Using WTP and WTA to value farmland preservation under ambiguous property rights and
preference uncertainty
Yicong Luo
Researcher, Department of Resource Economics and Environmental Sociology, University of Alberta,
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Edmonton, Alberta, Canada
Email: yicongluo5@163.com
Mailing address: 9#704, Nanguojinhui, Fuzhou City, Fuijan Province, China
Brent M. Swallow
Professor, Department of Resource Economics and Environmental Sociology, University of Alberta,
Edmonton, Alberta, Canada
Email: brent.swallow@ualberta.ca
Mailing address: 515 General Services Building, University of Alberta, Edmonton, Alberta, Canada,
T6G 2H1
Wiktor L. Adamowicz
Professor, Department of Resource Economics and Environmental Sociology, University of Alberta,
Edmonton, Alberta, Canada
Email: Vic.Adamowicz@ualberta.ca
Mailing address: 515 General Services Building, University of Alberta, Edmonton, Alberta, Canada,
T6G 2H1
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doi:10.3368/le.98.4.060120-0074R2
Abstract:
We use a paired-sample binary choice experiment to estimate willingness-to-pay (WTP) and willingness
to accept (WTA) values when land is converted from agriculture to developed uses in Alberta, Canada.
Validated principles for stated preference are followed in scenario design, elicitation format,
experimental design and ancillary questions. Preference uncertainty is addressed through alternative
calibration of uncertain responses. Reliability and incentive compatibility measures indicate that
respondents found both WTP and WTA scenarios to be plausible and incentive compatible. WTA –
WTP value gaps are smaller than most previous studies, with consequentiality increasing WTA, WTP
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and the gap between WTA and WTP.
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1. Introduction
The NOAA Blue Ribbon Panel (Arrrow et al., 1993) reviewed the state of stated choice valuation and
recommended measurement of willingness to pay (WTP) over willingness to accept (WTA). A central
reason for this recommendation was the large and consistent gap found between WTP and WTA
estimates. For example, Tuncel and Hammitt (2014) found gaps of 3-10 times in their analysis of 76
previous valuation studies. WTA-WTP gaps may reflect real behavioral motivations such as loss
aversion, reference dependence (Tversky and Kahneman, 1979), endowment effects, substitution effects
(Hanemann, 1991) or commitment costs (Kim, Kling and Zhao, 2015). WTA-WTP gaps may also result
from study design problems such as scenario rejection, protest voting, strategic behavior, social
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desirability bias, and hypothetical bias (Horowicz and McConnell, 2003; Tuncel and Hammitt, 2014).
The Arrow et al (1993) recommendation against WTA has contributed to a dearth of WTA studies.
Lloyd-Smith and Adamowicz (2018) report that their search of the Environmental Valuation Reference
Inventory (https://www.evri.ca/) in February 2018 revealed 14 times more studies of WTP than WTA.
Nonetheless, there has been consistent defense of WTA. Knetsch (2007) argues that the choice of WTP
or WTA should depend upon context, particularly the context of implied property rights and
respondents’ reference condition. The most recent comprehensive guidance for stated choice valuation
(Johnston et al 2017) concurs that the choice of WTA or WTP should be guided by a combination of
theory and empirical conditions. Johnston et al (2017, pp. 344-345) caution, however, that studies of
WTA should pay special attention to the framing of incentive-compatible questions and the possibility
for scenario rejection.
Following the argument laid out by Knetsch (2007, 2020), we We use a paired-sample binary choice
experiment to estimate willingness-to-pay (WTP) and willingness to accept (WTA) values when land is
converted from agriculture to developed uses in Alberta, Canada. Validated principles for stated
preference are followed in scenario design, elicitation format, experimental design and ancillary
questions. Preference uncertainty is addressed through alternative calibration of uncertain responses.
Reliability and incentive compatibility measures indicate that respondents found both WTP and WTA
scenarios to be plausible and incentive compatible. WTA – WTP value gaps are smaller than most
previous studies, with consequentiality postulate that farmland preservation in peri-urban areas can be
framed in both WTP and WTA terms. The literature is replete with WTP framing: owners of farms at
the peri-urban margin face the decision to continue farming or sell the land to a developer who will
convert it into an urban use. Residents of nearby urban areas are asked their willingness to pay to
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conserve some of that land in agriculture. The property right implied by that framing is the farm owner
has the right to convert land to urban uses, and would need to be compensated to forego that right. The
corresponding reference scenario is then assumed to be continual expansion at the city’s extensive
margin with supportive changes in zoning. That reference scenario is consistent with purchase of
development right programs that have been implemented in several American states over the last 45
years, including Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, Pennsylvania and
Rhode Island (Kline and Wichelns, 1988). Data from referenda to earmark public funds for those
programs, such as conducted in Pennsylvania and Rhode Island, provide insight into factors associated
with willingness to pay for the purchase of development rights (Kline and Wichelns, 1988).
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In their review of the literature from the previous 20 years, Bergstrom and Ready (2008) identified
eleven studies that used choice experiments to value amenity values of farmland in parts of the United
States where referendum data are not available. All eleven studies used choice experiment methods to
estimate net willingness to pay for farmland preservation of particular populations. Studies conducted in
the last ten years have continued to rely on choice experiments to value willingness to pay for farmland
preservation in the United States (e.g. Duke et al, 2012) and Canada, including Androkovich et al (2008)
in British Columbia and Wang and Swallow (2016) in Alberta.
Use of WTA approaches assumes a different framing of the policy and property rights context. Parcels
of land in the city and surrounding region are zoned for specific uses to promote the public interest,
optimizing investment in infrastructure, public services and overall quality of life. Some land is zoned
for preservation of different types of open space (e.g. parks, nature reserves, recreation areas, urban
farming, commercial-scale agriculture), producing different mixes of use and passive-use values.
Rezoning allowable land use is a quasi-political process that produces winners and losers, with certain
public benefits of open space diminished when agricultural or natural lands are rezoned into residential,
commercial or industrial uses. With residents assuming the property right to open space and current
land use as the reference scenario, residents should be asked their willingness to accept compensation
for rezoning and the loss of open space values that will result.
Despite the logic of the WTA scenario, we have identified very few studies of WTA for farmland
preservation in a peri-urban context. Willis (1982) used a contingent valuation approach to estimate the
willingness of local residents to accept compensation for the potential loss of the South Tyneside Green
Belt in northeast England, UK. In Finland, Li et al (2004) blended WTA and WTP approaches by
presenting survey respondents with choice scenarios in which they could choose one of 5 alternatives,
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including the status quo level of farmland preservation, a 3% reduction in the area of farmland preserved
that would be compensated by a reduction in income tax, and 3%, 6% and 9% increases in the area
preserved, that would require increases in income tax. We find no recent WTA study of the public
values of agricultural land that has followed the study design principles outlined by Johnston et al (2017)
or validated for WTA study by Lloyd-Smith and Adamowicz (2018).
Here we report a study that estimates and compares willingness to pay and willingness to accept
compensation for farmland preservation in Alberta, Canada. Recommended practices for study design
are followed and a split sample study design ensures comparability of methods and results. We compare
indicators of study effectiveness for WTP and WTA, including measures of survey completion, scenario
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rejection, strategy rejection, and respondent uncertainty, as well as estimates of marginal willingness to
pay generated through Random Parameters Logit models. While all other indicators were nearly equal,
respondent uncertainty was somewhat higher for WTA than WTP scenarios. We are unable to ascertain
the causes of the higher preference uncertainty, but postulate that it reflects respondents’ greater
familiarity with the WTP framing or greater social desirability bias in the WTA framing. The literature
provides little direction on uncertainty recalibration for WTA, so we report WTP and WTA estimates
with alternative approaches. We conclude that both WTA and WTP approaches produce valid and
useful information for planning and policy. The levels and gaps between WTA and WTP were highest
for those who were most convinced of the validity of the scenario, implying that loss aversion is
diminished by uncertain property rights and reference scenarios.
