2. A stated preference survey has been conducted to estimate the public's willingness-to- pay for a proposed state park.

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2 A Stated Preference Survey Has Been Conducted To Estimate The Public S Willingness To Pay For A Proposed State Park 1 (56.73 KiB) Viewed 15 times

2. A stated preference survey has been conducted to estimate the public's willingness-to- pay for a proposed state park. Because of the existence of other wildlife refuges and state parks in the general vicinity, there are no intrinsic values (existence value, option value, etc.) associated with this facility. However, the facility would attract additional visitors, above and beyond attendance at existing facilities. After deducting the cost of travel, the marginal willingness-to-pay is estimated for carloads of visitors (regardless of the number of people in the vehicle) as follows: P = 250 -0.02.2 Where: P = marginal willingness-to-pay ($/carload visit) Q = number of carload visits/year If needed, assume the following values for the all-items Consumer Price Index: CPI 2015 2025 (est) 237 295 2 Assume that the relevant nominal discount rate is 6.0%/yr. a. Suppose that the park opens in 2025, and that 6,000 carloads of visitors are expected for that year. Further suppose that the survey was conducted in 2015, and that the results are stated in 2015 dollars. Assuming that the survey results are valid for 2025, calculate the total willingness to pay (benefit) expected for 2025, and state this amount at 2022 present value. Notice that the marginal willingness to pay is zero when Q is equal to 12,500. Is this plausible? How would you explain this? b.