Showing papers in "Land Economics in 2002"
TL;DR: In this article, the marginal values of different open space attributes were tested using a hedonic pricing model with residential sales data from central Maryland, and the identification problems that arise due to endogenous land use spillovers and unobserved spatial correlation were addressed using instrumental variables estimation with a randomly drawn subset of the data that omits nearest neighbors.
Abstract: The marginal values of different open space attributes are tested using a hedonic pricing model with residential sales data from central Maryland. The identification problems that arise due to endogenous land use spillovers and unobserved spatial correlation are addressed using instrumental variables estimation with a randomly drawn subset of the data that omits nearest neighbors. Results show a premium associated with permanently preserved open space relative to developable agricultural and forested lands and support the hypothesis that open space is most valued for providing an absence of development, rather than for providing a particular bundle of open space amenities.
705 citations
TL;DR: In this paper, several hypotheses about the factors explaining the diversity in the environmental management systems adopted by firms are tested using survey data for a sample of S&P 500 firms and the analysis shows that the threat of environmental liabilities, high costs of compliance, market pressures, and public pressures on firms with high on-site toxic emissions per unit output create incentives for adopting a more comprehensive environmental management system.
Abstract: The corporate approach to environmental protection has been evolving from a regulation-driven reactive mode to a more proactive approach involving voluntarily adopted management systems that integrate environmental concerns with traditional managerial functions. Several hypotheses about the factors explaining the diversity in the environmental management systems adopted by firms are tested using survey data for a sample of S&P 500 firms. The analysis shows that the threat of environmental liabilities, high costs of compliance, market pressures, and public pressures on firms with high on-site toxic emissions per unit output create incentives for adopting a more comprehensive environmental management system.
394 citations
TL;DR: In this paper, the authors demonstrate that paying for ecosystem protection directly can be far more cost-effective than indirect commercial activities, such as ecotourism, that indirectly generate ecosystem protection as a joint product.
Abstract: International donors invest billions of dollars to conserve ecosystems in low-income nations. The most common investments aim to encourage commercial activities, such as ecotourism, that indirectly generate ecosystem protection as a joint product. We demonstrate that paying for ecosystem protection directly can be far more cost-effective. Although direct-payment initiatives have imposing institutional requirements, we argue that all conservation initiatives face similar challenges. Thus conservation practitioners would be well advised to implement the first-best direct-payment approach, rather than a secondbest policy option. An empirical example illustrates the spectacular cost savings that can be realized by direct-payment initiatives.
387 citations
TL;DR: In this article, the authors analyzed the determinants of land tenure insecurity and its impact on intensity of use of purchased farm inputs among households in Southern Ethiopia and found that, in the overall sample, relative farm size was not significantly correlated with tenure insecurity.
Abstract: "This study analyzes the determinants of land tenure insecurity and its impact on intensity of use of purchased farm inputs among households in Southern Ethiopia. Seventeen percent of the households stated that they were tenure insecure. The feeling of tenure insecurity could be caused by the land redistribution policy in Ethiopia where household size has been the main criterion used for land allocation after the land reform in 1975. This would imply that land rich households should be more tenure insecure. Alternatively, the local power structure may be strong enough to counter this and cause the land rich, who are also likely to be influential, to be able to protect their land rights. The analysis revealed that, in the overall sample, relative farm size was not significantly correlated with tenure insecurity. When testing for each site, however, we found that in four of the sites per capita farm size was positively associated with tenure insecurity, while in five other sites it had a significant negative association. This may be due to local historical, cultural, and demographic differences giving way to differences in the effects of the redistribution policy and the local power structure on tenure insecurity. We assessed the impact of tenure insecurity on the intensity of use of purchased farm inputs. The tenure insecurity variable was insignificant. Farmers in areas with a positive correlation between farm size and tenure insecurity were more likely to purchase farm inputs. Larger farms were more likely to use purchased inputs, but this effect was lower in areas with a positive correlation between farm size and tenure insecurity. Poverty and subsistence constraints may explain this absence of higher intensity of use of purchased inputs on small farms. By contrast, the land redistribution policy may have improved small farms' access to purchased farm inputs. (text of Abstract)
273 citations
TL;DR: In this paper, the authors used GIS data to develop variables representing the physical extent and visibility of surrounding land use/cover features in a hedonic model of a rural/suburban residential housing market.
