Showing papers in "Land Economics in 2010"
TL;DR: This paper examined whether a severe flood causes homeowners to update their assessment of flood risk as seen in a change in the price of floodplain property and found that after the 1993 flood on the Missouri and Mississippi rivers, property prices in 100-year floodplains did not change significantly, but prices in 500-year floodingplains declined by between 2% and 5%.
Abstract: This paper examines whether a severe flood causes homeowners to update their assessment of flood risk as seen in a change in the price of floodplain property. I use data on all single-family, residential property sales in St. Louis County, Missouri, between 1979 and 2006 in a repeat-sales model and a property fixed-effects model. After the 1993 flood on the Missouri and Mississippi rivers, property prices in 100-year floodplains did not change significantly, but prices in 500-year floodplains declined by between 2% and 5%. All property prices in municipalities located on the rivers fell postflood by 6% to 10%.
211 citations
TL;DR: In this paper, the main objective is to assess preference heterogeneity related to the spatial distribution of water quality improvements throughout a river basin, in a choice experiment, the river basin's hydrogeographical units and the levels of Water quality improvement are included as attributes in the experimental design.
Abstract: The main objective is to assess preference heterogeneity related to the spatial distribution of water quality improvements throughout a river basin. In a choice experiment, the river basin's hydrogeographical units and the levels of water quality improvement are included as attributes in the experimental design. Changes in water quality throughout the river basin are visualized with maps and modeled simultaneously in relation to where respondents live, in a random utility model. Not accounting for spatial preference heterogeneity results, in this case study, in an underestimation of welfare when aggregating willingness-to-pay values from subbasins to the river basin as a whole.
171 citations
TL;DR: In this paper, the authors investigated how increasing the information about applicants affects discrimination in the rental housing market and found that increasing the amount of information about the applicants will not reduce discrimination.
Abstract: We investigate how increasing the information about applicants affects discrimination in the rental housing market. We let four fictitious applicants, two with typical Arab/Muslim names and two with typical Swedish names, use application letters containing different amounts of information to apply for apartments over the Internet in Sweden. The Arab/Muslim applicants received fewer responses from the landlords than did the Swedish applicants. All of the applicants gained by providing more information about themselves, but the amount of discrimination against the Arab/Muslim applicants remained unchanged, indicating that increasing the amount of information about the applicants will not reduce discrimination.
141 citations
TL;DR: The authors developed protocols to measure respondent certainty in the context of a choice experiment, and to calibrate hypothetical choices using these certainty measures, which successfully mitigated hypothetical bias in this application, while both the measurement of respondent certainty and the use of certainty measures to calibration responses are complicated by the multiple-choice nature of choice experiments.
Abstract: In a choice experiment study, willingness to pay for a public good estimated from hypothetical choices was three times as large as willingness to pay estimated from choices requiring actual payment. This hypothetical bias was related to the stated level of certainty of respondents. We develop protocols to measure respondent certainty in the context of a choice experiment, and to calibrate hypothetical choices using these certainty measures. While both the measurement of respondent certainty and the use of certainty measures to calibrate responses are complicated by the multiple-choice nature of choice experiments, calibration successfully mitigated hypothetical bias in this application.
137 citations
TL;DR: In this article, the authors investigated the effect of attribute nonattendance on the performance of the multinomial logit (MNL) model of discrete choice and showed that accounting for choice task nonattentance significantly improves model fit and yields estimates of marginal willingness to pay with a more plausible pattern of signs and greater efficiency.
