IDEAS home Printed from https://ideas.repec.org/p/ags/aaea12/123434.html
   My bibliography  Save this paper

The Theoretical Structure of Producer Willingness to Pay Estimates

Author

Listed:
  • Zapata, Samuel D.
  • Carpio, Carlos E.

Abstract

This paper analyzes the theoretical underpinnings of producers’ willingness to pay (WTP) for novel inputs. In addition to conceptualizing the WTP function for producers, we derive its comparative statics and demonstrate the use of these properties to estimate input quantities demanded, outputs supplied, and price elasticities. We also discuss implications of the comparative statics results for the specification of empirical producer WTP models and survey design.

Suggested Citation

  • Zapata, Samuel D. & Carpio, Carlos E., 2012. "The Theoretical Structure of Producer Willingness to Pay Estimates," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123434, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea12:123434
    DOI: 10.22004/ag.econ.123434
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/123434/files/The%20Theoretical%20Structure%20of%20Producer%20WTP%20estimates%20_AAEA.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.123434?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489, November.
    2. William S. Breffle & Edward R. Morey & Tymon S. Lodder, 1998. "Using Contingent Valuation to Estimate a Neighbourhood's Willingness to Pay to Preserve Undeveloped Urban Land," Urban Studies, Urban Studies Journal Limited, vol. 35(4), pages 715-727, April.
    3. Kenkel, Philip L. & Norris, Patricia E., 1995. "Agricultural Producers' Willingness To Pay For Real-Time Mesoscale Weather Information," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(2), pages 1-17, December.
    4. Hasing, Tomas & Carpio, Carlos E. & Willis, David B. & Sydorovych, Olha & Marra, Michele, 2012. "The Effect of Label Information on U.S. Farmers' Herbicide Choices," Agricultural and Resource Economics Review, Cambridge University Press, vol. 41(2), pages 200-214, August.
    5. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
    6. Alan Diener & Bernie O'Brien & Amiram Gafni, 1998. "Health care contingent valuation studies: a review and classification of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 7(4), pages 313-326, June.
    7. John C. Whitehead, 1995. "Willingness to Pay for Quality Improvements: Comparative Statics and Interpretation of Contingent Valuation Results," Land Economics, University of Wisconsin Press, vol. 71(2), pages 207-215.
    8. Krupnick, Alan & Alberini, Anna & Cropper, Maureen & Simon, Nathalie & O'Brien, Bernie & Goeree, Ron & Heintzelman, Martin, 2002. "Age, Health and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey of Ontario Residents," Journal of Risk and Uncertainty, Springer, vol. 24(2), pages 161-186, March.
    9. Carlos E. Carpio & Olga Isengildina-Massa, 2009. "Consumer willingness to pay for locally grown products: the case of South Carolina," Agribusiness, John Wiley & Sons, Ltd., vol. 25(3), pages 412-426.
    10. Haab, Timothy C. & McConnell, Kenneth E., 1997. "Referendum Models and Negative Willingness to Pay: Alternative Solutions," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 251-270, February.
    11. Clifford, William B. & Hoban, Thomas J. & Whitehead, John C., 2001. "Willingness To Pay For Agricultural Research And Extension Programs," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 33(1), pages 1-11, April.
    12. Jayson L. Lusk, 2003. "Effects of Cheap Talk on Consumer Willingness-to-Pay for Golden Rice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 840-856.
    13. McConnell, Kenneth E. & Bockstael, Nancy E., 2006. "Valuing the Environment as a Factor of Production," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 14, pages 621-669, Elsevier.
    14. Jayson L. Lusk & Darren Hudson, 2004. "Willingness-to-Pay Estimates and Their Relevance to Agribusiness Decision Making," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(2), pages 152-169.
    15. Clifford Lipscomb, 2011. "Using contingent valuation to measure property value impacts," Journal of Property Investment & Finance, Emerald Group Publishing, vol. 29(4/5), pages 448-459, July.
    16. Fuss, Melvyn & McFadden, Daniel (ed.), 1978. "Production Economics: A Dual Approach to Theory and Applications," Elsevier Monographs, Elsevier, edition 1, number 9780444850133, December.
