1. Preferences for Timing of Wetland Loss Prevention in Louisiana
Ross Moore, Daniel Petrolia, and Tae-goun Kim
Dept. of Agricultural Economics,
Mississippi State University
May 28, 2010

2. Motivation
Approximately 40 percent of the coastal wetlands of the lower 48 states is located in Louisiana
Coastal Louisiana lost 1,900 square miles from 1932 to 2000
Has lost an average of 34 square mile per year for the last fifty years
Hurricanes Katrina and Rita destroyed more than 217 square miles of marsh in a single season.
By the year 2050 an additional 700 square miles is projected to be lost

4. Restoration Projects
Congress passed the Coastal Wetlands Planning, Protection and Restoration Act (CWPPRA) in 1990
Designates approximately $60 million annually for work in Louisiana.
April of 2007 the Louisiana Governor signed Louisiana’s Comprehensive Master Plan for a Sustainable Coast
“A sustainable landscape is a prerequisite for both storm protection and ecological restoration.” – CPRA Master Plan

5. Objectives
Estimate the value that the public of Louisiana places on preventing the future loss of wetlands within their state
Identify motivating factors that have an effect on willingness to pay/accept: demographics, proximity to the coast, risk preferences and risk perceptions, time preference of money, climate change, confidence in government, believe responses will influence decisions, previous knowledge of coastal protection efforts.

6. Survey Mail survey sent to 3,000 taxpaying households in Louisiana.
Stratified by county population
Survey design
Willingness to Pay/Willingness to Accept
Long Run/Short Run Proposal
Order of the two proposals
Response Rate: 681 surveys (22.7%)

7. Survey: Preference

8. Preference

9. Potential Benefits

10. Category 3 or Greater Hurricane Expectation

11. Actual Hurricane Frequency

12. Multinomial Logit Model Variables and Descriptions

13. Multinomial Logit Model Variables and Descriptions

14. Estimated Coefficients, Standard Errors, Average Marginal Effects, and Significance Levels for the Multinomial Logit Model.

15. Estimated Coefficients, Standard Errors, Average Marginal Effects, and Significance Levels for the Multinomial Logit Model.

16. Parametric and Turnbull Nominal (Annual) Willingness to Pay and Willingness to Accept Estimates

17. Net Present Value of Willingness to Pay for the Short Run Proposal

18. Net Present Value of Willingness to Accept for the Short Run Proposal

19. Present Value Estimates of Aggregate Welfare (millions of dollars) by discount rate

20. Summary of Results Probability of choosing short run over no action:
Increases:
Income
White
Storm protection primary benefit
Environmental benefits primary concern
Had prior knowledge of protection efforts
Decreases:
No confidence in government
Received WTP payment mechanism

21. Summary of Results The probability of choosing long run over no action
Increases:
Income
White
Storm protection primary benefit
Environment protection primary benefit
Climate change primary benefits
Prior knowledge of protection efforts
Decreases:
No confidence in government
Presented with long run first

22. Conclusions
Found respondents are highly willing to fund prevention of wetland loss
Overwhelming support for short run proposals over long run proposals
Protection from hurricane and storm damage is primary benefit driving support
Other factors: Government, Payment Mechanism, and Environmental Benefits
Problems
Low response rate
High welfare estimates

23. Thank you