2. Study context
Policy context
Our study is set in the Canadian province of Alberta, whose economy is heavily dependent upon mining,
oil and gas, forestry, tourism and agriculture, all land-extensive industries. The total area in agriculture
(field crop, grassland, intensive vegetable) has remained relatively constant over the last 20 years
(approximately 50 million acres in 2016, Statistics Canada, n.d.), with expansions at the northern
frontier roughly offsetting conversions to developed uses (residential, commercial, industrial) in the
more-densely populated south. Land use conversion has been particularly rapid around the major cities
of Edmonton and Calgary and the highway 2 corridor that connects them. Between 2000 and 2012, the
areas of agricultural land in that corridor area decreased by 7.0%, while the area of developed land
increased by 39.4%. Across the province, 0.3 million acres of farmland was converted from agriculture
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to developed uses between 2000 and 2012, 70.3% of which was classified as the highest or second
highest farmland quality in the province (Haarsma and Qiu, 2017).
We postulate that both WTP and WTA scenarios are logical approaches to estimate the public values of
converted agricultural land in the peri-urban areas around Alberta’s cities. As in many other
jurisdictions, the policy context encourages the preservation of land in agriculture. Specifically, the
Alberta Land Use Stewardship Act (2009) and the Modernized Municipal Government Act (2016)
mandate Regional Growth Boards and municipal governments to develop and implement land use plans
that preserve agricultural land and enhance the viability of the agricultural sector. Two policy
approaches are available to those governments. One approach is to compensate land owners for
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agreeing to conservation easements. In 2019-2020, the Alberta Government earmarked a limited
amount of funds for investment in Land Trusts that negotiate conservation easements with land owners
(https://www.alberta.ca/alberta-land-trust-grant-program.aspx). Currently, there are at least 13 land
trusts in Alberta holding conservation easements (http://www.ce-alberta.ca/). WTP is the appropriate
framing for assessing the willingness of Alberta residents to contribute to the purchase of conservation
easements that preserve land in agriculture. The second approach is to mandate compliance with land
use plans that preserve agricultural land, as has long been done by provincial governments in British
Columbia and Ontario where over 13 million acres of farmland is protected through provincial farmland
protection legislation. Kaplinsky and Percy (2016) postulate that municipal governments in Alberta are
empowered to impose significant limitations on private use of land without compensation, provided that
some reasonable private use of the property is left to the owners (Kaplinsky and Percy, 2016). WTA
would be appropriate for assessing the amount that the public would need to be compensated for the loss
of passive-use values when agricultural land is converted to developed land uses. Thus our premise was
that it is equally valid for planners to consider WTP for farmland preservation and WTA for
development. Our split-sample study design allows us to test whether survey respondents find
preservation and development to be equally plausible reference scenarios for estimating WTP and WTA.
Study Areas
Most Alberta cities are located in the central and southern parts of the province. For this study, we
selected the six most populous cities and their surrounding areas that could be developed in future years.
For cities with larger populations, we use the Census Metropolitan Area (CMA) as our study area, and
for the cities with smaller populations, we use the Census Agglomeration area (CA). Both CMAs and
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CAs are formed by one or more adjacent municipalities centered on a core population center. A CMA
must have a total population of at least 100,000 of which 50,000 or more people must live in the core. A
CA must have a core population of at least 10,000. Calgary CMA is the most populous in Alberta and
the 5th largest most populous in Canada. From 2011 to 2016, the Calgary CMA had the highest
population increase (14.6%), followed by the Edmonton CMA (13.9%), which is the second most
populous in Alberta. Red Deer CA and Lethbridge CMA rank third and fourth, with population increases
of 10.9% and 10.8% respectively between 2011 and 2016. Medicine Hat CA has the fifth largest
population, which increased by 5.1% between 2011 and 2016. The least populous urban area included
in this study is Grande Prairie, which had a population increase of 13.5%. Together the Edmonton CMA
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and Calgary CMA currently comprise around 66.7% of the Alberta population.
We used ArcGIS and interpreted remote sensing data to estimate the acres of agricultural land lost and
the increase of developed land use between 2000 and 2016 for each of the six study areas. The
Edmonton CMA map is shown as an example in Appendix Figure A.1. The map shows that the
conversion in the Edmonton CMA has primarily taken the form of suburban development on the
periphery of Edmonton and the smaller cities and towns in the area. Developed land increased by
128,710 acres, a 75.5% increase in 16 years. Approximately 92% of the newly developed land was
converted from agriculture. This represented a 7.2% reduction in agricultural land in the Edmonton
CMA. Appendix Table A.1 summarizes the development trend in the six study areas.
3. Methods
This study uses binary choice experiment methods to estimate and compare WTP and WTA for
preservation and conversion of agricultural land located around Alberta’s six largest urban areas. Our
goal was to follow best practice in both WTP and WTA variants of the study (Johnston et al, 2017), then
to compare results with respect to indicators of survey performance and estimation outcomes.
Study design
The population for this study is persons greater than 18 years of age who live in one of the 6 largest
CMAs or CAs in Alberta, and are actually or potentially responsible for paying property taxes or rent.
Our goal was to obtain data from samples of approximately 650 individuals for the WTP and WTA
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surveys. The survey was implemented on-line through a commercial survey company (explained in the
data collection section below).
We began both variants of the questionnaire by establishing the age and region of residence of the
respondent. If the potential respondent was over 18 and resident in one of the six regions, then the
survey could continue. Information about the purpose of the study was provided and consent obtained.
Consenting respondents were then provided with background information about the magnitude of recent
development and conversion of agricultural land in their particular region, illustrated by a map of the
relevant CMA / CA.
The remainder of the questionnaire had four sets of questions. The first set probed respondents’
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individual reference conditions, including Likert-scale questions regarding their perception of the
primary functions of land in the city-region context, the ecosystem services that agricultural land
provides, and whether it was desirable to live near agricultural land. We avoided using persuasive
communications to minimize social desirability bias. The second question set presented the choice
scenarios, including an introduction and 8 binary choice scenarios (WTP or WTA for the two variants of
the survey), with follow-up uncertainty questions for each scenario. The third and fourth sections
included ancillary questions about demographic characteristics and belief in the validity of the scenarios.
