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Open Access Publications from the University of California

Economic Analysis of Indemnity Payments for Wolf Depredation on Cattle in a Wolf Reintroduction Area

  • Author(s): Anderson, Aaron
  • Gebhardt, Karen
  • Kirkpatrick, Katy N.
  • Bergman, David L.
  • Shwiff, Stephanie A.
  • et al.
Abstract

Mexican gray wolves were reintroduced into New Mexico and Arizona in 1998. When wolves kill a producing cow, ranchers in the region are eligible to receive an indemnity payment equal to the market value of the lost animal. We developed a model that allows estimation of the present value of the revenue stream that a cow or herd provides and find that if a producing cow is killed, the decrease in the present value of the rancher’s revenue stream is about $1,230. Mean indemnity payments are currently $1,000, implying ranchers are not being sufficiently compensated.

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