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Willingness to Pay for Potential Standing Timber Insurance

Author

Listed:
  • Deng, Yiling
  • Munn, Ian A.
  • Coble, Keith
  • Yao, Haibo

Abstract

Landowners rarely insure standing timber, suggesting the limited products available do not appeal to potential clientele. We estimated landowner willingness to pay (WTP) for standing timber insurance. Data were generated through a contingent valuation survey. Questionnaires were mailed to a random sample of Mississippi private forest landowners with 100+ acres of forestland. WTP for standing timber insurance was derived using an interval-censored survival model and a Kaplan-Meier Turnbull nonparametric model. The estimated WTP premium rate was approximately $3.20 per $1,000 of standing timber value, well below existing premium rates. This partially explains the underinsurance of standing timber among landowners.

Suggested Citation

  • Deng, Yiling & Munn, Ian A. & Coble, Keith & Yao, Haibo, 2015. "Willingness to Pay for Potential Standing Timber Insurance," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 47(4), December.
    • Handle: RePEc:ags:joaaec:349124
    DOI: 10.22004/ag.econ.349124
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    References listed on IDEAS

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    1. Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
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