Showing papers in "Land Economics in 2001"

Selecting Biological Reserves Cost-Effectively: An Application to Terrestrial Vertebrate Conservation in Oregon

Abstract: Concerns that the loss of habitat have greatly increased species extinction rates has led to calls for establishing biological re- serves to preserve key habitat. In this paper, we study reserve site selection for terrestrial verte- brates in Oregon using data on species ranges and land values. We ® nd cost-effective strategies that represent a maximum number of species for a given conservation budget. By varying the bud- get, we ® nd the cost of obtaining various levels of representation. In general, effective conservation decision-making requires integrated analysis of both biological and economic data. (JEL Q20)

Do Tropical Forests Provide Natural Insurance? The Microeconomics of Non-Timber Forest Product Collection in the Brazilian Amazon

Abstract: Tropical forests may contribute to the well-being of local people by providing a form of ``natural insurance.’ ’ We draw on microeconomic theory to conceptualize a model relating agricultural risks to collection of non-timber forest products. Forest collection trips are positively correlated with both agricultural shocks and expected agricultural risks in an event-count model of survey data from the Brazilian Amazon. This suggests that households rely on forests to mitigate agricultural risk. Forest product collection may be less important to households with other consumption-smoothing options, but its importance is not restricted to the poorest households.

Predicting the Location of Deforestation: The Role of Roads and Protected Areas in North Thailand

Abstract: Using plot level data, we estimate a bivariate probit model to explain land clearing and the siting of protected areas in North Thailand in 1986. The model suggests that protected areas (national parks and wildlife sanctuaries together) did not reduce the likelihood of forest clearing; however, wildlife sanctuaries may have reduced the probability of deforestation. Road building, by reducing impedance-weighted distance to market, has promoted clearing, especially near the forest fringe. We simulate the impact of further road building to show where road building is likely to have greatest impact and where it is likely to threaten protected areas.

Agricultural Land Values and the Value of Rights to Future Land Development

Abstract: We investigate the inuence of fu- ture land development on current agricultural land values. From a theoretical model of land markets, we derive a reduced-form expression for agricultural land values in terms of observable variables. This result dictates the speci® cation of our econometric model and we ® nd strong sup- port for the model in an application to New York State. The estimated model, together with a spa- tial interpolation algorithm, is used to generate a surface of estimated development rights values for Orange County. This approach overcomes several problems that arise with the use of stan- dard appraisal methods to value conservation easements. (JEL Q24)

Economies of Scale and Scope: A Cost Analysis of Municipal Solid Waste Services

Abstract: The economics literature in municipal solid waste (MSW)markets is concerned primarily with demand-side issues and the associated policy implications. Few have studied the cost structure of this market, and none model the multiple product nature of MSWservices. We argue that the production of MSWservices has two major components Ð disposal and recycling, and that cost complementarities between the two activities may exist. Hence, we specify a multipleoutput cost structure, which models the relationship between recycling and disposal activity and investigates the extent of product-speci® c scale economies and overall scope economies in this market.

Combining Revealed and Stated Preference Methods to Value Environmental Amenities at Residential Locations

Abstract: This paper combines an established revealed-preference method, discrete-choice he- donic analysis, and a relatively new stated-refer- ence method, choice-based conjoint analysis, in order to estimate more accurately the aesthetic benefits generated by the presence and quality of environmental amenities associated with residen- tial locations. It applies the combined approach to the housing market of Fairfield, Connecticut, which contains several environmental amenities and is experiencing an improvement in the quality of its coastal wetlands due to active restoration efforts. (JEL Q26)

How Do Respondents with Uncertain Willingness to Pay Answer Contingent Valuation Questions

Abstract: Four elicitation methods are compared in a split-sample, contingent-valuation study valuing avoidance of episodes of ill health linked to air pollution: two discrete methods and two more-continuous methods. Respondents to a traditional payment card (PC) question gave willingness-to-pay values that were lower than those implied by dichotomous-choice (DC) responses. However, followup questions showed that DC respondents were less certain of their stated behavior than were PC respondents. When respondents were told to be ``almost certain’ ’ of their responses, responses to the DC and the PC formats converged.

Deforestation, Land Use, and Property Rights: Empirical Evidence from Darién, Panama

Abstract: Economic conventional wisdom suggests that providing land users with more secure property rights will result in more sustainable land use and less deforestation In this paper, we use spatial econometric techniques to evaluate quantitatively the effect on land use of designated property rights in three parts of DarieÂn province - a national park where no human activity is supposed to occur, and two reserves for indigenous peoples Results suggest that legal property rights for an indigenous population can influence land use Geography appears to be more important than legal protection for the national park

Objective versus Subjective Measures of Water Clarity in Hedonic Property Value Models

Abstract: This paper examines and compares objective, scientific measures of environmental quality with subjective measures of individuals’ perceptions obtained from survey information within the context of hedonic property value models. The specific application is to water clarity of freshwater lakes in Maine. Non-nested, J-test results indicate that the objective measure of water clarity was either preferred, or equally preferred, to the subjective measure for explaining variation in sale prices. These results are promising for hedonic applications employing scientific measures of environmental quality, however robustness of these results to other environmental amenities, and more complex environmental quality measures are of course needed.

