Comparing Willingness-to-pay and Willingness-to-accept Approaches for Valuing Farmland Protection and Conversion in Alberta

• Author / Creator

  Luo, Yicong

• Over the last three decades, Alberta has experienced substantial urban sprawl, with some of the province’s most productive agricultural land developed into residential, light industrial and retail uses.  The converted farmland provided not only market commodities, but also a variety of environmental services. Many of these environmental services are non-tradeable public goods and their value cannot be directly estimated from market data. We use choice experiments to calculate these non-market values using Willingness to Pay (WTP) and Willingness to Accept (WTA) approaches. The general objective of our study is to inform decision makers about the values gained and lost when land is converted from agriculture to other uses.  In Alberta, government policies make municipalities responsible for land use planning and authorization of permitted land uses.
  The six most populated urban areas in Alberta were chosen as study areas: Edmonton, Calgary, Lethbridge, Red Deer, Grande Prairie and Medicine Hat. In each choice experiment survey, people were required to consider whether they prefer the current development trend to an additional conservation (WTP) or additional development (WTA) strategy. Data were collected through a procedure that included an efficient design, consequentiality questions, focus groups, pre-tests, soft launch, and full launch. The full launch of the online surveys collected complete data from 1,303 respondents. Multinomial Logit, Latent Class, and Random Parameter Logit Models were used to analyze the choice experiment data and calculate respondents’ willingness-to-pay and willingness-to-accept compensation for protection and conversion of agricultural land located near urban areas.
  The WTP and WTA results can be used to gauge public support for the acceptance or denial of applications for land re-designation, which could be considered a passive or reactive policy tool.  The results can also be used in the design of more proactive and targeted policy tools, such as conservation easements, that could be used to identify and protect the most highly valued agricultural land or development fees, such as transferable development credits or conservation offsets, that could be levied on developers interested in converting land from agriculture to developed uses.  Both the passive and active approaches require conversations and public debate about acceptable limits to private property rights and the public interest in land use.

• Subjects / Keywords

  • Choice Experiment
  • WTA
  • WTP

• Graduation date

  Fall 2019

• Type of Item

  Thesis

• Degree

  Master of Science

• DOI

  https://doi.org/10.7939/r3-102a-g936

• License

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