368 December 1995
Journal OfAgricultural and Resource Economics
of the system would lie can be calculated. To calculate an upper bound on the aggregate
value of agricultural users’ willingness to pay, the mean willingness to pay estimated in this
study could be aggregated over the population of commercial agricultural producers (29,638
in Oklahoma) (U.S. Dept, of Commerce). The implicit assumption is that the nonrespondents
have the same willingness to pay as the survey respondents. On the conservative end, a lower
bound could be obtained by assuming that the proportion of commercial producers willing
to pay for Mesonet access is equal to the proportion of the survey sample that answered the
willingness-to-pay questions.5 This would imply a zero willingness to pay for nonrespon-
dents. When the survey respondents are not representative of the population surveyed, it is
also necessary to adjust for this bias in the calculation of aggregate values. Because the
demographic characteristics of the Mesonet survey respondents were virtually identical to
the population of commercial producers (table 2), no adjustment was made. Using the
conservative and optimistic assumptions about the willingness to pay of the nonrespondents,
the value of the raw Mesonet weather data was calculated between $29,374 and $162,422
per month. For the raw data∕value-added information combination, aggregate value was
calculated to lie between $34,943 and $186,364 per month.
Conclusions
Despite the perceived usefulness of weather information and the impact of weather on farm
income and profitability, agricultural producers do not appear to be willing to pay significant
fees to access improved weather information. Results indicate that, on average, producers
are willing to pay $5.83 per month for raw mesoscale weather data and $6.55 per month for
the raw data plus value-added weather-related products. Given that the cost to operate and
maintain the basic Mesonet system is expected to be $500,000 to $700,000 per year, the
anticipated income from user fees could cover as much as half of those costs, using the
conservative estimate of aggregate willingness to pay for the raw weather data. The range
of aggregate willingness to pay calculated for the raw data was $29,374 to $162,422 per
month ($352,488 to $1,949,064 per year).
The value of the basic system to other users such as radio and TV stations, weather
forecasters, and emergency information network operators may justify public investment in
the program. However, it is unlikely that public investment could be justified (or obtained)
to develop agriculture-specific products which benefit a single category of users. Given
agricultural producers’ low willingness to pay for mesoscale weather information and
decision aids, it also does not appear that the costs of developing and supporting these
value-added decision aids can be recovered from agricultural user fees. Results show that
the value-added products would earn only an additional $5,569 to $23,942 per month from
the user fees. The survey respondents clearly are not as optimistic as the Mesonet developers
in assessing the potential savings from using the Mesonet system to eliminate unnecessary
pesticide applications, reduce irrigation expenditures or identify more profitable crop
5To avoid overstating the upper bound, the population of 29,638 commercial producers was adjusted downward by the
proportion of respondents who gave a protest bid. Thus, for example, 6% of the population was not included for calculation of
aggregate willingness to pay for the raw data, because the true demand for the data by the protest bidders is unknown. To
calculate the conservative lower bound, only 17% of the population was used to calculate the aggregate willingness to pay for
the raw data—that proportion of the sample responding to the willingness-to-pay question but not giving a protest bid.