Measuring the Recreational Value of Open Space

The working papers in this series are preliminary and circulated for the purpose of discussion. The views expressed in the papers do not reflect those of the Center for Agricultural Economic Research

Benefit Transfer: A Comparison of Approaches

Benefit transfer has become increasingly important for policy researchers as a low-cost approach for assigning benefits to environmental amenities. To gain insights on how to best perform benefit transfer, this study analyzes estimates from both the travel cost (TC) and contingent valuation (CV) methods. The analysis compared the point estimate approach with the benefit function approach for transferring economic benefits between a study site and a policy site. Data from the 1996 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation for deer hunting was used to provide both the CV willingness-to-pay and the TC consumer surplus estimates. The study found that when focusing on a nonsite-specific activity such as deer hunting, benefits transferred fairly well, with the average error being slightly less than 30 percent for CV estimates and just under 35 percent for TC estimates. In addition, the empirical results suggest that the more precise benefit function approach provide some improvement to the more general point estimate approach, with the CV methods showing moderate gains while the TC method showing only minimal gains. The study also found that the closer the distance between the policy and research sites was, the more the precision of the benefit transfer increased. Copyright 2005 Blackwell Publishing Ltd..

Revealing Preferences for Leisure Time from Stated Preference Data

When consumer choice is constrained by time as well as money, willingness to pay can be defined with respect to either numeraire. The two measures can be related formally within a utility-consistent model of choice subject to two constraints. Furthermore, when information is collected on both, the respondent's marginal value of time can be identified. A system of willingness to pay time and money and the marginal value of leisure time is estimated jointly in an application to California whalewatching and whale stock enhancement. The empirical approach can be applied with only minor additions to survey techniques for nonmarket valuation. Copyright 2004, Oxford University Press.

Who Cares about Environmental Stigmas and Does It Matter? A Latent Segmentation Analysis of Stated Preferences for Real Estate

This article uses latent segmentation analysis to estimate the benefits of contaminant cleanup in Waukegan Harbor, Illinois. Survey responses to attitudinal and perception questions provide significant information about the existence of distinct preference groups. By comparison, the predictive usefulness of demographic covariates is unclear. The expected aggregate willingness-to-pay of Waukegan homeowners for full cleanup is approximately equivalent to a 20% increase in the market value of homes. The aggregate estimate is little affected by the identification of preference clusters. Copyright 2007, Oxford University Press.

Valuing Water Quality as a Function of Water Quality Measures

Employing a unique and rich data set of water quality attributes in conjunction with detailed household characteristics and trip information, we develop a mixed logit model of recreational lake usage and undertake thorough model specification and fitting procedures to identify the best set of explanatory variables, and their functional form for the estimated model. Our empirical analysis shows that individuals are responsive to the full set of water quality measures used by biologists to identify the impaired status of lakes. Thus, changes in these quality measures are not simply a scientific exercise, but they also translate into changes in the recreational usage patterns and well-being of individual households. Willingness-to-pay (WTP) estimates are reported based on improvements in these physical measures. Copyright 2009, Oxford University Press.

Estimating Willingness to Pay for Improved Water Quality in the Presence of Item Nonresponse Bias

This article deals with the problem of item nonresponse in contingent valuation surveys using a payment-card method, by applying a grouped-data sample-selection estimation technique that is capable of imputing the missing values conditional upon a respondent's decision to answer a willingness-to-pay question. The advantage of the technique lies in its ability to utilize all of the information in the sample, permitting a more efficient estimation in the presence of item nonresponse bias. The major determinants of willingness to pay appear to be household income, number of children, education, perception of existing water quality, and identification with environmental issues. Copyright 2003, Oxford University Press.