Addressing hypothetical bias
This study incorporates a number of survey design and ex post analysis features to strive to reduce the
effects of hypothetical bias. Loomis (2014, p.35) defines hypothetical bias in the WTP context as “the
difference between what a person indicates they will pay in a survey or interview and what a person
would actually pay.” In the WTA context, hypothetical bias could similarly be expressed as the
difference between what a person indicates they will be willing to accept in a survey or interview and
the amount that they would actually be willing to accept. Lopez-Becerra and Alcon (2021) identify the
following possible causes of hypothetical bias: 1) strategic bias and free riding; 2) social desirability and
warm glow bias; 3) information and framing effects; 4) interview and interviewer biases; 5) starting
point, status quo, and anchoring bias; 6) preference uncertainty due to unfamiliarity of the choice
scenario or payment vehicle; and 7) complexity of choice and cognitive dissonance (Lopez-Becerra and
Alcon, 2021). Incentive compatibility holds when the respondent has incentive to truthfully reveal
private information requested. Vossler et al (2012) show that incentive compatibility holds for binary
choice experiments of WTP when the following conditions are met: 1) participants care about the
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outcome; 2) the authority can enforce payment by voters; 3) the elicitation involves independent yes or
no votes on the choice sets; and 4) the probability that the proposed project is implemented is weakly
monotonically increasing with the proportion of yes votes. Lloyd-Smith and Adamowicz (2018, p. 136)
show that these conditions can be extended for incentive-compatible elicitation of WTA, with the
following modifications to condition 2): “the authority can enforce voters to give up the good” and
condition 3 “the elicitation involves a yes or no vote on a single project.” Condition 1) can be assessed
through preliminary and ancillary questions, conditions 2) and 3) depend upon the elicitation design, and
condition 4) – consequentiality -- depends upon the background and framing information provided to
respondents.
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In the WTP framing of farmland preservation values, consequentiality holds when a respondent
perceives a positive probability that their response will influence public policy or planning decisions
related to farmland preservation and that their property taxes or rent might increase as a result of public
decisions to preserve more farmland. In the WTA framing, the respondent must perceive a positive
probability that the research output would influence the pace of development allowed by policy makers
and planners and that additional development would reduce their taxes or rent. We framed the WTP and
WTA choice experiment scenarios to enhance consequentiality as described in endnote i.i
We used two additional approaches to reduce the effects of different sources of hypothetical bias. First,
we used the dichotomous choice format to reduce the complexity of the choice problems: respondents
could only choose the status quo or one alternative. This made the problem similar to a referendum vote
(Carson and Groves, 2007; Kline and Wichelns, 1994). We tried to make the preservation and
development scenarios as simple as possible, but recognize that some respondents may have experienced
cognitive dissonance due to the relative unfamiliarity of the proposed scenarios and the relative
complexity of the language that we used (see a further discussion of this in the results section below).
Second, we incorporated certainty questions and conducted ex post uncertainty recoding / recalibration
(Ready et al, 2010) to account for preference uncertainty or social desirability bias. After each
dichotomous choice scenario, we asked respondents “how certain are you that this is the choice you
would make in an actual vote?”, with five possible answers: “Very certain,” “somewhat certain,”
“neither certain nor uncertain,” “somewhat uncertain,” and “very uncertain.” Given its importance to
our empirical results, we next provide a more detailed discussion of uncertainty recalibration.
Uncertainty re-calibration
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Explicit concern about respondents’ preference uncertainty can be traced back many years, at least to
Arrow (1993). Stated preference studies may require respondents to consider choice scenarios that they
have not previously encountered, especially for amenity values of public goods. If a hypothetical
situation were to become real, respondents may truly be undecided about how they would respond. Two
survey design approaches have been taken to allow respondents to articulate such preference uncertainty
in the dichotomous choice WTP framework. The approach recommended by Arrow (1993) was to allow
“yes”, “no” and “don’t know” as possible responses. The alternative approach commonly associated
with Champ and Bishop (2001) and Ready et al (2010) is to ask respondents two questions about each
scenario: would they pay X amount for an item? and how certain are they of that choice? Certainty
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answers are either expressed on a numerical scale (eg 1-10) or on a Likert-type scale, for example
“certain,” “somewhat certain,” “somewhat uncertain,”, and “uncertain”. The uncertainty formulation
appears to be most favoured in recent studies.
The “don’t know” or “somewhat uncertain” responses can then be used to recalibrate the yes / no
responses. Several rules of thumb have emerged. In the WTP context, Champ and Bishop (2001)
propose recalibration of some “yes, but uncertain” responses as “no”, based on case studies that have
compared stated WTP with actual WTP. That is, there is a presumption that there will tend to be
hypothetical bias in WTP studies, with stated WTP exceeding actual WTP, so that a certain amount of
recalibration from yes to no will offset that bias and also produce a more “conservative” estimate of
value, although Loomis (2014) warns that the Champ and Bishop (2001) approach may over-correct.
Perhaps because so few studies of WTA have been conducted in recent years, there is very little
guidance in the literature regarding uncertainty recalibration of stated choice WTA studies. One of the
most fruitful for our purposes is Groothuis and Whitehead (2002), who evaluated “don’t know”
responses to dichotomous choice WTP and WTA scenarios. The WTP case concerned a program
designed to protect sea turtles in North Carolina, while the WTA case concerned siting of a hazardous
waste landfill in rural Pennsylvania. The authors compared the don’t know responses to predicted
values from multinomial logit and ordered logit models of WTP and WTA. They concluded that don’t
know in the WTP scenario was similar to a no response (similar to the Champ and Bishop (2001)
assumption), while don’t know in the WTA scenario was similar to an intermediate response between
yes and no. We found no study of uncertainty recalibration in a split sample comparative study such as
the present study. We reason that uncertainty in the WTP and WTA frameworks reflects some amount
of cognitive dissonance, or difficulty understanding the choice scenario and the payment vehicle. We
further speculate that there was a social desirability bias toward protection of farmland that could lead a
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WTP respondent toward saying yes, he or she would be willing to pay, and a WTA respondent toward
saying no, he or she would not be willing to accept the compensation offer.
To produce conservative estimates of WTP and WTA, we thus adopted the following approach in our
preferred model. Yes, but either very or somewhat uncertain WTP responses were recalibrated as no
while no, but either very uncertain or somewhat uncertain WTA responses were recalibrated as yes.
Given that we have no other evidence to support this approach, we also report the less conservative
WTP and WTA results without recalibration of uncertain responses.
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Choice Scenarios
Following Vossler et al (2012) and Lloyd-Smith and Adamowicz (2018), the study used a dichotomous
choice format. The status quo was the same in both the WTP and WTA variants: continuation of the
recent trend in conversion between agriculture and developed land uses and no change in property tax or
rent. The alternative for the WTP study had three attributes: current agricultural land use, alternative
developed land use, and a one-time payment that the respondent would make toward preservation of an
incremental 1,000 acres of land somewhere within 10 kilometers of developed urban areas that would
otherwise be converted into the developed land use. The WTA study had three similar attributes:
current agricultural land use, alternative developed land use, and a one-time compensation that the
respondent could receive as lower property tax or rent in order to allow the conversion of an incremental
1,000 acres of land from agriculture to the developed land use somewhere within 10 kilometers of the
developed urban areas. Three agricultural uses, grain / oilseed production, grassland / hayland, and
commercial vegetable production, and three developed land uses, light industrial, commercial and
residential, were considered. These land uses correspond to the main agricultural and urban land uses
around urban areas in Alberta (Haarsma & Qiu, 2015).
Our payment vehicle was a one-time increase in property tax or rent for WTP and a one-time rebate of
property tax or rent for WTA (all in Canadian dollars). Taxpayers in Alberta have long experience with
paying property taxes and recent experience receiving carbon tax rebate payments of $300 to $630 per
household. For both WTP and WTA versions of the study, we set a payment range of $50 to $1000 and
three payment levels between. This range was set to simplify the number of design combinations, to
ensure that respondents would find all alternatives credible, and to allow comparability with the previous
study of the Edmonton area by Wang and Swallow (2016) who used a payment range of $25 to $600.
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The payment range was discussed in some depth during both focus groups, discussed below. The wide
range reflected differing opinions regarding the level of payment or compensation that would be
considered meaningful and realistic for respondents with different income types and levels. Table 1 lists
the attributes and attribute levels for the WTP and WTA surveys.ii Figure A.2 presents examples of the
choice scenarios presented to respondents for WTP for additional farmland conservation (top panel) and
WTA compensation for additional development of farmland into alternative urban uses.
