Showing papers in "Land Economics in 2012"

Do Payments for Environmental Services Affect Forest Cover?: A Farm-Level Evaluation from Costa Rica

Abstract: Payments for environmental services (PES) are popular despite little empirical evidence of their effectiveness. We estimate the impact of PES on forest cover in a region known for exemplary implementation of one of the best-known and longest-lived PES programs. Our evaluation design combines sampling that incorporates prematching, data from remote sensing and household surveys, and empirical methods that include partial identification with weak assumptions, difference-in-differences matching estimators, and tests of sensitivity to unobservable heterogeneity. PES in our study site increased participating farm forest cover by about 11% to 17% of the mean area under PES contract over eight years. (JEL Q57, Q58)

Forest Conservation and Slippage: Evidence from Mexico's National Payments for Ecosystem Services Program

Abstract: We investigate a Mexican federal program that compensates landowners for forest protection. We use matched controls from the program applicant pool to establish counterfactual deforestation rates. Deforestation was reduced by 50% in enrolled parcels, but expected average clearing rates without the program were low (0.8% per year), suggesting modest total avoided deforestation benefits. We test for two types of slippage: increased deforestation on other property belonging to program recipients and increased deforestation within markets where there are high levels of program participation. We find evidence of both, with substitution impacts reducing program effectiveness in common properties by about 4% on average. (JEL O13, Q24)

Values in the Wind: A Hedonic Analysis of Wind Power Facilities

Abstract: The siting of wind facilities is extremely controversial. This paper uses data on 11,331 property transactions over nine years in northern New York State to explore the effects of new wind facilities on property values. We use a fixed-effects framework to control for omitted variables and endogeneity biases. We find that nearby wind facilities significantly reduce property values in two of the three counties studied. These results indicate that existing compensation to local homeowners/communities may not be sufficient to prevent a loss of property values. (JEL Q51, Q53)

Paying for Mitigation: A Multiple Country Study

Abstract: A contingent valuation study conducted in China, Sweden, and the United States was used to investigate citizens' willingness to pay (WTP) for reducing CO2 emissions. We find that a majority of the respondents in all three countries believe that the mean global temperature has increased over the last 100 years and that humans are responsible for the increase. The share of Americans that believes these statements is smaller, and a relatively larger share of Americans also believes that nothing can be done to stop climate change. Sweden has the highest WTP, while China has the lowest. (JEL Q51, Q54)

Enhancing the Content Validity of Stated Preference Valuation: The Structure and Function of Ecological Indicators

Abstract: Stated preference surveys often provide ambiguous descriptions of ecological commodities, yielding welfare estimates that have unclear interpretations and cannot be linked to measurable outcomes. This paper proposes guidelines to promote ecological content validity in survey scenarios and defensible use of ecological information for welfare analysis. These guidelines are illustrated through an application to migratory fish restoration. Content validity is evaluated vis-a-vis norms for communication of ecological changes in the ecological literature. Findings suggest that less structured treatment of ecological commodities may lead to an omission of information that is relevant to respondents and essential for valid welfare estimation.

A Field Experiment of Discrimination in the Norwegian Housing Market: Gender, Class, and Ethnicity

Abstract: We test for gender, class, and ethnic discrimination in the Norwegian rental housing market by using fake application letters. Females, individuals with high job status, and ethnic Norwegians are more likely to receive positive responses. For example, being an Arabic man and working in a warehouse is associated with a 25 percentage point lower probability of receiving a positive response when showing interest in an apartment, as compared to an ethnically Norwegian female economist. We conclude that gender, class, and ethnic discrimination do exist in the Norwegian housing market, and ethnic discrimination seems to be the most prevalent form of discrimination. (JEL R21)

Economic Shocks, Diversification, and Forest Use in Uganda

Abstract: We investigate household outcomes arising from economic shocks in rural Uganda, focusing on patterns of income diversification and forest use, and the role of assets in shaping ex post response to shocks. Income-poor households and those with below-average landholdings are observed to have more diversified income portfolios than their cohorts. Households encountering above-average losses tend to have more diversified income portfolios subsequent to the losses. Larger negative shocks are associated with greater use of the forest in subsequent periods, especially among asset-poor households. Findings suggest that development of better safety nets would reduce both vulnerability and forest pressure.