Abstract: Land management in Alpine parks provides multifunctional services to separate groups of users. Choice experiments can be used to derive estimates of value for different management attri- butes. However, little research has been conducted on how frequently respondents ignore attributes used to describe policy management scenarios. We fill this gap using an approach that identifies and compares both serial and choice task attribute nonattendance addressing five different visitor types. Our results indicate that accounting for choice task nonatten- dance significantly improves model fit and yield estimates of marginal willingness to pay with a more plausible pattern of signs and greater efficiency. (JEL Q24, Q51) I. INTRODUCTION The effects of park management policies on outdoor recreation are increasingly coming under public scrutiny. Alpine park- land is among the most valuable land in terms of outdoor recreation. Park manage- ment decisions are often controversial be- cause of differences between objectives pursued by conservationists and the tourist industry. Parkland management agencies find it increasingly difficult to fund all the services needed to facilitate the ever-broad- ening variety of outdoor recreation activi- ties. This is further exacerbated by the increasing expectations for high-quality recreational experiences by a population of recreationists with a heightened sensitivity to environmental and conservation issues. Such a situation widens the scope for multiattribute nonmarket valuation meth- ods, especially for those methods capable of capturing and modeling the preferences of heterogeneous visitors who seek to pursue a variety of activities in the land under study. Our research reports the results of a study designed to address attribute nonattendance (henceforth abbreviated as AN-A), which, despite being quite a common decision heuristic, has only recently begun to be explored by analysts. With this decision heuristic, respondents ignore some of the described attributes in their evaluation of alternatives within a given choice task. They hence act as if a zero weight were assigned to the ignored attributes in the utility of the respective alternatives. We study this issue by using a well-known statistical model of discrete choice: the multinomial logit (MNL) model. This random utility model is often used for the purpose of multi- attribute nonmarket valuation, but the effects of accounting for AN-A are still rela- tively unexplored. Information on AN-A is commonly collected by questioning each respondent at the end of the sequence of choice tasks. Respondents are asked to list those attributes that they feel they have
130 citations
TL;DR: The authors used a 2003 household survey to examine implementation and impacts of China's sloping land conversion program and found evidence of positive impact on cropping, husbandry, and total income, though the results were not robust enough to support government claims of huge gains.
Abstract: This paper uses a 2003 household survey to examine implementation and impacts of China's Sloping Land Conversion Program. We find that land targeting has been strongly influenced by program goals, but that mistargeting also occurred. Using a treatment effects approach to evaluate program impact, we find evidence of positive impact on cropping, husbandry, and total income, though the results are not robust enough to support government claims of huge gains. We also find evidence that lack of participant choice could be dampening program impacts, and that allowing households autonomy could lead to improvement in program cost-effectiveness and outcomes.
128 citations
TL;DR: In this paper, a survey on households' glass recycling indicates that perceived responsibility is a major determinant for reported recycling, that responsibility ascription is influenced by beliefs about others' behavior, and that people are, indeed, reluctant to accept responsibility based on uncertain information.
Abstract: Duty-orientation implies a warm glow of giving as well as a cold shiver of not giving enough. If duty-oriented consumers learn their moral responsibility by observing others' behavior, social interaction in contribution behavior arises. However, since moral responsibility is a burden, duty-oriented consumers may be less willing to accept responsibility if their information about others' behavior is uncertain. Data from a survey on households' glass recycling indicates that perceived responsibility is a major determinant for reported recycling, that responsibility ascription is influenced by beliefs about others' behavior, and that people are, indeed, reluctant to accept responsibility based on uncertain information.
102 citations
TL;DR: In this paper, the authors quantify the emergence of biofuel markets and its impact on world agriculture using the multimarket, multicommodity international FAPRI model and compute shock multipliers for land allocation decisions for important crops and countries.
Abstract: We quantify the emergence of biofuel markets and its impact on world agriculture using the multimarket, multicommodity international FAPRI model. The model incorporates trade-offs between biofuel, feed, and food production and consumption and international feedback effects of the emergence through world prices and trade. We shock the model with exogenous changes in ethanol demand, first in the United States, then in Brazil and other countries, and compute shock multipliers for land allocation decisions for important crops and countries. The Brazilian ethanol expansion using sugarcane has fewer consequences on existing arable land allocation than the U. S. ethanol expansion does using corn feedstock.
