Private vs. Public Private vs. Public Provision of Forest Provision of Forest E t S iE t S iEcosystem Services: Ecosystem Services: ADiscrete ChoiceADiscrete ChoiceA Discrete Choice A Discrete Choice 

AnalysisAnalysis

Gabrielle Roesch, M.S. Candidate School of Forest ResourcesAdvisor: Sergey Rabotyagovg y y g

Sponsoring Agency: USDA AFRI

OutlineOutlineBackgroundg

Research QuestionsPrevious StudiesPrevious Studies

MethodsResults

Analysis & DiscussionAnalysis & Discussion

BACKGROUNDBACKGROUND“A comprehensive system needs 

to be designed to provide incentives to keep forestincentives to keep forest landowners in forestry and maintain the land base”      

2008 Climate Action Team: Forest Sector Workgroup

• Increased regulationg

• Conversion

• Ownership structure

• Climate Change and emerging g g gmarkets

• The ECOSEL tool finds the most efficient combination of ecosystem services that can be delivered at the least ypossible cost. The tradeoffs and opportunity costs of providing an efficient range of forest ecosystem services are identified and linked to spatially explicitare identified and linked to spatially explicit management plans.

• University of Washington’s Pack Forest (4300 acre Douglas‐fir forest) provides the baseline for the management scenariosmanagement scenarios. Tóth, S.F., Ettl, G.J., and S.S. Rabotyagov. 2010. ECOSEL: An auction mechanism for forest ecosystem services. Mathematical and Computational Forestry and Natural Resources Science 2(2):99‐116.

Research QuestionsResearch QuestionsQQOR and WA household

• Preferences for forest ecosystem services and their• Preferences for forest ecosystem services  and their WTP for them

• The relative weights of specific attributes

• Willingness to participate in a voluntary vs. a mandatory programmandatory program

Previous StudiesPrevious StudiesPrevious StudiesPrevious Studies• WA: Positive WTP more biodiversity and aestheticWA: Positive WTP more biodiversity and aesthetic amenity (Xu et al., 2003).

• OR: Positive WTP for biodiversity conservation programs, lresistant to policy intervention (Garber‐Yonts et al., 2004). 

• Canada: High WTP for mature forest and wildlife habitat• Canada: High WTP for mature forest  and wildlife habitat (Moon, 2004).

• CA: Differences in preferences for public goods provision;  p p g pprivate consumption vs. policy intervention (Hamilton, Sunding & Zilberman 2000).

MethodsMethodsStated Preference Survey DesignSurvey Design 

Conduct Focus Groups

Web‐based survey administered

Analysis and Application

Focus GroupsFocus GroupsFocus GroupsFocus Groups

Focus Group Type Sample Size Direct Input

Seattle‐area residents 12 Survey InstrumentSea e a ea esi e s Su ey I s u e

Nisqually Watershed Council

9 Auction format andForest Valuation

Local Stakeholders 7 Auction format andLocal Stakeholders 7 Auction format and Forest Valuation

Environmental valuationEnvironmental valuation“Utility theory provides the conceptual

basis for resource compensation i ll l i l i

Stated Preference Methods

measures since all ecological services can be represented as entering an

individual’s utility function.”(Adamowicz et al 1998) Rating Ranking

Stated Choice(Adamowicz et al., 1998) Rating Ranking

Attribute Based Stated

• Valuation studies based on random utility theory:

Other Choice MethodsAttribute Based Stated Choice Methods

Referendum Contingent Valuation

Ui= vi + Єi

g

Figure reproduced from Adamowicz et al., 1998

Design of Survey Design of Survey InstrumentInstrument

Pack Forest as baseline-Utilized management scenarios under ECOSEL framework. -16 Alternatives, 4 Choice Sets Each-2 separate surveys: Mandatory vs. Voluntary2 separate surveys: Mandatory vs. VoluntaryAttributes Mature 