Abstract: This paper uses GIS data to develop variables representing the physical extent and visibility of surrounding land use/cover features in a hedonic model of a rural/suburban residential housing market. Three equations are estimated to determine if views affect property prices and, further, if omission of visibility variables leads to omitted variable biases. To improve efficiency, first-order spatial autoregressive models are estimated. Results indicate that the visibility measures are important determinants of prices and that their exclusion may lead to incorrect conclusions regarding the significance and signs of other environmental variables.
262 citations
TL;DR: Consumer survey data, collected in former West and East Berlin after the unification of Germany are used to address the issue of willingness to pay (WTP) for foods produced with techniques consistent with environmental stewardship, showing differences in the WTP between residents of the two former German states attributed to area of residence.
Abstract: Consumer survey data, collected in former West and East Berlin after the unification of Germany are used to address the issue of willingness to pay (WTP) for foods produced with techniques consistent with environmental stewardship. Results show differences in the WTP between residents of the two former German states attributed to area of residence. Residents of eastern city districts were generally less willing to pay a premium for foods produced with environmental- friendly methods which suggests that marketing of such foods will be more successful in western districts, unless educational efforts can be used to bridge the gap in the stated WTP.
221 citations
TL;DR: In this article, the authors investigated the market value of proximity to forest preserves as capitalized into the sale prices of vacant building lots in residential subdivisions that on one side border a preserve.
Abstract: This paper reports estimates of the market value of proximity to forest preserves as capitalized into the sale prices of vacant building lots in residential subdivisions that on one side border a preserve. The results indicate that building lots that border the preserve sell at premia of about $5,800 to $8,400 (19% to 35% of lot price). These proximity premia appear to be highly localized. Estimates obtained from observations on subsequent sales of houses (rather than of vacant building lots) are larger and less precisely estimated, which suggests that omitted house characteristics may bias estimates of amenity value.
181 citations
TL;DR: In this paper, a new approach to benefit transfer is proposed, which assumes a specific form for preferences and uses available benefit information to identify and calibrate the preference parameters to match the existing benefit estimates.
Abstract: This paper proposes a new approach to benefit transfer. The method assumes a specific form for preferences and uses available benefit information to identify and calibrate the preference parameters to match the existing benefit estimates. This approach assures economic consistency of the transfers. Benefit measures can never be inconsistent with household income. The logic also offers a series of potentially observable ‘‘predictions’’ that can be used to gauge the plausibility of benefit transfers. When multiple benefit estimates from different methods are available such as hedonic property value, travel cost demand, and contingent valuation, the framework uses the definition of the benefit concept from each method in a single preference function to reconcile differences. It provides a specific way to take account of baseline conditions and scope effects (i.e., the size of the proposed change) consistently in the transfer. The method is illustrated using estimates for benefit measure changes in water quality from three studies: travel cost demand, hedonic property value, and contingent valuation analysis.Q26
173 citations
TL;DR: The authors compare double-, triple-, and multiple-bounded models with data from two surveys with similar designs of the valuation questions and find that incentive incompatibility is present in both sets of data.
Abstract: We test for incentive incompatibility and starting-point bias to describe the effects of iterative valuation questions on willingness to pay. We compare double-, triple-, and multiplebounded models with data from two surveys with similar designs of the valuation questions. We find that incentive incompatibility is present in both sets of data and starting-point bias is present in one. The efficiency of the willingness-to-pay estimate is improved in only one set of data. The potential loss from using iterative questions without controlling for both incentive incompatibility and starting-point bias is biased willingness-topay estimates.
165 citations
TL;DR: In this article, a microeconomic analysis questions whether voluntary eco-labeling will cause producer profits in a competitive industry to decline, and whether eco labeling will necessarily generate different prices for labeled and unlabeled products.
