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 United States. Individual usage uncertainty is modelled 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.