"Applying Optimization and the Analytic Hierarchy Process to Enhance Agricultural Preservation Strategies in the State of Delaware"

Using agricultural preservation priorities derived from an analytical hierarchy process by 23 experts from 18 agencies in the State of Delaware, this research uses weighted suitability attributes to evaluate the historical success of the State of Delaware’s agricultural protection fund, which spent nearly $100 million in its first decade. This research demonstrates how these operation research techniques can be used on concert to address relevant conservation questions. Results suggest that the state’s sealed-bid-offer auction, which determines the yearly conservation selections, is superior to benefit targeting approaches frequently employed by conservation organizations but is inferior to the optimization technique of binary linear programming that could have provided additional benefits to the state, such as 12,000 additional acres worth an estimated$25 million.Conservation Optimization, Farmland Protection, Analytic Hierarchy Process

Applying Optimization and the Analytic Hierarchy Process to Enhance Agricultural Preservation Strategies in the State of Delaware

Using agricultural preservation priorities derived from an analytical hierarchy process by 23 conservation experts from 18 agencies in the state of Delaware, this research uses weighted benefit measures to evaluate the historical success of Delaware’s agricultural protection fund, which spent nearly $100 million in its first decade. This research demonstrates how these operation research techniques can be used in concert to address relevant conservation questions. Results suggest that the state’s sealed-bid-offer auction, which determines the yearly conservation selections, is superior to benefit-targeting approaches frequently employed by conservation organizations, but is inferior to the optimization technique of binary linear programming that could have provided additional benefits to the state, such as 12,000 additional acres worth an estimated$25 million.conservation optimization, farmland protection, analytic hierarchy process, binary linear programming, Environmental Economics and Policy, Land Economics/Use, Research and Development/Tech Change/Emerging Technologies,

Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods

Matching grants are a prevalent mechanism for funding environmental, conservation, and natural resource projects. However, economists have largely been silent regarding the potential benefits of these mechanisms at increasing voluntary contributions. To examine the behavioral responses to different match levels, this research uses controlled laboratory experiments with generically framed instructions and introduces a general-form matching-grant mechanism, referred to as the proportional contribution mechanism (PCM). Results show that contributions are positively correlated with both the match and the induced value of the public good even when a dominant strategy is free-riding. An implication of this partial demand revelation result is that manifestations of this type of “helping hand†social preference should be counted in benefit-cost analysis.matching grants, public goods, charitable giving, voluntary contributions, experimental economics, warm glow, helping hand, Environmental Economics and Policy, Public Economics,

"Integrating Optimization and Strategic Conservation to Achieve Higher Efficiencies in Land Protection"

Strategic land conservation seeks to select the highest quality lands given limited financial resources. Traditionally conservation officials implement strategic conservation by creating prioritization maps that attempt to identify the lands of highest ecological value or public value from a resource perspective. This paper describes the history of using optimization in strategic conservation and demonstrates how the combination of these approaches can significantly strengthen conservation efforts by making these programs more efficient with public monies.Mathematical Programming, Conservation Optimization, Cost Effectiveness Analysis, Strategic Conservation

Status-Quo-Bias and Voluntary Contributions: Can Lab Experiments Parallel Real World Outcomes for Generic Advertising?

Many commodities have programs assessing producers for generic advertising. Ads such as "Got Milk?" and the "Incredible Edible Egg" are a public good for producers. Most of these programs originally used the Voluntary Contribution Mechanism, but have now become mandatory because of free-riding. This research simulates both the economic and psychological details of the egg industry in experiments that produce strikingly realistic results. Because mandatory programs have recently been declared unconstitutional, we also the test the Provision Point Mechanism and show that observed low levels of free-riding for both mechanisms are the result of status quo bias.Marketing, H40, H41, M37,

The Value of Private Risk Versus the Value of Public Risk: An Experimental Analysis of the Johannesson et al. Conjecture

