1. Challenges of Natural Resource Economics & Policy May 22, 2007
Non-market Evaluation of Louisiana Coastal Restoration: A Contingent Valuation Survey of the Maurepas Swamp
Dr. Jay Johnson
Dr. David Bowes
Challenges of Natural Resource Economics & Policy May 22, 2007

2. Louisiana Speaks Survey
>23,000 respondents including ~1,300 displaced Louisianians
Conducted between January 22 and February 10, 2007
Tapped a $1,000,000 budget
Used paper, phone, and Internet balloting

3. Asked to choose from six “values” to guide development of coastal plan
Most support for
“Community preservation”
Protection of oil and gas infrastructure
Serving ship navigation needs
Less support for
Preserving wildlife habitat
Commercial fishing
Recreational fishing and hunting

4. Asked about “top priorities” for economic development
Most support for
Attracting and retaining companies
Expanding job skills
Strengthening higher education
Less support for
Nurturing entrepreneurs and small companies
“fostering knowledge-based businesses”
Expanding shipping and foreign trade

5. Louisiana Speaks Survey
Offered scant information on levee and coastal restoration projects

6. Louisiana Speaks Conclusions
Revealed a “big hell yes” response to the idea of spending tens of billions of dollars on a mix of flood-protection and coastal-restoration measures
Overwhelming support for heavy spending on restoring the coast even among people living north of Interstate 10
“People want to see action on this, and there is a sense of urgency.”

7. Critique of Louisiana Speaks Survey
Does not describe any specific action or project or good (outcome)
“Values or Goals” can be irreconcilable
Asks for support to spend “other people’s” money

8. Maurepas Swamp Contingent Valuation Survey
404 respondents From 16 Southeast Louisiana parishes
Conducted between March 27 to April 11, (many thanks to Dr. Kurt Corbello)
~$27,000 budget
Used only telephone balloting of random sample of registered voters

9. Key factors guiding survey design
Describe a “well-defined” good (based on the PO-29 Maurepas Restoration Project)
Make clear that this is a hypothetical market choice (using Cheap Talk)
Ask for specific Willingness-to-Pay (WTP)
Describe a specific method of payment

11. Describe a “well-defined” good
Maurepas Swamp is about 36,000 acres of wetlands west of Lake Pontchartrain, and is losing hundreds of acres to subsidence every year. In general, would you support the idea of diverting fresh water from the Mississippi River to restore damaged wetlands and increase wetland acreage in Maurepas Swamp by about 5,400 acres?

12. Cheap Talk
Now, I’d like for you to consider the following hypothetical proposition. Please try to answer as if this was an actual proposal and your answer is going to result in state policy. Suppose the Louisiana Legislature wants you to vote on a plan to pay for restoring and rebuilding wetlands in Maurepas Swamp. This plan would require you to pay an extra TEN dollars on your state income tax returns for the sole purpose of funding preservation and restoration projects in the Maurepas Swamp area. Would you vote for this proposition?

13. Willingness-to-Pay (WTP)
Tabulation of variable WTP
wtp | Freq. Percent Cum.
0 |
5 |
10 |
15 |
20 |
30 |
50 |
61 |
Total |
Another 39 respondents reported they “did not know” or refused to answer.
Summary of WTP
Variable | Obs Mean Std. Dev Min Max
wtp |

14. Model of ESTIMATED WTP Source | SS df MS Number of obs = 300
Model | Prob > F =
Residual | R-squared =
Adj R-squared =
Total | Root MSE =
wtp | Coef. Std. Err t P>|t| [95% Conf. Interval]
income |
wtp2 |
homeval | e-06
real |
child |
single |
contrib |
visit |
concern |
priority |
hur |
wl |
informed |
swamp |
research |
gender |
homevalhur | e
distance |

15. Key Variables in WTP Model
“income” = reported household income
“homeval” = reported value of home
“visit” = numbers of times reported to have visited a wetlands in the last year
“research” = support for projects as research even if benefits uncertain
“homevalhur” = interacted variable relating home value and perceived hurricane protection

16. Conclusions of CV survey
estimated WTP of $21.41
aggregate value of $35,456,095 ($985 per acre) for Maurepas Swamp
estimated a non-use value between $5,051,000 and $24,361,000
Fail Cost-Benefit Analysis because project cost is approximately $50,000,000
relationship between home value and storm protection suggests future research and outreach

17. Estimate of Total Benefits by Aggregation of Households and Adult Individual WTP
Parish WTP #House- Adult Household Individual Name holds Pop. Value Value
Ascension , ,161
Assumption , ,188
East Baton Rouge , ,974
East Feliciana , ,867
Iberville , ,451
Lafourche , ,042
Livingston , ,048
St. Charles , ,861
St. Helena , ,551
St. James , ,418
St. John , ,032
St. Tammany , ,018
Tangipahoa , ,705
Terrebonne , ,146
Washington , ,333
West Baton Rouge , ,031
Study Area Total $ ,863 1,042, $10,295,277 $22,326,926 Louisiana $ ,656,053 3,356, $35,456, $71,863,350