A Nonhypothetical Ranking and Auction Mechanism for Novel Products

Wetlands conservation within agricultural working lands is currently incentivized by land retirement programs and farm program eligibility criteria. Private ownership of the majority of agricultural lands within which these wetlands reside and growing opportunity costs facing landowners put wetlands at risk and motivate consideration of alternative policy options. A choice experiment was used to estimate likelihood of enrollment in a hypothetical working wetlands program. Landowners preferred shorter contract lengths, higher rental rates, midterm adjustment rather than a fixedrate contract, the right to conduct managed burning on their lands-containing program wetlands, and no conservation practice requirement. Landowners with higher expressed valuation of conservation and who favor protecting wetlands, believe that small wetlands are important for their farms, who would not drain any of their wetlands, and raise ruminant animals are more inclined to participate in the program. Recommendations include consideration of program targeting during program design, practicing creative thought regarding program promotion, and exploration of no-loss wetlands solutions, especially those market based.

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“…The unconditional probability can be obtained by integrating the conditional probability over all possible values of β:

\begin{matrix} true \\ left P ((), U_{i, j = a} > U_{i, j = b} > U_{i, j = c}) \\ left = \int \frac{\exp ((), V_{i, j = a})}{prefixexp ((), V_{i, j = a}) + prefixexp ((), V_{i, j = b}) + \exp ((), V_{i, j = c})} \\ left \times \frac{prefixexp ((), V_{i, j = b})}{prefixexp ((), V_{i, j = b}) + prefixexp ((), V_{i, j = c})} \cdot f ((), β false| θ) d β, \end{matrix}

where θ defines the distribution of

β

(Ghijben et al., ; McAdams et al., ).…”

Section: Methodsmentioning

confidence: 99%

Landowner valuation of a working wetlands program in the Prairie Pothole Region

Wachenheim

Lim

Roberts

et al. 2019

Agricultural Economics

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“…Each session lasted 1 h and included between 6 and 16 participants, with a total of 88 participants. The number of participants was subject to our budget constraints, yet previous studies using experimental auctions to elicit consumer preferences for horticultural products have used sample sizes ranging from 74 participants (Yue et al, 2009) to 203 participants (McAdams et al, 2013). Given the number of participants (88), the number of sessions (10) depended in part on two factors: the capacity of the experimental economics laboratory (18 computer stations) and the time availability of participants (McAdams et al, 2013).…”

Section: Quantifying Skinning Injurymentioning

confidence: 99%

“…The number of participants was subject to our budget constraints, yet previous studies using experimental auctions to elicit consumer preferences for horticultural products have used sample sizes ranging from 74 participants (Yue et al, 2009) to 203 participants (McAdams et al, 2013). Given the number of participants (88), the number of sessions (10) depended in part on two factors: the capacity of the experimental economics laboratory (18 computer stations) and the time availability of participants (McAdams et al, 2013). During each of the 2 d, the experimental sessions were conducted during different times of day (one each in the morning, midmorning, midday, afternoon, and late afternoon) to account for the potential influence of the time of day on consumer preferences for food as in Collart and Interis (2018).…”

Section: Quantifying Skinning Injurymentioning

confidence: 99%

Consumer Perception of Skinning Injury in Sweetpotatoes and Implications for Marketability: An Experimental Auction

Collart¹,

Meyers²,

Ward³

2019

hortte

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Skinning of sweetpotato (Ipomoea batatas) storage roots is one of the greatest concerns of sweetpotato producers. Although skinning injury is very common, the severity of the injury can vary widely. At an undefined threshold, sweetpotatoes with skinning injury are no longer sold for fresh consumption. The objectives of this study were to examine how skinning injury influences consumers’ willingness-to-pay (WTP) for sweetpotatoes and to identify differences in valuations when the extent of skinning injury is labeled. Image analysis was used to quantify skinning injury and then an incentive-compatible, nonhypothetical laboratory experimental auction was conducted to collect data on consumers’ WTP for five categories of sweetpotatoes: 0% to <1% skinning injury, 1.0% to 3.0%, 3.1% to 5.0%, 5.1% to 7.5%, and 7.6% to 10.0%. On average, consumers were willing to pay the most for sweetpotatoes with 0% to <1% skinning injury (up to $1.51/lb to $1.67/lb) and the least for sweetpotatoes with 7.6% to 10% (up to $0.76/lb to $0.85/lb), yet mean WTP values were nonzero for all skinning levels. Moreover, when the extent of skinning was labeled (relative to when they bid blindly), consumers were willing to pay price premiums for sweetpotatoes with low skinning injury levels (0% to 5%) and discounted sweetpotatoes with the highest skinning injury level (7.6% to 10.0%), suggesting that skinning levels of 7.6% and above may not be acceptable by consumers.

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“…6 Smith (1989) provides a nice (if a bit dated) overview. In the agricultural/resource sector, economists have used the laboratory to study numerous topics, including demand for products (Lusk et al, 2006), food safety (Hayes et al, 1995), the willingness to pay for products (McAdams et al, 2013), the willingness to pay versus the willingness to accept (Horowitz and McConnell, 2002), price expectations (Nelson and Bessler, 1989), and now many other important topics.…”

Section: Econometrics On Experimental Datamentioning

confidence: 99%

On Agricultural Econometrics

Bessler

2013

J. Agric. Appl. Econ.

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Appreciation is extended to the Southern Agricultural Economics Association for the Lifetime Achievement Award and to my Texas A&M colleagues, especially the graduate students I have interacted with in courses, thesis, and dissertation work over the last 30 years. I would also like to acknowledge contributions of the late Jon Brandt, former department head at North Carolina State University. Jon and I were graduate students at the University of California at Davis in the 1970s and cooperated on research related to this paper at Purdue University in the late 1970s and early 1980s. Coincidently, my first SAEA meeting was in Hot Springs in 1980, where I delivered a paper coauthored with Jon.

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A Nonhypothetical Ranking and Auction Mechanism for Novel Products

Cited by 11 publications

References 29 publications

Landowner valuation of a working wetlands program in the Prairie Pothole Region

Landowner valuation of a working wetlands program in the Prairie Pothole Region

Consumer Perception of Skinning Injury in Sweetpotatoes and Implications for Marketability: An Experimental Auction

On Agricultural Econometrics

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