Designing a Contingent-Valuation Study to Estimate the Benefits of the Conservation Reserve Program on Grassland Bird Populations

Abstract

The purpose of this chapter was to present an example of how a contingent-valuation study could be designed to address a specific public policy issue, the benefits of improved grassland bird populations due to the CRP. We attempted to design a CV instrument to address the policy issue as closely as possible using realistic data. We found that complete realism was difficult from a number of perspectives. While CV studies, and environmental valuation studies in general, typically assume that all changes have only positive effects, analyses of the effects of the CRP on grassland bird populations suggest both positive and negative effects. Such an outcome is not surprising given that any environmental intervention is unlikely to yield universally positive or negative effects. Unfortunately, respondents in early focus groups could not respond to scenarios when the populations of some bird species increased and the populations of others deceased. Moreover, some of the decreases (e.g., for ring-necked pheasants) did not coincide with local wisdom of the effects of the CRP on bird populations, raising questions about the reliability of the estimates of the changes in grassland bird populations from surveys of bird counts. Based on the initial focus group results and the mixed evidence of whether the populations of some species even did decrease, we converted the valuation scenario to only encompass those species of grassland birds whose populations had increased.

Despite mixed results, we conclude a substantial proportion of people value increases in grassland birds at both the national level and in Iowa. Thus, if these values are excluded from a benefit-cost analysis of the CRP, this would serve to underestimate benefit estimates. This general result also suggests that land proposed for enrollment in the CRP that enhances grassland bird habitat should receive some weight in the EBI index.

The bottom line is that designing a valuation study to address a specific policy issue is challenging and using the resulting value estimates in policy analyses is complicated. These issues do not present obstacles that prevent benefit estimation, rather they suggest that benefit estimation must proceed with care and caution and clearly indicate areas where future research can improve benefit estimation for public policies. Our results on scope point to a need for more research on applying contingent valuation to environmental goods that are distant, yet perhaps common, amenities. In addition, fruitful future research in the general area of ecosystem valuation would address the issue that we faced in this study of some respondents recognizing that a great deal of scientific complexity exists in our ecosystems. This recognition on the part of respondents tends to undermine the credibility of narrowly defined scenarios.

Keywords: contingent valuation, grassland birds, conservation reserve program

JEL Classification: Q26, Q28