Evaluating the demand for and price elasticity of state hunting licenses in the United States using panel data

As wildlife management agencies have been struggling financially, there continues to be a greater need for revenue to sustain wildlife and cover their costs. With the sales of hunting licenses playing an important role in a state wildlife agency's revenue, there has been a debate regarding whether to raise the license fee since a loss of revenue will result if the price elasticity of the hunting license is elastic. This study first used a panel dataset containing national surveys from 1996 to 2011 across the United States to explore this issue. A General Two-Stage Least Squares (G2SLS) model was employed to estimate the demand for residents' hunting licenses, while an Ordinary Least Squares ;(OLS) model was applied to determine the demand for nonresidents' hunting licenses. Price elasticities of −0.176 and −0.066 for resident and nonresident hunting licenses were obtained, respectively. The results supported the view that raising the hunting license fee would bring in more license sales revenue.