properties impose a negative externality on society. To reduce the social costs of wildfire and incentivise homeowners to take action, cost sharing programs seek to reduce the barriers that impede wildfire risk mitigation. Using survey data from a WUI community in western Colorado and a two-stage decision framework, we examine residents’ willingness to participate in a cost sharing program for removing vegetation on their properties and the amount they are willing to contribute to the cost of that removal. Wefind that different factors motivate decisions about participation and about how much to pay. Willingness to participate correlates with both financial and non-monetary considerations, including informational barriers and wildfire risk perceptions, but not with concerns about effectiveness or visual impacts. Residents of properties with higher wildfire risk levels are less likely to participate in the cost sharing than those with lower levels of wildfire risk. We find widespread, positive willingness to pay for vegetation removal, with the amount associated negatively with property size and positively with respondent income. These results can inform the development of cost sharing programs to encourage wildfire risk mitigation on private property

The Role of Preference Uncertainty in the Willingness to Pay - Willingness to Accept Disparity: An Experimental Test

Abstract Economists assume that individual preferences are rational and consistent with neoclassical expectations. This assumption is often appropriate but may be misplaced when low experience goods are considered. A common point of exploration is the well known disparity between an individual's willingness to pay and willingness to accept. The persistent finding that WTA is significantly greater than WTP has prompted economists to explain this behavior outside of neoclassical theory and to investigate the formation of preferences. The constructed preference hypothesis (CPH) suggests that preferences do not exist prior to a particular choice occasion but rather are created at the moment of choice leaving preferences susceptible to the variants of the choice environment. Alternatively, the discovered preference hypothesis (DPH) suggests that preferences exist but need to be uncovered through a process involving practice, repetition and experience. This paper considers a conceptual model largely consistent with the DPH. Specifically, preferences or choices are considered realizations from an underlying value distribution -a process referred to as preference uncertainty. The model allows for preference learning which suggests that the variance of this value distribution will lessen with a discovery process consistent with the DPH. As preference learning takes hold preferences will increasingly appear consistent with economic expectations. This paper designs a split sample controlled experiment in order to test the following hypothesis. Does a reduction in preference uncertainty through preference learning eliminate the well known value disparity? Results suggest that preference uncertainty appears to exacerbate the value disparity and its reduction is enough to eliminate the disparity. Further, results suggest that the model of preference uncertainty allowing for preference learning, largely consistent with the DPH, accurately characterizes preference formation within this choice experiment. In other words uncertain preferences appear constructed while learned preferences appear consistent with neoclassical expectations. These results imply that choice experiments providing limited learning opportunities may not accurately reveal individual preferences.

Donation Payment Mechanisms and Contingent Valuation: An Empirical Study of Hypothetical Bias

Donation payment mechanisms are well suited forsome contingent valuation studies. In aneffort to better understand the discrepancythat has been consistently found between actualand hypothetical donations, we investigate anapproach to estimating actual willingness todonate using contingent donations with afollow-up question in which respondents ratethe level of certainty about their response tothe contingent donation question. The approachallows us to estimate the magnitude of thehypothetical bias and identify the respondentsresponsible for the bias. Identification ofthe respondents responsible for thehypothetical bias is the first step towarddeveloping an understanding of the causes andpossible remedies. In this study we find thatmost of the respondents (80%) to thecontingent donation question provide a responseconsistent with how we predict they wouldrespond in an actual donation situation. Copyright Kluwer Academic Publishers 2001actual donations, calibration, contingent donations, contingent valuation, hypothetical bias, uncertainty,

Understanding the wicked nature of “unmanaged recreation” in Colorado’s Front Range

Unmanaged recreation presents a challenge to both researchers and managers of outdoor recreation in the United States because it is shrouded in uncertainty resulting from disagreement over the definition of the problem, the strategies for resolving the problem, and the outcomes of management. Incomplete knowledge about recreation visitors’ values and relationships with one another, other stakeholders, and the land further complicate the problem. Uncertainty and social complexity make the unmanaged recreation issue a wicked problem. We describe the wickedness inherent in unmanaged recreation and some of the implications of wickedness for addressing the problem for the Front Range of the Rocky Mountains in Colorado. Conclusions about the nature of the problem are based on a problem appraisal that included a literature review and interviews of key informants. Addressing wickedness calls for institutional changes that allow for and reward the use of trust building, inclusive communication, and genuinely collaborative processes