Measuring the Impacts of Wolves on the 'Market' for Elk Hunting: Hunter Adjustment and Game Agency Response

The reintroduction of the gray wolf to Montana and other western states has to date largely pitted ranchers against environmental groups, with the U.S. Fish and Wildlife Service (USFWS) as the central agency for this reintroduction. There is also another group affected by wolves that to date have had little influence on this reintroduction. Hunters have diverse views on wolves, and accordingly have not spoken with one voice concerning their reintroduction. This lack of a common view is mirrored by the Rocky Mountain Elk Foundation's (one of the largest hunting groups in North America) evolving policy statements in 1995 and 2003 that specifically addresses that their membership will take different sides to wolf reintroduction, and that the group supports state control of wolves, 'ultimately achieving an appropriate balance between wildlife, habitat, and people' (Rocky Mountain Elk Foundation, 2005). Part of the ambivalence of hunters towards wolves stems from the general lack of published knowledge regarding the actual impacts of wolves on game populations, game behavior, and ultimately hunters- satisfaction. This lack of knowledge arises due to the complex nature of the predator/prey relationships, the extensive movements of wolves and their prey, and the difficulty of obtaining good population estimates of both wolves and particularly their prey. Additionally from an economic perspective, hunters- property rights to game are ill-defined, with the political strength of hunting "rights" and their values quite difficult to determine. This paper provides estimates of the effects of wolves on hunter opportunities, where these opportunities are influenced by actions taken by both the game agency and hunters in response to the spread of wolves. We utilize observed measures for these effects -permit availability, hunter success, and measures of hunter - to assess the impacts of wolves on hunters. We focus on elk − a game species that are both vulnerable to wolves and that is in high demand in Montana. Our estimation approach draws from a hedonic model in which hunters compete for a rivalrous good (elk hunting opportunities) that is not allocated through a price mechanism. Hunters in most western states compete for hunting rights by entering a special permit lottery in some cases, while they compete in other cases by undertaking costly activities to obtain a right under open access. Hunters compete for these rights under open access by racing to reach hunting areas early, establishing expertise and customary areas, and in other ways consistent with Barzel (1997). Both types of competition are observable using different instruments as in Nickerson (1990), by Buschena, Anderson, and Leonard (2001), and by Scroggin, Berrens, and Bohara (2000). Hunters are empirically modeled in such a way that allows them to benefit from elk and also from experience value of wolves. The paper provides not only a study of agency decisions in response to impacts of a threatened species, but also applies a relatively little-studied method of determining factors affecting demand and agency decision for goods distributed via a non-price mechanism. Our application (1) uses observable measures of hunter competition that reflect good valuation, (2) statistically accounts for the endogeneity of hunter and agency decision, and (3) models the simultaneous equilibria across numerous and diverse hunting districts (the "goods" being competed for in this case). Our statistical estimation shows that as wolf populations in a particularly high profile region outside Yellowstone National Park become established in a hunting district, (1) the state game agency reduces the supply of special hunting permits, (2) there are fewer hunters hunting in that district under open access licenses, and (3) hunter success rates for both special permits and open access decline with increased wolf pressure in areas with the heaviest wolf pressure. We find that the game agency and hunters respond to reduced hunting opportunities, and that their responses are larger in magnitude for high-profile (political profile) wolf populations. We believe that this paper is quite relevant to numerous parties involved in resource allocation, endangered species policy, state and federal agencies, and recreational users of public and private lands. The paper should be of interest to resource economists as it provides an application of an observable "market" for desirable resources as a complement to elicitation-based valuation methods. We expect the paper to generate a good deal of interest and discussion regarding the methodology and policy implications. Barzel, Yoram. Economic Analysis of Property Rights: Second Edition. Cambridge, UK: Cambridge University Press, 1997. Buschena, D.E., T. Anderson, and J Leonard. "Valuing Non-Market Goods: The Case of Elk Hunting in Colorado and Montana." Journal of Environmental Economics and Management 41 (2001): 33-43. Montana Fish, Wildlife and Parks. "FWP Takes Lead in Wolf Management in Montana." http://fwp.state.mt.us/news/article_3700.aspx. June 24, 2005. Nickerson, Peter H. (1990) "Demand for the Regulation of Recreation: The Case of Elk and Deer Hunting in Washington State." Land Economics, 66, 437-447. Rocky Mountain Elk Foundation. "Our Positions" (official position statements on wolves). Bugle, the Journal of the Rocky Mountain Elk Foundation. July/August, 2005. pp 78. Scroggin, David, Robert P. Berrens, and Alok. K. Bohara. (2000). "Policy Changes and the Demand for Lottery-Rationed Big Game Hunting Licenses." Journal of Agricultural and Resource Economics, 25(2): 501-519.