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Economic Assessment of Meteorological Information Services for Livestock Farmers: A Case Study in Taiwan

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No.:WPE2018-3

Author:Lin, Hen-I, Je-Liang Liou, and Ruei-Hua Wang

Price:Free

Publication:2018.07

Abstract:

The substantial livestock production losses can be attributed to increased mortality, reduced feeding efficiency, and productivity, and those phenomenon could be affected by the extreme weather events. This research uses contingent valuation method (CVM) to evaluate the economic benefits of the meteorological information services provided by Central Weather Bureau for livestock farmers in 2016. Meteorological services has typically been perceived as public goods which should be provided by the government with free charges. However, there is no marketing mechanism designed for meteorological services. So CVM should be an appropriate methodology to adopt to evaluate their economic values.

The livestock industry in Taiwan has approximately 30 percent of total production values in agricultural sector. The top four livestock productions by values are hog, chicken, egg, and dairy. Therefore, we recruited 125 registered livestock farmers who hogs, chickens, egg chickens, and dairy cows in 2016 as our research participants and conducted face-to-face survey to collect data. Research outcomes has found that 74% and 83% of the respondents perceive that weather information will have positive effect on and can reduce risk on livestock production respectively.

Additionally, research has found that dairy farmers have higher frequency in using internet or smartphone application to access weather information than other livestock farmers. As a result, the dairy farmers have higher average willingness to pay for weather information services with better accuracy than other livestock farmers. Respondents’ judgement on the accuracy of weather information, years of experiences in livestock farming, and first bid price all have a significant influence on their Willingness to Pay (WTP).

With the CVM calibration methodology, we have found that an estimate of respondents’ average monthly WTP for meteorological information service is 488.63 NT dollars. The monthly WTP estimates in 95% confident interval lie between 457.72 and 519.54 NT dollars. Compared this result to our previous findings concerning the WTP estimates of crops farmers and fishermen, starting point bias has less impact on livestock farmers’ WTP. That is their WTPs are anchored within certain ranges of economic values. Besides, for farmers with longer years of experiences in livestock farming, their WTP is higher. This might indicate that senior livestock farmers are more likely to pay more cost to access weather information service with better accuracy, and this has shown a big difference than our previous research which whose research participants are farmers or fishermen.

Keywords: Contingent Valuation Method, Willingness to Pay, Meteorological Information Service, Livestock
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