Economics Research Institute Study Paper
Utah State University Department of Economics
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The fees charged for using federally administered lands has been a controversial topic for many decades. These fees are often compared to estimated forage values (shadow prices) obtained from a linear programming (LP) model. Researchers have shown that both the fee and non fee costs of grazing must be considered in setting grazing fees. LP models used to derive forage values must also consistently consider the fee and non fee costs of grazing. The LP model used in this study shows that the shadow prices derived are directly affected by how non fee variable costs of grazing are incorporated in a LP model. LP models that do not consistently allocate non fee costs for all types of forage result in shadow prices that can not be compared: Forage values derived using LP models must therefore be carefully evaluated with respect to the allocation of non fee costs of grazing before these values can be used to set grazing fees.
Godfrey, E. Bruce and Nielsen, Darwin B., "Shadow Prices for Forage on Western Rangelands: A Methodological Comment" (1994). Economic Research Institute Study Papers. Paper 35.