Abstract: International environmental organizations propose voluntary eco-labeling as a market incentive to promote industry to operate in an ecologically sustainable and environmentally friendly manner. A microeconomic analysis questions whether voluntary eco-labeling will cause producer profits in a competitive industry to decline and whether eco-labeling will necessarily generate different prices for labeled and unlabeled product. Using wood product as an example, results identify conditions that may exist when firms lose profits, even under a voluntary system, and where existing production constraints may lead to a single price, regardless of labeling.
146 citations
TL;DR: This paper found significant evidence of market failure in information in the National Flood Insurance Program (NFIP) and found that the majority of survey respondents did not fully understand the degree of flood risk or the cost of insuring against this risk when negotiating the purchase of their property.
Abstract: The National Flood Insurance Program (NFIP) was established in 1968 and requires mandatory flood insurance for property owners who have federally backed mortgages. Krutilla (1966) noted that a compulsory national flood insurance program could greatly improve the economic efficiency of flood plain occupancy in the United States. However, in order to realize the efficiency gains suggested by Krutilla, property owners must have sufficient information about flood risk and insurance premiums to make well-informed home purchase decisions. Using survey data from Boulder, Colorado, we find significant evidence of market failure in information in the NFIP program. The majority of survey respondents, all of whom live in a special flood hazard area, report they did not fully understand the degree of flood risk or the cost of insuring against this risk when negotiating the purchase of their property.
TL;DR: The authors explored ways in which definitions of property rights in the economic literature diverge from conventional legal understandings, and how those divergences can create interdisciplinary confusion and bias economic analyses.
Abstract: Property rights are fundamental to economic analysis. There is, however, no consensus in the economic literature about what property rights are. Economists define them variously and inconsistently, sometimes in ways that deviate from the conventional understandings of legal scholars and judges. This article explores ways in which definitions of property rights in the economic literature diverge from conventional legal understandings, and how those divergences can create interdisciplinary confusion and bias economic analyses. Indeed, some economists’ idiosyncratic definitions of property rights, if used to guide policy, could lead to suboptimal economic outcomes.
TL;DR: The authors empirically investigate the effect of the payment mechanism on contingent val- ues by asking a willingness-to-pay question with one of three payment mechanisms: indi- vidual contribution, contribution with provision point, and referendum.
Abstract: We empirically investigate the ef- fect of the payment mechanism on contingent val- ues by asking a willingness-to-pay question with one of three different payment mechanisms: indi- vidual contribution, contribution with provision point, and referendum. We e nd statistical evi- dence of more afe rmative responses in the refer- endum treatment relative to the individual contri- bution treatment, some weak statistical evidence of more afe rmative responses in the referendum treatment relative to the provision point treat- ment, and no statistical evidence of more afe r- mative responses in the provision point treatment relative to the individual contribution treatment. The relative credibility of the three payment mechanisms is also examined . (JEL H41, Q26)
TL;DR: In this paper, the authors examine economic aspects of the institutions and incentives needed to encourage landowners in Canada to adopt tree planting on a large scale, based on data from a survey of landowners, the transaction costs of getting landowners to convert their land from agriculture to plantation forests appear to be a significant obstacle.
Abstract: Land-use change and forestry projects are considered a low-cost option for addressing climate change mitigation. In Canada, afforestation is targeted to sequester enough carbon to meet one-fifth of its international obligations, and at lower cost than emissions reduction. We examine economic aspects of the institutions and incentives needed to encourage landowners in Canada to adopt tree planting on a large scale. Based on data from a survey of landowners, the transaction costs of getting landowners to convert their land from agriculture to plantation forests appear to be a significant obstacle, possibly increasing the costs of afforestation projects beyond what conventional economic analysis suggests.
TL;DR: The authors examine whether and how survey respondents react to spatial factors in stated preference surveys, and the ways in which preferences for spatial factors may influence welfare estimation, and find that subtle, and potentially unintended, spatial features presented in choice questions may influence marginal valuation of non-spatial attributes.
