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The recent developments of nonmarket valuation have focused on identifying preference heterogeneity and examining the impact it has on consumer’s willingness to pay. The objective of this study is to examine the extent to which heterogeneous environmental attitudes influence demand for freshwater recreational activities as well as the valuation of freshwater recreational benefits. We focus on the St. Johns River, the longest river in Florida, and use a telephone survey of Florida’s residents to elicit information in regards to household outdoor recreational experiences on the river. Information regarding respondent attitudes and perceptions towards Florida’s water resources and natural resource policies was gathered in the survey as well. We employed a latent class analysis to reveal two distinct classes of respondents based on their responses to questions regarding their environmental attitudes and perceptions. We then estimated a recreational demand model with respect to travel costs associated with getting to the river, household income, perceived water quality of the river, and respondents’ environmental attitudes within each latent class. We found that class 1’s individual recreational benefits are twice as large as class 2’s. We contribute to the literature by emphasizing that environmental attitudes directly influence consumer recreational demand and valuation of the river, and should be taken into consideration for water resource management policies.

This study examines the extent to which heterogeneous environmental attitudes influence recreational demand in a river basin and the valuation of recreational benefits. We first employed a latent class analysis to reveal two distinct classes of respondents that differ in their environmental attitudes despite representing similar demographic characteristics. We then estimated a recreational demand model conditional on respondent’s latent class membership after controlling for the probabilistic nature of the membership classification. We found that environmental attitudes directly influence consumer recreational demand and valuation. Ignoring preference heterogeneity leads to overestimation of the recreational benefits.

Catch shares fishery management schemes, including individual fishing quota (IFQ) programs, have become a popular tool for fishery managers trying to stop overfishing. IFQ, in theory, provides quota owners with the “right” to a share of both the current catch and all future harvests. By making quota a perpetual asset it is in the fishermen’s best interest to protect future harvests by not overharvesting in the current period. Overharvesting now will decrease future landings and the value of quota going forward. In most IFQ programs quota is tradable; and many IFQ programs allow for not only the sale of quota (the perpetual asset) but also the leasing of quota during a given year (the lessee attains the right to harvest the quota this year but the lessor retains the right for all subsequent years). In a number of IFQ fisheries leasing is the predominate form of quota trading. During the first five years of the Gulf of Mexico red snapper IFQ program (2007-2011) there were 16 times more quota lease than sale trades and the amount of quota pounds traded through leasing was 12 times the amount of pounds traded through sales. Newell, Sanchirico, and Kerr (2005) found that quota lease transactions increased 10-fold in New Zealand IFQ fisheries from approximately 1,500 in 1986 to about 15,000 in 2000 representing approximately 45% of the total allowable catch (TAC), while sales of quota only accounted for about 5% of the TAC. Quota leasing in the British Columbia halibut IFQ program rose steadily from program implementation in 1993 to reach 79% of the TAC in 2006 (Pinkerton and Edwards 2009). The Tasmanian rock lobster IFQ program saw similar large amounts of quota leasing with 44% of the TAC leased in 2007 the ninth full year of the program, during the same year only 3% of the TAC was sold (van Putten et al. 2010). The predominance of leasing as the major form of quota exchange in these IFQ programs has been accompanied by the growth of two distinct types of quota fishery participants: investors and lease-dependent fishers. Investors are quota owners that do not fish and simply hold quota as an investment that pays dividends through lease payments. Lease dependent fishers are those fishers that do not own quota and lease in their entire quota. During the first five years of the Gulf of Mexico red snapper IFQ program the percentage of red snapper landings caught by lease dependent fishers increased from 9% to 26% while the share of quota owned by investors increased from 13% to 27%. The preponderance of quota leasing in these markets leads to the question: do potential buyers and sellers of quota have inherently different valuations of quota that preclude trading in the quota sale market? The implementation of a catch shares management program that allows for both the sale and lease of quota provides an opportunity to analyze discount rates in the fishery. In an IFQ fishery each fishing firm has an incentive to buy, sell, or lease quota until it attains just enough quota to cover a level of catch that maximizes its profits. The value of quota is the discounted value of all future cash flows provided by the quota or the resource rent earned from harvesting the quota. The quota lease price should equal the profit from harvesting that fish. If we assume fishing firm i has the generic profit function shown in equation 1 where p is the exogenously determined dockside price of fish, qi is the amount of fish landed, and c(qi) is a function representing firm i’s cost of catching qi fish; then maximizing profits with respect to landings, subject to the constraint that firm i holds enough quota to cover qi level of catch, the firm will be willing to pay λi to lease quota as shown in equation 2. πi=pqi- c(qi) (1) λi=p- c'(qi) (2) The expected present value of quota for firm i then is the expected future values of leasing that quota discounted back at an appropriate discount rate, r, as shown in equation 3. E(V_(i,0))= ∑_(t=0)^∞▒λ_(i,t)/〖(1+r_i)〗^t (3) This research inspects the link between IFQ lease and sale prices using survey data and examines the variation in implied discount rates between different groups of quota market participants, namely potential quota buyers and potential quota sellers. Respondents were classified as either potential quota buyers or potential quota sellers based on past trading activity (those that historically leased in quota were classified as potential buyers while those who usually leased out quota were classified as potential sellers). Using survey data from the Gulf of Mexico Red Snapper and Grouper-Tilefish IFQ program participants we were able to examine participants implied discount rates using a dividend discount valuation model. IFQ participants were surveyed to determine at what prices they would buy and sell quota and lease in and out quota, their expectations about future growth of the quota, and their expectations regarding the longevity of IFQ management in the fishery. By accounting for participant expectations regarding the growth of the quota and the future of IFQ management in the fishery we are able to not only measure fundamental differences in respondents’ expectations regarding the future of the fishery, but also control for differences in quota valuation due to factors other than the implied discount rate.

Future harvests from commercial fish stocks are unlikely to increase substantially due to biological and regulatory constraints. Developing alternative sets of processed seafood products is one strategy for increasing welfare while managing the risks inherent in a variable and renewable natural resource. To quantify the risk-benefit tradeoffs of alternative strategies, a portfolio decision framework is embedded into a multi-period bioeconomic model. The model is used to generate an efficient portfolio frontier to estimate possible rent dissipation from status quo management. Frontiers are also generated for seafood processors and brokers. Implications for the different industry agents are discussed.

This paper examines whether adoption of precision technologies, farm and farmer characteristics influence perceived improvements in cotton quality. Using data from cotton producers in twelve U.S. Southeastern states and discrete choice models, we find that the use of soil sampling, maps, participating in agricultural easement programs, farm size, university publications, and expected profitability of precision agriculture are positively associated with the probability that farmers experienced improved cotton quality. This implies that farmers should also consider the potential cotton quality benefits from these technologies, in addition to potential yield and environmental improvements, when deciding whether or not to adopt precision technologies.