What are weather forecasts worth stated preference approaches to valuing information
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What Are Weather Forecasts Worth? Stated Preference Approaches to Valuing Information. Jeff Lazo Societal Impacts Program National Center for Atmospheric Research Boulder, CO www.sip.ucar.edu CANSEE, Toronto, CA - October 28, 2005. Outline. Motivation of the Study Prior Studies

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What Are Weather Forecasts Worth?Stated Preference Approaches to Valuing Information

Jeff Lazo

Societal Impacts Program

National Center for Atmospheric Research

Boulder, CO

www.sip.ucar.edu

CANSEE, Toronto, CA - October 28, 2005


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Outline

  • Motivation of the Study

  • Prior Studies

  • Stated Preference Valuation

  • Survey Development

  • Results

  • Next Steps


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Motivation

  • Evaluate benefits to households of improvements in weather forecasting services

  • 104,705,000 households

  • Day-to-day weather

  • National Oceanic & Atmospheric Administration


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Value of Weather Information

  • Haas and Rinkle (1979)

  • MSI Services Incorporated (1981)

  • Chapman (1992)

  • Anaman and Lellyett (1996)

  • Rollins and Shaykewich (2003)

  • Weather forecasts - quasi-public good

  • Non-market valuation methods

    • stated preference

      • contingent valuation

      • choice based methods


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Survey Development

  • Atmospheric Science Advisors (ASA)

    • attributes of weather forecasts

    • current and potential level of attributes

  • Focus groups (15 subjects)

  • One-on-one interviews (11 subjects)

  • Denver Pretest (84 Subjects)

  • Survey Expert Review Panel

  • North Carolina Focus Groups (23 subjects)

  • Multi-site implementation (381 Subjects)

  • National random sample (~1,400 Subjects)


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Survey Layout

  • Introduction

  • Sources, perceptions and uses

  • Forecast attributes

  • Value for improved weather forecasts

    • Stated choice - attributes of forecasts

    • Contingent valuation – demand characteristics

  • Household characteristics

  • Value for Current Forecasts

  • Severe Weather


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9 cities – in-person self-administered

written survey - ~25-30 minutes

381 Respondents

Survey Implementation



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Results

  • Perceptions (sources & uses)

  • Attributes and Levels

  • Valuation

    • modeling

    • value estimates


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PerceptionsImportance of Weather Forecast Characteristic


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PerceptionsImportance of Weather Forecast Characteristic



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Stated Choice:Attributes and Attribute Levels

  • Dollars per year per household of $3, $8, $15, $24

  • Budget constraint reminder

  • 20 versions of survey

  • 9 Stated Choice and 1 Stated Value question


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Stated ChoiceQuest-ion




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A-B-Status Quo Model (Conditional Probit)




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Model Estimates(t-ratios in parentheses)



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Next Steps

  • THORPEX Grant

    • Re-defining attribute sets and levels

      • Temperature: 0-2 days 3-6 days 7-14 days

      • Precipitation : 0-2 days 3-6 days 7-14 days

      • Geographic Specificity

    • National sample - ~1400 completes

    • Internet based implementation

    • Probablistic forecast Information

    • Modeling and analysis

      • non-linear in attribute levels

      • random parameters

      • socio-demographic characteristics

  • Hurricanes!



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