In traditional contingent valuation, the researcher seeks the amount a respondent is willing, ceteris paribus, to pay to obtain something. But if a respondent receives a “warm glow” from a yes response, ceteris is not paribus. In estimating willingness to pay (WTP) to reduce environmental impacts from consumption of transportation fuel, we find that respondents who were relatively less environmentally focused in the past receive greater warm-glow benefits from a “yes” response and have greater “warm” WTP (WTP that includes warm-glow benefits). Yet respondents who were relatively more environmentally focused in the past have greater “cold” WTP (WTP excluding warm-glow benefits).

Consumer's surplus has played an important role in evaluating agricultural price support programs as well as in other applications. Gardner and Wallace provide examples of the use of consumer's surplus in theoretical models, while numerous empirical studies (for example, Anderson, Sedjo and Wiseman, Johnson and Norton) have used the concept to measure welfare costs. Since its introduction by Dupuit and Marshall, the interpretation of consumer's surplus has been subject to change and controversy. In an important paper, Willig demonstrated that consumer's surplus is bounded by compensating variation (C) and equivalent variation (E) and derived rules of thumb showing how closely consumer's surplus approximates these appropriate welfare measures. These rules are compact and readily understandable to researchers doing applied welfare analysis.

While historians believe that preserving a historic building in its original location is important to maintain its historic integrity, the general public's opinion is unknown. Survey data were gathered from local residents regarding a proposed relocation of a historic mill in rural West Virginia. Only a minority of the sample population supported preserving the mill at its original location. Willingness to pay for preservation was estimated at $8.45 for a one-time donation for the sample and $2.29 after adjusting for non-respondents using characteristics of the local population.

Flows of water pollutants from agricultural sources are, for all practical purposes, unobservable by direct monitoring. These flows can, however, be estimated using hydrological models. The analysis presented in this paper demonstrates that uncertainty on estimated flows is not neutral with respect to the optimal level and allocation of estimated abatement or with respect to the expected net benefits of alternative pollution control policy instruments. Policy implications are noted.

Data on 268 farm sales in 10 counties throughout Pennsylvania in 1977 were analyzed using a hedonic price model. Problems associated with the influence of parcel size and buildings on per acre land values appear to have been overcome. Proximity of farms to metropolitan centers and the quantities of different types of land on a farm were important explanatory variables. Values per acre were computed showing the effects of those variables on price. Values for non-tillable land, high productivity tillable land, and land suitable for on-site sewage disposal tended to cluster within a $650-$700 price range per acre at 85 miles from the nearest SMSA.

The contribution of research to agricultural production is measured by estimating a production function which includes variables to reflect conventional inputs as well as agricultural research. Conventional inputs considered are hired labor, feed and livestock, seed and fertilizer, and capital and depreciation. Investment in agricultural research and extension within the region and investment in agricultural research in other production regions of the U.S. are included in the production function. Marginal products and internal rates of return axe derived for the own region and outside-the-region investments in agricultural research.

The empirical results indicate that sane agricultural production regions have a greater capacity for exporting agricultural research results while some have a greater capacity for importing agricultural research results from other production regions. Of the ten agricultural production regions of the U.S., the Northeast had the lowest marginal product per dollar invested in agricultural research during the 1977–81 period and the lowest internal rate of return to investment in agricultural research. For the same time period the average annual spillovers from the Northeast were approximately 3.3 times as large as the average annual regional benefit and the spillovers from the Northeast were about 2.3 times as large as the spill-ins into the Northeast region. The ratio of federal to state expenditures on agricultural research in the Northeast was 1.03 and compared to a ratio of spillover's to regional benefits of 3.3 suggests that the Northeast does not fare well in terms of federal support of agricultural research benefiting other regions of the U.S.

