In a static setting, willingness to pay for an environmental improvement is equal to compensating variation. However, in a dynamic setting characterized by uncertainty, irreversibility, and the potential for learning, willingness to pay may also contain an option value. In this paper, we...

This study advances, and experimentally tests, a new explanation for the disparity between willingness to pay (WTP) and willingness to accept (WTA)—a dynamic neoclassical theory based on the presence of commitment costs. While to date neoclassical models have not explained the observed...

The authors present a dynamic model of an agent's decision to purchase or sell a good under the following conditions: uncertainty, irreversibility, and learning over time. As the authors show, an agent's willingness-to-pay (WTP) is influenced by both the intrinsic value of the good and the...

In this paper, we study the social efficiency of private carbon markets that include trading in agricultural soil carbon sequestration when there are significant co-benefits (positive environmental externalities) associated with the practices that sequester carbon. Likewise, we investigate the...

Improved assessment of flow, sediment, and nutrient losses from watersheds with computer simulation models is needed in order to identify and control nonpoint source pollution. One model, currently under consideration by the U.S. Environmental Protection Agency for watershed assessments, is the...

The growth in federal conservation programs has created a need for policy modeling frameworks capable of measuring micro-level behavioral responses and macro-level landscape changes. This paper presents an empirical model that predicts crop choices, crop rotations, and conservation tillage...

Presents a real options model of an agent's decision to purchase or sell a good under conditions of uncertainty, irreversibility, and learning over time. The agent's willingness to pay (WTP) and willingness to accept (WTA) contain both the intrinsic value of the good and an option value...

Land use changes to sequester carbon also provide "co-benefits," some of which (for example, water quality) have attracted at least as much attention as carbon storage. The non-separability of these co-benefits presents a challenge for policy design. If carbon markets are employed, then social...

The study develops a conceptual framework for analyzing the allocation of conservation funds via selectively offering incentive payments to farmers for enrolling in one of two mutually exclusive agricultural conservation programs: retiring land from production or changing farming practices on...

Given the empirically observed sensitivity of welfare estimates to functional form, it is natural to consider whether nonparametric methods such as those developed by Varian might be of value in nonmarket welfare analysis. This study presents simple methods for constructing nonparametric bounds...