provided by Research Papers in Economics
Journal OfAgricultural and Resource Economics 20(2):356-372
Copyright 1995 Western Agricultural Economics Association
Agricultural Producers’ Willingness to Pay for
Real-Time Mesoscale Weather Information
PhiI L. Kenkel and Patricia E. Norris
Mesoscale weather networks can provide improved weather information to agricultural
producers. This technology can potentially improve production decisions, reduce irrigation
and pesticide inputs, and reduce weather-related losses. Developing a mesoscale network to
disseminate real-time mesoscale weather information requires a substantial investment. In
addition, there are costs associated with maintenance of the system and distribution of the
information available. While public funds may be available to support initial development
of the system, there may be less public support for maintaining the system and subsidizing
users’ access to the information. This study uses the contingent valuation technique to
deteπnine the willingness of Oklahoma farmers and ranchers, as one set of potential users,
to pay for real-time mesoscale weather information. The results indicate that agricultural
producers are willing to pay only a modest fee for improved weather information. Gross
sales, irrigation, and past weather losses are among the factors shown to significantly impact
willingness to pay.
Key words: contingent valuation, decision aids, mesoscale weather information
Introduction
Flooding in the Midwest during 1992 and 1995 underscores how weather contributes to the
overall risk faced by farmers and ranchers. Precipitation and other climatic variables affect
a producer’s decisions regarding input timing and usage, irrigation scheduling, and market-
ing decisions. Producers also assess current wind conditions in order to apply chemicals
safely or to undertake controlled burning activities. Weather conditions directly affect
producers’ income and profitability.
Advances in technology have made it feasible to improve the quality of weather
information and interpreted weather information products. A good example is the develop-
ment of mesoscale weather networks. This new technology provides more timely and
accurate weather information by using a denser network of observation points and more
frequent observations. However, access to these improved weather information networks
will be more expensive than current weather information sources.
In 1990, researchers in Oklahoma began work on a $2.7 million mesoscale weather
network which is referred to as “Mesonet.” The annual costs of maintaining and operating
the Mesonet system have been estimated to be between $500,000 and $700,000. Because
Mesonet offers important data for a number of public uses, several public sources are
expected to assist with financial support for the system. However, user fees are also expected
to provide support for the system. The development and support of agricultural decision aids
based on the mesoscale data also depend on projected user fee revenues. If a good portion
The authors are associate professors in the Department of Agricultural Economics, Oklahoma State University, Stillwater.
Senior authorship is not assigned.