Lloyd-Smith and Adamowicz (2018) condition 3 for incentive compatibility is that there be a single
discrete choice question. Resource and sample size constraints did not allow us to fully satisfy this
condition, although we encouraged respondents to give independent consideration of choice scenarios by
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randomizing the order in which scenarios were presented to respondents, disallowing respondents from
returning to previously answered questions, and including the following statement immediately before
the choice scenarios. “In each set presented below, imagine that these are the only options available for
you to choose from. For each set, please choose independently from other questions – please do not
compare options from different sets.” (emphasis in original). Finally, to address the possibility of protest
voting we asked the following open-ended question in the final section: “Do you have any other
comments about the context of this survey or the reasons for your answers?” The study team read each
of these responses and identified respondents who indicated protest against the premise of the WTP or
WTA approach. Those who lodged protests were recorded and excluded from further analysis.
Following Herriges et al (2010), in the last section of the questionnaire, we asked the following ancillary
question to assess respondents’ perceptions of plausibility / consequentiality: “How likely do you feel
the strategies presented in the survey could be really implemented? Possible answers were “very
likely,” “somewhat likely,” “uncertain,” “somewhat unlikely,” and “very unlikely.” We labelled
respondents who answered “very likely” or “somewhat likely” to be “strategy believers.”iii We
hypothesized that strategy believers perceived the study to be more consequential, although we did not
have a specific hypothesis regarding the WTA / WTP gap for strategy believers compared to the full
sample. Below we present and compare results for the full samples and the samples of strategy
believers.
Experimental design
The experimental design was symmetrical for the WTP and WTA versions of the study. As discussed
above, choices were made over 3 attributes: current agricultural use, replacement development use, and
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one-time payment or compensation level. There were three types of current agriculture use, 3 types of
replacement development use, and 5 payment or compensation levels covering the range of $50 to
$1000. Therefore, there are 45 combinations (3*3*5=45). A full factorial experimental design would
include all 45 combinations to fully cover the attribute space so that all main and interaction effects are
statistically independent. However, the full factorial design means fewer observations for each
combination when sample sizes are constrained (Hensher et al., 2005). In this study, there are
observations for about 650 respondents for the WTP and WTA variants of the survey: we judged that
there would be insufficient observations for accurate parameter estimates if the full factorial design was
applied. We instead chose the “d-optimal” efficient design that minimizes the inverse of the determinant
of the variance-covariance matrix of the parameters (D-error) (Rose et al, 2008). Because we had no
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prior data, we assumed that all alternatives contained in the choice sets were equally attractive. We
considered 16 different choice sets blocked into two groups of eight, with each respondent required to
answer one block of 8 choice questions. The Ngene software was used for the d-optimal design and
blocking.
Questionnaire development and data collection
We convened two focus groups, a pretest, and a soft launch of the internet-based survey. Focus groups
of 10-12 persons were held in the Lethbridge and Edmonton areas, two of the six locations for this
study, and convened by a local survey company. The survey company recruited participants from a
panel of over 40,000 Albertans and random digit dial telephone contact.iv After giving their informed
consent, focus group participants completed a trial version of the WTA or WTP survey (on paper), then
participated in a facilitated conversation regarding ease of comprehension, respondent fatigue, language
and format, hypothetical bias, consequentiality, and payment and compensation ranges. Respondents
expressed good understanding of both frames and a range of opinions about the plausibility of either
frame. Using the constructive feedback from the focus groups we adapted the survey to increase the
credibility of the scenarios and consequentiality of the overall study, providing more complete
information, highlighting the payment and compensation mechanisms, randomizing the order of some
questions to minimize default effects, simplifying the language and formatting the questions and survey
layout to alleviate respondents’ cognitive burden. We used a survey design software to format the
questionnaire for online presentation. The online version was pre-tested with 10 volunteers known to
the researchers.
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Before recruiting the full sample of respondents, a soft launch of 10% of the intended sample was
implemented. Analysis of the soft launch data showed levels of payment and compensation consistent
with our expectations. We also ran simple multinomial models for both WTP and WTA that yielded a
significant negative sign on cost for the WTP equation and a significant positive sign on compensation
for the WTA equation, as expected. We then requested the survey company to open the surveys to large
numbers of panelists (about 42,000 for the WTP survey and about 40,000 for the WTA survey),
accepting entrants and completed responses until pre-determined quotas were filled for the WTP and
WTA variants of the survey. Quotas of WTP and WTA respondents were set for each of the 6 areas.
The survey company screened potential respondents by three criteria. Residents should be actual or
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potential taxpayers, over the age of 18 years, and residents of urban areas from which they were
recruited. The survey was offered only in the English language; thus non-English speakers were
excluded from participating in the online surveys. A “trap question” was inserted before the choice
experiment questions to test whether respondents were reading the materials and paying attention to the
questions.v Considering the sensitivity of questions about income, that question was asked last and
respondents were allowed to avoid answering that question. All other questions were forced responses,
requiring respondents to answer each question before moving to the next question.
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4. Data analysis
Data analysis involved three steps. The first step was to compare demographic and socio-economic
statistics for the respondents from the two online surveys. A two-sample t-test was used to determine
whether there were statistically significant differences between the WTP and WTA samples. The second
step was to use the choice experiment data to estimate marginal utility of the strategies and their
attributes and calculate MWTP and MWTA using appropriate statistical models. The third step was to
compare indicators of study reliability and welfare measures estimated by the WTP and WTA models.
The framework for welfare analysis in choice experiments is the random utility model as initially
proposed by McFadden (1974) and first used by Hanemann (1978) to place values on environmental and
natural resources. In the random utility model, a decision maker chooses one option from a set of
alternatives and the researcher observes the choice and attributes of the option.
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When individuals make a choice among N mutually exclusive alternatives, it is assumed that they know
their utility perfectly, so they make the choice that maximizes their utility. Zi and Zj reflect the utility
from the land use attributes in alternatives i and j. Therefore, individual k will choose alternative i
among a set of all alternatives C in the choice set if and only if:
𝑣𝑖𝑘 (𝒁𝒊 , 𝑦𝑘 − 𝑝𝑖 ) + 𝜀𝑖𝑘 > 𝑣𝑗𝑘 (𝒁𝒋 , 𝑦𝑘 − 𝑝𝑗 ) + 𝜀𝑗𝑘 ; ∀ 𝑗 ∈ C
(1)
The random utility model predicts the probability that an alternative was chosen given its systematic and
error components. The general form for the probability that individual k choses alternative i from a
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choice set is:
𝑃𝑖𝑘 = 𝑃[𝑣𝑖𝑘 (𝒁𝒊 , 𝑦𝑘 − 𝑝𝑖 ) + 𝜀𝑖𝑘 > 𝑣𝑗𝑘 (𝒁𝒋 , 𝑦𝑘 − 𝑝𝑗 ) + 𝜀𝑗𝑘 ; ∀ 𝑗 ∈ C]
(2)
β0 (ASC) + β1 (vegetable) + β2 (livestock) + β3 (retail) + β4 (light industrial) + β5 (cost)
(3)
The observable utility function for the empirical analysis in our study is:
Vik (Zi, yk – pi) =
with variables are defined as in Table 2. Appendix Table A.2 defines the variables used in the
econometric analysis.
