Journal ofAgricultural and Resource Economics, 20(1):146-164 Copyright 1995 Western Agricultural Economics Association Property Rights, Grazing Permits, and Rancher Welfare

This study attempts to link factors affecting the demand for Bureau of Land Management grazing to perceived changes in permittee welfare over the 1962-92 period. Annual demand for federal forage is found to be sensitive to active preference, beef cow and breeding ewe inventories, and grazing fees and nonfee allotment utilization costs. No evidence is found to support the notion that the demand for grazing has been affected by changes in property rights associated with the federal grazing permit that are not reflected in higher user costs. The total decrease in welfare generated from the permit to graze public lands has been about 9 % per authorized cattle animal unit month and 65 % per authorized sheep animal unit month over the study period. Key words: confirmatory factor analysis, grazing fees, latent variables, property rights, public land