85 citations
TL;DR: In this paper, the authors argue that the decades old fear that privatization of fishery resources could lead to resource extinction is not baseless and that there are definite limits to socially desirable privatization.
Abstract: A debate is emerging over the extent to which privatization of fishery resources is socially desirable. The "pessimists" argue that there are strict limits to socially optimal privatization of such resources. The "optimists" maintain that there are no effective limits to privatization and that the decades old fear that privatization could, in some cases, lead to resource extinction are of theoretical interest only. We argue here that these fears are, regrettably, not baseless and that there are definite limits to socially desirable privatization. We discuss means by which such limits could be identified on a fishery-by-fishery basis.
76 citations
TL;DR: In this article, the benefits of large patches of tree canopy are estimated by applying a hedonic price model to the sale of single-family residential properties in Portland, Oregon.
Abstract: The benefits of large patches of tree canopy are estimated by applying a hedonic price model to the sale of single-family residential properties in Portland, Oregon. The first-stage analysis provides evidence of diminishing returns from increasing tree canopy past a certain level. The second-stage analysis uses a survey of property owners' preferences and socioeconomic characteristics to overcome the problem of endogeneity. Average benefit estimates for the mean canopy cover within ¼ mile of properties in the study area, using the second-stage model, are between 0.75% and 2.52% of the mean sale price.
73 citations
TL;DR: In this paper, the authors exploit a unique dataset to study the deterrent effect of criminal enforcement and find that standing trial provides one of the most significant deterrents, rather than the probability of conviction or the magnitude of fines.
Abstract: U.S. and E. U. environmental policy employ criminal sanctions to enforce compliance. Recent moves toward revising their use are based on little empirical evidence as to their effectiveness. This paper exploits a unique dataset to study the deterrent effect of criminal enforcement. The dynamic panel data analysis leads to three findings. First, criminal sanctions do provide the intended deterrent effects. Second, standing trial provides one of the most significant deterrents, rather than the probability of conviction or the magnitude of fines. Third, public preferences regarding environmental quality and political economy variables affect reported environmental crime.
TL;DR: In this article, a stochastic dynamic profit maximization model was used to investigate the effects of forest carbon sequestration credits on optimal forest management practices for stands facing wildfire risk, and the results indicated that thinning and shortening rotations are cost-effective strategies to mitigate wildfire risk.
Abstract: We use a stochastic dynamic profit maximization model to investigate the effects of forest carbon sequestration credits on optimal forest management practices for stands facing wildfire risk. Landowners that periodically thin a stand can increase growth rates and mitigate loss of timber and carbon stocks from wildfire. Results indicate that thinning and shortening rotations are cost-effective strategies to mitigate wildfire risk. Carbon prices cause landowners to delay both their thinning treatments and the final rotation age. Thinning and extending timber rotations are thus a viable climate-change mitigation option even when stands are susceptible to risks of fire.
TL;DR: In this paper, the effects of the conservation reserve program (CRP) on land values were evaluated. And the results indicated that CRP participation had the largest effects in the Mountain, Southern Plains, and Northern Plains regions, where it increased average farmland values by 5% to 14, 4% to 6, and 2% to 5%, respectively.
Abstract: This paper evaluates the effects of the Conservation Reserve Program (CRP) on land values. A theoretical model is presented to analyze the interaction between farmers' CRP participation decisions and land values. Empirical models are estimated to evaluate the effects of the CRP on land values. Results suggest that CRP participation had the largest effects in the Mountain, Southern Plains, and Northern Plains regions, where it increased average farmland values by 5% to 14%, 4% to 6%, and 2% to 5%, respectively. The CRP also had a statistically significant effect on developed land values, but the percentage increases were smaller. Implications of the results for the design of conservation programs are discussed.
TL;DR: In this article, the authors employ panel data analysis to examine the effect of water regulation, as measured by permitted wastewater discharge limits, on the profitability of publicly held firms operating within the chemical manufacturing industries.
