Essays on Economic Evaluations of Environmental Conservation

Date of Award

Spring 2025

Project Type

Dissertation

Program or Major

Economics

Degree Name

Doctor of Philosophy

First Advisor

Ju-Chin Huang

Second Advisor

Robert Mohr

Third Advisor

Deniz Ozabaci

Abstract

This dissertation advances the field of environmental economics by addressing critical gaps in the non-market valuation of habitat conservation and dam removal. Three interrelated studies refine methodological approaches to stated preference valuation of habitat conservation and dam removal decisions and provide empirical insights that enhance our understanding of how individuals and communities value ecological restoration.

The first essay focuses on New England's urgent need for conservation action due to habitat loss, driven by human activities like deforestation and urbanization. The study evaluates New England’s private homeowners' investment decisions in wildlife-friendly landscaping by incorporating both time and money. This approach goes beyond traditional monetary valuation frameworks, acknowledging that conservation efforts require both financial contributions and personal engagement. Using a survey of over 2,000 homeowners in the region and a bivariate probit model, the study quantifies homeowners’ willingness to spend (WTS) time alongside their willingness to pay (WTP) money for wildlife habitat landscaping, offering a more comprehensive measure of homeowners' commitment to local habitat restoration. Also, the study identifies factors that influence homeowners’ time and money investment decisions. Findings reveal that homeowners are willing to invest at least 101 hours and $401 yearly to landscape their property to benefit local wildlife. Urban homeowners are more inclined to invest in conservation efforts than rural homeowners, and elderly homeowners (within retirement age) are less likely to invest time and money than their younger counterparts. While conservation awareness and knowledge of wildlife species encourage conservation participation, fear of damage caused by wildlife discourages involvement. The findings provide valuable insights for policymakers and conservation organizations in designing targeted policies and incentive programs that promote private land conservation in New England. The study’s contributions enrich the literature on private land conservation by demonstrating that time constraints and ecological awareness significantly influence conservation behavior.

The second essay advances the discourse on dam removal and river restoration by conducting the first meta-analysis of stated preference studies on dam removal. Given the increasing recognition of the ecological and social benefits of dam decommissioning and the predominantly case-specific studies on dam removal, this study synthesizes 17 studies spanning 25 years to evaluate trends in willingness to pay (WTP) for dam removal. The study identifies broader trends in WTP and evaluates how methodological and socioeconomic factors influence valuation estimates. Employing the multilevel random effects (MLRE) model on a Box-Cox transformed data, as the preferred model, the study addresses key meta-analysis challenges, including heterogeneity, heteroskedasticity, and within-study dependence. The findings show that WTP estimates decrease with a short payment duration (one year), the contingent valuation method compared to choice experiments, and factors such as respondents' income and age. Conversely, WTP estimates increase with larger sample sizes, the study country, and among male respondents. This meta-analysis provides a crucial basis for researchers and policymakers looking to generalize WTP estimates across various contexts.

The final essay examines the economic implications of dam removal, using primary data from a referendum-style contingent valuation survey on the Mill Pond Dam in Durham, New Hampshire. The study focuses on the Kaldor-Hicks (K-H) criterion of social welfare to examine the economic plausibility of a policy referendum. This study is among the first to apply the K-H criterion to evaluate dam removal policies, assessing whether majority-supported referendum outcomes truly lead to socially efficient decisions. The study makes a methodological and policy contribution by disaggregating stakeholders into supporters and opposers of dam removal and incorporating willingness to accept (WTA) compensation for those opposing removal. Unlike most valuation studies that focus solely on WTP for ecological improvements, this research captures the full spectrum of economic preferences by recognizing that environmental policies create both winners and losers.

The study estimates mean WTP among supporters and mean WTA among opponents of dam removal, revealing the extent of compensation required to make removal a Pareto-improving decision. Using the aggregate WTP and aggregate WTA as proxies for social benefits and losses, the findings show net societal benefit based on the K-H criterion. However, the uncertainty in the valuations (with WTA confidence interval spanning zero) implies that it is difficult to make firm conclusions on welfare and the plausibility of the policy to remove the dam. The key contribution of this study is in pioneering the K-H criterion to reveal welfare trade-offs obscured by referendum vote shares, offering a novel economic lens for environmental policy.

In conclusion, these studies offer a comprehensive evaluation of the non-market values associated with habitat conservation and dam removal. The dissertation’s contributions lie in its inclusion of time in private conservation decisions, the incorporation of the Kaldor-Hicks criterion of social welfare in referendum-based policy evaluation, and the first meta-analysis of WTP for dam removal, highlighting important factors that influence stated preference valuation of environmental conservation.

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