Abstract: This paper examines whether and how survey respondents react to spatial factors in stated preference surveys, and the ways in which preferences for spatial factors may influence welfare estimation. Alternative proposals to develop rural lands for residential purposes in southern New England were studied. Results illustrate that spatial attributes can influence estimated willingness to pay for development plans, even in cases where spatial attributes are only presented as cartographic details of maps used to clarify survey scenarios. Moreover, we find that subtle, and potentially unintended, spatial features presented in choice questions may influence marginal valuation of non-spatial attributes.
TL;DR: In this article, the authors quantify the effect that public conservation lands have on employment growth in the Northern Forest region of the United States and find that net migration rates were higher in counties with more conservation lands, but the effects are relatively small.
Abstract: We quantify the effect that public conservation lands have on employment growth in the Northern Forest region of the United States. A model of simultaneous employment and net migration growth is estimated with data on non-metropolitan counties from 1990 to 1997. Exogenous variables include the 1990 share of the land base in public conservation uses. We find that net migration rates were higher in counties with more conservation lands, but the effects are relatively small. No significant effect on employment growth is detected. As well, variables measuring changes in public timber harvests have no effect on employment growth.
TL;DR: In this article, a simple resource-to-resource format appears superior to simple referendum and composite formats in terms of coherence, and the authors provide an empirical comparison of response variance from three formats.
Abstract: Choice questions are increasingly being used to scale competing natural resource programs. Respondents choose between two alternatives with varying levels of program characteristics and costs. Complexity in the choice task can increase the randomness (variance) in the choices and the estimation of preferences, and the magnitude of randomness is examined using scope tests and scale parameters. We provide an empirical comparison of response variance from three formats. A simple resource-to-resource format appears superior to simple referendum and composite formats in terms of coherence. The application stems from a study addressing PCBcaused natural resource losses in Green Bay, Wisconsin.
TL;DR: In this article, the spatial patterns of exploitation in the California sea urchin fishery were analyzed using two different econometric approaches: a combined count data and SUR model of monthly observations and a micro-level Nested Logit model of individual harvester daily decisions.
Abstract: This paper analyzes spatial patterns of exploitation in the California sea urchin fishery using two different econometric approaches: a combined count data and SUR model of monthly observations and a micro-level Nested Logit model of individual harvester daily decisions. Each model is used to simulate the spatial distribution of fishing effort. The models are compared using goodness of fit measures and implications for management are discussed.
TL;DR: This paper developed an optimization model of villagers' extraction behavior that clarifies how, and under what conditions, policies that create incentives such as improved returns to extraction in a buffer zone might be used instead of adversarial enforcement efforts to protect a forest's pristine inner core.
Abstract: When villagers extract resources, such as fuelwood, fodder, or medicinal plants from forests, their decisions over where and how much to extract are influenced by market conditions, their particular opportunity costs of time, minimum consumption needs, and access to markets. This paper develops an optimization model of villagers’ extraction behavior that clarifies how, and under what conditions, policies that create incentives such as improved returns to extraction in a buffer zone might be used instead of adversarial enforcement efforts to protect a forest’s pristine ‘‘inner core.’’
TL;DR: This article examined the relationship between pollution and land use variables and found that other factors may also be involved in vacancy and underuse in industrial areas of Baltimore, Maryland, characterized by brownfields and recent economic development.
Abstract: Recently, many states have passed brownfields legislation to limit the liability of innocent property redevelopers, based on the assumption that pollution systematically affects land use and development. The goal of this study was to examine this assumption. The study area was an industrial area of Baltimore, Maryland, characterized by brownfields and recent economic development. Data from 1963–1999 for brownfield and non-brownfield parcels were collected and compared to identify variations in assessed land value, vacancy, sales, and redevelopment. The absence of a systematic relationship between pollution and land use variables suggests that other factors may also be involved in vacancy and underuse.
TL;DR: In this paper, a repeated-nested logit, random-utility model is used to analyze economic losses to climbers resulting from the U.S. Forest Service (USFS) proposal to prohibit the use of fixed climbing protection in wilderness areas.
