Valuation of Regional Ecological Response to Acidification and Techniques for Transferring EstimatesEPA Grant Number: R832422
Title: Valuation of Regional Ecological Response to Acidification and Techniques for Transferring Estimates
Investigators: Krupnick, Alan J. , Banzhaf, Spencer , Burtraw, Dallas , Cosby, Bernard , Driscoll, Charles T. , Evans, David , Siikam�ki, Juha
Institution: Resources for the Future , Syracuse University , University of Virginia
EPA Project Officer: Hahn, Intaek
Project Period: October 1, 2005 through September 30, 2008 (Extended to September 30, 2009)
Project Amount: $717,929
RFA: Valuation for Environmental Policy (2004) RFA Text | Recipients Lists
Research Category: Economics and Decision Sciences
The absence of estimates of the economic value of improvements in ecological systems has so far hindered policymakers’ attempts to set policy goals with economic efficiency in mind. The proposed research will be anchored to the team’s recently completed contingent valuation (CV) study of the total value of ecological improvements from reduced acidification in the Adirondacks. We will supplement this study with a choice experiment (CE) survey in the Adirondacks and both a CV and a CE survey in the Southern Appalachian Mountain region. For the latter region, a new effort to describe the state of the science and translate this to attributes suitable for valuation will be lead by our natural science team members.
The results of these surveys will be compared in various ways. After testing for construct validity, we will test convergent validity of the two valuation approaches by comparing the CE and CV results in a given area. To address benefit transfer issues, the survey results from each survey type in one area will be transferred to another area and compared to the direct survey results for that other area. Some of these transfers will be conducted by using the functional benefit transfer approach, which adjusts for both demographic and attribute differences across areas. Traditional and Bayesian pooling techniques will also be used in another set of transfer exercises. Further, shadow prices estimated in the CE studies will be compared for shared attributes. In addition to developing methodologies for some of the above activities, we will examine approaches to treating uncertainty in ecological outcomes in a CE analysis (i.e., by making uncertainty an attribute) and a new approach to addressing prior beliefs by respondents (what we term “expansive priors”).
This research will provide estimates of WTP for ecological changes resulting from reduced acidification in the Adirondack Park and Southern Appalachian region on a geographic and temporal scale that would be expected to result from current legislative or regulatory proposals. This would provide first-ever comprehensive data for benefit cost analysis with respect to the effects of acidification, which for three decades has been a central issue in air pollution policy. Important methodological advances include benefit transfer methods using small-sample studies that could reduce the cost of valuing benefits in new regions.