The economics of tropical deforestation and land use: an introduction to the special issue

Abstract: This paper both introduces the special issue on the economics of tropical deforestation and land use and conducts a synthesis crosscountry analysis of tropical agricultural land expansion. Agricultural development is the main factor determining land expansion, but institutional factors have an important influence. Income effects vary from region to region, and do not always display an EKC relationship. The case studies comprising this special issue provide further case study insights into tropical deforestation and land use, through spatial analysis of locational factors, CGE modeling of policy scenarios, assessing external market impacts on land clearing, and modelling state interventions and taxation.

Deforestation in the Brazilian Amazon: Comparing the Impacts of Macroeconomic Shocks, Land Tenure, and Technological Change

Abstract: The paper examines the current relevance of the set of variables reported in the literature as driving deforestation in the Brazilian Amazon. The analysis uses a computable general equilibrium (CGE)model adapted to capture regional economic structures and the environmental processes specific to tropical areas. The paper compares the impact on deforestation in the Brazilian Amazon of: changes in real exchange rate; modifications in agricultural tax and support policies; reductions in transportation costs arising from investment in infrastructure in the Amazon; changes in land tenure regimes; and technological change in agriculture affecting productivity and agronomic sustainability.

Demand Specification for Municipal Water Management: Evaluation of the Stone-Geary Form

Abstract: To specify demand in most water allocation problems, researchers face a tradeoff between flexibility and parsimony. Flexible forms are less constraining on elasticity estimates, but require large parameter sets that tend to cause poor out-of-sample forecasts and computational difficulties. Using a five-year panel of Texas municipalities, the parsimonious Stone-Geary form yields estimated demand functions that are comparable to flexible form results. The Stone-Geary specification also provides an estimate of the portion of water use that may not be responsive to price, and is useful in analysing price structures and designing conservation policies.

Agricultural change, rural labor markets, and forest clearing: An illustrative case from the Philippines

Abstract: This paper studies the links between agricultural employment and upland activities at a tropical forest margin. A model of lowland agricultural production is combined with a model of labor allocation on a representative upland farm to show how labor productivity, agricultural wages, and the returns from upland activities determine rates of forest clearing. Farm level data from the Philippines demonstrate how agricultural intensification - in the form of lowland irrigation development - led to an increase in labor demand, an increase in employment of upland inhabitants, and small but statistically signi ficant reductions in rates of forest clearing.

Sticks, Carrots, and Reforestation Investment

Abstract: Environmental regulations and public financial assistance programs are the typical ``sticks’ ’ and ``carrots’ ’ facing non-industrial private forest (NIPF)landowners in the U.S. This paper presents a theoretical framework and empirical evidence on the impacts of the Endangered Species Act and public financial assistance programs - cost-share programs and a tax incentive program - on reforestation investment behavior. The results indicate that NIPF landowners’ reforestation investments are influenced negatively by environmental regulations and positively by public financial assistance programs. The results imply that both sticks and carrots can be used simultaneously to influence NIPF landowners’ reforestation behavior.

Spatial variability and disincentives to harvest: deforestation and fuelwood collection in South Asia.

Abstract: A major strategy to combat deforestation caused by household fuel collection has been the establishment of plantations, especially in India. A household model is specified with a number of collection possibilities and analyzed empirically using household, vegetation, and GIS data, and the potential decrease in collection from the natural forest is estimated. The results show reduced pressure on the natural forest due to the establishment of plantations. It also questions buffer zone plantations very close to natural forests.

Why Are There NIMBYs

Abstract: An owner-occupied home is an un- usual asset because it cannot be diversi® ed among locations and because it is the onlysizable asset that most owners possess. Among the unin- sured risks of homeownership is devaluation by nearby changes in land use. Opponents of land- use change are called NIMBYs (``Not In My Back Yard''). This article submits that NIMBYism is a rational response to the uninsured risks of home- ownership. It explores the possibilities and draw- backs of providing an insurance market to cover such risks. It concludes that some progress is being made towards developing such markets. (JEL R52) Residents who strenuously oppose devel- opment of land in their immediate area are often called ``NIMBYs,'' the acronymic per- soni® cation of the expression ``not in my backyard.'' The oppositionof neighbors is an importantproblemin Americanland-use reg- ulation. Itcanfrustrate the implementationof carefully planned residential development, locally desired industrial development, and placement of the necessary nuisances of ur- ban life, such as power plants and land® lls (Downs 1994; Fischel 1991; Nelson 1999; Portney 1991; Rephann forthcoming). NIMBYs sometimes appear to be irratio- nal in theiroppositionto projects in the sense that they express far-fetched anxieties or doggedly ® ght projects whose expected neighborhood effects seem small or even be- nign. I submit in this note that such anxieties might not be irrational if we consider that most NIMBYs are homeowners, and that homeowners cannot insure their major (and often only) asset against devaluation by neighborhood effects. NIMBYism mightbet- ter be viewed as a risk-averse strategy. I con- clude with a few notes about how an insur- ance market might be developed to head off