    17. McConnell, K. E., 1990. "Models for referendum data: The structure of discrete choice models for contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 19-34, January.
    18. Eric Thompson & Mark Berger & Glenn Blomquist & Steven Allen, 2002. "Valuing the Arts: A Contingent Valuation Approach," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 26(2), pages 87-113, May.
    19. Cai, Ximing & Ringler, Claudia & You, Jiing-Yun, 2008. "Substitution between water and other agricultural inputs: Implications for water conservation in a River Basin context," Ecological Economics, Elsevier, vol. 66(1), pages 38-50, May.
    20. Bryan J. Hubbell & Gerald A. Carlson, 1998. "Effects of Insecticide Attributes on Within-Season Insecticide Product and Rate Choices: The Case of U.S. Apple Growers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 382-396.
    21. Zvi Griliches, 1957. "Specification Bias in Estimates of Production Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 39(1), pages 8-20.
    22. Chang, Yang-Ming & Huang, Biing-Wen & Chen, Yun-Ju, 2012. "Labor supply, income, and welfare of the farm household," Labour Economics, Elsevier, vol. 19(3), pages 427-437.
    23. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387.
    24. Banfi, Silvia & Farsi, Mehdi & Filippini, Massimo & Jakob, Martin, 2008. "Willingness to pay for energy-saving measures in residential buildings," Energy Economics, Elsevier, vol. 30(2), pages 503-516, March.
    25. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275.
    26. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (I): The Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number fuss1978.
    27. Darren Hudson & Diane Hite, 2003. "Producer Willingness to Pay for Precision Application Technology: Implications for Government and the Technology Industry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 51(1), pages 39-53, March.
    28. Zapata, Samuel D. & Benavides, Holger M. & Carpio, Carlos E. & Willis, David B., 2009. "The Economic Value of Basin Protection to Improve the Quality and Reliability of Potable Water Supply: Some Evidence from Ecuador," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46773, Southern Agricultural Economics Association.
    29. Bergman, Mats A. & Brannlund, Runar, 1992. "A note on the application of the restricted generalised Leontief profit function," Economics Letters, Elsevier, vol. 40(2), pages 177-180, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zapata, Samuel D. & Carpio, Carlos E. & Isengildina-Massa, Olga & Lamie, R. David, 2013. "The Economic Impact of Services Provided by an Electronic Trade Platform: The Case of MarketMaker," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(3), pages 1-20.
    2. Lai, John & Wang, H. Holly, 2016. "Producers’ Willingness to Adopt an Alternative Technology: Market Opportunities to Export Pork to China," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236054, Agricultural and Applied Economics Association.
    3. Murphy, David M. A., 2017. "Underground Knowledge: Soil Testing, Farmer Learning, and Input Demand in Kenya," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258372, Agricultural and Applied Economics Association.
    4. Velandia, Margarita & Jensen, Kimberly & DeLong, Karen L. & Wszelaki, Annette & Rihn, Alicia, 2020. "Tennessee Fruit and Vegetable Farmer Preferences and Willingness to Pay for Plastic Biodegradable Mulch," Journal of Food Distribution Research, Food Distribution Research Society, vol. 51(3), November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zapata, Samuel D. & Carpio, Carlos E. & Isengildina-Massa, Olga & Lamie, R. David, 2013. "The Economic Impact of Services Provided by an Electronic Trade Platform: The Case of MarketMaker," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(3), pages 1-20.
    2. Zapata, Samuel D. & Carpio, Carlos E., 2014. "Distribution-free Methods for Estimation of Willingness to Pay Models Using Discrete Response Valuation Data," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170453, Agricultural and Applied Economics Association.