Abstract: Previous theoretical research provides opposing arguments regarding the effect of environmental regulation on profitability. This study provides empirical evidence on this debated effect by testing the "strong" version of the Porter hypothesis. We employ panel data analysis to examine the effect of water regulation, as measured by permitted wastewater discharge limits, on the profitability of publicly held firms operating within the chemical manufacturing industries. We find that tighter water regulation meaningfully lowers profitability. By reinterpreting profitability in terms of sales and costs, the results demonstrate that tighter water regulation increases costs conditioned on a given level of sales.
TL;DR: In this paper, a variety of approaches to examine the success of a voluntary conservation program for a common property resource were used to investigate the distribution of outcome treatment effects, and a difference-in-differences structure was incorporated into a behavioral model of fishing location choice.
Abstract: We utilize a variety of approaches to examine the success of a voluntary conservation program for a common property resource. The availability of panel data and a nonparticipatory group lets us use quasi-experimental methods to investigate the distribution of outcome treatment effects. We supplement these methods by incorporating a difference-in-differences structure into a behavioral model of fishing location choice to disentangle the program's incentive effects from potentially misleading temporal variations in behavioral constraints. Our findings yield insight into the factors that support cooperation and illustrate the power of the complementary use of structural and reduced form models in program evaluation.
TL;DR: In this paper, the existence of a mineral resource curse for developing countries with weak institutions, consistent with the hypothesis that owners of mineral resources use weak institutions and openness to trade to stifle the development of human capital, to the detriment of growth in other sectors of the economy.
Abstract: Competing explanations of the resource curse are tested using panel data. The data support the existence of a mineral resource curse for developing countries with weak institutions, consistent with the hypothesis that owners of mineral resources use weak institutions and openness to trade to stifle the development of human capital, to the detriment of growth in other sectors of the economy. Manufacturing imports substitute for the development of domestic production, so openness to trade correlates with lower growth in mineral dependent economies. The "Dutch disease" and debt overhang explanations of the resource curse are not supported.
TL;DR: This paper found that as respondents progress through a sequence of binary choices, they become more consistent, apparently fine-tuning their preferences, indicated by the variance of the estimated valuation distribution measured by the error term in the random utility model.
Abstract: Results from paired comparison experiments suggest that as respondents progress through a sequence of binary choices they become more consistent, apparently fine-tuning their preferences. Consistency may be indicated by the variance of the estimated valuation distribution measured by the error term in the random utility model. A significant reduction in the variance is shown to be consistent with a model of preference uncertainty allowing for preference learning. Respondents become more adept at discriminating among items as they gain experience considering and comparing them, suggesting that methods allowing for such experience may obtain more well founded values.
TL;DR: In this paper, the authors examined attitudes toward adoption of anaerobic digestion technology on dairy farms and found that private and social costs, social motives, capacity, innovation receptivity, and opportunity costs were highly related to the decision to seriously consider adoption.
Abstract: Anaerobic digestion technology addresses environmental issues of waste disposal and greenhouse gas emission reduction. This paper examines attitudes toward adoption of this conservation technology on dairy farms. To specify an appropriate dependent variable without a large number of adopters, an ordered probit model is constructed. The empirical analysis uses data from a 2006 survey of Pacific Northwest dairy farms. Aggregate variables are constructed based on behavioral economics and conservation adoption literature. Variables include private and social costs, social motives, capacity, innovation receptivity, and opportunity costs, most of which are found to be highly related to the decision to seriously consider adoption.
TL;DR: In this paper, the authors compared the effect of two programs promoting soil conservation in Peru on the adoption decision of households, and found that each program attracts different types of households and achieves different outcomes in terms of soil conservation.
Abstract: Many efforts are made to promote soil conservation in developing countries. This paper compares the effect of two programs promoting soil conservation in Peru on the adoption decision of households. One program applies a top-down approach with soil conservation as its core activity. The other program applies a participatory approach, offering a portfolio of activities in order to improve rural livelihoods. The decisions on participation and adoption are estimated with a trivariate probit model. The results show that each program attracts different types of households and achieves different outcomes in terms of soil conservation.