Estimation of Perceived Risk and Its Effect on Property Values

Abstract: A dynamic discrete time model is estimated in order to analyze the evolution of perceived risk around a hazardous waste site and its effect on property values. Residential property values are modeled as a function of housing attributes and perceived risk to health from a nearby hazardous waste site using an hedonic price framework. Perceived risk enters the model as a state equation, which includes a media coverage variable. An aggregate measure of perceived risk is estimated and weighted by the distance to the hazardous waste site in order to individualize risk to each location. Using a data set that spans seventeen years of property values around a hazardous waste site, the results indicate that media coverage and high prior risk perception increase current perceived risk. Increased perceived risk surrounding the hazardous waste site, in tum, lowers property values.

A Relative Efficiency Analysis of Farmland Preservation Programs

Abstract: While agricultural land preservation programs seek to maximize the number of acres, to preserve productive farms, to preserve contiguous farms, and to preserve threatened farms, they are often evaluated solely on the number of acres preserved. Preserved parcels in four Maryland counties were evaluated to determine how well programs traded off the four goals using a Farrell efficiency analysis approach. Comparisons are made between the types of programs. Of the four objectives, parcel size and productivity measures were the most likely to affect the efi - ciency measures. In addition, purchase of development right programs were most successful in trading off objectives.

Altruism and the Demand for Environmental Quality

Abstract: This paper asks whether individuals consider the value that future generations will receive from environmental quality when deciding what level of environmental protection to provide. Using data on life expectancy, I develop two tests for altruism towards future generations. One, a test for strong altruism, asks whether individual motives are purely altruistic when deciding to provide environmental quality. The second, a test for weak altruism, combines an individual’ s concern for both self-interest and the interest of future generations. Using data from a Washington Post survey on environmental attitudes to implement the test, I find evidence of weak altruism.

A Dynamic Approach to Estimating Hedonic Prices for Environmental Goods: An Application to Open Space Purchase

Abstract: If housing markets exhibit slow adjustment to system shocks, then hedonic estimates of the price impact from environmental amenity trends may be time variant. This paper suggests an alternative to the cross-sectional model for estimating hedonic prices using an error correction approach that allows for endogenous environmental quality. The model is applied to data concerning an open space purchase program in Boulder, Colorado, and shows that the economic impact of an open space purchase takes several years to be fully realized. This observation questions using cross-sectional, hedonic models for evaluating willingness to pay for time-trended environmental amenities.

Gender Differences in Land Inheritance and Schooling Investments in the Rural Philippines

Abstract: This paper examines the preferences of parents with respect to the allocation of land and investments in schooling between sons and daughters in two generations of households in the rural Philippines. In the older generation higher-educated fathers prefer to invest in sons schooling while land-owning mothers preferentially bestow land to daughters. While gender preference in relation to parental resources has disappeared in the child generation sons are preferred with respect to land inheritance while daughters are treated more favorably in schooling investments. (authors)

Optimal Allocation of TAC and the Implications of Implementing an ITQ Management System for the North-East Arctic Cod

Abstract: First, we study the allocation rule applied to split the Norwegian total allowable catch for cod between coastal and trawler vessels. Second, we explore the bioeconomic implications of an ITQ management system for this fishery. A model combining a cannibalistic biomodel with cooperative game theory is developed. Key results from the study are (1) the current allocation rule acts in opposite fashion to what may be considered bioeconomically optimal; and (2) an ITQ system for this fishery is likely to result in economic losses, as the biological advantages of harvesting with the two vessels types may be lost.

An Analysis of Minimum Frontage Zoning to Preserve Lakefront Amenities

Abstract: The development of lakefront property in northern Wisconsin has prompted, in several towns, minimum frontage zoning stricter than the state standard. Such zoning generates an economic loss by constraining development (development effect), and an economic gain by preserving environmental amenities (amenity effect). Estimation of a hedonic price function for lakefront property in northern Wisconsin quantifies these competing effects. The estimation indicates that at the current margin the economic loss from the development effect is negligible, and the economic gain from the amenity effect may be considerable, raising frontage prices by an average of 21.5%.