In 1996 Johannesson et al. published a paper in this journal entitled “The Value of Private Safety versus the Value of Public Safety.” Based on preliminary evidence from a hypothetical contingent valuation study, these authors argue that consumers behave as “pure altruists” and reject the notion of paternalistic preferences for safety in a coercive tax setting. These pure altruists consider the cost of a program that might be imposed on other voters when they decide whether to vote for or against public safety programs. The authors conclude that further empirical research in this area is warranted. This paper presents a set of laboratory economics experiments to test Johannesson et al.’s conjecture under controlled conditions in which participants face an actual risk of financial loss. The laboratory results extend those of Johannesson et al., providing strong evidence of pure altruism but limited support for paternalistic altruism for risk.Altruism, risk, voting, public goods, Research Methods/ Statistical Methods, Risk and Uncertainty, D81, D64, H41, C91, C92, D72,

PURE ALTRUISM AND THE VALUATION OF RISK: AN EXPERIMENTAL TEST OF THE JOHANNESSON ET AL. CONJECTURE

Johannesson et al.(1996) conjecture that in a coercive, uniform tax setting like dichotomous choice contingent valuation, willingness to pay for public programs would be affected by altruistic consideration of the costs imposed on others. Using a voting-BDM elicitation mechanism, we demonstrate such valuation petterns in an experimental economics setting.Research Methods/ Statistical Methods,

Social Preferences and Voting: An Exploration Using a Novel Preference Revealing Mechanism

Public referenda are frequently used to determine the provision of public goods. As public programs have distributional consequences, a compelling question is what role if any social preferences have on voting behavior. This paper explores this issue using laboratory experiments wherein voting outcomes lead to a known distribution of net benefits across participants. Preferences are elicited using a novel Random Price Voting Mechanism (RPVM), which is a more parsimonious mechanism than dichotomous choice referenda, but gives consistent results. Results suggest that social preferences, in particular a social efficiency motive, lead to economically meaningful deviations from self-interested voting choices and increase the likelihood that welfare-enhancing programs are implemented.Institutional and Behavioral Economics, Research Methods/ Statistical Methods, C91, C92, D64, D72, H41,

ANOMALIES IN VOTING: AN EXPERIMENTAL ANALYSIS USING A NEW, DEMAND REVEALING (RANDOM PRICE VOTING) MECHANISM

This study investigates the influence of social preferences on voting decisions using a new Random Price Voting Mechanism (RPVM), which is best thought of as a public goods voting extension of the Becker-DeGroot-Marshack mechanism for private goods. In particular, this mechanism is used to investigate experimentally whether voting decisions are affected by the distribution of net benefits associated with a proposed public program. Recent papers have shown that, in additional to selfishness, factors such as inequality aversion, maximin preferences, and efficiency may influence individual decisions. However, the effect of social preferences on voting, the predominant funding mechanism for public goods by legislatures and public referenda, has not been thoroughly examined. We first establish the presence of anomalous behavior in dichotomous voting, and introduce the RPVM as a more efficient mechanism to examine such anomalies. We show that it is demand revealing in the presence of social preferences and empirically consistent with dichotomous choice voting. Laboratory experiments involving 440 subjects show that when net benefits are homogeneously distributed, the new RPVM is demand-revealing in both willingness-to-pay (WTP) and willingness-to-accept (WTA) settings, for both gains and losses. When the voting outcome potentially results in a heterogeneous distribution of (net) benefits, a systematic wedge appears between individuals' controlled induced values and their revealed WTP or WTA. With induced gains, the best-off subjects under-report their WTP and WTA in comparison to their induced value. Worst-off subjects express WTP and WTA that exceed their induced value. With induced losses a mirror image is evident. Best-off subjects over-report their induced value while the worst-off subjects under-report. Theoretical and econometric results presented in the paper suggest that these differences are caused by a concern for social efficiency.Institutional and Behavioral Economics,