Abstract: Given potential growth in outdoor rock climbing and its concentration on public lands, the management of climbing access in wilderness areas is an issue of considerable national controversy in the United States. A proposed rule change by the U.S. Forest Service (USFS) would prohibit the use of fixed climbing protection in wilderness areas—effectively eliminating safe access to many sites. Using a unique data set on rock climbing trips, a repeated-nested logit, random-utility model is used to analyze economic losses to climbers resulting from the USFS proposal. Results indicate that the USFS proposal may constitute a major regulatory change. (
TL;DR: In this paper, it is shown that Weitzman's framework of diversity measurement can be made practical and applicable by shifting the level analysis from species to ecosystems, which can be used to identify cost-effective policies for the preservation of biodiversity.
Abstract: Biodiversity loss has been recognized as one of the most important global environmental problems, but the choice of conservation policies is hampered by the lack of an operational concept of biodiversity. Weitzman (1992, 1998) develops a framework for the measurement of diversity and the identification of cost-effective policies for the preservation of biodiversity. Weitzman’s framework has been criticized as being unsuitable for the global problem of biodiversity loss. This paper responds to this critique. It is shown that Weitzman’s framework of diversity measurement can be made practical and applicable by shifting the level analysis from species to ecosystems.
TL;DR: In this paper, the shadow prices of emission reductions for power plants that serve Florida were calculated and compared to the actions of utility owners to the predicted shadow prices, showing that plant owners have not taken full advantage of the opportunities the allowance market has provided to date.
Abstract: Since the passage of the 1990 Clean Air Act Amendments, researchers have hastened to appraise the new market for sulfur dioxide (SO2) emission allowances. As the EPA’s program moves into its second phase, some analysts question whether large enough savings are available to induce widespread market participation. This study calculates the shadow prices of emission reductions for power plants that serve Florida and compares the actions of utility owners to the actions predicted by the shadow prices. The evidence suggests that plant owners have not taken full advantage of the opportunities the allowance market has provided to date.
TL;DR: The authors developed a household model that examines the roles of market integration, subsistence, time preference, and non-timber forest uses in the household's decision to clear forest for future agriculture.
Abstract: A significant proportion of deforestation in Latin America is caused by smallholders living at the frontier of modern rural markets. This paper develops a household model that examines the roles of market integration, subsistence, time preference, and non-timber forest uses in the household’s decision to clear forest for future agriculture. The model explores the possible impacts of development programs that encourage market integration. The model shows that rates of forest clearance should be exacerbated in areas in which market integration is most rapid. An empirical estimation, using household data from the Tsimane people of Bolivia, tests hypotheses from the model.
TL;DR: The authors demonstrate a preference for public goods over monetary compensation in the presence of public harms, in part because receipt of public goods may limit the sense of guilt or bribery from accepting compensation for the injury.
Abstract: This paper provides evidence that public goods represent a more acceptable response to public harms than monetary compensation. We demonstrate a preference for public goods over monetary compensation, in part because receipt of public goods may limit the sense of guilt or bribery from accepting compensation for the injury. More surprising, this preference for public goods over money in the presence of a harm remains in a free-market choice where guilt is not an issue. It appears that public goods psychologically mitigate or balance public harms in a way that makes them more valuable in the presence of public harms.
TL;DR: This article explore two potential experimental effects in multiple-bounded questions and find that respondents may simply express welfare estimates in the center of the bid list and that the range of bids may systematically influence welfare estimates.
Abstract: Multiple-bounded, contingent-valuation questions have been proposed as an alternative to single-bounded and double-bounded questions. While the effects of bid design on multiple- bounded responses have not been explored, findings of experimental effects in single- and double-bounded questions make this a logical area of inquiry. We explore two potential experimental effects in multiple-bounded questions. Respondents may simply express welfare estimates in the center of the bid list. Also, the range of bids may systematically influence welfare estimates. We find while respondents do not center their responses, the range of bids influences welfare estimates and responses to individual bids.
TL;DR: In this paper, the acquisition of land for a riparian buffer can be viewed as a binary optimization problem and applied the resulting model to a case study in New York, where the authors demonstrate how the land acquisition for a buffer can also be modeled as an optimization problem.
