The purpose of this study is to analyze agricultural producers’ willingness to adopt regenerative cover crop practices in their operation and the effects of producer and farm characteristics on willingness to accept (WTA) values. The paper utilizes the double-bounded contingent valuation method to analyze survey responses submitted by producers and non-operating landowners in the Texas and Oklahoma portions of the Southern Great Plains. Results showed an average WTA of $26.38/acre for producers to adopt cover crops and that programs aimed at increasing adoption rates may require more substantial investment compared to those focused on continuity with current adopters.

The Federal Emergency Management Agency (FEMA) offers a portfolio of flood risk mitigation options for high-risk homeowners, hoping to reduce flood damages. Buyout (home acquisition) and home retrofit (e.g., home elevation) are candidates available to homeowners. FEMA has recently amended and increased its buyout efforts. This study examines homeowners’ stated preference for buyout and home elevation contracts using survey data. Results indicate multiple factors influence the decision to participate in home acquisition and elevation programs. Importantly, we find that preferences vary with the timing (whether the contract is offered before or after a damage event) of the contract offered.

Previous studies indicate that “hesitation” and “skepticism” are important barriers to the development of renewable energy industries in the United States. We examine whether key pecuniary and nonpecuniary characteristics of bioenergy crops underlie the hesitation argument. Based on a stated choice experiment, we find that Midwestern producers appreciate certain crop attributes that are found in switchgrass, but not in conventional crops. We also find that producers would be willing to grow switchgrass-like crops for net margins between $222/acre/year and $247/acre/year in marginal counties. We argue that farmers’ hesitation and skepticism toward bioenergy crops can be overcome.

This article investigates the use of payments for environmental services to support a wildlife corridor between two Priority Tiger Conservation Landscapes in central Sumatra, Indonesia. Several hundred smallholders operate within a Protection Forest linking the Tiger Conservation Landscapes. This study explores the willingness of these smallholders to accept a payment requiring them to forgo access to their land for five years. In addition to asking households directly what they would be willing to accept (WTA), we also ask them to infer what their neighbour would accept. The study finds evidence of hypothetical bias in the conventional WTA values, with a statistically significant difference between what people say they would be willing to accept when surveyed, compared to what they say would actually be willing to accept in a ‘real life’ situation. We show how inferred valuation techniques can mitigate against this.

Environmental valuation is the branch of environmental economics in which researchers estimate the economic value of environmental goods and services. Environmental valuation has been practiced for decades. However, there are some ideas in the field of environmental valuation held by many environmental economists and nonenvironmental economists that appear to be outdated. This article discusses three such ideas: 1) that it is better to estimate willingness-to-pay values than willingness-to-accept values; 2) that stated preference valuation methods are questionable because they are based on hypothetical choices rather than real choices; and 3) that it is better to use a repeated-choice question format than a single-choice format in choiceexperiments. We discuss the origins of each idea and why the idea became prevalent in the first place. We then review recent literature, which casts doubt on the idea. We conclude with a reminder for researchers—in environmental economics and in other economic fields—to periodically reassess ideas they currently hold in light of recent research developments and in light of the context in which they are used.

Producing biomass energy requires extensive land resources. In western Massachusetts, where almost 90 percent of former farmland is no longer in commercial use, we study factors that motivate landowners to grow biomass energy crops. A geographic information system model identifies a landowner population, and a contingent valuation survey reveals payments landowners are willing to accept (WTA) for growing biomass crops. The median WTA estimate is $321 per hectare per year, which is high compared to regional land rental rates. Nonpecuniary factors appear to be as important in landowner acceptance as profit opportunities, especially for nonfarmer landowners.

Recent research shows that disparities between willingness to pay (WTP) and willingness to accept (WTA) disappear with market experience and training. In effect, preferences can be refined by eliminating subjects’ misconceptions regarding elicitation procedures. We use a stated measure of confidence as a proxy for misconceptions and test the influence of confidence on truthful revelation of induced values in WTP and WTA auctions using the Becker-DeGroot-Marschak (BDM) mechanism. The results indicate that confidence matters for buyers and sellers. With confidence, WTA and WTP measures converge, and people with greater confidence choose the dominant bidding strategy more frequently.

We illustrate the experimental method by examining bidding behavior for controversial goods, i.e., goods in which bidders have positive and negative values. Our results suggest that bidding behavior differs across auction type. Bidders with positive induced values bid sincerely in a WTP auction. Bidders bid conservatively, however, in the WTA auction, foregoing profitable opportunities. Informing bidders of their optimal strategy serves to attenuate bidding discrepancies but does not eliminate them. Treating the WTP and WTA auctions as equivalent given positive and negative values could lead one to overstate the costs relative to the benefits of the controversial good.

Willingness-to-pay (WTP) values and willingness-to-accept (WTA) values have received considerable attention, but the role of reference-dependence effects is more diverse. Policies involving cost and risk may have reference point effects with respect to both cost and risk, leading to four potential valuation measures. Experimental evidence for water quality policies suggests that the cost reference effects are particularly influential in that context. There is, however, no evidence of significant reference effects for labor market estimates of the value of a statistical life. Sound application of benefit values other than WTP measures requires pertinent empirical evidence and an assessment of the underlying rationality of the determinants of the reference-dependence effects.

Differences between estimated willingness to accept compensation (WTA) and willingness to pay (WTP) that are larger than can be explained by standard economic theory raise questions about which measures should be used for benefit–cost analysis (BCA). These differences do not create a new problem but accentuate an existing one: the fact that the Kaldor–Hicks compensation test is ambiguous when its two components conflict. This conflict is more likely when the difference between WTA and WTP measures of a change is large. In many cases, the same individuals receive benefits and incur costs from a policy change and their preferences for the policy cannot depend on whether they ask whether their WTP for the benefit exceeds the cost they will incur or their WTA to forgo the benefit exceeds the cost they will save. In cases where benefits and costs are incurred by different people, it seems more useful to evaluate the fundamental question – whether the benefits to some justify the harms to others – than to obscure this question through a technical debate about valuation measures.