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What accounts for the divergence between ranchers' WTA and WTP for public forage?

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  • Sun, Lili
  • van Kooten, G. Cornelis
  • Voss, Graham M.

Abstract

Results from a 2002 survey of Nevada ranchers that asked about willingness to pay for public forage and willingness to accept compensation to part with grazing rights provide empirical support for the contention of large divergence between WTA and WTP. WTA and WTP are estimated simultaneously, thereby enabling the identification of ranch characteristics that could explain the discrepancy in valuations. We find that some of the discrepancy might be explained by the size of a ranch's herd and the amount of public forage the ranch can access. We find little evidence that the ranching lifestyle accounts for the difference between WTP and WTA for public forage, as asserted by some ranch economists. It would appear that the discrepancy between WTA and WTP can be attributed primarily to an endowment effect.

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  • Sun, Lili & van Kooten, G. Cornelis & Voss, Graham M., 2009. "What accounts for the divergence between ranchers' WTA and WTP for public forage?," Forest Policy and Economics, Elsevier, vol. 11(4), pages 271-279, July.
    • Handle: RePEc:eee:forpol:v:11:y:2009:i:4:p:271-279
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    1. Sun, Chuanwang & Zhu, Xiting, 2014. "Evaluating the public perceptions of nuclear power in China: Evidence from a contingent valuation survey," Energy Policy, Elsevier, vol. 69(C), pages 397-405.

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