Divergence between WTA and WTP Revisited: Livestock Grazing on Public Range

Lili Sun, Gerrit van Kooten and Graham Voss

No 37014, Working Papers from University of Victoria, Resource Economics and Policy

Abstract: The research reported here provides further empirical support for the contention that there is a divergence between WTA and WTP. The conclusion is based on results from a 2002 survey of Nevada ranchers that asked about willingness to pay for public forage and WTA compensation to part with grazing rights. WTP and WTA are estimated simultaneously, with the estimators used to demonstrate a statistically significant divergence between WTP and WTA. The simultaneous estimation allows us to identify ranch characteristics that influence the discrepancy in valuations. Ranch size, public grazing allotment, financial distress, and long term commitment to ranching are all significant influences on the disparity. We interpret these results both with respect to general differences in welfare measures and with respect to ranch policy.

Keywords: Agribusiness; Land Economics/Use (search for similar items in EconPapers)
Pages: 38
Date: 2005-07
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Working Paper: Divergence between WTA and WTP Revisited: Livestock Grazing on Public Range (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uvicwp:37014

DOI: 10.22004/ag.econ.37014

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