DEMAND FOR GRAZING ON PUBLIC LANDS - A DISEQUILIBRIUM APPROACH

A demand function for grazing on western public rangelands is estimate d. Since the federal government sets the grazing fee and rations the q uantity of Animal Unit Months (AUMs), a disequilibrium market model is developed. The estimate of own-price elasticity of demand (-0.178) su ggests a 0.82 percent revenue gain for a 1 percent fee increase. Resul ts show that most western states experienced excess supply of AUMs sin ce the mid-1980s, suggesting a relatively high fee. The levels of dema nd and effective,supply vary substantially across states; this implies that state- or region-specific factors should be incorporated in sett ing the grazing fee.