TL;DR: The authors used a simple choice experiment to elicit individual preferences over equity-efficiency trade-offs in the context of two environmental problems, local air pollution and global climate change, and found that equity matters to people as much as efficiency does in the design and delivery of environmental policy.
Abstract: The design of environmental policy raises several equity issues, in particular the distribution of benefits and costs. At the same time, it has often been argued that there is a trade-off in environmental policy between equity and efficiency, which brings these issues firmly to the attention of environmental economics. In this paper we use a simple choice experiment to elicit individual preferences over equity-efficiency trade-offs in the context of two environmental problems, local air pollution and global climate change. We find that equity matters to people as much as efficiency does in the design and delivery of environmental policy.
TL;DR: In this article, the authors analyzed the effect of technological change on labor and total factor productivity in the Lofoten fishery, using detailed data for 130 years, and found that the total factors productivity has risen faster than labor factors in the fishery.
Abstract: We analyze the effect of technological change on labor and total factor productivity in the Lofoten fishery, using detailed data for 130 years. Our findings support the important role of natural resources in productivity and improvements in welfare in natural resource-based industries. The total factor productivity has risen faster than labor productivity in the fishery, indicating that the considerable technological progress in this industry has to some extent been neutralized by the decline in the fish stock. Open access to the fish resource most probably led to this situation.
TL;DR: The authors found that the Japanese financial market does not value risk associated with toxic chemical releases, and that even without market valuation, firms increase investment to reduce pollution even when companies are exposed to toxic chemical release.
Abstract: The environmental performance of a listed firm could affect its level of investment in pollution prevention and its access to financial markets. Previous studies using Tobin's q that explore market response to environmental performance do not distinguish between the impact of performance on investment and market response, which may mislead conclusions. To overcome this problem, we simultaneously estimate the functions of the intangible asset, the replacement cost, and the toxic chemical risk. We find that the Japanese financial market does not value risk associated with toxic chemical releases. Nevertheless, even without market valuation, firms increase investment to reduce pollution. © 2010 by the Board of Regents of the University of Wisconsin System.
TL;DR: In this article, a method for incorporating unobserved heterogeneity into aggregate count data frameworks is presented and used to control for endogenous spatial sorting in zonal recreation models, based on latent class analysis.
Abstract: A method for incorporating unobserved heterogeneity into aggregate count data frameworks is presented and used to control for endogenous spatial sorting in zonal recreation models. The method is based on latent class analysis, which has become a popular tool for analyzing heterogeneous preferences with individual data but has not yet been applied to aggregate count data. The method is tested using data on backcountry hikers for a southern California study site and performs well for relatively small numbers of classes. The latent class model produces substantially smaller welfare estimates compared to a constrained version that assumes homogeneity throughout the population.
TL;DR: In this paper, the U.S. Federal Energy Regulatory Commission (FERC) must balance environmental protection of riverine resources with the nation's growing demand for power production every time it issues a hydroelectric license.
Abstract: The U.S. Federal Energy Regulatory Commission (FERC) must balance environmental protection of riverine resources with the nation's growing demand for power production every time it issues a hydroelectric license. This paper models the bureaucratic agency's decision-making process in issuing these licenses. Data on nearly 500 hydro-power licenses issued from 1983 to 2005 are utilized. It is discovered that legislative and institutional constraints are, by far, the largest influences on FERC's regulatory decisions, implying that if the current allocation of surface water in the United States is considered inefficient, the most effective way to alter this allocation is by passing new legislation, or by implementing institutional reform at FERC.
TL;DR: In this paper, the authors established the discount that mineral developers place on oil and gas leases with divided ownership, and analyzed the impact of multiple ownerships and additional leasing stipulations.