ForestHabitat

Carbon Stored

Water Quality

Land Protected

Recreation

Your Cost

Habitat

Level 1 460 39,000 2%  50 Years No $25

Level 2 630 57,000 4% NeverDeveloped

Yes $75

Level 3 730 77 000 6% $125Level 3 730 77,000 6% $125

Level 4 870 97,000 8% $175

Experimental DesignExperimental DesignExperimental DesignExperimental Design

S S lS S lSurvey SampleSurvey Sample• Mandatory Payment 

mechanism framed as a f d l di t

• Voluntary Payment Mechanism asked for an 

l t ib ti i referendum leading to an annual tax payment

annual contribution in a provision‐point (threshold), with a 

• N= 264

refund, game format. 

N 192• N= 192

Choice Set (Voluntary Provision) Choice Set (Voluntary Provision) ( y )( y )

Choice Set (Mandatory, TaxChoice Set (Mandatory, Tax funded,  funded,  

Provision) Provision) 

Attribute Alternative A Alternative B Current TrendMature Forest: Total 

f t ld94% increase in total 

630169% increase in total 

87010% reduction in t t l t f tacres of trees older 

than 115 years within the next 50 years 

acreage or 630 acres. acreage or 870 acres. total mature forest acreage or 292 acres. 

Carbon Storage: Total  175% increase in total  104% increase in total  5% reduction in gtons of carbon stored over 50 years 

carbon storage or 77,000 tons stored. 

carbon storage or 57,000 tons stored. 

carbon storage or 26,600 tons of carbon stored. 

Wate Quality % 4% i ea e i 6% i ea e i 10% de ea e iWater Quality: % Increase in improved salmon habitat 

4% increase in salmon habitat 

6% increase in salmon habitat

10% decrease in salmon habitat 

Land Conversion Never Developed Never Developed 25% of land developed in the next 50 years 

Recreation Public Access Public Access No Public Accessl C $ f $ f ATotal Cost to

landowner above baseline

$58.44 per acre, for fifty years. 

$62.44 per acre, for fifty years. 

NA

Your annual tax $75 $25 $0

Respondent Respondent D hiD hiDemographicsDemographics

• Survey Sampling International

Demographic Characteristic

VoluntaryMechanism

MandatoryMechanism OR/WA Average

% Female 63% 73% 50%

• Response Rate:

Eastern Washington 27% 24%aprox. 15%

Response Rate:-TBD

Eastern Oregon 8% 24%aprox. 5%

Democratic 34% 43% 44%

Average Age 48 53 36

Average Income 44,000 42,000 $54,000 

% Caucasian 81% 85% 87%

Model SpecificationModel SpecificationppMNL ModelChoices: A, B or Current TrendUtility associated with choice:

U(A,B)=Characteristics varying by alternative: Mature Forest Habitat, Carbon Sequestration, Water Quality, Land Conversion, Recreation, the Cost to the landowner and the Cost to respondent and the Cost to the landowner and the Cost to respondent and perception of total number of other respondents choosing an alternative.

U (Current Trend)=Characteristics of the decision maker: alternative U (Current Trend)=Characteristics of the decision-maker: alternative specific constant , geographic location, length of residence, neighborhood-type, gender, age, level of education, conservation and volunteer history, Small Forest Landowner, employment level, income political affiliation voting history and perception of total income, political affiliation, voting history, and perception of total number of other respondents choosing an alternative.