We estimate the relationship between farm animal welfare (FAW) efforts taken by beef farmers and the economic performance of beef farms by using farm accounting data from the Swedish Farm Economic Survey matched with survey data on farm management practices. To this end, we perform a two-step analysis. First, an item response theory (IRT) model estimates the latent FAW effort on farms. FAW effort likely depends on a host of complementary FAW-improving strategies, and the IRT model combines the considered strategies into a unidimensional scale. We take this to represent on-farm FAW effort. Second, we use instrumental variable regressions to estimate the relationship between FAW effort and multiple measures of farm economic performance. We find that higher FAW effort scores have no effect on margins and costs. However, higher FAW effort scores are associated with lower farm sales. Findings suggest that policies (such as targeted label for high FAW) that increase farm revenue as well as incentivize the uptake of FAW-improvement practices may be able to compensate farmers for their FAW effort.

Farmers in the Northeast have traditionally rotated crops in a particular field. This system has several advantages. Rotation of crops reduces the buildup of weeds, insects, and diseases specific to one crop. Legumes such as alfalfa fix nitrogen for use by the following grain crops. Including close growing crops in the rotation reduces soil loss. Growing several crops distributes labor requirements and reduces risk.

In increasing numbers, communities that rely on groundwater for drinking supplies have discovered contamination from agricultural pesticides and herbicides, road salt, underground fuel storage, and septic systems. A variety of short- and long-run remedies are available with highly uncertain outcomes. An appropriate technique for solving a benefit-cost problem of this type is a sequential decision framework using stochastic dynamic programming procedures for solution. The approach is illustrated here by means of an application to the problem of the recent contamination of the groundwater of Whately, Massachusetts by the agricultural fumigant EDB and the pesticide aldicarb.

Most econometric studies of the groundfish sector have suggested that either imports are not sensitive to U.S. prices, or that domestic prices are not much affected by imports, or both. Using a six equation model of the domestic fresh groundfish market we obtained contrasting results. For example, a 5.82 percent tariff of the type proposed by the U.S. International Trade Commission in 1986 would, if it applied to both whole fish and fillets, lower imports of fresh fish 3.7 percent and raise domestic ex-vessel prices 2.6 percent in the long run. The main reasons for the different results appear to be our inclusion of exchange rate effects and a more accurate measure of total fresh imports.

Creeping urbanization without land use controls is threatening rural areas with the loss of prime and scenic agricultural land. The operation of a relatively free land market shifts land to the highest bidder—one who believes he can make a profit, or one who judges his psychic income from ownership and/or use sufficient to make him prefer land ownership to alternative investments or consumption. As farmers retire and sell to nonfarmers, prime agricultural land adjacent to cities is transferred to more intensive, profitable, and irreversible urban uses—residences, commerce, recreation, and industry. Farmland is shifted from active farming to retirement homes and second homes, both at retail and in large developments. This land use trend is frequently cited as undesirable by municipal planners since it leads to a loss of prime agricultural land which may be needed for future food production and reduces pastoral scenery. In a recent study in Massachusetts, J. B. Wyckoff found that the process of suburbanization was consuming rural land at a very rapid rate—from two to eight times the historic rate.

This study's objective is to identify and understand the factors important to hardwood processors’ location decisions in the northern and central Appalachian region. Concepts from neoclassical and behavioral location theories were integrated to develop a general framework for analyzing these decisions. Logit regression analysis was used to determine those establishment characteristics related to the likelihood of location search. To a great extent, establishments locate based on personal ties and do not conduct searches. Most variables found to influence the likelihood of search are not controllable by state or local governments. The implications are that existing establishments should be targeted for retention and expansion, rather than focusing on recruitment.

In this study, we examine the impacts of retail promotions and flu/cold incidences on the demand for orange juice using weekly Nielsen grocery orange juice sales statistics and the flu/cold incidences reported by Surveillance Data Inc. The cross-section time-series pooling technique proposed by Parks was used to estimate the demand parameters. Results show that flu/cold incidences increased the effectiveness of retail promotions on the demand for orange juice.