Abstract: The use of riparian land buffers to protect water quality for human consumption and wildlife habitat has become an important conservation tool of both government and non-government agencies. The funds available to acquire private lands for riparian buffers are limited, however, and not all land contributes to water quality goals in the same way. Conservation agencies must therefore identify effective ways to allocate their scarce budgets in heterogeneous landscapes. We demonstrate how the acquisition of land for a riparian buffer can be viewed as a binary optimization problem and we apply the resulting model to a case study in New York.
TL;DR: In this paper, the authors argue that the belief that discrete contingent valuation questions yield substantially larger estimates of the mean (and the median) willingness to pay (WTP) for nonmarket resources in comparison to open-ended CV questions is unfounded.
Abstract: This paper argues that the belief that discrete contingent valuation (CV) questions yield substantially larger estimates of the mean (and the median) willingness to pay (WTP) for nonmarket resources in comparison to open-ended CV questions is unfounded. Monte Carlo experiments estimate the factors influencing the performance of WTP estimates based on discrete response models. Most of the error arises from the specification errors common to the empirical models in the literature. These experiments suggest models where WTP is dominated by nonuse (or passive use) values are likely to have smaller errors than where large use values influence these decisions.
TL;DR: In this article, the authors developed a computable general equilibrium model based on tradable and non-tradable sectors to hypothesize the impact on Idaho's public finances, household income, and economic growth, with and without the initiative's tax policy.
Abstract: Idaho voters rejected a property tax limitation initiative in 1996. Before the election, proponents claimed the decrease in revenues would be offset from the increase in economic activity. We developed a computable general equilibrium model based on tradable and non-tradable sectors to hypothesize the impact on Idaho's public finances, household income, and economic growth, with and without the initiative's tax policy. The model predicts that each $3 reduction in property tax revenues would result in an overall $2 loss in state and local revenues. The benefits are predicted to be $35 per low-income household and $738 per high- income household. The federal government would receive 1% additional revenues from Idaho. (R51) Most economists who use computable general equilibrium (CGE) models to analyze the impacts of tax reforms focus their attention on the national and multi-regional level. 3 Waters, Holland, and Weber (1997) were the first ones to use a CGE model to analyze the general equilibrium impacts of a property tax reduction—Oregon's Measure 5—on a state's economy. They compared the results of a two-sector, goods-and-services CGE model to those of a fixed- price, input-output model. They concluded that CGE models represent a significant advancement over fixed-price, input-output models for estimating economy-wide effects of a property tax reform. In addition, they demonstrated the ability of these models to incorporate after-tax effects on the distribution of household income. One shortcoming of the Waters, Holland, and Weber approach is that the goods and services sectoring scheme used in the CGE model is convenient but conceptually incorrect. These categories are approximations of the theoretically correct distinction of tradable and non-tradable sectors. In this study, we evaluate the potential impact of a 50% property tax reduction proposed in the "One Percent Initiative" on Idaho's economy from a general equilibrium perspective. We introduce a two-sector, tradable-and-non-tradable CGE model for the state of Idaho. We argue that our approach is more conceptually accurate and deductively coherent than the Waters, Holland, and Weber approach in hypothesizing the direction and size of a tax policy shock on a regional economy. The distinction between tradable and non-tradable sectors is important conceptually both to understand a region's economic behavior and to measure the effects of a change in policy correctly. The results provide testable hypotheses on the likely impact from a
TL;DR: In this article, the influence of ownership and efficiency characteristics in firms' decisions regarding whether to spend or not on pollution control and how much to spend and how to spend was investigated.
Abstract: This paper considers a number of hypotheses. Primary among them is the notion that foreign-owned plants spend more on pollution abatement than do domestically owned plants after controlling for productive efficiency and cognizant of the prevailing regulatory regime. The evidence drawn upon in the first econometric assessment of this contention is plant level data from the U.K. metal manufacturing industry. In essence, this study directly estimates the influence of ownership and efficiency characteristics in firms’ decisions regarding whether to spend or not on pollution control and how much to spend.