Date: April 22
Speaker: Scott Steinback
Title: The Value of Saltwater Recreational Fishing in Massachusetts: Separating Truth from Fiction
Resource economics assumes that people are able to make rational decisions about the values they place on nonmarket goods. Unfortunately, people are not routinely asked to value nonmarket goods such as clean air, water, open space, or endangered species, and therefore it is reasonable to question the ability of people to provide such estimates. In this paper we compare nonmarket values estimated from responses to hypothetical questions to those based on actual cash transactions. The nonmarket good that served as the subject matter of our study was early season 2012 saltwater recreational fishing permits in Massachusetts. Modeling results indicate that nonmarket values estimated from simulated market transactions were significantly different then values calculated from identical hypothetical transactions. The mean value of a 2012 Massachusetts saltwater recreational fishing permit estimated from actual cash transactions was $317. Values based on hypothetical willingness to sell and willingness to pay transactions were $593 and $80, respectively. These findings align with previous studies that found differences in economic valuation measures calculated from hypothetical versus actual behavior. While a full set of conclusions must come after additional analyses, our results suggest that hypothetical measures of willingness to sell and willingness to pay for a saltwater recreational fishing permit in Massachusetts will be biased, but in opposite directions. This has important implications because economists typically employ hypothetical surveys to estimate recreational fishing values for use in ocean zoning debates, damage assessments, and evaluating investments that maintain or improve recreational fishing infrastructure.