Hypothetical bias exists when people overstate their actual willingness to pay (WTP) in a survey. In our
analysis, we account for hypothetical decision-making because we are able to calibrate our new price
estimates to actual, incentive-compatible purchasing decisions of households.
Unlike most other non-market valuation exercises, we have a real benchmark - the GEP. The
GEP entitles households to basically identical access to public lands as the NRP and had been offered at
$65 since 2000. Using past GEP sales figures and purchasing decisions for households within our
sample, we are then able to estimate the degree of hypothetical bias (including awareness bias). The total
degree of awareness and hypothetical bias in our sampling of the U.S. general population (a Random
Digit Dialing sample) implies that NRP revenues taken directly from household survey responses are
higher than the actual data by a factor of 16! The total bias using our sampling of recent pass purchasers
(a sample obtained from the National Parks Foundation) is much lower and even slightly negative. This
finding supports previous research in the area of non-market valuation, which shows that market
experience is an important indicator of people’s ability to accurately identify and state their true valuation
for public and environmental goods (e.g., List and Shogren, 1998; Cherry et al., 2003; Cherry and
Shogren, 2007; List and Gallet, 2001; Murphy et al., 2005).
2. Background
The Federal Lands Recreation Enhancement Act (Public Law 108-447, the FLREA), which was
signed into law on December 8, 2004, approved the introduction of a new federal lands recreation pass to
replace the existing GEP and NPP. The FLREA called for a pass to provide convenient and fairly priced
access to federal recreation sites that charge fees; to provide opportunities for education on our federal
lands; to provide support for public lands; and to develop partnerships with organizations that support
recreation and stewardship on our public lands. This new recreation pass (NRP) covers the entrance fees
for units administered by the National Park Service and the National Wildlife Refuge System, as well as
standard amenity fees for developed areas administered by the Bureau of Land Management, the Bureau
of Reclamation, and the U.S. Forest Service. Fee areas generally include visitor centers or other