• Analyzing factors affecting Alaska's salmon permit values: evidence from Bristol Bay drift gillnet permits

      Wood, Mackenzie D.; Baek, Jungho; Little, Joseph; Greenberg, Joshua (2017-05)
      The effects of total earnings, total costs and mining exploration on permit prices in Alaska are investigated using an autoregressive distributed lag (ARDL) approach to cointegration. I take specific account of regional and gear specific salmon fisheries -- that is, Bristol Bay drift gillnet permits -- in our modelling. I find that there is a stable long-run relationship among permit prices, total earnings, and total costs. It is also found that, in both the short- and long-run, total earnings have a positive and significant relationship with permit prices, while total costs have a negative and significant relationship. Although the mining exploration in the region has a negative and significant effect on permit prices in the short-run, the effect does not seem to last in the long-run.
    • Determinants of anglers willingness to pay to support the Recreational Quota Entity program

      Mitchell, McKenzie; Little, Joseph; Criddle, Keith; Greenberg, Joshua; Hermann, Mark (2019-05)
      This study applies data from a web-based survey administered to Alaska sport fish license holders in 2017 to examine the newly introduced Recreational Quota Entity (RQE) program in Alaska's guided halibut sport fishery and the possibility of increasing halibut available to sport anglers by funding this program through a state-endorsed halibut stamp. Two valuation questions were randomized amongst the survey sample. The questions were designed to elicit willingness to pay (WTP) for a halibut stamp in support of the RQE program under (1) status quo halibut fishing regulations (2) more relaxed charter halibut fishing regulations made possible through revenues from halibut stamp sales. The need for two valuation questions is in response to the many factors that would ultimately determine the degree to which charter fishing regulations could be relaxed and the time needed for regulatory change made possible through revenues from halibut stamp sales. The findings indicate that non-resident anglers and resident anglers have a very similar WTP for a state-endorsed halibut stamp and that anglers are willing to pay for a halibut stamp despite having little or no history of participation in the halibut fishery. The pairwise comparison among mean WTP estimates from both valuation questions indicates that differences in anglers' WTP are inconsequential. Findings suggest that the WTP for a state-endorsed halibut stamp reflects an interest in preserving access to the fishery or the value of reserving an option to participate in the halibut fishery. Respondent education level and employment status were found to be statistically significant determinants of anglers' willingness to pay for a state-endorsed halibut stamp to support the RQE program.
    • The effect of wildfires, spruce bark beetles, and prescribed burns on residential property values in Alaska's Kenai Peninsula

      Reinker, Paul C.; Little, Joseph; Baek, Jungho; Greenberg, Joshua (2019-08)
      This study estimates the effect that forest fires, spruce bark beetle outbreaks, and controlled burns performed by fire management agencies have on nearby residential property values. Using the hedonic pricing framework, and ten years of house sales from south-central Alaska's Kenai Peninsula, this study found little evidence that wildfires and spruce beetle outbreaks have a significant effect on the final sale price of surrounding homes, but found that the controlled burns contribute to a decrease in surrounding home values. As Alaska's climate becomes warmer and drier, these disturbances threaten to increase in frequency and severity. Understanding how homeowners perceive fire risk and forest damage is increasingly important to fire management policy, as the behavior of residents can help limit both the cost from and incidence of wildfires. The study's findings suggest that homeowners are either insulated from, or indifferent to fire risk, but targeted burns of high-risk areas by fire managers could increase awareness and sensitivity to fire risk.
    • Effects of wind energy utilization on long-run fuel consumption in remote Alaska microgrids

      Vaught, Laura K.; Little, Joseph; Baek, Jungho; Pride, Dominique (2019-12)
      This paper presents an empirical analysis of the long-run reduction in diesel fuel consumption driven by wind energy utilization in remote Alaska electrical grids. Models control for other fuel consumption determinants including customer base and transmission and distribution system efficiency. Fourteen rural communities that integrated wind energy into their diesel powered electrical grids are analyzed within a dynamic panel framework using monthly utility data spanning sixteen years, from 2001 to 2017. An auto-regressive distributed lag approach is taken to address cointegration and presence of a unit root in the data. Long-run parameters are estimated for the full dataset as well as for four sub-samples to compare impacts on microgrids with high and low average renewable utilization and with large and small customer bases. Results indicate that fuel consumption is reduced by an estimated 68 gallons on average for each one percent increase in wind energy penetration on the electricity grid. Beyond 30% average penetration, however, additional wind energy generation leads to increased fuel consumption as turbine curtailment methods must be employed to maintain grid stability, indicating that this is a fuel-offset constraint point in low and medium penetration wind-diesel hybrid systems. High penetration-capable wind-diesel systems with energy storage capabilities may allow utilities to increase utilization rates beyond this threshold to capture additional fuel savings and carbon emissions offset.
    • An exploration of own and cross-price elasticity of demand for residential heating in the Fairbanks North Star Borough