Voluntary Provision: Voluntary Provision: Distribution of ChoicesDistribution of ChoicesDistribution of ChoicesDistribution of ChoicesChoice Percent Total Number

A 26.271 165

B 36.568 229

None 37.161 233

Total 100% 627

Voluntary Payment MechanismVoluntary Payment Mechanism

Variable CoefficientStandard 

Error

ASC (Unobservable source of utility) 2 30750968 0 7178047ASC (Unobservable source of utility) 2.30750968 0.7178047

MATURE HABITAT 0.00146444 0.00072218

CARBON STORAGE 1.64E‐05 .586785E‐05

WATER QUALITY 0.13822438 0.04009317

LAND CONVERSION ‐0.12122294 0.04532947

RECREATION ‐0.24329431 0.21040076

COST OF MANAGEMENT ‐0.01271055 0.00680592

CONTRIBUTION/PRICE 0 0060785 0 00227158CONTRIBUTION/PRICE ‐0.0060785 0.00227158

% OF OTHERS 0.17536388 0.01285438

EASTERN WASHINGTON ‐0.65950132 0.28419927

RESIDENCE(TIME) ‐0.34082461 0.08879644

MALE 0.49284877 0.22052031

INCOME 0.05397921 0.03145905

Mandatory Provision: Mandatory Provision: Di t ib ti f Ch iDi t ib ti f Ch iDistribution of ChoicesDistribution of Choices

Choice Percent Total Number

A 37.024 302

B 36.660 300B 36.660 300

None 26.316 215

Total 100% 817

Mandatory Payment Mandatory Payment M h iM h iMechanismMechanism

Variable CoefficientStandard 

ErrorVariable Coefficient Error

ASC (unobservable source of utility) ‐1.61541618 0.51214784

MATURE HABITAT 0.00048121 0.00049367

CARBON STORAGE 6.83E‐06 .408850E05

WATER QUALITY 0.06738179 0.02507541

LAND CONVERSION 0.01195353 0.02719643

RECREATION 0.22154924 0.17707935

COST OF MANAGEMENT ‐0.0076906 0.00537359

TAX(PRICE) ‐0.00580644 0.00143536

% OF OTHERS 0.15825407 0.01096772

WESTERN WASHINGTON ‐0.25024902 0.18785174

FULL TIME EMPLOYMENT ‐0.46522214 0.20268746

VOTE NATIONALLY 1.12080839 0.22246154

VOLUNTEER LOCALLY 1.28719386 0.35535919

WillingnessWillingness‐‐toto‐‐PayPayWillingnessWillingness‐‐toto‐‐Pay Pay • Private, Voluntary • Public, Mandatory , y

System• Critical WTP estimate:

, ySystem

• Critical WTP estimate:$231 86 -$75.21$231.86

PublicMarginal Willingness To Pay i

Marginal Willingness To Public To Pay

MATURE HABITAT 0.08

CARBON STORAGE 0.0012

WATER QUALITY 11 60

Private Pay

MATURE HABITAT 0.24

CARBON STORAGE 0.0027

WATER QUALITY 11.60

LAND CONVERSION 2.06

RECREATION 38.16

WATER QUALITY 22.74

LAND CONVERSION ‐19.94

RECREATION ‐40.03

COST TO LANDOWNER ‐1.32 COST TO LANDOWNER ‐2.09

C iC iComparisons…Comparisons…• Differences between • Similarity between voluntary and mandatory models:

• ASC unobservable

yvoluntary and mandatory models:R d t iti t ASC unobservable 

portion of utility for status quo (voluntary system) whereas we see

• Respondents sensitive to cost of landowner estimates and efficiency. system) whereas we see 

unobservable utility for choosing a a forest management plan

y• Price Point important• Water quality and carbon 

t ti management plan (mandatory system).

• WTP estimates much higher in public system

sequestration 

higher in public system.

Perceived Risks to Forest Perceived Risks to Forest LandLand‐‐BaseBasePerceived Threats to Forests

ConversionConversion

Climate Change

Pests and Disease

Private Mismanagement

Public Mismanagement

Attribute InfluenceAttribute Influence70

80 Public Payment Mechanism 60Private Payment Mechanism

50

60

40

50

20

30

40

10

20

30

0

10

0

10

Most Influence

Least InfluenceMost Influence

Least Influence

F t I tFuture Impacts

Inform sellers of Ecosystem Services

Policy Makers

Design of future Ecosystem Services Marketsg y

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