be seen in Figure 2, the median
WTP
estimates with the single-
and double-bounded models are nearly identical.
Figure 1 communicates two intuitive ideas. First, the large
majority of users value Landsat imagery at very low amounts.
The median
WTP
amount is $182
USD
per scene, so by defini-
tion, half of the users value it less than that. However, there is
a not-so-small proportion of users that find Landsat imagery
incredibly valuable. Five and a half percent of users are will-
ing to pay $5,000
USD
per scene or more. Most US established
users are willing to pay a small amount to maintain access to
the imagery but there is a minority of the same set of users
that appear to find the information almost irreplaceable.
Within Figure 2, we see that choosing a percentage different
from 50 percent will result in different valuations. For exam-
ple, 74.5 percent of respondents value Landsat imagery at $50
per scene or higher and 92.3 percent of respondents value it at
least $10 per scene. Likewise, the model results can determine
the number of Landsat users that would no longer acquire
imagery if the
USGS
resumed charging. Half the users, as repre-
sented by the sampling in 2012, would no longer acquire imag-
ery if the median was charged. Charging $100
USD
per scene or
$10
USD
per scene would result in 37.5 percent and 7.7 percent
of US established users not acquiring imagery, respectively.
WTP Amounts
Results from this analysis show that the median value of the
economic benefits obtained from Landsat imagery is $182
USD
per scene for US established users and $49
USD
per scene for
US new/returning users (Table 2). This is not the value of the
scene to the typical user but the value where a majority (>50
percent) of the sampled users would purchase a scene equiva-
lent to a Landsat scene. The mean or average value of the
economic benefits is $912
USD
per scene for US established us-
ers and $367
USD
per scene for US new/returning users (Table
2: means were weighted by the number of users in each of the
four groups and the integration truncated at the highest dollar
amount asked in the survey). The mean is substantially less for
new and returning users than for established users, as would
be expected for a group of users that was not accustomed to
paying for Landsat imagery. The mean is much higher than the
median for both groups of users because there is that small, but
significant group, which values Landsat imagery very highly.
This may be due to the type of respondents to this survey who
are generally technically oriented, professional, and knowl-
edgeable about the good they were asked to value. This type of
respondent is not typical of many other
CVM
studies that tend
to sample the general public and consider non-market goods
with which the survey respondents may not actually use.
As expected, there are significant differences in
WTP
across
sectors, particularly for established users. Academic users
report the lowest values and non-government organizations
(
NGO
) report the highest values for the imagery among US
established users (Table 3). Among US new/returning users,
state, and local government users report the lowest values, and
private sector users report the highest. Sector does not seem to
play as large a role in determining value among new/return-
ing users as it does among established users. For example, the
mean value for US established users from non-profit organiza-
tions is more than double that of academic users. However, the
mean value for new/returning users from private businesses is
only 58 percent more than that of state and local government
users. This may indicate that longer-term use of the imagery
in certain sectors has created an increased dependency among
some users which translates into greater benefits.
Thus, within the sets of models examined, the strata that
appear to be the most important are, as expected: US versus
international users, established versus new/returning users,
and the sector within these groups. Other variables within the
survey offered little improvement to predicting the response
to the
WTP
bid amounts.
An Estimate of Total Economic Benefits of Landsat
The aggregate value of Landsat imagery is a relatively straight-
forward calculation. We have estimated the average value of a
scene for US and international established and new/returning
users. Using information from the survey on the average num-
ber of scenes that each of these four groups obtains annually
from
EROS
and combining that information with the total num-
ber of scenes distributed by
EROS
in 2011 (the last full year be-
fore the survey was administered), the value of Landsat is the
sum of the mean value per scene for each group multiplied by
the total number of scenes each group obtained in 2011 (Table
4). The annual economic benefit from Landsat imagery is just
over $1.79 billion
USD
per year for US users and almost $400
million
USD
per year for international users, resulting in an
annual economic benefit of $2.19 billion
USD
for the Landsat
scenes which were obtained from
EROS
in 2011. This estimate
is conservative and does not represent the entire societal
benefit from Landsat imagery, since it accounts only for the
benefits received by direct users registered with
EROS
. A more
complete survey of end users of Landsat imagery would likely
result in a valuation that is substantially higher.
Economic Loss to Society from Charging for Landsat Imagery
Although Landsat imagery is currently available at no cost,
user fees are sometimes charged to access goods provided by
the US Federal government, as well as state and local gov-
ernments. In this section, we evaluate the economic effects
to society of charging a positive price for the use of Landsat
imagery. In a market for a particular good, the demand curve
is a graphical representation of the relationship between the
T
able
2. O
verall
M
edian
and
M
ean
V
alues
of
E
conomic
B
enefits
from
a
L
andsat
S
cene
by
U
ser
G
roup
Value per
Landsat
scene
U.S. users
International users
Established New/returning Established New/returning
Median
$182
$49
$171
$59
Mean
$912
$367
$930
$463
T
able
3. M
ean
and
M
edian
V
alues
in
USD
of
E
conomic
B
enefits
from
a
L
andsat
S
cene
to
US U
sers
by
S
ector
Sector
Established users
New/returning users
Mean Median Mean Median
Academic
$704
$123
$331
$43
Federal Gov
$1,181
$264
$354
$47
State and Local Gov $940
$187
$307
$39
Private Business
$1,057
$223
$484
$72
NGO
$1,490
$379
$380
$52
T
able
4. E
stimated
A
nnual
A
ggregate
E
conomic
B
enefits
in
usd
to
L
andsat
U
sers
R
egistered with
the
USGS
from
L
andsat
I
magery
D
istributed
by
usgs
in
2011
Landsat
user group
Number of scenes
obtained in 2011
from EROS
Mean economic
benefit
per scene
Annual
economic
benefit
(millions)
U.S. users
Established
1,687,600
$912
$1,539.091
New/returning
692,508
$367
$254.151
U.S. total
2,380,108
$1,793.242
International users
Established
377,749
$930
$298.086
New/returning
160,969
$463
$101.025
International total
538,718
$399.111
TOTAL
2,918,826
$2,192.353
PHOTOGRAMMETRIC ENGINEERING & REMOTE SENSING
August 2015
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