Hedonic Valuation of Farmland Using Sale Prices versus Appraised Values

Abstract: Farmland provides agricultural products and natural amenities, as well as residential sites. The emergence of exurbanization appears to be changing the demand for natural amenities and their role in determining land values. To better understand how appraised value and sale price capture the determinants of farmland value in a region facing exurbanization, this study applies the hedonic method to land transaction data in southwestern Michigan during 2003-2007. Results suggest that appraised values are a poor substitute for sale prices if the research goal is to understand dynamically evolving determinants of land value in exurbanizing regions, especially the value of natural amenities.

Transaction Costs and Institutional Performance in Market-Based Environmental Water Allocation

Abstract: Policy reforms in the Columbia Basin spurred water rights reallocation for ecological recovery. Transaction costs have caused implementation to lag. This paper examines transaction costs and institutional performance in environmental water allocation. It evaluates spatial and temporal performance trends in watershed cases along three dimensions of adaptive efficiency: water recovery, transaction costs, and program budgets. Performance trends demonstrate intrastate variability and volatility over time due to the importance of local institutional capacity, which is uneven within states. Higher levels of water recovery may coincide with moderate to high transaction costs and program budgets, particularly during initial implementation efforts. This finding reflects investments in multilevel policy reform to strengthen enabling conditions and adapt to unintended consequences. (JEL Q25, Q58)

Prices, Land Tenure Institutions, and Geography: A Matching Analysis of Farmland Abandonment in Post-Socialist Eastern Europe

Abstract: This paper uses remote sensing data from 1989 to 2000 to examine the impacts of price liberalization, land tenure, and biophysical characteristics on farmland abandonment in the border region of Poland, Slovakia, and Ukraine. Using regression analysis and matching estimators, we find that differences in biophysical characteristics, rather than in tenure systems, best explain the variation in abandonment rates within Poland. The difference in abandonment rates between Poland and Slovakia partially results from differences in land reform strategy, and abandonment in Ukraine takes a unique trajectory because of the incompleteness of the land reform and the lack of outside opportunities for residents. (JEL Q15, R14)

Accounting for Heterogeneity of Public Lands in Hedonic Property Models

Abstract: Open space lands, national forests in particular, are usually treated as homogeneous entities in hedonic price studies. Failure to account for the heterogeneous nature of public open spaces may result in inappropriate inferences about the benefits of proximate location to such lands. In this study the hedonic price method is used to estimate the marginal values for proximity to the Pike National Forest. The results indicate that specifying the forest as homogeneous overstates the benefits for homes within two miles relative to specifying the forest based on land use characteristics, because the significant negative effect from noise-intensive activities is omitted. (JEL H41, Q51)

Living Conditions, Rents, and Their Determinants in the Slums of Nairobi and Dakar

Abstract: Using data from 3,715 slum households in Nairobi and Dakar, we find living conditions for tenants are worse than for owners, although tenants pay significant rents. Compared to Nairobi, both nominal rents and living conditions are higher in Dakar. Despite differences in respective slum rental markets, determinants of rent in both cities are strikingly similar. Analysis suggests that tenure mix—proportion of tenants to owners—affects what is available for rent and overall living conditions. Ensuring a certain proportion of housing is owner occupied may be instrumental for delivering greater choice for tenants and better living conditions for all slum residents. (JEL R21)

Productivity, Net Returns, and Efficiency: Land and Market Reform in Vietnamese Rice Production

Abstract: Extensive land and market reform in Vietnam has resulted in dramatic increases in rice output over the past thirty years. The land and market reforms in agriculture were pervasive, moving the system of rice production from commune-based public ownership and control to one with effective private property rights over land and farm assets, competitive domestic markets and individual decision making over a wide range of agricultural activities. The effect of this reform period and beyond is detailed with measures of total factor productivity (TFP), terms of trade and net returns in rice production in Vietnam from 1985 to 2006. Results show that TFP rises considerably in the major rice growing areas (the Mekong and Red River Delta areas) during the early years of reform, and beyond, but also that there is clear evidence of a productivity 'slow-down' since 2000. The differences over time and by region speak directly to existing land use regulations and practices, suggesting calls for further land and market reform. To illustrate this, additional frontier and efficiency model estimates detail the effects of remaining institutional and policy constraints, including existing restrictions on land consolidation and conversion and poorly developed markets for land and capital. Estimates show that larger and less land-fragmented farms, farms in the major rice growing areas, and those farms that are better irrigated, have a greater proportion of capital per unit of cultivated land, a clear property right or land use certificate and access to agricultural extension services are more efficient.

Insecure Land Rights and Share Tenancy: Evidence from Madagascar

Abstract: Most studies of tenurial insecurity focus on its effects on investment. This paper studies the hitherto unexplored relationship between tenurial insecurity and land tenancy contracts. Based on distinct features of formal law and customary rights in Madagascar, this paper augments the canonical model of sharecropping by making the strength of the landlord's property right increasing in the amount of risk she bears within the contract. Using data on landlords' subjective perceptions in rural Madagascar, empirical tests support the hypothesis that insecure property rights drive contract choice but offer little support in favor of the canonical risk sharing hypothesis.

On the Productive Value of Crop Biodiversity: Evidence from the Highlands of Ethiopia

Abstract: This paper investigates the productive value of crop biodiversity, with an application to a farming system in the Tigray region in the highlands of Ethiopia. We examine a general measure of the productive value of crop biodiversity and its components. Using Ethiopian farm-level data, agroecosystem productivity is investigated empirically. The analysis gives estimates of the value of diversity and its components. The value of crop biodiversity is estimated to be positive. The complementarity component is found to be large and statistically significant:it is the main source of crop biodiversity value in this agroecosystem of Ethiopia. However, the convexity component is negative, indicating that nonconvexity contributes to reducing the value of crop biodiversity.

A Cross-Country Study of Household Waste Prevention and Recycling: Assessing the Effectiveness of Policy Instruments

Abstract: With worldwide concern for how and where to dispose of household waste, policy makers are increasingly looking for tools to efficiently and effectively reduce the amount of waste households produce. Using a comprehensive household-level data set involving 10,251 respondents from a cross-section of 10 countries (Australia, Canada, Czech Republic, France, Italy, Korea, Mexico, Netherlands, Norway, and Sweden), we examine waste policy, recycling behavior, and waste prevention. Unlike previous work, we empirically make comparisons across countries, incorporate attitudinal characteristics and a wide range of policy instruments, and allow for interdependence of decisions about recycling different materials. (JEL H23, Q58)

Reassessment of the Impact of the EPA's Voluntary 33/50 Program on Toxic Releases

Abstract: This paper reevaluates the effectiveness of the EPA's voluntary 33/50 program in reducing the releases of 17 high-priority toxic chemicals for the 1988-1995 period. Contrary to previous studies that use program participation information at the firm level and find mixed evidence on the effectiveness of the program, our analysis uses participation status at the facility level and shows the importance of undertaking analysis at a disaggregated scale. We find the rate of reduction in releases was significantly higher for program participants than nonparticipants, but the effect is attenuated when estimated using firm-level participation data. (JEL Q51, Q52)

Collective Action for Local Commons Management in Rural Yunnan, China: Empirical Evidence and Hypotheses Using Evolutionary Game Theory

Abstract: This paper presents hypotheses regarding collective actions for irrigation management, with the help of evolutionary game theory. Data for the analysis were collected by the author from the irrigation system of rural Yunnan, China. An econometric analysis reveals that collective action will be forthcoming in rural communities where few nonfarm job opportunities are provided, the degree of income disparity is quite small, and resource restrictions are moderately problematic. The finding that communities without local government intervention outperform those with intervention supports the proverbial view that external agencies should delegate significant parts of the control rights of common pool resources to immediate stakeholders.

Wildfire Risk Management in a Landscape with Fragmented Ownership and Spatial Interactions

Abstract: This article examines how the spatial configuration of forest ownership influences risk-mitigating behavior of public and private forestland owners over time. We use a game theoretic framework to examine how the public landowner’s investment in fuel management influences, and is influenced by, decisions made by private forestland owners. We find that spatial configuration and location affect the timing and amount of fuel treatment on the landscape. There is less investment in fuel management on landscapes characterized by fragmented ownerships. We also find that the type of strategic interaction between landowners depends critically on the shape of the wildfire damage function. (JEL Q23, Q24)

Examining for Evidence of the Leapfrog Effect in the Context of Strict Agricultural Zoning

Abstract: While strict agricultural zoning policies, or greenbelts, are implemented to reduce urban sprawl, such policies may result in the leapfrog effect, which could cause sprawl to extend further. This paper outlines a theoretical explanation for the occurrence of the leapfrog effect due to developent restrictions imposed by agricultural zoning. This theory is then applied empirically to a setting where agricultural zoning has been implemented: Ontario’s Greenbelt. The results provide evidence that the leapfrog effect has occurred around the Greenbelt, as farmland values just beyond the outer boundary have increased. Extensive sensitivity analysis supports this result. (JEL Q15, R52)

Climate Policy Design with Correlated Uncertainties in Offset Supply and Abatement Cost

Abstract: Emission offsets within cap-and-trade systems are widely believed to contain system costs and stabilize allowance prices. However, trends in offsets supply are uncertain, may be persistent, and may be correlated with other sources of uncertainty. In a dynamic stochastic model we find total costs increase, as does variability in allowance prices and emissions, as uncertainty in offsets becomes more persistent and, to a lesser extent, becomes negatively correlated with uncertainty in abatement costs. These results are amplified with risk sensitivity, larger annual offset limits, and competitive offset purchasing. Imposing an allowance price collar can mitigate cost increases and price variability. (JEL Q54, Q58)

Spatial Fragmentation and the Value of Residential Housing

Abstract: This study examines the impacts of spatial fragmentation and land use diversity on single-family residential real estate values. Through hedonic price analysis, we estimate the implicit price effects of spatial fragmentation and neighborhood land use diversity in the city of Milwaukee, Wisconsin. Spatial econometric estimates suggest that house prices are negatively impacted by spatial fragmentation at low levels of fragmentation, yet there is a positive price relationship at high levels of fragmentation. The results also suggest that house prices do not share a statistically significant relationship with land use diversity.

Land Cover Change in Agroforestry: Shade Coffee in El Salvador

Abstract: Little is known about land cover change in agroforestry systems, which often supply valuable ecological services. We use a spatial regression model to analyze clearing in El Salvador's shade coffee-growing regions during the 1990s. Our findings buttress previous research suggesting the relationship between proximity to markets and clearing in agroforestry systems is the opposite of that in natural forests. But this result, and several others, depends critically on the characteristics of the growing area, particularly the dominant cleared land use. These findings imply that policies aimed at retaining agroforestry need to be carefully targeted and tailored.

