Book Description
This dissertation addresses issues in non-market valuation related to preference uncertainty and to the divergence between willingness to accept (WTA) and willingness to pay (WTP) in contingent valuation method. The contributions are two fold. First, the dissertation contributes to development in non-market valuation by comparing emerging approaches addressing preference uncertainty in the standard contingent valuation framework and by introducing a promising approach, the fuzzy random utility maximization model. Further, the study provides empirical support for the observed divergence between WTA and WTP using a simultaneous equation regression model. Second, the dissertation provides policy implications. The non-market valuation model was calibrated with a survey of western Canadian landowners in 2000 to determine their willingness to accept compensation for planting trees to mitigate climate change. WTA values were then used to analyze the cost effectiveness of sequestering carbon by converting agricultural land to forestry. While estimates of WTA are less than foregone agricultural values, average costs of creating carbon credits still exceed their projected value under a C02-emissions trading scheme. Another results from the survey of Nevada ranchers that asked about WTP for public forage and WTA compensation to part with grazing rights indicate that ranch size, public grazing allotment, financial distress, and long term commitment to ranching are all significant influences on the disparity between WTA and WTP, which gives valuable information to ranch policy.
