WPS 14-06: Does Distance Impact Willingness to Pay for Forested Watershed Restoration?

Posted: Sunday, October 12th 2014 at 7:32 AM


Does Distance Impact Willingness to Pay for Forested Watershed Restoration? A Spatial Probit Analysis


Julie M. Mueller, Ph.D.
Associate Professor


While the relationship between ecological restoration and forested watershed health is well established in the literature, funding for restoration remains a significant constraint. Thus, estimates of the benefits of restoration are essential for efficient decision-making. While much research exists estimating the non-market value of wildfire, less research exists estimating the value of forested watershed restoration, and no studies explicitly model spatial variables estimating Willingness to Pay (WTP) for forested watershed restoration. We estimate WTP for forested municipal watershed restoration in Flagstaff, AZ, located in an arid region of the southwestern United States. We find policy-relevant differences in estimated WTP when explicitly incorporating spatial information on the distance to restoration treatment area. Our results indicate that careful consideration of the distance to proposed environmental improvements may be necessary to ensure accurate WTP estimates from dichotomous choice Contingent Valuation models.

Keywords: Bayesian Estimation, Contingent Valuation, Spatial Probit, Willingness to Pay, Forested Watershed Restoration

WPS 14-06 October 2014

PDF of working paper HERE.

Categories: working paper series working paper series 2014 julie mueller does distance impact willingness to pay for forested watershed restoration a spatial probit analysis faculty 2014 fall 2014