<Table 2 about here>
ASC is an alternative specific constant which was defined as the utility of choosing the baseline strategy,
which was to avoid the conversion of 1,000 acres of grain or oilseed farming to residential use in the
WTP preservation case and converting an additional 1,000 acres of grain or oilseed farming to
residential uses in the WTA development case. There are two other attributes for type of agricultural
land: livestock grazing land and commercial vegetable production. The other types of residential land
use are retail and light industrial.
The parameters from the choice experiment are used to estimate marginal WTP and marginal WTA.
Choice experiment methods are consistent with utility maximization and demand theory (Bateman et al.,
2002), therefore, the marginal WTP and marginal WTA in a linear utility function is given by equation
(4) (Hanemann, 1984). See Appendix B for a more detailed explanation of equation (4) in terms of
Compensating Variation (CV) for the WTP case and Equivalent Variation for the WTA case.
15
𝜕𝑣 ⁄𝜕𝑍
⁄𝜕𝑦
𝑀𝑊𝑇𝑃 = 𝑀𝑊𝑇𝐴 = 𝜕𝑣
(4)
We estimate equation (3) as a Random Parameter Logit Model (RPL), which can capture heterogeneity
through estimates of the mean and variance of the random parameter distributions.
Like previous studies discussed above, we evaluated the WTA – WTP gap as one indicator of the
performance of the two approaches. We also evaluated the credibility of the two methods by comparing
rates of completion and protest. The completion rate is the ratio of the number of complete responses
and the number of people who entered the survey. Protest was evaluated by responses to the concluding
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open-ended question in which respondents were asked to provide feedback on the overall survey. The
protest rate is the number of protest votes divided by the total number of complete responses. The
uncertainty rate is the number of uncertain responses divided by the total number of complete responses.
The people who believed that the preservation strategies are likely or very likely to be implemented are
identified as strategy believers. The proportion of strategy believers is the ratio of the number of
strategy believers and the total number of complete responses.
5. Results
In February 2019, the survey company opened the WTP variant of the survey to a panel of about 42,000
people and the WTA variant to a separate panel of about 40,000 people. Two panels were used due to
small number of panelists in the smaller cities relative to the size of the quotas. Once the survey
company received sufficient completed responses to meet the survey quotas, they closed the surveys to
new participants. 1,900 respondents entered the WTP survey and 1,750 respondents entered the WTA
survey.
The survey company implemented a data scrubbing process to remove responses that were incomplete or
clearly insincere. 34 WTP responses and 40 WTA responses were ruled out by the attention trap
question. Finally, a total of 643 WTP and 660 WTA complete responses was regarded as the full valid
sample. The survey completion rate was 33.84% for the WTP survey and 37.71% for the WTA survey.
28 responses from the WTP survey and 13 responses from the WTA survey were excluded from the
analysis because their answers to the open-ended questions suggested that they rejected the premise of
the study. We thus conclude that most respondents accepted the plausibility of the scenarios. On the
16
basis of the uncertainty questions, 8.56% of the WTP scenarios were recoded from willing to not willing
to pay (842 / 9,840 scenario responses) and 15.34% of the WTA scenarios were recoded from not accept
to accept (1,588 / 10,352 scenario responses).
A possible limitation of the study design is the complexity of the language used to describe the WTP and
WTA protection and payment scenarios. The Flesch-Kincaid grade level is 19.3 for the WTP scenario
and 18.5 for the WTA scenario. 58% of our respondents had less than university undergraduate
education (Table 2). The complexity of language, coupled with relative lack of familiarity with the
WTA payment vehicle, may have led to greater preference uncertainty for the WTA questions. To
evaluate this hypothesis, we compared the percentage of uncertain responses for respondents with
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bachelor’s education or more and for respondents with less than bachelor’s education. For the WTP
survey, the level of certainty (somewhat certain or very certain) was very similar for the two groups of
respondents: 82.2% for respondents with bachelor’s degree education and above and 83.1% for
respondents with less than bachelor’s degree education. For the WTA survey, the level of certainty was
79.1% for respondents with bachelor’s education or above and 75% for respondents with less than
bachelor’s education. Thus, the WTP – WTA uncertainty gap was 3.1% for the more educated group
and 8.1% for the less educated group. This supports the hypothesis that cognitive difficulty could have
been a more important issue for the less educated group.
Respondent Characteristics
Table 2 summarizes demographic and socio-economic statistics for all respondents to the on-line
surveys. Eighty percent of the respondents are resident in either the Edmonton or Calgary regions. Here,
we only report the results for the pooled samples, results are similar when estimated for the Edmonton
and Calgary sub-samples. Two-sample t-tests are used to examine whether there are statistically
significant differences between the WTP and WTA samples. Over 70% of all respondents live in cities.
Age, residence, living in city, education, income, and ownership are very similar between the WTP and
WTA surveys, while there are statistically significant differences in participation by gender, % retired,
and incomes of $90,000-100,000. Our assumption is that the differences in demographic characteristics
in the WTP and WTA samples reflect differences in the sampling frames from which the two samples
were drawn. Unfortunately, it is not possible for us to easily compare the characteristics of our samples
with the sampling frames or the broader Alberta population because of differences between the simple
17
demographic information we collected and information available through the Government of Canada
census.
<Table 2 about here>
Pooling results across Alberta’s urban regions
We first estimated equation (3) as a Random Parameter Logit Model for three sub-samples: respondents
living in the Edmonton urban region; respondents living in the Calgary urban region; and respondents
living in the other four smaller urban regions combined. We present the resulting mean willing to pay
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and mean willingness to accept results in Table A.2. The results are similar for Edmonton and Calgary,
and somewhat lower for the other urban areas. For the present purposes, we focus on results for the
pooled sample. For the welfare calculations, this pooling required an assumption of equal marginal
willingness to pay and willingness to accept across the study areas. We consider the results most
representative of the Edmonton and Calgary regions.
WTP for Farmland Preservation
For comparison purposes, we estimated and present three versions of the WTP model in Table 3. The
first version is estimated for the full sample, with “yes but uncertain” responses recoded as no. This is
our preferred model. The results are reported in the second and third columns of Table 3. The second
version is estimated for the full sample, with no recoding, and the results are reported in the fourth and
fifth columns of Table 3. That is, “yes, but uncertain” responses are treated in the same way as “yes, but
certain.” The third model is estimated with data for the sub-sample of “strategy believers”, those who
indicated in the ancillary question that they regarded the study to be consequential, and reported in
columns six and seven. The estimates of the price coefficient are statistically significant and virtually
identical in all three models, while the estimate of the ASC is lower for the preferred (recoded) model,
and virtually identical for the other two models. The results for the different types of land use indicate
few statistically significant differences between land uses, although high heterogeneity of land use
preference in all models. The estimated value for the vegetable land use variable is statistically
significant, but only for the model estimated without uncertainty recoding.
18
<Table 3 about here>
We then used the estimated parameters from the RPL model to estimate MWTP for the farmland
preservation scenarios according to equation 4 (Table 4).
<Table 4 about here>
The results of our preferred model indicate that the average respondent is willing to make a one-time
payment of between $340.15 and $475.90 (depending on the land use change prevented) to preserve
1,000 acres of farmland that would otherwise be converted into non-agricultural uses. MWTP for the
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sub-sample of strategy believers is higher than for the whole sample, ranging from $472.16 to $832.02.
