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

ABSTRACT

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.

KEYWORDS:

• General two-stage least squares
• hunting license
• price elasticity

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1. $\left(\mathit{CP}{I}_{2020}-\mathit{CP}{I}_{2004}\right)/\mathit{CP}{I}_{2004}=\left(258.8-188.9\right)/188.9$ = 0.37.

2. The number of households sampled in the National survey.

The first phase

The second phase

1996

80,000

22,578

2001

80,000

25,070

2006

85,000

21,938

2011

48,600

11,330

3. https://www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf