Valuing the Prevention of an Infestation: The Threat of the New Zealand Mud Snail in Northern Nevada

The Truckee / Carson / Walker River Watershed in Northern Nevada is under an imminent threat of infestation by the New Zealand Mud Snail, an aquatic nuisance species with the potential to harm recreational fisheries. We combine a utility-theoretic system-demand model of recreational angling with a Bayesian econometric framework to provide estimates of trip and welfare losses under different types of regulatory control policies. We find that such losses can be substantial, warranting immediate investments in preemptive strategies via public outreach and awareness campaigns.New Zealand Mud Snail; Incomplete Demand System; Hierarchical Modeling; Bayesian Simulation

Meta-Regression and Benefit Transfer: Data Space, Model Space, and the Quest for ‘Optimal Scope’

Meta-functional Benefit Transfer, while conceptually attractive, is often plagued by the paucity of available source studies and related small sample problems. A broadening of scope of the Meta-Regression Model by adding data from “related, yet different” contexts or activities may circumvent these issues, but may not necessarily enhance the efficiency of transfer functions if the different contexts do not share policy-relevant parameters. We illustrate how different combinations of contexts can be interpreted as ‘data spaces’ which can then be explored for the most promising transfer function using Bayesian Model Search techniques. Our results indicate that for some scope-augmented data spaces model-averaged benefit predictions can be more efficient than those flowing from the baseline context and data.Bayesian Model Averaging; Stochastic Search Variable Selection; Meta-Analysis; Benefit Transfer; Resource Valuation

A Censored Random Coefficients Model for Pooled Survey Data with Application to the Estimation of Power Outage Costs

In many surveys multiple observations on the dependent variable are collected from a given respondent. The resulting pooled data set is likely to be censored and to exhibit cross-sectional heterogeneity. We propose a model that addresses both issues by allowing regression coefficients to vary randomly across respondents and by using the Geweke-Hajivassiliou-Keane simulator and Halton sequences to estimate high-order probabilities. We show how this framework can be usefully applied to the estimation of power outage costs to firms using data from a recent survey conducted by a U.S. utility. Our results strongly reject the hypotheses of parameter constancy and cross-sectional homogeneity.

Intercept and Recall: Examining Avidity Carryover in On-Site Collected Travel Data

This study examines the proper estimation of trip demand and economic benefits for visitors to recreation sites when past-season trip information is elicited from travelers intercepted on-site. We show that the proper weighting of past season counts is different from the standard on-site correction appropriate for current-season counts. We find that for our sample of lake visitors relatively stronger preference or “avidity” for the interview site carries over across seasons. We further show that using the correct weighting of past trip counts is critical in deriving meaningful estimates of travel demand and economic benefits.On-site Sampling; Recreation Demand Systems; Poisson-Lognormal Distribution; Simulated Maximum Likelihood

Meta-Functional Benefit Transfer for Wetland Valuation: Making the Most of Small Samples

This study applies functional Benefit Transfer via Meta-Regression Modeling to derive valuation estimates for wetlands in an actual policy setting of proposed groundwater transfers in Eastern Nevada. We illustrate how Bayesian estimation techniques can be used to overcome small sample problems notoriously present in Meta-functional Benefit Transfer. The highlights of our methodology are (i) The hierarchical modeling of heteroskedasticity, (ii) The ability to incorporate additional information via refined priors, and (ii) The derivation of measures of model performance with the corresponding option of model-averaged Benefit Transfer predictions. Our results indicate that economic losses associated with the disappearance of these wetlands can be substantial and that primary valuation studies are warranted.Bayesian Model Averaging; t-Error Regression Model; Meta-Analysis; Benefit Transfer; Wetland Valuation

Voluntary Environmental Action and Export Destinations: The Case of Forest Certification

There is an increasing tendency for forest product firms worldwide to adopt sound environmental management practices by voluntarily agreeing to have their forest practices certified by third parties. Using a simple model of profit maximization, we illustrate that the puzzling emergence of this non-state, self-imposed governance structure is compatible with firms' profit motives. An empirical model using firm data from three countries shows firm location and export destinations play a key role in firms' decisions to seek certification, while the nature of forestland ownership has no significant impact on certification decisions.export markets, forest certification, profit maximization, discrete choice models, Environmental Economics and Policy,

Latent Thresholds Analysis of Choice Data with Multiple Bids and Response Options