Strategy believers are willing to pay 27% to 92% more than the whole sample. The finding of higher
MWTP for respondents who feel that the survey is policy consequential is consistent with the finding of
Vossler et al (2012). Table 4 also shows MWTP estimates for the full sample without recoding. MWTP
are also somewhat higher than the base model, with a range of $602.35-$828.75, 48% to 119% higher
than the base model. Clearly, uncertainty recoding had a material effect on the MWTP results. As
suggested by Champ and Bishop (2001), uncertainty recoding produces a more conservative estimate of
WTP.
WTA Compensation for Development
Next we focus on the results of the RPL models of willingness to accept compensation for the loss of
passive-use value due to conversion of additional agricultural land into developed uses. The results
presented in Table 5 show that price (a one-time tax reduction) always has a positive effect on
respondents’ utility and that all respondents prefer the status quo level of conversion over additional
conversion. Respondents from the full sample indicate no preference for conversion of commercial
vegetable or grain land, but they are less likely to accept compensation for conversion of grazing land.
Regarding alternative developed land use, respondents are more willing to allow conversion to light
industrial compared to conversion to retail or residential. Significant coefficients of the standard
deviation indicate that the RPL model captured large unobserved heterogeneity in WTA. MWTA
estimates are presented in Table 6 for the preferred base model (with uncertainty recoding), for the
strategy believers sub-sample, and for the full sample without uncertainty recoding.
19
Respondents who believed that these strategies would be implemented place greater value on the
preservation scenarios compared with the current development trend. MWTA for those who believed in
the consequentiality of the study (strategy believers) were willing to accept 21-93% more than the whole
sample, as indicated by the Ratio 3/2 column. MWTA estimates without recoding were much higher
than MWTA with recoding, ranging from 122% to 344% higher. As expected, the uncertainty recoding
procedure produced a much more conservative estimate of MWTA. We do not have data on actual
willingness to pay for farmland conservation in Alberta, so cannot independently verify the results with
and without uncertainty recoding.
<Table 5 about here>
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<Table 6 about here>
Comparison of WTP and WTA
Finally, we present our comparison of results for WTP and WTA, summarized in Table 7. The first
indicator is the completion rate of each survey. The online survey involved a total of 1,303 complete
respondents. The survey completion rate was 33.84% for the WTP survey and 37.71% for the WTA
survey. The slightly higher completion rate for the WTA suggests that the WTA presented no greater
cognitive dissonance than the WTP survey (p<0.05). As indicated above, however, we note that the
Flesch-Kincaid reading level is 19.3 for the WTP survey and 18.5 for the WTA survey, and that less
well-educated respondents expressed higher uncertainty in responding to the WTA questions.
28 WTP respondents (4.36%) and 13 WTA respondents were identified as project-rejecters (1.97%) on
the basis of their responses to the open-ended question at the end of the survey. The number of WTP
project rejecters is somewhat higher than for WTA, although still relatively low (4.63%). The difference
is statistically significant). Overall, we conclude that most respondents accepted the plausibility of both
the WTP and WTA scenarios.
From the ancillary question regarding consequentiality, we found that 54.9% of respondents believed
that the preservation strategies evaluated through the WTP are likely or very likely to be implemented,
while 51.5% of respondents believed that the development strategies evaluated through the WTA are
likely or very likely to be implemented. This 3.3% difference is statistically significant. This indicates
20
that belief in consequentiality was similar for the two groups, although marginally higher for WTP than
WTA (p<0.01).
A fourth indicator of the reliability of the survey design is the percentage of respondents who indicated
“uncertain” or “very uncertain” in their reactions to the scenarios. The percentage of uncertain
responses for the WTP survey was 8.6%, while the percentage of uncertain responses for WTA was
15.3%, a statistically significant difference. Thus, we conclude that respondents in the WTP case were
somewhat more certain of their answers to the WTP survey than respondents in the WTA case. As
discussed in the methods section, we assume that this preference uncertainty reflects a combination of
cognitive dissonance and social desirability bias toward farmland preservation over development.
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Theses biases appears to have somewhat greater effect on WTA than WTP.
To further illustrate the differences between estimates of WTA and WTP, the ratios of MWTA / MWTP
for the nine strategies were calculated for the preferred base model and alternative models (Table A.6).
For our preferred base model with the full sample and uncertainty recoding, we found that the ratio of
MWTA to MWTP to range from -0.16 to 3.05, with an average of 1.21 across the nine scenarios.
Overall, the ratios are higher for the strategy believers, ranging from 0.34 to 2.70, with an average of
2.11, and the full sample without recoding, ranging from 0.83 to 3.35, with an average of 1.42. All of
these ratios compare favourably to the review conducted by Tuncel and Hammitt (2014). For the 76
studies that they considered, Tuncel and Hammitt (2014) found the average ratio to be about 3.00 across
all goods, 6.23 for environmental goods, and 3.93 for other public or non-market good.
It is noteworthy that we found a few MWTA / MWTP ratios to be less than 1. For example, for the
‘strategy believers’ group, grain-vegetable and livestock-light industrial are only 0.34 and 0.3,
respectively, which means that MWTA is considerably smaller than MWTP. A potential reason is that
although MWTA in these two categories are significant, the p values are just at the 10% level.
Our WTP and WTA respondents included persons who were potential or actual tax payers. We
estimated versions of both models for the sub-sample of renters. The RPL model results for the WTP
and WTA models are reported in Table A.3 and the MWTP estimates are reported in Table A.4. While
the WTP results are similar to the results for the base WTP model, the WTA results are much lower, not
significantly different from 0.
<Table 7 about here>
21
6. Discussion
Few previous studies have applied the WTA framing to estimate the public values given up when
agricultural land is converted into developed uses. We are aware of no previous study that has estimated
WTA applying the consequentiality principles identified by Vossler et al (2012) for WTP and validated
by Lloyd-Smith and Adamowicz (2018) for WTA. Yet, farmland preservation is a matter of public
concern in many contexts. Policy makers and planners are expected to manage the tradeoffs between
public and private interests associated with different land uses in urban-rural fringe areas.
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We conclude that the results of this study show that willingness to accept for the loss of the public good
values of farmland can be reliably estimated using best practice choice experiment methods. This
includes due attention to study framing to meet consequentiality requirements, cognitive burden,
payment vehicle, use of follow-up questions, recoding for uncertainty and efficient estimation. Using
four measures of survey reliability, we found two measures that indicated higher reliability of WTA -survey completion rate, rate of project rejection – and two measures that indicated higher reliability of
WTP – strategy believer rate and scenario uncertainty.1
All of the differences in study performance are small, except for the rate of scenario uncertainty.
Respondents expressed more uncertainty about their responses to the WTA framing. We postulate that
this difference may reflect differences in respondents’ understanding of the consistency of scenarios
with the de facto property rights situation to agricultural land in the peri-urban areas around Alberta’s
cities. As indicated in the context section above, both the Alberta Land Use Framework and Municipal
Government Act make it clear that private land rights are limited and that municipalities are expected to
consider the public interest in allowing changes in zoning. This might lead to a social desirability bias
for respondents to WTP scenarios to agree to high payments for preservation and WTA respondents to
disagree to accept high levels of compensation for development. In practice, however, other supporting
research shows that many farm owners believe that they have a right to convert their land to more
developed uses and many municipal governments are reluctant to deny applications for land use redesignation made by those farm owners (personal communication with municipal authorities in Parkland
and RockyView Counties). Municipal land use plans are not strictly followed, and municipal
1
We urge other researchers to pay attention to the ease of comprehension of the conservation and
development scenarios. As reported in footnote 3, these surveys had high reading levels scores which
may have contributed to respondents’ uncertainty.
