**Using Surveys to Measure Public Preferences**

**for Forest Ecosystem Attributes**

**TOM HOLMES**

**Southern Research Station, U.S. Forest Service**

**Research Triangle Park, North Carolina**

**Forest Service Demand for Non-market Value Information**

The U.S. Forest Service is the federal agency responsible for
stewardship of the nation=s forest land. This includes activities such
as setting strategic direction for forest land management; monitoring
and evaluating forest structure, extent and condition; provision of
economic incentives to influence management decisions by private forest
owners; and direct responsibility for protecting and managing about 20
percent of the nation=s forest land though the National Forest System.
In the formulation of policies and plans that impact the forest
environment, the Agency is required by law to involve the public.
Largely because of the multiple-use mandate that guides Agency
decision-making on public land, the public involvement process has been
difficult and contentious. Appeals and litigation have been the rule
rather than the exception in the Forest Planning process.

Surveys are a powerful method for providing the Agency with information
about how the public wants public and private forest land to be managed.
Through a national network of Research Stations, the Forest Service has
provided funding for the development and application of stated and
revealed preference methods related to a broad array of environmental
goods and services provided by forest ecosystems. The Agency has
historically emphasized the measurement of non-market values related to
outdoor recreation and has supported the development of benefit transfer
and meta-analysis techniques. Unfortunately, ARPA@ values are poorly
understood by resource managers and have had relatively minor impact on
management decisions.

Over the past few years, the Forest Service has adopted a new management
philosophy called AEcosystem Management@ which draws heavily on the
discipline of Conservation Biology. Ecosystem Management focuses on
issues related to sustainability, complexity and connectedness, dynamic
aspects of ecosystems, spatial and temporal scale, and interactions
between humans and the environment. The Ecosystem Management focus
presents a host of new issues faced by social scientists trying to
measure and understand public values related with forest ecosystems.
These issues force valuation researchers to move beyond atomistic models
(e.g. site and/or activity specific) to think about holistic models that
link ecological conditions and human welfare. These models may well
proceed using standard economic tools such as complementarity and
substitutability to derive aggregation rules, but these approaches may
fail if Apreference synergies@ exist and the whole is valued differently
than the sum of the parts. Further complicating matters is the issue of
communicating to the public, in meaningful ways, complex concepts such
as biodiversity and ecological integrity.

Stated preference methodologies have recently been extended to include
Lancaster=s hedonic model which views goods as bundles of attributes.
These methods have borrowed heavily from the marketing research
literature and are generally referred to as Conjoint Analysis (CJ).
These methods are similar in several respects to Contingent Valuation
methods (CV), and some researchers have suggested that CJ models may
overcome some of the problems encountered by CV instruments. Because CJ
methods evaluate multiple dimensions or attributes of goods, they offer
promise for measuring values associated with complex ecosystem goods and
services.

**Recent Examples of Stated Preference Research**

The summary below reviews five recent research studies I have conducted
that test for Apathological@ response behavior in CV and CJ stated
preference methods. (By Apathological@ I refer to responses that do not
conform with the norms of economic theory).

***Contingent Valuation Forest Ecosystem Protection***

Thus study, conducted in collaboration with Randy Kramer at Duke
University, focused on valuation of the high-elevation spruce-fir
ecosystem in the southern Appalachian Mountains. This region is highly
valued as a recreational resource and for its rich biological diversity.
The Great Smoky Mountain National Park lies in the heart of this
ecosystem. The spruce-fir ecosystem is threatened by an exotic insect
and, some scientists think, by ozone and acid rain.

The methodological focus of the study was to test the convergent
validity of two response formats: dichotomous choice (DC) and payment
card (PC). Using Monte Carlo techniques to construct counterfactual
observations, we were able to observe two types of pathological
behaviors in the DC data - *yea saying* and *anchoring*. Although the
WTP distribution for the DC data (WTP~DC~) did not exhibit Afat tails@
(only 5% of respondents responded Ayes@ to the highest bid) the
dispersion parameter (σ) for the WTP~DC~ distribution was much larger
than σ computed for the WTP~PC~ distribution. Estimates of mean WTP
depend on the functional form used and the ratio of WTP~DC~/WTP~PC~
ranged from about 2.75 using the Turnbull estimator for the DC data to
about 9.45 using a Probit model with a log-normal error specification.