Abstract: Taking advantage of randomly assigned federal mineral rights, this paper establishes the discount that mineral developers place on oil and gas leases with divided ownership. Results of 53 bimonthly federal oil and gas lease auctions in Wyoming between February 1998 and October 2006 are examined. Bidders discount split estate by 11% to 14% on average, but by as much as 24% for more expensive leases. Impacts of multiple ownerships and additional leasing stipulations are also explored. This discount is interpreted as an expectation of transaction costs incurred in obtaining surface access, so total costs remain unaffected on average.
TL;DR: Pollution abatement costs are estimated based on a series of data from the Norwegian salmon aquaculture industry, and results indicate that pollution abatements costs vary among observations and models.
Abstract: Salmon aquaculture generates good output (i.e., salmon) and bad output (e.g., pollution). A joint production function approach is applied to model both outputs simultaneously. Two environmental production technologies are specified, namely, regulated and unregulated technologies. Two production functions with different mapping rules are applied. Pollution abatement costs are estimated based on a series of data from the Norwegian salmon aquaculture industry. Results indicate that pollution abatement costs vary among observations and models. On average, pollution abatement cost is estimated to be about 3.5% in terms of total farmed salmon production, and 6.5% in terms of total revenue of farmed salmon.
TL;DR: In this article, the use of a "combinatorial optimization" technique in the aggregation of environmental benefit values is used to statistically match population census data to a contingent valuation survey to produce regional and national total willingness-to-pay figures.
Abstract: This paper considers the use of a "combinatorial optimization" technique in the aggregation of environmental benefit values. Combinatorial optimization is used to statistically match population census data to a contingent valuation survey. The matched survey and census information is then used to produce regional and national total willingness-to-pay figures. These figures are then compared to figures derived using more standard approaches to calculating aggregate environment benefit values. The choice of aggregation approach is shown to have a major impact upon estimates of total benefits at a regional level, especially when the target population displays considerable heterogeneity across space.
TL;DR: In this paper, the influence of buyer and personal relationship characteristics on agricultural land prices has received little attention in the literature and the results indicate that buyer characteristics and personal relationships exert nonuniform effects on the implicit prices of land characteristics.
Abstract: The influence of buyer and personal relationship characteristics on agricultural land prices has received little attention in the literature. Recently, Perry and Robison (2001) used a restricted nonlinear specification to model the influence of personal relationships on the implicit prices of land characteristics. In this paper a more flexible alternative model is proposed. An approach to general model specification and model selection is presented. The results indicate that buyer characteristics and personal relationships exert nonuniform effects on the implicit prices of land characteristics. Our results support the hypothesis that social capital affects the terms of trade in the land market.
TL;DR: The authors showed that "outsider" households have relatively small land holdings and less complete rights over land than locals, and demonstrated a link between property rights and investment incentives by looking at the decision to leave land fallow.
Abstract: This study uses data from Cote d'Ivoire to show that "outsider" households have relatively small land holdings and less complete rights over land than locals. It then demonstrates a link between property rights and investment incentives by looking at the decision to leave land fallow. "Outsiders" fallow a smaller proportion of their land, indicating that their farms are left uncultivated for shorter periods. This is only partly explained by their incomplete property rights and relative land-poverty. These differences in investment patterns lead to lower yields per hectare. (JEL O12, Q15)
TL;DR: The authors examined the effect of referenda for preservation and affordable housing on home prices in two Massachusetts towns. And they found that preservation has a positive effect on property values. But they did not examine the effect on the quality of the neighborhoods.
Abstract: This paper examines a Massachusetts policy that encourages communities to raise money through referenda for preservation and affordable housing. I use difference-indifferences, fixed effects, and quantile regression to compare home prices before and after such referenda in two towns. I include covariates representing existing land uses, zoning, and historic resources to estimate the value of these amenities. Standard regression techniques indicate weak effects of the referenda, while the estimated coefficients on land use and historic preservation confirm that preservation has a positive effect on property values. The quantile regression sheds light on some heterogeneity that goes unnoticed in standard regression results.