High Country Air Quality

1. High Country Air Quality By Emily, Anne, Rob, and David

2. Purpose • The purpose of this study is to estimate the value of clean air as stated by visitors and locals of the High Country that consume the air. • Each student collected ten surveys, totaling 40 surveys, which asked questions about one’s willingness to pay for improved air quality.

3. Hello, my name is ______________. I’m a student at ASU and we’re conducting a survey. The survey is designed to gather information about visitation to the Blue Ridge Parkway).  The information provided is anonymous and cannot be traced to survey participants.  The results will be used for student research and class purposes only. Would you be willing to answer a few questions? It will only take about 5 minutes. 1. How many people are in your party today? _____ People 2. Are you a local resident or a visitor staying overnight in the High Country (you need to define this somehow, e.g., Ashe, Allegheny, etc)? _____Local Resident (skip to #3) _____Vacationer staying for overnight in the High Country How many nights will you spend in the High Country? _____ nights How many years have you vacationed in the High Country? _____ years 3. How many miles did you travel to get to your destination today? _____ Miles (one-way) 4. How many hours will you stay at the Parkway today? _____ Hours

4. 5. How many times during the past 12 months did you visit the Parkway? _____ Visits 6. On a scale 1-5 where 1 is not important at all and 5 is very important, how important is air quality in the High Country to you? • 2 3 4 5 7. On a scale 1-5 where 1 is not important at all and 5 is very important, how important is air quality in your home town to you? • 2 3 4 5 8. Have you noticed the effects of acid rain in the High Country? Yes No (if yes) Does this affect the number of trips that you make to the Parkway? (if yes) About how many times would you visit the Parkway in a year without acid rain damage? _____ visits 9. On a scale of 1-5 where 1 is not concerned at all and 5 is very concerned, how concerned are you about acid rain in the High Country? 1 2 3 4 5

5. Consider the following situation. The U.S. Environmental Protection Agency sells pollution permits that allow power plants to release pollutants that cause acid rain. These permits are auctioned off to power plants and the public every year. A permit for one ton of pollution cost about $400 last year. The Acid Rain Retirement Fund is an organization that raises money from the public and bids against power plants for the pollution permits. They retire the pollution permits they buy, preventing power plants from producing acid rain. 10. If you were given the opportunity (hypothetically), would you be willing to make a one-time donation to the Acid Rain Retirement Fund to help reduce acid rain pollution? Yes No (skip to next question) If yes, what would you donate during 2005? _____* 11. In what year were you born? 19 ___ ___ 12. What is the highest level of education you have completed? High School 2-year college 4-year college Masters degree Other graduate degree

6. 13. Do you smoke cigarettes? Yes No (skip next question)How many years have you been a smoker? _____ yearsAbout how many cigarettes do you smoke each day? _____ cigarettes14. Do you take Basil pills for lung health? Yes NoSex: Male FemaleThank you for participating in our survey. *http://www.usm.maine.edu/~pos/arrf.htm

7. Methods • Each student collected 10 surveys by asking random people at different locations in the High Country the aforementioned questions. • The survey methods used to collect data include revealed preference questions and stated preference questions.

8. Revealed Preference • Revealed preference was measured by asking and observing the behavior of High Country residents/visitors. Ex. How many times during the past 12 months did you visit the Parkway?

9. Stated Preference • Stated Preference questions included contingent behavior about future trips and contingent valuation or one’s willingness to pay (for cleaner air). • About how many times would you visit the Parkway in a year without acid rain damage? • We asked the respondents how much they would be willing to contribute to the Acid Rain Retirement Fund in 2005, knowing their donation would be used to bid against power plants to retire pollution permits.

10. Theory TC ΔCS CS Trips

11. Regression Stats • Dependent variable = ln(trips) • R Squared = 0.26 • Observations = 80 (40 x 2) • Coefficient (Intercept) = 2.79 (p < 0.01) • Coefficient (Travel Cost) = -0.021 (p < 0.01) • Coefficient (SP) = 0.016 (p = 0.96)

12. Our Statistical Model

13. Theory of Demand

14. Consumer Surplus with TCM • Semi-log model: CS = -trips/b • Average Trips = 31.85 • CS = 31.85/.021 = $1517 • 7 million visitors a year (assuming that NC = VA) • Aggregate CS = $10.62 billion

15. Willingness to Pay • WTP = $73.57 • Without outlying $1600 contribution*- WTP = $28.68 • 7 million visitors a year (assuming that NC = VA) • Aggregate WTP = $514,990,000 • *WTP = $200,760,000

16. Conclusions • Our effort to observe a shift in demand due to acid rain proved insignificant due to the insignificance of our coefficient. • P-value was very close to 1. • Our only stated preference question barely shifted our demand curve • A solution to this would be to collect more data with more stated preferences, as we only had one question