In many stated preference settings stakeholders will be uncertain as to their exact willingness-to-pay for a proposed environmental amenity. To accommodate this possibility analysts have designed elicitation formats with multiple bids and response options that allow for the expression of uncertainty. We argue that the information content flowing from such elicitation has not yet been fully and efficiently exploited in existing contributions. We introduce a Latent Thresholds Estimator that focuses on the simultaneous identification of the full set of thresholds that delineate an individual's value space in accordance with observed response categories. Our framework provides a more complete picture of the underlying value distribution, the marginal effects of regressors, and the impact of bid designs on estimation efficiency. We show that the common practice of re-coding responses to derive point estimate of willingness-to-pay leaves useful information untapped and can produce misleading results if thresholds are highly correlated.Stated Preference; Multiple Bounded Elicitation; Polychotomous Choice; Bayesian Estimation; Value Uncertainty

Modeling the Impact of New Information on Consumer Preferences for Specialty Meat Products

As the demand for organic and natural food grows in the U.S., studies show that consumers would and do pay more for these foods than their traditional counterparts. However, the question remains as to whether consumers really understand the differences between organic and natural products versus common products. The USDA provides an official definition of organic, but there is no official definition or certification for natural products. The general lack of knowledge among consumers concerning organic and natural products can be misleading and hence, there is a need for a better understanding of how consumer pre-existing knowledge and new information regarding organic and natural products influences consumer purchasing behavior. In this study, we research the effect of providing consumers with information regarding organic and natural production processes in four separate stages on their willingness to pay (WTP) for various natural/organic meat products. Through the use of survey data collected in-person during the fall of 2007 Nevada, in which 597 surveys were completed, we examine the impact of consumer perceived knowledge of organic and natural grass-fed production processes on their WTP, whether or not new information/knowledge will modify their WTP, and the degree of modification across meat types and cuts. Meats examined vary from high-end to low-end cuts and across various meat types, such as pork and beef. The modeling will include a multinomial probit model to measure WTP and also consider the modeling issues that arise when updated preferences are included. The results of this study will be important for researchers looking to model updated consumer preferences. The purpose of our research is twofold. First, we wish to observe whether or not advertising and other promotional methods truly influence consumer demand and willingness to pay for these specialty meat products. These results will likely be important to the role of marketing and the way in which information is provided to consumers on organic and natural production methods and the potential positive effects of those methods. Additionally, the paper will show how consumers purchasing experiences and pre-existing knowledge might influence their reaction to the same information.Marketing,

Benefit Transfer from Multiple Contingent Experiments: A Flexible Two-Step Model Combining Individual Choice Data with Community Characteristics

This study proposes a new approach to utilize information from existing choice experiments to predict policy outcomes for a transfer setting. Recognizing the difficulties from pooling raw data from experiments with different designs and sub-populations we first re-estimate all underlying Random Utility Models individually, and then combine them in a second stage process to form a weighted mixture density for the generation of policy-relevant welfare estimates. Using data from recent choice experiments on farmland preservation we illustrate that our strategy is more robust to transfer inaccuracies than single-site approaches. The specification of "intelligent" mixture weights will be a fruitful ground for future research in the area of Benefit Transfer.

Creating Carbon Offsets in Agriculture through No-Till Cultivation: A Meta-Analysis of Costs and Carbon Benefits

Carbon terrestrial sinks are often seen as a low-cost alternative to fuel switching and reduced fossil fuel use for lowering atmospheric CO2. To determine whether this is true for agriculture, one meta-regression analysis (52 studies, 536 observations) examines the costs of switching from conventional tillage to no-till, while another (51 studies, 374 observations) compares carbon accumulation under the two practices. Costs per ton of carbon uptake are determined by combining the two results. The viability of agricultural carbon sinks is found to vary by region and crop, with no-till representing a low-cost option in some regions (costs of less than $10/tC), but a high-cost option in others (costs of$100-$400/tC). A particularly important finding is that no-till cultivation may store no carbon at all if measurements are taken at sufficient depth. In some circumstances no-till cultivation may yield a “triple dividend” of carbon storage, increased returns and reduced soil erosion, but in many others creating carbon offset credits in agricultural soils is not cost effective because reduced tillage practices store little or no carbon.costs of soil carbon credits, conventional and zero tillage systems, carbon accumulation in soil