***Contingent Valuation Study of Endangered Species Protection***

To gain greater insight into the convergent validity of response
formats, this study (also conducted with Randy Kramer) compared
responses to double bounded dichotomous choice (DBDC), payment card (PC)
and open-ended (OE) response formats. The commodity valued was
restoration of habitat for the federally endangered red-cockaded
woodpecker, a species that favors old-growth pine forests in the
Southern United States. Unlike the spruce-fir study, we found convergent
validity of WTP estimates in this study. The ratio of WTP~DC~/WTP~OE~
was 1.29 and the ratio of WTP~DC~/WTP~PC~ was 1.59. Monte Carlo
simulation revealed that the distribution function for DBDC responses
was located significantly above the distribution functions for PC and OE
responses. Although this study provides evidence that the CV method can
elicit WTP values that satisfy convergent validity for goods with
significant nonuse value, the conditions under which this is true
deserve closer scrutiny. For example, recent research conducted by
Ju-Chin Huang and Kerry Smith indicated that WTP estimates for nonuse
values may be less affected by misspecification errors than where use
values affect decisions.

***Conjoint Analysis of Rainforest Protection Values***

This study was conducted with colleagues at Conservation International
who were interested in evaluating economic options for protecting rain
forest remnants in the Atlantic Coastal Forest of Brazil. We used the
computerized Adaptive Conjoint Analysis (ACA) program to interview
Brazilian tourists. The ACA interview provides an iterative series of
paired comparisons between bundles of attributes. For our experiment, we
used six attributes and a total of twenty attribute levels. The
complexity of the trade-off problem faced by respondents was increased
by using two price variables - one for daily expenditures and one for
entrance fee to a nature park. We were interested in estimating economic
values for nature park attributes (such as canopy walks and
environmental education centers) as well as the value of protecting the
remaining area of rain forest.

ACA automatically records which attribute bundle in each pair is
preferred and by how much, as well as the total response time for each
individual. We estimated ordered probit models using the standard model
and a varying parameter model that adjusted parameter estimates for
response time. We found that response time had a significant effect on
estimates of preference parameters. People that made Aimpulsive@
responses made mistakes that violated the property that indirect utility
decreases in prices. These mistakes were obviated for respondents who
invested more time in the decision-making process. The richness of the
ACA data allowed us to identify and trim pathological responses from
estimates of WTP.

***Conjoint Analysis of Timber Harvesting Preferences***

This research, conducted in collaboration with Kevin Boyle at the
University of Maine, focuses on understanding public preferences for
timber harvesting alternatives on public land. Given that there is
substantial evidence that question format matters in CV estimates of
WTP, we were interested in testing the hypothesis that question format
matters in CJ as well. We developed a CJ survey instrument with seven
timber harvesting attributes (excluding price) and a total of 20
attribute levels. Fifteen levels were used for the bid variable. We used
a completely randomized experimental design. Three question formats were
used: rating, ranking and choice. Each question format was sent to an
independent sample. An iterative series of four follow-up referendum
questions (which we call Areferendum choice experiment@, or RCE) were
also asked to each independent sample.

Analysis of the data has revealed some interesting findings. By
converting ratings to rankings, and ratings and rankings to choices we
were able to compare estimates of preference parameters and compensating
variation across response format. We found that preference parameters
were significantly different across response formats, but that estimates
of mean WTP were not significantly different. Analysis of the RCE data
showed that the response surface became more complex (i.e. more
attributes become significant) and the marginal utility of money
decreased as iterations increased. These results suggest that
preferences evolve over iterations. We also found significant
correlations between equation errors in the four equation system. This
result provides evidence of *yea-saying* in choice experiments.
Correcting for *yea-saying* reduced estimates of compensating variation
by 28-36%.

