A Multi-Species Valuation Study of U.S. Threatened and Endangered Marine Species

1. A Multi-Species Valuation Study of U.S. Threatened and Endangered Marine Species Daniel K. Lew Alaska Fisheries Science Center, NOAA Fisheries University of California, Davis Kristy Wallmo Office of Science and Technology, NOAA Fisheries University of Maryland, Eastern Shore For presentation at the 2010 NMFS Economics and Social Science Workshop, Orlando, Florida

2. Threatened and Endangered (T&E) Species Valuation • Typically T&E valuation studies estimate existence values, not wildlife viewing, some exceptions • Estimates for over 40 T&E species exist in literature, from bald eagles to striped shiners • Meta-analysis of annual willingness-to-pay shows estimates range from $6 to $95 to protect species • Traditional method is contingent valuation; recent applications of Stated Preference Choice Experiments • Species of interest to NMFS that have been valued include Atlantic and Pacific salmon species, Hawaiian monk seal, many whale species, bottlenose dolphin, sea otters, Steller sea lion, coral reefs

3. Potential Uses of Value Estimates for NOAA • Under amendments to ESA: • Critical habitat designations: Secretary may take into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat… the Secretary of Commerce may exclude an area from critical habitat if the benefits of exclusion outweigh the benefits of designation, unless excluding the area will result in the extinction of the species concerned. • Next Generation Strategic Plan • Social and economic indicators are developed and used in management strategy evaluation. • Natural Resource Damage Assessments

4. NMFS Protected Species Valuation Survey Goals • To develop a systematic Stated Preference Choice Experiment (SPCE) framework for valuing multiple species under the stewardship of the National Marine Fisheries Service (NMFS) • Policy-oriented • Estimate WTP for NMFS ESA-listed species • Do distinct preferences exist for different species? • Do distinct preferences exist for ‘distinct population segments’ of a species? • Can the public make trade-offs among multiple species? • Methodological • Is it possible to estimate a “global” valuation function? • Are preferences sensitive to scope? Cost vectors? • Can hypothetical bias be reduced with cheap talk? • Does ordering of the species in surveys affect WTP?

5. NMFS Protected Species Valuation Survey Goals • To develop a systematic Stated Preference Choice Experiment (SPCE) framework for valuing multiple species under the stewardship of the National Marine Fisheries Service (NMFS) • Policy-oriented • Estimate WTP for NMFS ESA-listed species • Do distinct preferences exist for different species? • Do distinct preferences exist for ‘distinct population segments’ of a species? • Can the public make trade-offs among multiple species? • Methodological • Is it possible to estimate a “global” valuation function? • Are preferences sensitive to scope? Cost vectors? • Can hypothetical bias be reduced with cheap talk? • Does ordering of the species in surveys affect WTP?

6. Phase I: 8 Species • North Atlantic right whale • North Pacific right whale • Loggerhead sea turtle • Leatherback sea turtle • Smalltooth sawfish • Upper Willamette River Chinook salmon • Puget Sound Chinook salmon • Hawaiian monk seal

7. Pretest Survey • Smalltooth sawfish: found in shallow coastal areas and river mouths, in US found regularly only in south Florida, endangered since 2003 • Hawaiian monk seal: found only in Hawaiian islands, primarily remote areas, one of two remaining species of monk seal, listed as endangered since 1976 • Puget Sound Chinook salmon: distinct population segment of Chinook found in Puget Sound and tributaries, listed as threatened since 1999

8. Overview of Survey Development • Qualitative research conducted 2005 - 2008 • Five sets of focus groups conducted in Seattle, Denver, Dallas, St. Louis, Boston • 17 Cognitive interviews • Final focus group conducted in Chicago • Small pilot (n=50) to test choice task set up revisions • Formal reviews • Pretest 2008 • Full implementation 2009

9. General SPCE Survey Structure • Section 1: Introduction • Section 2: Species information (3 species) • Section 3: Additional protection • Section 4: Choice tasks (3) • Contingency questions (debriefing) dependent on selected alternative • Selected questions from NEP scale

11. Experimental Design Plan • Each individual survey contains 3 species with potentially different ESA status levels available • 4 different sized individual main version designs • 23 x 6 • 22 x 3 x 6 • 2 x 32 x 6 • 33 x 6 • The “grand” design with all species is 23 x 35 x 6 • Grand design is composed of stacked individual version designs • 704 individual survey versions

12. Survey Implementation • Implemented online with Knowledge Networks panel of U.S. households • Invitation, Survey, Reminder • 62% completion rate • ~9% item non-response across all choice task questions

13. Respondent Demographics • General Social Survey • Are we spending too much, too little, or just the right amount on • Education • Health care • Environment • Space exploration • Assistance to big cities • Law enforcement • Drug rehabilitation

14. Model Framework • Parameter estimation: Random Utility Model • Correlated Random Parameters Model • Welfare calculation • Standard approach for compensating variation; Krinsky & Robb (1986) confidence intervals • Testing for statistical differences in WTP • Method of convolutions (Poe et al. 2005)

16. Welfare Estimates

17. Are they statistically different welfare estimates? • *Recovering monk seal > recovering salmon • *Improving sawfish to threatened < recovering salmon • Limitation: small sample for pretest study – full Phase I has > 10,000 observations • Scenarios that include multiple improvements not tested using method of convolutions

18. Welfare Estimates

19. Welfare Estimates

20. Welfare Estimates

21. Policy Implications from Pretest • Distinct preferences exist for different species • Method of convolutions approach supports this, but species and type of improvement may affect welfare • Recovering monk seal > recovering salmon • Improving sawfish to threatened > recovering salmon • Larger utility increase for helping charismatic species • Successful framework to value multiple T&E species developed

22. Next Steps • Analysis of all species in Phase I • Frequentist Model Averaging • Method of convolutions approach to evaluate scenarios with multiple improvements • Additional models incorporating preference heterogeneity

23. Phase I and II Species • Loggerhead sea turtle • Leatherback sea turtle • Hawaiian monk seal • Puget Sound Chinook salmon • Upper Willamette River Chinook salmon • Smalltooth sawfish • North Atlantic right whale • North Pacific right whale • Hawksbill sea turtle • Black abalone • Elkhorn coral • Johnson’s seagrass • Southern Resident killer whale • Southern California steelhead • Central California coast coho salmon • Humpback whale

24. Experimental Design Attributes and Levels • Two ESA status levels (Thr., Rec.) • Puget Sound Chinook salmon • Upper Willamette River Chinook salmon • Loggerhead sea turtle • Three ESA status levels (End., Thr., Rec.) • Hawaiian monk seal • North Pacific right whale • Leatherback sea turtle • Smalltooth sawfish • North Atlantic right whale • 6 cost levels plus $0

25. Threatened and Endangered (T&E) Species Valuation • Typically T&E valuation studies estimate existence values, not wildlife viewing, some exceptions • Estimates for over 40 T&E species exist in literature, from bald eagles to striped shiners • Traditional method is contingent valuation • Meta-analysis of annual willingness-to-pay shows estimates range from $6 to $95 to protect species • Species of interest to NMFS that have been valued include Atlantic and Pacific salmon species, Hawaiian monk seal, many whale species, bottlenose dolphin, sea otters, Steller sea lion, coral reefs

26. Pretest of single main version Evaluated a single main version • Design had D-efficiency of 98.3% • Conducted in December 2008 (699 responses, 62% response rate) • Primary formal pretest goals • Evaluate survey protocols and materials • Estimate and evaluate preliminary models • Scope test: split-sample 2 vs 3 species • Cost sensitivity range: test response rates to variety of “high” costs ($100 to $200