AGRICULTURAL PRODUCERS' WILLINGNESS TO PAY FOR REAL-TIME MESOSCALE WEATHER INFORMATION

Kenkel, Norris

Real-Time Weather Information 361

Table ɪ. Variables Hypothesized to Explain Willingness to Pay for Mesoscale Weather Data

Variable	Unit	Hypothesized Sign	Definition
NEWS	$10	+	Annual payment for journals and magazines
DATA		7	1 if subscribes to electronic data service
ACRES	100 acres	7	Total crop acreage
DEBT	%	+	Ratio of long-term debt payments to gross farm income
FULL		7	1 if a full-time farmer
COMP		+	I if uses a computer
SALES	$10,000	+	Average annual gross sales
IRRlG		+ .	1 if irrigation is used
ALFALFA		+	I if alfalfa is produced
PEANUT		+	1 if peanuts are produced
COTTON		+	I if cotton is produced
LOSS	%	+	Average annual weather-related crop losses as percent of sales
CROPS		7	Number of crop enterprises
YEARF			IifIO years or less of farming experience
YEAR2		+	1 if 11—20 years of farming experience
YEAR3		+	I if 21—30 years of farming experience
YEAR4		+	1 if 31^40 years of farming experience
YEARS		+	I if more than 40 years of farming experience
EDUCl^a			I if a high school graduate
EDUC2		+	1 if some college education
EDUC3		+	I if a college graduate

^a These variables denote the reference category and were excluded from the models.

higher dollar, riskier enterprises. Large producers may also operate several noncontiguous
acreages. They might, therefore, be somewhat diversified against local adverse weather
events and less likely to perceive that weather information would lower their production
risk. Similarly, a manager of a more diversified farming operation—one with a larger number
of crop enterprises—is faced with a greater number of production decisions, many of which
are affected by weather. On the other hand, more diversified operations are also less risky.
As such, farmers with more enterprises may feel that they have a lower exposure to
weather-related production risks.

Characteristics of the producer such as ownership of a computer and subscription to a
data service or other news sources might also be expected to affect willingness to pay.
Computer ownership would be expected to increase willingness to pay, since the use of a
computer suggests an interest in technology and a ready ability to access computer-based
information. However, the expected impact of data service subscription is ambiguous.
Producers who subscribe to an electronic data service or other news services have a

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