22
governments are not held to account for complying with those plans. Another possible cause of the
higher rate of uncertainty for WTA is that the idea of financial compensation for loss of public goods
associated with agricultural land is less familiar than the idea of payment toward farmland preservation.
We account for potential social desirability bias or cognitive dissonance by recoding “yes, but uncertain”
WTP responses as no, and “no, but uncertain” WTA responses as yes. With this recoding, average
WTA across the 9 land use change scenarios was only 21% higher than WTP; without this recoding,
average WTA was 42% higher than WTP. Both of these gaps are considerably lower than gaps found in
most previous WTA / WTP comparisons. This smaller gap may be partly due to the rigorous study
design. However, we also need to accept that the smaller gap may reflect lower loss aversion.
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Respondents who had not previously thought of farmland conversion as the loss of public good benefits
of open space might perceive less loss. One result that bolsters that proposition is that respondents who
believed in the plausibility (and potentially consequentiality) of the preservation and development
strategies had higher average willingness to pay and willingness to accept compensation than the full
sample. The WTA-WTP gap was also larger, possibly indicating greater loss aversion. Following
Hanemann (1991), lower loss aversion might also reflect the fact that respondents perceived there to be
many substitutes for the public goods provided by agricultural land. Further exploration of this topic is
warranted, possibly involving laboratory experiments that vary the certainty of property rights.
We recommend that future studies of farmland preservation revive the logic of Knetsch (2007, 2020)
and estimate the welfare measure that best matches the context. Ambiguous property rights and the de
facto reference scenario of continual development may leave no clear choice between the two welfare
indicators. In that context, accurate measurement of either welfare measure requires the analyst to
present the scenario in terms that gain higher scenario acceptance by respondents, augmented by
uncertainty questions and recoding. We argue that the WTA approach is more compelling than WTP,
however, given the reversibility of land use changes. That is, today’s decision to preserve an area of
farmland can be reversed tomorrow at relatively little cost, while today’s decision to develop that same
area is unlikely to ever be reversed.
Acknowledgements
Financial support for this research was provided by the Alberta Real Estate Foundation, the Max Bell
Foundation, the Calgary Regional Partnership, and the Alberta Land Institute. The authors thank Rachel
23
de Vos (Bocock) for first suggesting that we consider the duality between willingness to pay and
willingness to accept compensation for preserved farmland. Haoluan Wang contributed methodological
assistance for the survey and analysis. We acknowledge constructive comments from Edward Barbier
and Ryan Abman, as well as the editor and two anonymous reviewers of Land Economics.
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Table 1: Binary choice experiment attributes and attribute levels for the WTP and WTA surveys
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Attribute
Level
Explanation
Type of Current
Grain or oilseed farming
Agricultural Use
Livestock grazing on native pasture
(WTP & WTA)
Commercial vegetable farm
Type of development
Residential
Major types pf urban
without preservation
Light Industrial
development without
(WTP & WTA)
Retail
conservation in your areas
50
One-time additional
100
cost to each taxpayer
300
($) (WTP)
600
Major types of
agricultural in your area
One-time additional
increase in property tax or
rent to each taxpayer in
your areas
1000
50
One-time compensation 100
One-time reduction in
paid to each taxpayer
300
property tax or rent to
($) (WTA)
600
each taxpayer in your area
1000
Source: Authors.
28
Table 2. Demographic and Socio-economic Statistics for the Sample
(N=643 for WTP, N= 660 for WTA)
Demographic
variables
Gender
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Residence (region)
Household income
(before tax)
Education
Employment
City
Ownership
Age
Description
WTP
38.26
61.59
0.16
42.15
41.84
5.29
5.13
3.27
2.33
14.02
25.55
21.34
19.31
10.90
8.88
3.11
22.71
Male
Female
Other
Edmonton
Calgary
Lethbridge
Red Deer
Medicine Hat
Grande Prairie
Less than $30,000
$30,000 - $59,999
$60,000 - $89,999
$90,000 - $119,999
$120,000 - $149,999
Greater than $150,000
Lower than high school
Completed high school
Completed post-secondary
technical school
Completed university
undergraduate degree
Completed post-graduate
degree (e.g., Master or Ph.D.)
Working part-time
Working full-time
Retired
Student
Unemployed
Other, please specify
In a city
Outside of a city
Others, please specify
Own residence
Rent residence
Own agricultural land
18-64
65+
Sample percentage (%)
WTA
Significancea
46.21
***
53.79
***
0.00
39.85
41.82
6.82
4.85
4.39
2.27
15.05
25.53
23.25
15.35
**
11.25
9.57
1.82
26.52
Total
42.29
57.64
0.08
40.98
41.83
6.06
4.99
3.84
2.30
14.50
25.48
22.26
17.27
11.05
9.21
2.46
24.64
32.66
30.45
31.54
32.66
31.06
31.85
8.86
10.15
9.52
17.11
48.06
17.42
3.89
7.78
5.75
74.03
9.64
16.33
69.83
29.86
5.75
86.16
13.84
14.39
43.79
24.24
4.39
8.03
5.15
70.30
11.52
18.18
71.82
29.70
5.91
81.52
18.48
15.73
45.89
20.87
4.14
7.90
5.45
72.14
10.59
17.27
70.84
29.78
5.83
83.81
16.19
**
a. The significance of the differences between WTP and WTA samples gained from two-sample ttest. *** p<0.01, ** p<0.05, *, no symbol represents no significant differences. (Source:
authors)
29
Table 3. Random Parameter Logit Model (RPL) Coefficient Estimates (WTP) (preferred model, without
recoding and strategy believers)
Attributes
Price
ASC
vegetable
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livestock
retail
light
industrial
RPL (Preferred model)
Coefficient Coefficient
(Std. Dev.)
-0.00188***
(0.000121)
0.763***
(0.0776)
0.13
(0.124)
-0.0735
(0.125)
-0.00467
(0.124)
1.888***
(0.201)
1.737***
(0.206)
1.858***
(0.187)
-0.0513
2.067***
(0.141)
(0.199)
6014.723
6086.665
RPL (without recoding)
Coefficient Coefficient
(Std. Dev.)
0.00186***
(0.000117)
1.119***
(0.0810)
0.272**
1.732***
(0.120)
(0.189)
0.208
1.663***
(0.130)
(0.188)
0.145
1.819***
(0.123)
(0.183)
0.0592
1.669***
(0.128)
(0.180)
5949.394
6021.336
AIC
BIC
Log
-2997.3614
-2964.697
likelihood
Number of
615
615
Individuals
Number of
9,840
9840
Choices
Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1
30
Strategy believers
Coefficient Coefficient
(Std. Dev.)
