Welfare Effects of Changes in Environmental Quality under Individual Uncertainty about Use

We adapt the theoretical state-preference model to value nonmarket public goods under individual uncertainty about use, illustrating with an assessment of willingness-to-pay to prevent acid rain lake damage in the northeast. Individual usage uncertainty is modeled via probabilities of participation in trout fishing. Changes in environmental quality are valued using a random utility model to explain yes/no responses to a contingent valuation question. We produce quantitative welfare measures: individual fitted and simulated passive- and active-use values, individual expected consumer surplus, option price, option value, and complete individual willingness-to-pay loci.