    3. Fadipe, Ademoye Emmanuel Akinboboye & Adigun, A.A. & Animashaun, Jubril Olayinka, 2014. "Assessment of Rural Farming Households WTP for Fertilizers and Agrochemicals in Kwawara State, Nigeria," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 4(2), February.
    4. Kim, Seon-Ae & Gillespie, Jeffrey M. & Paudel, Krishna P., 2008. "Rotational grazing adoption in cattle production under a cost-share agreement: does uncertainty have a role in conservation technology adoption?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(3), pages 1-18.
    5. John C. Whitehead & O. Ashton Morgan & William L. Huth & Gregory S. Martin & Richard Sjolander, 2012. "Willingness-to-Pay for Oyster Consumption Mortality Risk Reductions," Working Papers 12-07, Department of Economics, Appalachian State University.
    6. Senakpon, Kokoye, 2017. "Farmers’ Willingness To Pay For Soil Testing Service In Northern Haiti," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252804, Southern Agricultural Economics Association.
    7. Jae Kim & Seung-Nam Kim & Soogwan Doh, 2015. "The distance decay of willingness to pay and the spatial distribution of benefits and costs for the ecological restoration of an urban branch stream in Ulsan, South Korea," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 835-853, May.
    8. Yoo, Seung-Hoon & Kwak, So-Yoon, 2009. "Willingness to pay for green electricity in Korea: A contingent valuation study," Energy Policy, Elsevier, vol. 37(12), pages 5408-5416, December.
    9. Carlsson, Fredrik & Frykblom, Peter & Lagerkvist, Carl Johan, 2004. "Consumer willingness to pay for farm animal welfare - transportation of farm animals to slaughter versus the use of mobile abattoirs," Working Papers in Economics 149, University of Gothenburg, Department of Economics.
    10. John C. Whitehead & O. Ashton Morgan & William L. Huth, 2018. "Convergent validity of stated preference methods to estimate willingness-to-pay for seafood traceability: The case of Gulf of Mexico oysters," Economics Bulletin, AccessEcon, vol. 38(1), pages 326-335.
    11. Sylvia Brandt & Felipe Vásquez & Michael Hanemann, 2008. "Designing Contingent Valuation Scenarios for Environmental Health: The Case of Childhood Asthma," Working Papers 11-2008, Departamento de Economía, Universidad de Concepción.
    12. Timothy Park & John Loomis, 1996. "Joint estimation of contingent valuation survey responses," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 7(2), pages 149-162, March.
    13. Timothy C. Haab, "undated". "Indifference or Misspecification? The Distributional Impacts of Indifference on Dichotomous Choice Contingent Valuation," Working Papers 9607, East Carolina University, Department of Economics.
    14. Carroll, Kathryn A. & Bernard, John C. & Pesek, John D. Jr., 2013. "Consumer Preferences for Tomatoes: The Influence of Local, Organic, and State Program Promotions by Purchasing Venue," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(3), pages 1-18.
    15. Lai, John & Wang, H. Holly, 2016. "Producers’ Willingness to Adopt an Alternative Technology: Market Opportunities to Export Pork to China," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236054, Agricultural and Applied Economics Association.
    16. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    17. John Crooker & Joseph Herriges, 2004. "Parametric and Semi-Nonparametric Estimation of Willingness-to-Pay in the Dichotomous Choice Contingent Valuation Framework," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 27(4), pages 451-480, April.
    18. Diederich, Johannes & Goeschl, Timo, 2011. "Willingness to Pay for Individual Greenhouse Gas Emissions Reductions: Evidence from a Large Field Experiment," Working Papers 0517, University of Heidelberg, Department of Economics.
    19. Rauli Svento, 1999. "On the Asymmetry of the Vagueness Band in Willingness to Pay Answers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(1), pages 151-163, July.
    20. Massimo FLORIO & Francesco GIFFONI, 2017. "Willingness-to-Pay for Science as a Public Good: A Contingent Valuation Experiment," Departmental Working Papers 2017-17, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

    More about this item

    Keywords

    Agribusiness; Demand and Price Analysis; Environmental Economics and Policy; Production Economics;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea12:123434. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.