Timothy C. Haab

Valuing Environmental and Natural Resources

Non-market valuation has become a broadly accepted and widely practiced means of measuring the economic values of the environment and natural resources. In this book, the authors provide a guide to the statistical and econometric practices that economists employ in estimating non-market values.

Measuring Recreation Benefits of Quality Improvements with Revealed and Stated Behavior Data

We propose a combined revealed and stated behavior estimation method to measure recreation benefits of a fixed quality improvement that directly addresses the issues of variation in environmental quality beyond the observed range and new participation induced by higher quality. We survey a sample of the general population, including non-participants, to obtain stated preference data for trips based on a policy-relevant estuarine quality improvement. Panel recreation demand models that take into account new participants induced by the higher quality are estimated and used to derive total consumer surplus.

Count Data Models and the Problem of Zeros in Recreation Demand Analysis

In this paper we develop a count data model for consumer demand which explicitly allows for a large number of zero observations for the dependent variable, and separation of the participation versus quantity decisions. The advantages of the model over traditional censored and count demand models are brought out, and the appropriate consumer surplus measures are derived. By introducing a random error term into the traditional count model demand function, the appropriate measure of expected consumer surplus for count models is derived. The model is illustrated using a recreational survey of the general population. Copyright 1996, Oxford University Press.

Are Hypothetical Referenda Incentive Compatible? A comment

In a recent article in this Journal, Cummings al. (1997) offer experimental evidence rejecting the hypothesis that a hypothetical referendum is an incentive‐compatible mechanism for obtaining the social value of, or willingness to pay for, changes in the allocation of environmental goods and services. While cautions in offering a blanket rejection of hypothetical referenda as a means of measuring economic values on the basis of their findings, the authors do suggest that at least in experimental settings respondents appear to behave differently when real money is changing hands. Wheather hypothetical situations adequately mimic real‐market situations has been debated in the contigent valuation literature since its inception (see Cummings, Brookshire, and Schulze 1986). Cummings et al.s finding of incentive incompatibility appears to offer strong evidence for the critics of hypothetical referenda.

Nonparticipation or Misspecification? The Impacts of Nonparticipation on Dichotomous Choice Contingent Valuation

Dichotomous choice (or Referendum) contingent valuation surveys have become the predominate choice for valuing goods and services otherwise not valued in a standard market (nonmarket goods and services). A number of researchers have recently recommended that dichotomous choice contingent valuation studies include a follow-up question to all no responses to determine whether the no response is a result of unwillingness to pay, or nonparticipation. If the goal of the study is to investigate the impact of covariates on either mean willingness to pay or the probability of nonparticipation, simple identification of indifferent individuals will not suffice. A simulation study shows that existing econometric models designed to account for nonparticipation are extremely sensitive to misspecification bias. Accurate identification of the probability of nonparticipation is hampered by potential misspecification of the distribution of willingness to pay.

Southeast Marine Recreational Fishery Statistical Survey: Distance and Catch Based Choice Sets

In this paper we estimate the economic value associated with marine recreational fishing in the southeast United States using the random utility model. The data used is the Southeast (North Carolina to Louisiana) Marine Recreational Fishery Statistics Survey (SE MRFSS). The geographic extent of the market and potential catch are used to determine the effect of choice set definition on random utility model parameter and welfare estimates. We find that choice sets based on distance or catch do not lead to large differences in the compensating variation of a fishing trip. Defining choice sets based on catch does lead to insignificant estimates of the effect of one measure of site quality on site selection. We also find differences in the value of an additional fish when comparing alternative measures of site quality.

Part-Whole Bias in Contingent Valuation: Will Scope Effects Be Detected with Inexpensive Survey Methods?

The purpose of this paper is to test for scope effects with the contingent valuation method. We use data from a telephone survey focusing on water quality improvements in the Albemarle and Pamlico Sounds in North Carolina. We find that the willingness to pay estimates are sensitive to the scope of the policy. These results suggest that the use of inexpensive survey methods may not be the cause of the failure to detect scope effects in some recent contingent valuation studies.

Financial and Psychological Risk Attitudes Associated with Two Single Nucleotide Polymorphisms in the Nicotine Receptor (CHRNA4) Gene

With recent advances in understanding of the neuroscience of risk taking, attention is now turning to genetic factors that may contribute to individual heterogeneity in risk attitudes. In this paper we test for genetic associations with risk attitude measures derived from both the psychology and economics literature. To develop a long-term prospective study, we first evaluate both types of risk attitudes and find that the economic and psychological measures are poorly correlated, suggesting that different genetic factors may underlie human response to risk faced in different behavioral domains. We then examine polymorphisms in a spectrum of candidate genes that affect neurotransmitter systems influencing dopamine regulation or are thought to be associated with risk attitudes or impulsive disorders. Analysis of the genotyping data identified two single nucleotide polymorphisms (SNPs) in the gene encoding the alpha 4 nicotine receptor (CHRNA4, rs4603829 and rs4522666) that are significantly associated with harm avoidance, a risk attitude measurement drawn from the psychology literature. Novelty seeking, another risk attitude measure from the psychology literature, is associated with several COMT (catechol-O-methyl transferase) SNPs while economic risk attitude measures are associated with several VMAT2 (vesicular monoamine transporter) SNPs, but the significance of these associations did not withstand statistical adjustment for multiple testing and requires larger cohorts. These exploratory results provide a starting point for understanding the genetic basis of risk attitudes by considering the range of methods available for measuring risk attitudes and by searching beyond the traditional direct focus on dopamine and serotonin receptor and transporter genes.

Contingent Valuation Method

The contingent valuation method is a stated preference approach to environmental valuation. The method is useful for estimating benefits and costs for environmental and natural resource policy analysis and benefit–cost analysis. Survey implementation requires attention to survey design including scenario design and the format of the valuation question. The advantages include flexibility, ability to estimate nonuse values, and incorporation of ex ante uncertainty. The accuracy of the method is assessed with various tests for validity and reliability.

Economic effects of Pfiesteria

Pfiesteria is a single-celled microorganism that is a toxic predator of a number of fish species. We measure the effects of information about Pfiesteria on three related decision processes of the consumer: risk perceptions, seafood demand, and willingness to pay for a mandatory seafood inspection program. Using responses to a survey on seafood consumption and hypothetical Pfiesteria-related fish kills, we find that announcement of a fish kill increases the perceived risks of seafood and decreases the demand for seafood. Information policies that assure the safety of seafood have little effect in restoring consumer confidence in seafood. Perceived negative information tends to decrease welfare by more than the counter effects of perceived positive information. Welfare losses are recovered through a mandatory seafood inspection program rather than safety announcements.