***Conjoint Analysis of Preferences for National Forest Management***

This study, conducted with colleagues at North Carolina State
University, is concerned with measuring public preferences for benefits
associated with Ecosystem Management on two National Forests in western
North Carolina. It is different from the above studies in that we don=t
include a price variable in the trade-off analysis. Instead, we are
interested in identifying public preferences for desired future
conditions of the Forests, and implicitly assume that preferences would
be implemented given Forest budgets. A rating based CJ model was
developed with five attributes and fifteen attribute levels using an
orthogonal experimental design. Mail surveys were administered to a
random sample of the public, hunters/anglers, environmentalists and
timber industry representatives.

Preliminary analysis of the data suggest that all respondents highly
value protection of fundamental ecological services provided by forest
ecosystems. Responses from the random sample of the population indicate
that restoration of native (pre-Columbian) ecosystems and protection of
water quality dominate other benefits which could be provided by these
Forests. Based on the analysis to date, we are optimistic that CJ
experiments without a monetary metric can be developed to measure public
preferences for complex ecosystem goods and services.

***Implications for Future Research Needs***

The U.S. Forest Service will continue to need non-market value
information to assist in the planning for National Forest management and
the efficient provision of management incentives for private forest
land. The non-market value information needs of the Agency are becoming
more complex due to the adoption of the more holistic Ecosystem
Management paradigm. There is a need for preference and valuation models
that consider the spatial and temporal distribution of benefits for
complex ecosystem attributes involving ecosystem structure and function.
This is very different than an autecological focus, for example, that
values individual species. Holistic rather than atomistic valuation and
decision-making models will be required.

The Agency will continue to demand recreation value estimates and a
better understanding of the public=s willingness to pay for recreational
access. This is evident in the Recreation Marketing Initiative currently
being undertaken by the Agency in response to the User Fee Pilot Program
authorized by Congress. The emphasis of the Recreation Marketing
Initiative is to use marketing research techniques to understand what
the public wants from their public lands, what attributes/activities
they are willing to pay for, and how much. A better understanding of
contingent behavior under hypothetical scenarios will enhance this
development.

Unresolved instrument effects in stated preference methods will continue
to limit the impact of value estimates in forest management decisions.
The Agency has experienced significant difficulty in involving the
public in the forest planning process. Defensible methods to measure and
understand what the public wants are greatly needed. However, the Agency
is unlikely to embrace methods that are found to be contentious within
their academic discipline.

A clear benefit of CJ experiments is that they provide information on
marginal adjustments in a set of attributes. This is potentially of
great benefit to forest managers who are often more concerned with
changing attribute levels than gaining/losing an entire resource.

It has been suggested that CJ experiments may address some of the
problems plaguing CV research. Recent research suggests that CJ is not a
panacea for the CV method, and that certain pathological behaviors such
as Aresponse-format bias@ and Ayea-saying@ contaminate CJ responses.
Evidence of Apreference evolution@ and Alearning@ suggests that the
valuation process for complex goods is dynamic. Because it is not clear
what stage of the learning process represents Atrue@ preferences, it
remains uncertain how to use CJ based values for management decisions.

The relative richness of CJ data provides the opportunity to conduct
tests of theoretical validity and to trim or otherwise adjust
observations that do not conform to theoretical standards. If
statistical methods are developed that control for instrument effects
and response bias, then CJ or other stated preference methods may be
used with greater confidence.

Finally, it is not known just how ubiquitous response bias really is.
Perhaps economists are fortunate to have used prices in their stated
preference experiments because they were able to focus in on response
biases fairly quickly. If response bias is an endemic cognitive
propensity among some members of the population, then it may be
triggered by non-price variables as well. If so, this may greatly
complicate the identification and statistical control of biases due to
pathological responses and estimates of the marginal rate of
substitution between forest ecosystem attributes may not be reliable.