Katuwal

The Effects of Information Framing on
Willingness-to-pay for a Wildfire

Management Program to Reduce Wildfire
Risks in a Contingent Valuation Survey
Hari Katuwal
Tyron J. Venn
Travis Paveglio
May, 2014
Motivation
Validity of WTP from CVM relies heavily on the

information conveyed to the respondents
Full and unbiased information is recommended by
the NOAA Panel (Arrow et al., 1993)
Mixed evidence about the effect of information on
WTP
Information provided in the survey may be all the
information a respondents might be able to use
Objectives and Research Questions
Estimate WTP for wildfire management program

Identify and examine determinants of WTP
Understand the impact of information framing
Relevant Literature
Information influence the outcome of the
valuation studies (Samples et al., 1986))
No significant difference in mean WTP values
because of small change in the information
presented to the respondents (Boyle, 1989)
Differences in respondents prior knowledge
interact with the level of information provided in
the survey (Tkac, 1998)
Relevant Literature
Information increases restoration values for
some respondents while reducing it for others
because of the level of prior information level
(Hoehn and Randall, 2002)
Both appearance of an interviewer and degree
of information provided have significant impact
on stated WTP (Bateman and Mawby, 2004)
Inclusion of the reminder raises WTP for less
highly educated respondents, and decreases it
for more highly educated respondents (Alberini
et al., 2005)
Research Methodology
In-person survey
Pre-survey letter to 2058 households, 169 returned
Questionnaires to 1889 households
1155 households completed
Response rate 60%
Contingent Valuation
Payment card
Annual increase in tax
Econometric Approach
WTP Distribution
Different Level of Information
Level1 (info_evacuation): In recent year, about 130 homes have been
evacuated annually due to wildfire in the Flathead County. Evacuated
homes are considered to be in danger of being damaged or destroyed
by wildfire
Level2 (info_evacnodest): 1+ although wildfire has not destroyed a
home in Flathead County since 1988
Level3 (info_evacdest): 2+ Many thousands of homes are evacuated
each year in the United States each year and, on average, 1,156 U.S.
homes have been destroyed by wildfire each year since 1999. Other
parts of western Montana have experienced home losses due to
wildfire in more recent years. For example, the Bitterroot fires of 2000
threatened 1070 homes and destroyed
Destruction Vs Evacuation
WTP for County Vs Neighborhood

Destruction: Please circle the maximum amount that you would be willing to pay
to fund an expanded wildfire management program that would reduce by half the
likelihood that wildfire will destroy homes in Flathead County / (your home
and homes of your immediate neighbors ) during the next 10 years.
Remember to consider your available income and other things you have the money
to spend on:
Evacuation: Please circle the maximum amount that you would be willing to pay to
fund an expanded wildfire management program that would reduce by half the
likelihood that homes in Flathead County/ your home and homes of your
immediate neighbors ) will be evacuated during the next 10 years. Remember
to consider your available income and other things you have to spend money on:
Descriptive Statistics
Variables Mean Std dev Max Min
____________________________________________________________________________________________________________________________________________________
destruction 0.5 0.5 1 0

wtp_neighbourhood 0.5 0.5 1 0
info_evacnodest 0.33 0.47 1 0
info_evacdest 0.34 0.48 1 0
income_000 88.21 57.49 200 5
edu 11.32 4.35 20 3
ege 9.02 12.49 93 23
eale 0.61 0.49 1 0
no_ofyear_movedin 17.22 13.26 72 1
res_fulltime 0.74 0.44 1 0
seek_less 0.8 0.4 1 0
evacnodest_seek_less 0.28 0.45 1 0
evacdest_seek_less 0.26 0.44 1 0
_________________________________________________________________________________________________________________________________________________________
Exploratory Analysis
Information Destruction Evacuation All
level
info_evacuation 81.78 88.23 85.12
info_evacnodest 105.28 55.15 82.39
pooled_all 93.19 78.78 86.06

Information Wtp_county Wtp_neigh All
level bourhood
info_evacuation 70.85 102.19 85.12
pooled_all 76.57 95.47 86.06

Information level Destruction Evacuation All
Wtp_county 86.34 67.13 76.57
Wtp_neighbourhood 99.63 90.98 95.47
pooled_all 93.19 78.78 86.06

Explanatory Variables
Model1;
pay, destruction, wtp_your_neighbour,
info_evacnodest, info_evacdest
Model2;
Model1+
income_000, age,male, no_ofyear_movedin,
res_fulltime
Model3;
Model2+seek_less, info_evacnodest_seek_less,
info_evacdest_seek_less
Maximum Likelihood Estimation Result
Variables Model1 Model1 Model1
pay 0.0102*** 0.0109*** -0.0111***

constant 0.1956 -1.541*** -0.5665
destruction 0.1292 0.1644 0.167
wtp_your_neighbour 0.1406 0.1329 0.125
info_evacnodest -0.1219 -0.1683 -0.7835*
info_evacdest -0.1312 -0.1201 -0.6595*
Maximum Likelihood Estimation Result
Variables Model1 Model1 Model1

income_000 0.0065*** 0.0062***
edu 0.0527*** 0.048***
age 0.0162** 0.0152**
male -0.0053 -0.0295
no_ofyear_movedin -0.0121** -0.0124**
res_fulltime -0.1979 -0.2655
seek_less -0.9783***
info_evacuation_seek_less 0.817*
info_evacdest_seek_less 0.6926*
Conclusion
Mean WTP~$80
Effect of different level of information

inconclusive
Level of information affect WTP positively for

the respondents who sought less information
Future Research
Mitigation behavior for home ignition zone
Simultaneous estimation of WTP and mitigation

behavior
Thank you!
For comments and suggestions:
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The Effects of Information Framing on

Willingness-to-pay for a Wildfire

Validity of WTP from CVM relies heavily on the

Estimate WTP for wildfire management program

WTP for County Vs Neighborhood

destruction 0.5 0.5 1 0

info_evacuation 81.78 88.23 85.12

info_evacnodest 105.28 55.15 82.39

info_evacnodest 91.48 88.99 90.22

pooled_all 93.19 78.78 86.06

info_evacuation 70.85 102.19 85.12

info_evacnodest 86.66 78.93 82.39

info_evacnodest 74.17 106.26 90.22

pooled_all 76.57 95.47 86.06

Wtp_county 86.34 67.13 76.57

Wtp_neighbourhood 99.63 90.98 95.47

pooled_all 93.19 78.78 86.06

Variables Model1 Model1 Model1

pay 0.0102*** 0.0109*** -0.0111***

Variables Model1 Model1 Model1

Effect of different level of information

Level of information affect WTP positively for

Mitigation behavior for home ignition zone

Simultaneous estimation of WTP and mitigation

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pay 0.0102* 0.0109* -0.0111***