Evaluating the Influence of Personal Relationships on Land Sale Prices: A Case Study in Oregon

Abstract: Land transactions typically involve substantial personal interaction between buyer and seller. Despite this fact, researchers have made little attempt to determine how personal relationships influence the terms of trade for a property. In this study, Linn County, Oregon, farm land sales from 1992 - 1997 were examined to better understand and quantify the influences of personal relationships. Transactions between relatives and neighbors involved special considerations with greater frequency than did those between strangers and acquaintances. Transactions between parent and child and between neighbors brought significantly less than sales between strangers. Transactions resulting from a realtor or advertisement sold at a significant premium.

Biodiversity, Biocomplexity, and the Economics of Genetic Dissimilarity

Abstract: Some economists have advocated the use of measures of genetic dissimilarity to guide species preservation priorities. It is argued here that such policies are: 1)possible for only a very small number of species for which data are available; 2)impractical as a general guide to bi- odiversity preservation for that reason and be- cause it is impossible, given the present state of knowledge, to account for species interdepen- dence; and critically, 3) misguided because, at least over the relatively small species sets for which data exist, there are generally no estab- lished or theoretically convincing relationships between genetic dissimilarity and species value. (JEL Q21, Q28)

How Do National Markets and Price Policies Affect Land Use at the Forest Margin? Evidence from the Philippines

Abstract: Agricultural growth in uplands of tropical developing countries is associated with deforestation, land degradation, and diminished watershed function. Using time-series price data from an upland Philippine watershed, we examine market integration and quantify product market links through which policy and macroeconomic shocks - including instability from the Asian financial crisis of 1997 - 1998 are transmitted to farm gate prices. If market-driven incentives dominate farmers’ decisions, then our results indicate the desirability of using a broader range of policy instruments to address upland problems, and the need for upland projects to devote increased attention to national-level information dissemination and policy advocacy.

An Update on Priorities and Expenditures under the Endangered Species Act

Abstract: This paper reevaluates federal allocation decisions to protect 241 endangered vertebrates between 1993 - 1996. We control for the time invariant species characteristics to address species heterogeneity bias. The results suggest that yearly variation in variables like endangerment rankings and economic conflict now have no significant effect on the expenditures. This finding implies either these factors did not vary enough during the time frame or their impact has been biased upward in non-panel data exercises. This suggests any combination of time invariant factors, from charisma to the underlying ecosystem and historical uses as game species, could explain federal outlays for species protection.

Playing games in the forest: state-local conflicts of land appropriation

Abstract: This paper explores possible strategic interactions between the state and local community in games of tropical forestland appropriation. Three typical cases are discussed, corresponding to a development over time of increased resource competition and market integration. The local response to more state deforestation depends on the costs, market, and behavioral assumptions, and less on the structure of the game (Cournot or Stackelberg). The state fuels local deforestation by providing infrastructure (roads) which reduces the net costs of agricultural expansion, or when markets are imperfect and local behavior determined by survival needs. The game structure is, however, important for total deforestation.This paper explores possible strategic interactions between the state and local community in games of tropical forestland appropriation. Three typical cases are discussed, corresponding to a development over time of increased resource competition and market integration. The local response to more state deforestation depends on the costs, market, and behavioral assumptions, and less on the structure of the game (Cournot or Stackelberg). The state fuels local deforestation by providing infrastructure (roads) which reduces the net costs of agricultural expansion, or when markets are imperfect and local behavior determined by survival needs. The game structure is, however, important for total deforestation.

Environmental damage schedules: community judgments of importance and assessments of losses.

Abstract: Available methods of valuing envi- ronmental changes are often limited in their ap- plicability to current issues such as damage as- sessment and implementing regulatory controls, or may otherwise not provide reliable readings of community preferences. An alternative is to base decisions on predetermined ® xed schedules of sanctions, restrictions, damage awards, and other allocative guides and incentives, which are based on community judgments of the relative impor- tance of different environmental resources and particular changes in their availability and qual- ity. Such schedules can offer advantages of cost savings and consistency over current methods, as demonstrated in the case of Thailand coastal re- sources. (Jel Q20)

Valuing Bundled Attributes: A Latent Characteristics Approach

Abstract: Lancaster wrote that attributes of goods may combine to produce characteristics that are the primary units of consumption (1966). Often, the attributes of goods are bundled and cannot be separated. We show that if attributes are technically bundled then valuation analyses that treat these attributes as independent will be wrong. We show that a latent characteristics ap- proach improves upon other methods by incorpo- rating more information about attributes than standard methods and by directly modeling the linkages among attributes. For the case of wilder- ness hiking, the latent approach provides a statis- tically better model of site choice than other stan- dard methods. (JEL Q20, Q26)