-0.00188***
(0.000156)
1.110***
(0.108)
0.195
(0.166)
-0.225
(0.156)
0.147
(0.153)
1.837***
(0.271)
1.348***
(0.256)
1.626***
(0.228)
0.255
2.202***
(0.196)
(0.298)
3368.716
3434.877
-1674.3581
345
5,520
Table 4. Estimated MWTP for Farmland Preservation Scenarios in Alberta (per household, next year
only) (RPL: preferred model, strategy believers, without recoding)
Preservation Scenario
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Grain or oilseed farming; Residential
Commercial vegetable farm; Residential
Livestock grazing on native pasture; Residential
Grain or oilseed Farming; Retail
Commercial vegetable farm; Retail
Livestock grazing on native pasture; Retail
Grain or oilseed farming; Light industrial
Commercial vegetable farm; Light industrial
Livestock grazing on native pasture; Light
industrial
Mean of 9 land use changes
Preferred
Model ($)
406.67***
475.90***
367.50***
404.19***
473.41***
365.01***
379.33***
448.55***
Strategy
believers ($)
592.01***
695.91***
472.16***
670.18***
774.08***
550.33***
728.12***
832.02***
Ratio
(3/2)
1.46
1.46
1.28
1.66
1.64
1.51
1.92
1.85
Without
recoding ($)
602.35***
748.53***
714.26***
680.56***
828.75***
792.48***
634.23***
780.41***
340.15***
608.27***
1.79
746.14***
406.75
565.67
1.39
725.30
Ratio
(5/2)
1.48
1.57
1.94
1.68
1.75
2.17
1.67
1.74
2.19
1.78
*** p<0.01. Ratio (3/2) is the ratio of the MWTP for strategy believers (column 3) and base model
(column 2). Ratio (5/2) is the ratio of the MWTP without recoding (column 5) to base model (column
2). Source: Authors
31
Table 5. Random Parameter Logit (RPL) Model Coefficient Estimates (WTA) (preferred model,
without recoding and strategy believers)
Attributes
Price
ASC
vegetable
livestock
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Retail
light industrial
Preferred model
Coefficient
Coefficient
(Std. Dev.)
0.000675***
(9.74e-05)
-0.333***
(0.0694)
0.0494
0.176
(0.0782)
(0.335)
-0.270**
1.866***
(0.121)
(0.196)
-0.148
2.440***
(0.136)
(0.220)
0.373***
-0.797***
(0.0885)
(0.128)
6712.539
6784.988
-3346.2695
RPL (without recoding)
Strategy believers
Coefficient Coefficient
(Std. Dev.)
0.000737***
0.000849***
(0.000131)
(9.76e-05)
-0.499***
-1.087***
(0.0955)
(0.0747)
0.0192
-0.00242
0.144
0.134*
(0.117)
(0.105)
(0.311)
(0.0781)
1.744***
-0.301*
1.686***
-0.601***
(0.185)
(0.157)
(0.227)
(0.135)
-0.567***
2.009***
-0.297*
1.936***
(0.194)
(0.163)
(0.245)
(0.139)
-0.00790
0.315***
0.316
0.404***
(0.146)
(0.110)
(0.241)
(0.0804)
6298.831
3543.133
6341.28
3609.06
-3139.415
-1761.5665
AIC
BIC
Log likelihood
Number of
647
647
Individuals
Number of
10352
10352
Choices
Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1
32
337
5392
Table 6. Estimated MWTA for Conservation Strategy in Alberta (per household, next year only) (RPL:
preferred model, without recoding and strategy believers)
Conservation Strategy
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Grain or oilseed farming; Residential
Commercial vegetable farm; Residential
Livestock grazing on native pasture; Residential
Grain or oilseed Farming; Retail
Commercial vegetable farm; Retail
Livestock grazing on native pasture; Retail
Grain or oilseed farming; Light industrial
Commercial vegetable farm; Light industrial
Livestock grazing on native pasture; Light
industrial
Mean of 9 land use changes
Preferred
Model ($)
Strategy
believers ($)
Ratio
(3/2)
Without
Recoding ($)
Ratio
(5/2)
492.99***
419.81***
893.58***
711.86***
638.68***
1112.45***
-59.69
-132.87
676.64***
679.92***
1084.67***
1079.18***
1082.45***
1487.20***
249.15*
252.42*
1.37
1.62
1.21
1.52
1.69
1.34
-
1280.23***
1122.09***
1987.31***
1948.12***
1789.97***
2655.2***
804.83***
646.68***
340.90*
657.17***
1.93
2.60
2.67
2.22
2.74
2.80
2.39
4.44
490.86
805.42
1.64
1511.90***
1527.3
3.11
*** p<0.01, * p<0.1. Ratio (3/2) is the ratio of the MWTP for strategy believers (column 3) and base
model (column 2). Ratio (5/2) is the ratio of the MWTP without recoding (column 5) to base model
(column 2). Source: Authors
33
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Table 7. Comparison of indicators between WTP and WTA
WTP
WTA
T test between
the difference of
two samples
Survey completion rate
33.84%
37.71%
+2.4969**
Project rejectors
4.63%
1.97%
-2.2878**
Strategy believers
54.90%
51.50%
-3.9906***
Scenario uncertainty rate
8.60%
15.30%
10.3194***
Mean WTP & WTA across 9 land use
changes (Cdn $) (preferred model)
$406.75
$490.86
NA
Range of WTP & WTA across 9 land
use changes (preferred model)
$340.15 - $473.41
-$132.87 $1,112.45
NA
Mean WTP & WTA across 9 land use
changes (Cdn $) (without uncertainty
recoding)
725.30
$1527.30
NA
Range of WTP & WTA across 9 land
use changes (without uncertainty
recoding)
$602.35 - $828.75
-646.68 - $1987.31
NA
Mean WTP & WTA across 9 land use
changes (Cdn $) (scenario believers)
$565.67
$805.42
NA
Range of WTP & WTA across 9 land
use changes (scenario believers)
$472.16 - $832.2
$249.15 $1487.20
NA
*** p<0.01, ** p<0.05. Source: authors.
34
i
To enhance consequentiality, we included the following statements in the introduction to the choice
experiment scenarios. “Provincial and municipal governments make many decisions that affect land
use. According to provincial policies, governments are expected to develop and follow land use plans
that maintain the viability of agricultural operations. All municipalities and regions in Alberta are
required to get input from local residents as they develop those plans. Some jurisdictions use survey like
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this to get such input. We will share our results with the provincial government and municipal
governments in the areas covered by this study.” This statement was followed by the cheap talk text
regarding the importance of honest responses: “It is very important that you choose as if this as a real
vote. You need to imagine that you actually have to dig into your budget and pay the additional onetime increase in tax or rent costs associated with each of the proposed strategies. Remember, the results
of this study will be shared with local municipalities. They may decide to change policy as a result. The
cheap talk text for the WTA variant of the study was: “It is very important that you choose as if this was
a real vote. You need to imagine that you would benefit from a one-time reduction in your property
taxes or rent costs associated with each of the proposed strategies. You may have had experience with
such incentives provided as tax credits. Remember, the results of this study will be shared with local
municipalities. They may decide to change policy as a result.” In the ending ancillary questions, we
asked “How likely do you feel the strategies presented in the survey could be really implemented?” with
very likely, somewhat likely, uncertain, somewhat unlikely and very unlikely as possible responses.
ii
We considered the possibility that WTP and WTA responses might have been affected by the tax
paying experience of our respondents. A one-time reduction or increase in property tax might be more
credible than a one-time reduction or increase in rent. We considered the effects of this by estimating
35
the RPL models for sub-samples of renters and owners (not shown). There were no meaningful
differences in results from the two samples, so we focus on the full sample results here.
iii
We now recognize that our consequentiality question was not ideal. The current preferred version of a
consequentiality question is something like “do you feel that your vote (or the outcome of the survey)
may actually have an impact on the policy outcome.” We acknowledge the input of the reviewer who
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raised this issue.
iv
Other studies have shown that samples collected by the survey company, Qualtrics, are good
reflections of the population characteristics (Boaz et al., 2020).
v
The trap question is “Please select ‘agree’ for this line.” The five possible answers were “strongly
agree”, “agree”, “neither agree nor disagree”, “disagree”, and “strongly disagree” were provided for
participants to choose. Respondents who did not answer “agree” were removed from the sample.
36