Preferences for environmental quality under uncertainty and the value of precision nitrogen application
Abstract
Scope and Method of Study: The first essay in this models winter wheat producers' choice among potential nitrogen fertilizer application systems that predict nitrogen needs based on optical reflectance data collected from growing plants at different spatial resolutions. Monte Carlo simulation is used to account for the uncertain relationship between optical reflectance data. Expected profits are calculated for each nitrogen application system, and paired differences tests determine which system is most profitable. The second essay addresses winter wheat producers' choice among different field-specific, uniform rate application systems that predict nitrogen needs using optical reflectance data collected from different types of experimental strips. Additionally, Monte Carlo simulation is used to determine the effects of parameter uncertainty on the profit maximization process given the linear response-plateau functional form. Paired differences tests are used to determine the effect of parameter uncertainty on profit maximization and to estimate the relative profitability of the different experimental strip techniques. Essay three determines whether (and how) uncertainty about environmental outcomes influences recreationists' willingness-to-pay for water quality improvements at Lake Tenkiller. On-site interviews were conducted with recreationists at the lake, and multinomial logit estimation is used to model the effect of uncertain outcomes on willingness-to-pay. Findings and Conclusions: The evidence presented suggests that the nitrogen application strategy expected to be most profitable is to apply 90 kg ha-1 each year as anhydrous ammonia, rather than use topdress urea-ammonium nitrate solution, which is much more expensive. Field-level sampling of predictive optical reflectance data is no more profitable than regional sampling. It is also determined that the ramped strip technology is statistically neither more nor less profitable than the nitrogen-rich strip technology. Evidence suggests that, in some cases, accounting for parameter uncertainty improves the predictive accuracy and profitability of optical reflectance-based nitrogen needs predictors. The ramped strip technology is expected to be more profitable when accounting for parameter uncertainty. The Lake Tenkiller study shows that uncertain outcomes affect recreationist willingness-to-pay for water quality, suggesting that uncertainty should be explicitly included in survey instruments for valuation of natural resources and environmental amenities.
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- OSU Dissertations [11222]