Bill Provencher

Professor

Agricultural and Applied Economics

University of Wisconsin-Madison

Current Projects

Heterogeneous preferences and the value of ecosystem goods and services

Lake management and shoreline development policies

Dynamics of resource-related decisions

Measurement of the value of spatially-variable ecosystem goods and services

Heterogeneous preferences and the value of ecosystem goods and services

Collaborators: Dave Lewis (UW), Ken Baerenklau (UC-Riverside.), Rebecca Moore (University of Georgia.), Richard Bishop (UW emeritus), Mike Papenfus (UW student)

This project applies new statistical approaches in ecosystem valuation that account for differences among people in their preferences for ecosystem goods and services. For instance, some recreational anglers place a relatively high value on solitude –fishing in relatively wild, uncongested areas is especially important to them. Others place a relatively high value on actually catching fish –they don’t mind fishing in the shadow of a power plant, as long as they catch fish. This research examines how to model this variation econometrically, and its implications for policies to manage and preserve ecosystem goods and services.

Refereed Journal Articles

Provencher, Bill, and Rebecca Moore. “A Discussion of ‘Using Angler Characteristics and Attitudinal Data to Identify Environmental Preference Classes: A Latent-Class Model’”, Environmental and Resource Economics 34(1): 117-124 (May 2006).

Provencher, Bill, and Richard C. Bishop. “Does accounting for preference heterogeneity improve the forecasting of a random utility model? A case study”, Journal of Environmental Economics and Management 48(1):793-810 (2004).

Provencher, Bill, Ken Baerenklau, and Richard C. Bishop. 2002. “A Finite-Mixture Logit Model of Salmon Angling with Serially-Correlated Random Utility. American Journal of Agricultural Economics 84: 1066-1075 (November 2002).

Lake management and shoreline development policies

Collaborators: Dave Lewis (UW), Joe Schoen, Mike Papenfus, and Van Butsic (UW students), Stephen Carpenter, Tim Kratz, (UW limnologists) and others

This project examines the factors that influence land conversion and human settlement patterns on lakefronts, and the feedbacks to lake ecology. Initial stages of the research focused on the factors affecting lakeshore property values, in particular (a) whether lakeshore zoning restrictions have a positive or negative effect on property values, and (b) the effect of water clarity on property values. The project includes a contingent valuation analysis of the value lakeshore property owners place on lower rates of development.

The second stage of the research is a theoretical model of the implications of heterogeneous preferences for environmental zoning policies. A primary focus is on the sorting of individuals across lakes with varying levels of environmental amenities.

On-going work follows two threads. The first concerns the development of various spatial econometric models of land development on lakefronts. These models will be used to simulate the effects of policies on development and eventually link with limnology models to understand the ecological effects of various policies. The second thread develops an empirical sorting model aimed at understanding the sorting process of people across a diverse lake system. The fundamental research hypothesis underlying this work is that land use policies have indirect environmental effects via their impact on how different types of households –households with different attitudes and behaviors with respect to the environment –sort themselves across a lake system.

Working Papers

Lewis, D.J. and B. Provencher. 2007. “The Implications of Heterogeneous Preferences for Environmental Zoning.” Working Paper. PDF.

Papenfus, Michael, and Bill Provencher. “A Hedonic Analysis of Environmental Zoning”. Working Paper. PDF.

Refereed Journal Articles

Carpenter, S.R., B.J. Benson, R. Biggs, J.W. Chipman, J.A. Foley, S.A. Golding, R.B. Hammer, P.C. Hanson, P.T.J. Johnson, A.M. Kamarainen, T.K. Kratz, R.C. Lathrop, K.D. McMahon, B. Provencher, J.A. Rusak, C.T. Solomon, E.H. Stanley, M.G. Turner, M.J. Vander Zanden, C.-H. Wu and H. Yuan. 2007. Understanding regional change: Comparison of two lake districts. BioScience: in press.

Spalatro, Fiorenza, and Bill Provencher. “An Analysis of Minimum Frontage Zoning to Preserve Lakefront Amenities”. Land Economics 77:1-14 (2001).

Dynamics of resource-related decisions

Collaborators: Dave Lewis (UW), Ken Baerenklau (UC-Riverside), Andrew Plantinga (Oregon State), Bruce McGough (Oregon State)

This work concerns the modeling of the temporal aspect of the resource decisions individuals make over time, with attention focused mainly on using statistical methods to recover the dynamic behavior of resource owners, and on the issues that arise when economists use static models of behavior in statistical analyses when in fact the decision context is dynamic. How do people choose when to subdivide a lakeshore parcel? What rules should forest owners use to harvest timber when timber prices fluctuate over time? How do recreational anglers decide how to allocate their fishing trips over the course of a season? The goal of this work is to examine the aspects of dynamic behavior with consequences for public policy.

Refereed Journal Articles

Baerenklau, Kenneth A. and Bill Provencher. “Static modeling of dynamic recreation behavior: implications for prediction and welfare estimation”, Journal of Environmental Economics and Management, 50(3): 617-636 (2005).

McGough, Bruce, Andrew Plantinga and Bill Provencher. “The Dynamic Behavior of Efficient Timber Prices”, Land Economics 80(1): 95-108 (2004).

Book Chapter

Provencher, Bill, and Kenneth A. Baerenklau. “Estimation of Discrete Dynamic Decision Processes”, in Application of Simulation Methods in Environmental and Resource Economics, Anna Alberini and Ricardo Scarpa, editors. Springer, 2005.

Measuring the value of spatially-variable environmental goods

Collaborators: Rebecca Moore (University of Georgia), Richard Bishop (UW emeritus)

Many public policies generate environmental outcomes with a spatial element that is integral to the value of the goods and services produced by the outcome. A case in point is water quality in a large body of water, such as one of the Great Lakes. Another is the spatial arrangement of residential development at the urban fringe. A third is the spatial arrangement of marine reserves. Still another is the spatial arrangement of public hunting grounds or conservation easements in a rural area. For some of these outcomes, revealed preference methods, such as the travel cost method, can be used to quantify the value of the policy if the spatial pattern is sufficiently simple and the policy does not much affect the pattern. But for most interesting problems this will not be the case. This presents the research question, How do we value changes in such spatially complex patterns? To answer this question, we innovate in two ways. First, we use valuation surveys in which respondents are presented with maps of alternative patterns for the variable of interest (such as water quality) and asked how much they would be willing to pay for one spatial pattern over another. This begs the question, How does one "map" a map into the respondent's utility function? In other words, how does the analyst determine what features of a continuous surface people are valuing most or least highly? This is the focus of on-going work involving the importing of such surfaces into econometric models of utility via polynomial approximations of the surface.

Last revised: 01/19/2007