The Value of Kentucky's Equine Industry To

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The Value of Kentucky's Equine Industry To University of Kentucky UKnowledge Theses and Dissertations--Agricultural Economics Agricultural Economics 2016 THE VALUE OF KENTUCKY’S EQUINE INDUSTRY TO KENTUCKY STATE RESIDENTS: A CONTINGENT VALUATION STUDY Stephanie Waters University of Kentucky, [email protected] Digital Object Identifier: https://doi.org/10.13023/ETD.2016.401 Right click to open a feedback form in a new tab to let us know how this document benefits ou.y Recommended Citation Waters, Stephanie, "THE VALUE OF KENTUCKY’S EQUINE INDUSTRY TO KENTUCKY STATE RESIDENTS: A CONTINGENT VALUATION STUDY" (2016). Theses and Dissertations--Agricultural Economics. 45. https://uknowledge.uky.edu/agecon_etds/45 This Master's Thesis is brought to you for free and open access by the Agricultural Economics at UKnowledge. It has been accepted for inclusion in Theses and Dissertations--Agricultural Economics by an authorized administrator of UKnowledge. For more information, please contact [email protected]. STUDENT AGREEMENT: I represent that my thesis or dissertation and abstract are my original work. Proper attribution has been given to all outside sources. I understand that I am solely responsible for obtaining any needed copyright permissions. I have obtained needed written permission statement(s) from the owner(s) of each third-party copyrighted matter to be included in my work, allowing electronic distribution (if such use is not permitted by the fair use doctrine) which will be submitted to UKnowledge as Additional File. I hereby grant to The University of Kentucky and its agents the irrevocable, non-exclusive, and royalty-free license to archive and make accessible my work in whole or in part in all forms of media, now or hereafter known. I agree that the document mentioned above may be made available immediately for worldwide access unless an embargo applies. I retain all other ownership rights to the copyright of my work. I also retain the right to use in future works (such as articles or books) all or part of my work. I understand that I am free to register the copyright to my work. REVIEW, APPROVAL AND ACCEPTANCE The document mentioned above has been reviewed and accepted by the student’s advisor, on behalf of the advisory committee, and by the Director of Graduate Studies (DGS), on behalf of the program; we verify that this is the final, approved version of the student’s thesis including all changes required by the advisory committee. The undersigned agree to abide by the statements above. Stephanie Waters, Student Dr. Alison Davis, Major Professor Dr. Carl Dillon, Director of Graduate Studies 2016 THE VALUE OF KENTUCKY’S EQUINE INDUSTRY TO KENTUCKY STATE RESIDENTS: A CONTINGENT VALUATION STUDY ________________________________________ THESIS ________________________________________ A thesis submitted in partial fulfillment of the requirements for the degree of Master of Science in Agricultural Economics in the College of Agriculture, Food and Environment at the University of Kentucky By Stephanie J Waters Lexington, KY Director: Dr. Alison Davis, Extension Professor of Agricultural Economics Lexington, KY 2016 Copyright® Stephanie J. Waters 2016 ABSTRACT OF THESIS THE VALUE OF KENTUCKY’S EQUINE INDUSTRY TO KENTUCKY STATE RESIDENTS: A CONTINGENT VALUATION STUDY This thesis examines whether the presence of the equine industry improves the quality of life for Kentucky residents; the contingent valuation method (CV) is used to estimate the value Kentucky residents place on the presence of the equine industry in Kentucky. The data comes from Phase II of the 2012 Kentucky Equine Survey of Kentucky residents. Seven thousand seven hundred fifty- seven surveys were distributed throughout the one hundred twenty counties in Kentucky. Four versions of the survey were distributed; the versions varied by the percentage decline in the equine industry. Surveys distributed to Bluegrass counties were distinguished by the color of paper the survey was printed on; the paper color identified the housing quartile of the respondent. Each version of the survey included a dichotomous choice experiment predicting a percentage decline in the equine industry. A payment card willingness-to-pay experiment followed the dichotomous choice experiment. Attitude questions, demographic data, and a consequentiality question were included at the end of the survey. The goal of the study was to identify if and in what way Kentucky residents’ lifestyle, beliefs, and knowledge of the equine industry influence their willingness to avoid a loss of the equine industry. KEYWORDS: Equine, Contingent Valuation (CV), Willingness to Pay, Payment Card, Dichotomous Choice, 2012 Kentucky Equine Survey Stephanie J Waters 08/26/2016 THE VALUE OF KENTUCKY’S EQUINE INDUSTRY TO KENTUCKY STATE RESIDENTS: A CONTINGENT VALUATION STUDY By STEPHANIE J WATERS Dr. Alison Davis _ Director of Thesis Dr. Carl Dillon _ Director of Graduate Studies 08/26/2016 _ TABLE OF CONTENTS Table of Contents ............................................................................................................................ iv List of Tables .................................................................................................................................. vi List of Figures ............................................................................................................................... viii Chapter 1: Introduction .................................................................................................................... 1 1.1 Welcome to the Horse Capital of the World ...................................................................... 1 1.1.1 Why are horses economically important for Kentucky? ............................................ 1 1.1.2 The demographics of Kentucky’s equine population ................................................ 2 1.2 Purpose of Study ................................................................................................................ 3 1.3 Objective of Study ............................................................................................................. 4 1.4 Thesis Structure ................................................................................................................. 5 Chapter 2: Literature Review ........................................................................................................... 6 2.1 Agricultural Land Preservation .......................................................................................... 6 2.1.1 Benefits of Agricultural Land Preservation ............................................................... 6 2.1.2 Benefits of Kentucky’s Equine Industry .................................................................... 6 2.2 Method of Willingness to Pay Elicitation .......................................................................... 7 2.2.1 Contingent Valuation ................................................................................................. 8 2.2.2 Consumer Willingness to Pay for Preservation of Ag Land ...................................... 9 2.2.3 Factors affecting Consumer WTP ............................................................................ 11 2.2.4 Contingent Valuation Studies focusing on Equine .................................................. 12 2.2.5 Criticisms of Contingent Valuation Method ............................................................ 12 2.2.6 Elicitation Methods for Deriving Willingness to Pay .............................................. 13 Chapter 3: Research Methodology ................................................................................................. 14 3.1 Survey Design and Implementation ................................................................................. 14 3.1.1 Context of the Survey .............................................................................................. 14 3.1.2 Survey Design .......................................................................................................... 14 3.1.3 Survey Administration ............................................................................................. 15 3.2 Choice Models ................................................................................................................. 22 3.2.1 Dichotomous Choice ................................................................................................ 22 3.2.2 Payment Card ........................................................................................................... 23 3.3 Hypotheses ....................................................................................................................... 24 Chapter 4: Data Description ........................................................................................................... 25 4.1 Description of Variables and Demographic Characteristics ............................................ 25 4.2 Descriptive Statistics ........................................................................................................ 30 iii Chapter 5: Empirical Results ......................................................................................................... 35 5.1 Variables and Hypotheses ................................................................................................ 35 5.2 Kentucky Resident’s Analysis ......................................................................................... 36 5.2.1 Willingness to Support the Preservation of Horse
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