Robert D. Rowe

A Repeated Nested-Logit Model of Atlantic Salmon Fishing

Participation and site choice for Atlantic salmon fishing are modeled in the context of a repeated three-level nested-logit model. Consumers surplus measures are derived for different levels of species availability in the Penobscot River, the most important salmon river in New England. For comparison, six other travel-cost models are estimated. These include restrictive cases of the nested-logit model, a partial demand model, and two single-site demand models. Comparisons across these models indicate the importance of modeling the participation decision, including income effects, and of adopting a nested-logit structure rather than a single-level logit structure.

An experiment on the economic value of visibility

Abstract This paper reports on the development and application of an iterative bidding technique to examine proposed visibility reductions in the Four Corners Region of the southwest United States. The iterative bidding technique is a method to elicit honest bids for “goods” not priced in formal markets. Four issues associated with direct revelation of preferences for environmental goods are explored: (1) the establishment of linkages between the physical parameters of visibility and representation of the “good” called visibility to individuals for valuation purposes; (2) a systematic test for both observed and induced biases associated with the interative bidding technique; (3) replication of the results of previous experiments; and (4) reporting of empirical divergences between compensating and equivalent surplus measures of consumer surplus.

A discrete-choice model of recreational participation, site choice, and activity valuation when complete trip data are not available

Abstract A discrete-choice model of the demand for site-specific recreational activities is developed and estimated. It simultaneously predicts both how many trips the individual will take and which site will be chosen on each trip. The model is formulated to estimate demand when the data set reports the total number of trips in a given time period, but the actual destinations for only a subset of the total. The model also includes a correction for sample-selectivity bias. The application is marine recreational fishing. The consumers surplus associated with any change in supply conditions is derived and used to assess the impact of changes in species availability.

Comparing Choice Question Formats for Evaluating Natural Resource Tradeoffs

Choice questions are increasingly being used to scale competing natural resource programs. Respondents choose between two alternatives with varying levels of program characteristics and costs. Complexity in the choice task can increase the randomness (variance) in the choices and the estimation of preferences, and the magnitude of randomness is examined using scope tests and scale parameters. We provide an empirical comparison of response variance from three formats. A simple resource-to-resource format appears superior to simple referendum and composite formats in terms of coherence. The application stems from a study addressing PCB-caused natural resource losses in Green Bay, Wisconsin. (JEL Q26)

Embedding and calibration in measuring non-use values

Embedding, the notion that respondents to contingent valuation (CV) questions often value more than the researcher intends, has engendered extreme views. These range from the suggestion that embedding is so severe that it renders CV useless to the assertion that embedding can be eliminated by providing sufficient information in a survey. This paper examines three alternative explanations for embedding: 1) the purchase of moral satisfaction, 2) independent valuation and summation, and 3) mental models of joint products. Several studies that shed light on the nature of the embedding problem are presented and we examine whether it is possible to test for embedding through follow up questions that obtain self reports from respondents. We show that answers to these debriefing questions predict whether or not different groups of respondents pass a scope test (i.e., a statistically significant difference between groups valuing different levels of the same commodity). We reject the view that increased market context can solve the embedding problem. Rather, embedding may depend on the nature of the commodity itself.

Critical factors in computing externalities for electricity resources

Abstract The New York State Environmental Externalities Cost Study and computerized externality model (EXMOD) are used to examine the specification of methods design and application factors in the computation of electricity externalities. We report the sensitivity of externality estimates with alternative specifications for 15 different factors in the analysis, including the selection of facility type, site, and operating characteristics; air emission assumptions and air modeling procedures; dose-response assumptions; economic valuation assumptions; and other modeling procedures and assumptions. Many of the factors that most influence externality computations can be well specified in the analysis, such as the facility type, age, characteristics, emission rates, whether there is SO 2 trading, and the inclusion of long range impacts. Most significant among the factors for which there remains significant scientific uncertainty are the selection and application of air dispersion models, selection of air pollution thresholds for health impacts, reduced life span risks associated with ozone exposure and with long-term exposure to PM 10 , values for CO 2 damages, and the value to be applied to increased risks of reduced life span for individuals age 65 or older.

Transportation and Air Pollution: The Environmental Damages

This paper examines estimates of the damages caused by air pollution emissions from transportation sources. The paper first provides a summary of dollar per gallon air pollution damage estimates from twenty studies. Next, new nationwide estimates of damages associated with air emissions are presented. Finally, three key issues in the estimation of damages are discussed.

Economic Valuation of Mortality‐Risk Reduction: Stated Preference Estimates from the United States and Canada

Two internet‐based surveys were conducted with adults aged 35 to 84 - 885 respondents in the United States and 641 respondents in Canada - to estimate willingness to pay (WTP) for reducing mortality risks through out‐of‐pocket costs for health‐care programs. All respondents were asked a series of choice questions followed by a payment‐card question. Causes of death included cancer and heart attack. Levels of annual mortality‐risk reduction were 1, 2, and 5 in 10,000. Converted to values of statistical life, results were in the range of

Combining Stated-Choice and Stated-Frequency Data with Observed Behavior to Value NRDA Compensable Damages: Green Bay, PCBs, and Fish Consumption Advisories

4–5 million (2002 U.S. dollars) for the choice‐question results for a 2‐in‐10,000 annual risk reduction for illness‐related mortality. U.S. and Canadian results were similar. The payment‐card results were about 50% lower than the choice‐question results. WTP to reduce mortality risk was essentially the same for cancer and heart attack. The results showed WTP weakly increasing with age, and no evidence of lower WTP for older adults versus middle‐aged adults.

The Magnitude of Electricity Externalities Through Time

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