Estimating Consumer Willingness to Supply and Willingness to Pay for Curbside Recycling

Abstract: We estimate the willingness to pay for curbside recycling based on a contingent valuation survey of 600 residents of a large southeastern United States city. The best estimate of willingness to pay for curbside recycling is $2.29/month after adjustment for hypothetical bias. We also report the results of a field experiment designed to test the effectiveness of explicit monetary incentives and communication appeals to influence the decision to recycle and the quantity of materials to recycle. While households respond to the monetary cost of recycling, the effects of the token, ex ante incentives and appeals appear to be small. (JEL D61, Q21)

Investment Drivers in a Fishery with Tradable Quotas

Abstract: I analyze drivers of investment in a fishery with tradable quotas. Theory predicts that tradable quotas increase efficiency because efficient firms buy quotas from less efficient firms. I identify what drives investment, using data on Norwegian purse seiners. Results show that while the basic economic investment model explains investment within firms, it does not explain differences between firms. These differences are explained by other firm-specific factors such as geographical location, whether it is a family firm, and prices paid for quotas. Consequently, investment strategies are not necessarily driven by efficiency considerations, and quota trade may not increase allocative efficiency. (JEL Q22, Q28)

Life-Cycle and Cohort Effects in the Valuation of Air Quality: Evidence from Subjective Well-being Data

Abstract: By using data on self-rated life satisfaction as an empirical indicator of well-being, this paper estimates the valuation of two major air pollutants differentiated by people's age category (stage in the life cycle) and birth cohort. Life satisfaction regressions involving about 59,000 individuals in 10 European countries, 1990-1997, imply that, consistent with epidemiological evidence, both life-cycle and cohort effects exist in the valuation of air quality. The age and cohort dependence of the sensitivity to air pollution translates into considerable differences in the valuation of clean air. (JEL Q51 Q53)

How does India's rural roads program affect the grassroots ? findings from a survey in Orissa

Abstract: This paper analyzes the effects of all-weather rural roads on households' net output prices, education and health in a poor, drought-prone region of India. Of 30 villages originally surveyed in 2001-02, when two had such roads, a further nine received them between January 2007 and December 2009 under the program Pradhan Mantri Gram Sadak Yojana. Cross-section comparisons involving all villages and 'before and after' comparisons in the nine yielded these findings: (i) net output prices were 5 per cent or more higher; (ii) substantially fewer days of schooling were lost due to bad weather, largely because teachers had fewer absences; (iii) the acutely sick received more timely treatment and were more likely to be treated in a hospital than in the nearest primary health clinic; and (iv) the respondents ranked the resulting benefits in the domains of health and education at least as highly as the 'commercial' ones.

Evaluating Conservation Auctions with Unknown Bidder Costs: The Scottish Fishing Vessel Decommissioning Program

Abstract: As an alternative to the more traditional fixed-price schemes, governments can run auctions to purchase environmental services from private agents. Governments have so far chosen the discriminatory price (DP) over the uniform price (UP) format. Theoretical and experimental studies have concluded that the DP usually performs better than the UP in terms of cost-effectiveness. Using field data from two fishing vessel decommissioning auctions in Scotland, we find ambiguous results regarding relative DP and UP performances. A novel approach for estimating the underlying bidder costs shows that bid shading and cost heterogeneity can each determine relative auction performance. (JEL Q22, Q28)

Environmental Externalities and Residential Property Values: Externalized Costs along the House Price Distribution

Abstract: This study examines the impacts of animal agricultural facilities on the value of residential housing. Through a quantile regression framework we are able to show that the estimated price impacts are not uniform across the distribution of housing prices, and a statistically significant relationship exists only for houses at or above median price levels. These estimated price impacts also increase as the percentile increases. For comparison, the model also includes the proximity to three other waste facility types: industrial, solid, and septic. Our dataset features 14,785 single-family residential transactions in Tippecanoe County, Indiana, over the period 1993-2006. (JEL Q51)

Interjurisdictional Determinants of Property Assessment Regressivity

Abstract: The previous literature on vertical equity in property assessment has focused on parcel-level data within a single area and has produced mixed conclusions on whether the process is progressive or regressive. This paper advances the discussion to identifying what differences between jurisdictions might account for the mix of findings. Using data from Virginia cities and counties between 2001 and 2007, evidence is presented that indicates having tax maps available online, appointed assessors, and senior citizens all influence the level of regressivity observed between jurisdictions. Overall, the results support the hypothesis that interjurisdictional differences are determinants of vertical inequity.