Joshua M. Duke

Identifying public preferences for land preservation using the analytic hierarchy process

Much debate exists on whether purchase of development rights programs are cost-effectively targeting the nonmarket attributes of preserved land that the public truly demands. This paper applies the analytic hierarchy process (AHP) to general population survey data in order to compare the publics sources of value for the environmental, agricultural, growth control, and open space attributes of preserved land. AHP is a methodology that encourages respondents to make subtle trade-offs in nonquantifiable, nonmarket attributes of preserved land. AHP also measures the relative public preference of one attribute over another attribute. Although this methodology is entirely different from conjoint analysis and other choice-based methods for processing trade-offs for nonmarket goods, the results of AHP are highly comparable to and offer another way to adjudge the validity of these complementary methods. The results of the AHP application to data collected from Delaware residents find that public preference is strongest for the environmental and agricultural attributes of farmland, two potentially opposing attributes. Growth control and open space are found to be less important. At a more precise level, a comparison of the qualities of these attributes shows that the public favors agricultural land preservation because it protects a rural way of life, which also is seen to protect human-regarding environmental quality. Results generally validate those of Kline and Wichelns (Land Econ. 72 (1996, p. 538) and Rosenberger (Land Econ. 74 (1998, p. 557).

Willingness to Pay for Agricultural Land Preservation and Policy Process Attributes: Does the Method Matter?

This article examines relationships between willingness to pay for land preservation and policy process attributes. The approach departs from traditional welfare assessments in that it does not constrain attributes of the policy process to be utility-neutral. Results indicate policy process attributes may influence utility in some circumstances, even after controlling for the influence of land use outcomes often correlated with specific policy techniques. Results further imply that in some cases, even comprehensive specification of land use outcomes by stated preference instruments may be insufficient to prevent systematic shifts in willingness to pay related to unspecified, yet assumed, policy process attributes.

An experiment on the consistency of aggregated comparison matrices in AHP

The analytic hierarchy process can be used for group decision making by aggregating individual judgments or individual priorities. The most commonly used aggregation methods are the geometric mean method and the weighted arithmetic mean method. While it is known that the weighted geometric mean comparison matrix is of acceptable consistency if all individual comparison matrices are of acceptable consistency, this paper addresses the following question: Under what conditions would an aggregated geometric mean comparison matrix be of acceptable consistency if some (or all) of the individual comparison matrices are not of acceptable consistency? Using Monte Carlo simulation, results indicate that given a sufficiently large group size, consistency of the aggregate comparison matrix is guaranteed, regardless of the consistency measures of the individual comparison matrices, if the geometric mean is used to aggregate. This result implies that consistency at the aggregate level is a non-issue in group decision making when group size exceeds a threshold value and the geometric mean is used to aggregate individual judgments. This paper determines threshold values for various dimensions of the aggregated comparison matrix.

Willingness to Pay for Land Preservation across States and Jurisdictional Scale: Implications for Benefit Transfer

In stated preference valuation of farmland preservation, respondents are often told that preservation will occur within various jurisdictional scales—that is, community or state—but are not told the specific location of parcels. The resultant availability of welfare estimates for different scales and regions provides numerous avenues for benefit transfer. This paper provides a systematic assessment of transfer error, contrasting different methods for the transfer of farmland preservation values across states and jurisdictional scales. Results drawn from multistate choice experiments suggest that the choice of across scale versus across state transfer method can have significant implications for transfer validity. (JEL Q24, Q51)

A Conjoint Analysis of Public Preferences for Agricultural Land Preservation

Public preferences for the nonmarket services of permanently preserved agricultural land are measured and compared using conjoint analysis. The results from a survey of 199 Delawareans suggest environmental and nonmarket-agricultural services are the most important preserved-land attributes. Results also suggest that open space associated with wetlands on farms is neither an amenity nor a disamenity. On the margin, preserved parcels with agricultural and environmental attributes provide net benefits, which may exceed

Participation in Agricultural Land Preservation Programs: Parcel Quality and a Complex Policy Environment

1,000,000 for a 1,000-acre parcel. Preserved forestland provides benefits per acre that are statistically equivalent to cropland, though forestland may be less expensive to preserve.

Adverse Selection in Reverse Auctions for Ecosystem Services

Data on owner and land characteristics are used to analyze factors affecting participation decisions in Delawares agricultural lands preservation program, federal commodity programs, and federal conservation programs. A trivariate probit model estimates a set of random utility models of participation. Participation decisions at the state and federal levels are found to be driven by many of the same observed factors, but uncorrelated in unobserved characteristics. The important exceptions are that owners of small parcels under development pressure and with parcels of relatively low environmental quality tend to enroll in commodity programs rather than preservation. In part, the complex policy environment may therefore limit the effectiveness of programs seeking to preserve parcels with the highest environmental quality or facing the greatest development pressure.

Behavior in a Spatially Explicit Groundwater Resource: Evidence from the Lab

This paper examines how auctions for ecosystem services introduce adverse selection, limiting cost-effectiveness. Induced-value experiments test theory and examine the extent of adverse selection in these markets. In comparison to the baseline of either doing nothing or the optimality of an externality-correcting tax, a discriminatory reverse auction and two screening contracts are tested. In limited budget situations, the auction achieved the lowest social surplus, while screening contracts that rely upon the government observing the development value yield the highest relative social surplus. These results are important because recent environmental policy trends are focused on expanding fiscally costly reverse auctions. (JEL Q57, Q58)

Farmland Retention Techniques: Property Rights Implications and Comparative Evaluation

This research uses laboratory experiments to examine how hydrogeologic properties of groundwater models influence decision making. The results reveal that pumping rates are highest when the underlying model is such that the future costs of groundwater use are broadcast evenly to all users, as a majority of participants behave myopically. There is less myopic behavior when the groundwater dynamics are governed by spatially explicit models, where the private cost of groundwater use is high relative to external costs. These results suggest that models used to simulate common-pool resource dynamics play an important role in determining both economic predictions and behavioral outcomes. Copyright 2012, Oxford University Press.

Dynamic Entry, Reverse Auctions, and the Purchase of Environmental Services

A conceptual framework distinguishes farmland retention institutions and with a survey of various literatures, interviews, and original policy design, classifies 28 techniques in four types: regulatory, incentive-based, governmental-participatory, and hybrid. The analysis reveals that techniques often perceived to be incentive-based, such as PDR/PACE and TDR, are better understood as participatory and hybrid techniques, respectively. Likely fiscal impacts, stakeholder acceptability, and implementation challenges are assessed. The framework suggests that when governments select multiple techniques, attention should be paid to the implied allocation of property rights to maintain coherent land-use policy and minimize property rights conflicts. (JEL Q15, Q24)