      Graham, Noelle J.; Little, Joseph; Baek, Jungho; Kennedy, Camilla (2019-05)
      The purpose of this study is to utilize community level household energy consumption data to determine the short-run own- and cross-price elasticity of heating oil and wood using the proportionally calibrated almost idea demand system model. Elasticity values can identify how residents of the Fairbanks North Star Borough will potentially alter home heating practices in response to a change in home heating oil price. Results indicate that values for own-price elasticity for oil is -0.259, with a 95% confidence interval of [-0.272, -0.246]. Based on predicted values a 1% increase in the price of heating oil is estimated to result in a reduction of 0.259% in the quantity of residential heating oil consumed by the average household. Cross-price elasticity estimates of wood with respect to a change in the price of oil is 0.198 with a 95% confidence interval of [0.171, 0.234]. Based on predicted values, a 1% increase in the price of oil is predicted to increase wood consumption by 0.198%. In addition, this study utilized a Monte Carlo Simulation with estimated elasticity parameters to predict the change in household level energy consumption of wood and heating oil given an increase in heating oil prices. Approximately 71% of households are predicted to decrease overall energy consumption. 83.5% of households are predicted to decrease oil consumption, and 57.3% of houses are predicted to increase wood consumption. Through evaluating household's energy consumption decisions in the face of changing prices, these results can inform effective air quality policies.
    • Hunters like skewness, not risk: evidence of gambling behaviors in the Alaska hunting permit lottery

      Lane, Brock; Little, Joseph; Greenberg, Joshua; Baek, Jungho (2018-05)
      In Alaska, hunting permits are distributed by traditional lottery. The absence of a preference point system means that applicants have little invested in their applications, and there are a variety of fallback hunting opportunities. Not unlike a jackpot-style state lottery, the cost to play is low relative to the potential prize winnings. These factors may cause risk-averse or risk-neutral individuals to exhibit a preference for positive skewness in their bets. Analysis in this paper is focused on four prevalent game species: moose, dall sheep, mountain goat, and bison. Pooled Ordinary Least Squares regression models were constructed to predict permit application levels as a function of various hunt characteristics, qualities, and restrictions. Permit descriptions are provided to applicants in a published document called the drawing supplement, which is the primary source of data for this study. Additional hunter-reported data is obtained from the Alaska Department of Fish and Game website. A comparison of calculated permit values and private ranch hunting opportunities validates many of the observations drawn from the models. Permit values are also used to fit a cubic model of bettor utility. Even when awarded prizes are not monetary, applicants exhibit a preference for positive skewness and aversion from risk that is typically associated with gambling.
    • McNeil River State Game Sanctuary permit lottery applicant preferences and marginal willingness to pay for permit application: a best-worst discrete choice experiment

      Young, Taylor B.; Little, Joseph; Baek, Jungho; Greenberg, Joshua (2019-08)
      This study applies data from a web-based survey administered to 2016-2018 McNeil River State Game Sanctuary permit lottery applicants to examine preferences and marginal willingness-to-pay (WTP) for an application contingent upon marginal interval increases among specific attributes of a bear viewing experience. A best-worst discrete choice experiment (BWDCE) was used to elicit respondent data, which consisted of eight individual choice tasks using a Balanced Incomplete Block Design (BIBD) in Sawtooth Software. Each choice task was comprised of five attributes: permit application price, odds of winning a permit, number of bears viewed daily during visit to the Sanctuary, cubs being present, and most common type of bear feeding activity viewed while at the Sanctuary. Each attribute was decomposed into two to four varying levels across choice tasks, depending on the attribute in question. The findings suggest that lottery permit applicants have a significant desire to view bears fishing for salmon, and to see cubs. These results imply a clear desire of applicants to visit the Sanctuary in high season. As expected, respondents also stand to obtain a positive effect on personal utility of increased odds of winning a permit, and to a lesser extent, view a larger number of bears while at the Sanctuary, and therefore have a positive mWTP to both of these characteristics as well. The price coefficient in both the preference parameter utility model and the mWTP model is negative, as expected, but not large in magnitude which may be attributed to the sample being wealthier than average and/or the forgone permit application price is viewed as a wildlife conservation donation. The main model used for analysis is the mixed (random parameters) logit (MXL), and the preference parameters estimated are then used to estimate mWTP in WTP-space using Stata. Results using a multinomial logit (MNL) and conditional logit (CL) are also presented for comparison and affirmation that MXL is better suited for the data in order to allow for preference heterogeneity and random parameters, rather than fixed parameters.