The United States and the European Union both employ export subsidies to stimulate wheat trade and to increase their competitiveness in world markets. The environmental consequences of these policies are being questioned. We stimulate reducing or removing export subsidies for wheat from the United States and the EU using a multicountry partial equilibrium model, and we analyze the impact of export subsidy policy reform on nitrogen fertilizer and other chemical use. Our findings indicate that the U.S. EEP program cannot be blamed for environmental degradation in terms of nitrate leaching, while EU wheat subsidies make only a small contribution to nitrate pollution.

Geographic Information Systems (GIS) are becoming increasingly important to virtually all of the natural and social sciences. Applied economists will find that GIS can make valuable contributions to many of the problems with which they are concerned. Moreover, a great deal of the science behind GIS technology would benefit from the contributions of applied economists. This paper presents some initial suggestions for the ways in which GIS may be important to economics and the GIS related issues concerning which applied economists could provide useful insights.

Conventional economic theory suggests that economists’ contribution to local government is primarily with respect to the production function type of knowledge. A characterization of local government decision making exposes some limitations on applicability of economic analysis of that kind. Public choice perspectives to local government help to redefine and elaborate the role of economic analysis in instructing local government decision making.

Despite the generally recognized need for facilities such as power plants, landfills, prisons, and medical laboratories, finding host sites has become extremely difficult. This study uses the expected utility (EU) model to explain individuals’ preferences in the hypothetical case of siting a municipal solid waste composting facility. The three principal factors which EU theory prescribes would affect the decision process—benefits of the proposed facility, losses from the facility, and the (perceived) probability of various scenarios occurring—embodied by the variables in a multinomial logit model explain a substantial amount of the variation in siting decisions.

To investigate the poor participation rate of cranberry growers in the multiple-peril crop insurance program, a sample of 15 Massachusetts growers was interviewed. According to their risk preferences, a much greater proportion of growers should have insured, than actually did. A possible solution is to match the distribution used by the insurer closer to that believed by the grower. Adjusting each grower's historical yield series for trend brought the historical and subjective mean yields much closer. However, an aggregate test found the effect of adjustment to be insignificant, implying that the avenue for increased participation lies elsewhere.

Land/grant colleges were established to serve the public via a tripartite system of teaching, research, and extension. Agricultural economists have played a key role in this system in meeting agriculture's needs and are expanding this role to better cover the areas of food, natural resources, and the environment. The declining economic importance of agriculture and the growing interest in relegating agriculture to free market forces has resulted in declining formula funding for the land grant system, greater emphasis on competitive funding, demands for greater accountability, and demands for a return to greater focus on public service, problem solving, and stakeholder involvement in the definition of research, teaching, and outreach agenda. Simultaneously, the demand for the traditional “agricultural economics” graduate is declining. This paper reviews the current and long-term issues and trends facing agricultural economics departments, explores the futures of their teaching, research, and outreach programs, and highlights the challenges that will be faced as these departments explore new teaching, research, and service opportunities in the areas of food, natural resources, and the environment. The paper concludes by arguing that for forward thinking agricultural economics departments, these pending changes will represent opportunities for better scholarship, more balance, and more effective service.

Population has been increasing for at least a decade in rural areas of West Virginia as in many areas of the Nation. This phenomenon is transforming rural areas, with problems of growth replacing those of decline. If local governments, the extension service and others are to cope adequately with this emerging set of problems, more must be learned about the newer residents, their attitudes, needs and how they relate to those of the rest of the population in the area. A number of recent analyses of rural development attest to the serious data gap that exists with respect to knowledge in the area (Beal; Fuguitt, Voss and Doherty; Gilford, Nelson, and Ingram; Powers and Moe in Dillman and Hobbs, p. 14; and Sofranko and Williams). This paper reports on a 1981 survey of rural residents in nine selected West Virginia counties, a survey which was conducted to help solve the data gap problems.