A Theoretical Foundation for Count Data Models

The paper develops a theoretical foundation for using count data models in travel cost analysis. Two micro models are developed: a restricted choice model and a repeated discrete choice model. We show that both models lead to identical welfare measures.

Modeling Conservation Program Impacts: Accounting for participation using bootstrapping

Many conservation programs, such as the Conservation Reserve Program (CRP), use indices to select offers. When modeling how changes in the index weights effect program outcomes, one must account for the attributes of available land, and which landowners chose to participate. This paper introduces a methodology to account for changes in participation as index weights change. Data on the actual CRP (all offers received) are combined with an artificial population of available lands (based on National Resources Inventory data). Bootstrapping methods are used to calibrate estimates of participation probability, and to account for errors-in-variables when estimating how index scores effect this probability. Preliminary analysis suggests that accounting for participation effects will effect estimated impacts of changing the CRP's index weights.Environmental Economics and Policy,

The Effective Use of Limited Information: Do Bid Maximums Reduce Procurement Cost in Asymmetric Auctions?

Conservation programs faced with limited budgets often use a competitive enrollment mechanism. Goals of enrollment might include minimizing program expenditures, encouraging broad participation, and inducing adoption of enhanced environmental practices. We use experimental methods to evaluate an auction mechanism that incorporates bid maximums and quality adjustments. We examine this mechanism’s performance characteristics when opportunity costs are heterogeneous across potential participants, and when costs are only approximately known by the purchaser. We find that overly stringent maximums can increase overall expenditures, and that when quality of offers is important, substantial increases in offer maximums can yield a better quality-adjusted result.

The Effective Use of Limited Information: Do Bid Maximums Reduce Procurement Cost in Asymmetric Auctions?

Conservation programs faced with limited budgets often use a competitive enrollment mechanism. Goals of enrollment might include minimizing program expenditures, encouraging broad participation, and inducing adoption of enhanced environmental practices. We use experimental methods to evaluate an auction mechanism that incorporates bid maximums and quality adjustments. We examine this mechanism’s performance characteristics when opportunity costs are heterogeneous across potential participants, and when costs are only approximately known by the purchaser. We find that overly stringent maximums can increase overall expenditures, and that when quality of offers is important, substantial increases in offer maximums can yield a better quality-adjusted result.conservation auctions, Conservation Reserve Program, CRP, bid caps, experimental economics

Estimating Water Quality Benefits: Theoretical and Methodological Issues

Knowledge of the benefits and costs to water users is required for a complete assessment of policies to create incentives for water quality improving changes in agricultural production. A number of benefit estimation methods are required to handle the varying nature of water quality effects. This report reviews practical approaches and theoretical foundations for estimating the economic value of changes in water quality to recreation, navigation, reservoirs, municipal water treatment and use, and roadside drainage ditches.benefits, water quality, economic welfare, demand, Resource /Energy Economics and Policy,

The Effective Use of Limited Information: Do Bid Maximums Reduce Procurement Cost in Asymmetric Auctions?

Conservation programs faced with limited budgets often use a competitive enrollment mechanism. Goals of enrollment might include minimizing program expenditures, encouraging broad participation, and inducing adoption of enhanced environmental practices. We use experimental methods to evaluate an auction mechanism that incorporates bid maximums and quality adjustments. We examine this mechanism’s performance characteristics when opportunity costs are heterogeneous across potential participants, and when costs are only approximately known by the purchaser. We find that overly stringent maximums can increase overall expenditures, and that when quality of offers is important, substantial increases in offer maximums can yield a better quality-adjusted result.conservation auctions, Conservation Reserve Program, CRP, bid caps, experimental economics, Institutional and Behavioral Economics, Land Economics/Use,

Do roads cause deforestation? Using satellite images in econometric analysis of land use

In this paper we demonstrate how satellite images and other geographic data can be used to predict land use. A cross-section model of land use is estimated with data for a region in central Mexico. Parameters from the model are used to examine the effects of reduced human activity. If variables that proxy human influence are changed to reflect reduced impact, "forest" area increases and "irrigated crop" area is reduced.geographic data, land use, remotely sensed data, spatial econometrics.

Better Targeting, Better Outcomes

A multitude of design decisions influence the performance of voluntary conservation programs. This Economic Brief is one of a set of five exploring the implications of decisions policymakers and program managers must make about who is eligible to receive payments, how much can be received, for what action, and the means by which applicants are selected. The particular issue addressed here is options for targeting program payments to where they can yield the greatest gain.Agricultural and Food Policy, Environmental Economics and Policy,

VALUING MARGINAL CHANGES IN THE QUALITY OF AN ENVIRONMENTAL ASSET

We present a model that extends the replacement cost theory to cases where benefits are restored for multiple years. Our theoretical framework derives a functional relationship between investments expenditures and environmental benefits. By extending the investment framework, we model reservoir benefits as a function of marginal changes in soil erosion.Environmental Economics and Policy,