Showing papers in "Land Economics in 2014"
TL;DR: In this paper, the authors identify the factors that affect farmers' decisions to adopt soil and water conservation technology in Africa and how this technology impacts farm yields and net returns, and show that adoption of this technology increases rice yields and nets significantly.
Abstract: This paper identifies the factors that affect farmers’ decisions to adopt soil and water conservation technology in Africa and how this technology impacts farm yields and net returns. This technology is important because it improves efficiency of water use from rainfall—a critical issue in water-deficient Sub-Saharan Africa. An analysis of new data from a survey of 342 rice farmers in northern Ghana shows that farmers’ education, capital and labor constraints, social networks and extension contacts, and farm soil conditions mainly determine adoption of field ridging, and the adoption of this technology increases rice yields and net returns significantly. ( JEL Q15, Q24 )
378 citations
150 citations
TL;DR: In this paper, the authors examined potential causes of the inverse productivity relationship in Rwanda, where policy makers consider land fragmentation and small farm sizes to be key bottlenecks for the growth of the agricultural sector.
Abstract: Whether the negative relationship between farm size and productivity that is confirmed in a large global literature holds in Africa is of considerable policy relevance. This paper revisits this issue and examines potential causes of the inverse productivity relationship in Rwanda, where policy makers consider land fragmentation and small farm sizes to be key bottlenecks for the growth of the agricultural sector. Nationwide plot-level data from Rwanda point toward a constant returns to scale crop production function and a strong negative relationship between farm size and output per hectare as well as intensity of labor use that is robust across specifications. The inverse relationship continues to hold if profits with family labor valued at shadow wages are used, but disappears if family labor is rather valued at village-level market wage rates. These findings imply that, in Rwanda, labor market imperfections, rather than other unobserved factors, seem to be a key reason for the inverse farm-size productivity relationship.
130 citations
[...]
TL;DR: The paradox of slums is that despite the wealth and the high level of economic development of the United States, they are as prevalent in our cities as in many an overseas urban area.
Abstract: The paradox of slums is that despite the
wealth and the· high level of economic development of the United States, they are as prevalent in our cities as in many an overseas
urban area. Moreover, slums persist here
despite attempts over the past three decades
at least to eliminate them. Is there a justification or an explanation for slums in this country?
123 citations
TL;DR: In this article, the authors investigated the effect of introducing a fiscally neutral increasing block rate water budget price structure on residential water demand and found that demand was reduced by around 17% although the reduction was achieved gradually over more than three years.
Abstract: We investigate the effect of introducing a fiscally neutral increasing block rate water budget price structure on residential water demand. We estimate that demand was reduced by around 17%, although the reduction was achieved gradually over more than three years. As intermediate steps we derive estimates of price and income elasticities that rely only on longitudinal variability. We investigate how different subpopulations responded to the pricing change and find evidence that marginal, rather than average, prices may be driving consumption. We also derive alternative rate structures that might have been implemented, and assess their estimated demand effects.
92 citations
TL;DR: In this article, the marginal external effects of nearby land-based wind turbines on property prices were quantified by using a dataset consisting of 12,640 traded residential properties located within 2,500 meters of a turbine sold in the period 2000-2011.
Abstract: In this article we quantify the marginal external effects of nearby land-based wind turbines on property prices. We succeed in separating the effect of noise and visual pollution from wind turbines. This is achieved by using a dataset consisting of 12,640 traded residential properties located within 2,500 meters of a turbine sold in the period 2000–2011. Our results show that wind turbines have a significant negative impact on the price schedule of neighboring residential properties. Visual pollution reduces the residential sales price by up to about 3%, while noise pollution reduces the price between 3% and 7%.
88 citations
TL;DR: In this paper, the authors show how accounting for unobservable preference and scale heterogeneity can influence the magnitude of observed ordering effects, and they also show that the scale heterogeneity of the observed ordering effect is a significant component in explaining these differences.
Abstract: Using multiple choice tasks per respondent in discrete choice experiment studies increases the amount of available information However, respondents’ learning and fatigue may lead to changes in observed utility function preference (taste) parameters, as well as the variance in its error term (scale); they need to be controlled to avoid potential bias A sizable body of empirical research offers mixed evidence in terms of whether these ordering effects are observed We point to a significant component in explaining these differences; we show how accounting for unobservable preference and scale heterogeneity can influence the magnitude of observed ordering effects
85 citations
TL;DR: In this article, the authors explore the empirical effects of decentralization on environmental quality by studying water pollution in rivers around the world and examine the level of pollution and variation in pollution across jurisdictions within a country, for both a local and a regional pollutant.
Abstract: This paper explores the empirical effects of decentralization on environmental quality by studying water pollution in rivers around the world It examines the level of pollution and variation in pollution across jurisdictions within a country, for both a local and a regional pollutant Federal countries exhibit greater interjurisdictional variation in pollution, supporting the traditional view that decentralization allows policies more tailored to local conditions The analysis does not point to a “race to the bottom” in pollution levels ( JEL H73, Q53 )
68 citations
TL;DR: In this paper, the effect of water scarcity and increased river temperatures on German electricity prices from 2002 to 2009 was analyzed, and the results indicated that the electricity price is significantly impacted by both a change in river temperatures and the relative abundance of river water.
Abstract: Thermal-based power stations rely on water for cooling purposes. These water sources may be subject to incidents of scarcity, environmental regulations, and competing economic concerns. This paper analyzes the effect of water scarcity and increased river temperatures on German electricity prices from 2002 to 2009. Having controlled for demand effects, the results indicate that the electricity price is significantly impacted by both a change in river temperatures and the relative abundance of river water. An implication is that future climate change will affect electricity prices not only through changes in demand, but also via increased water temperatures and scarcity. ( JEL Q25, Q41 )
65 citations
TL;DR: In this article, the authors present an empirical model of the impacts of agricultural and urban returns on farmland value, which allows the marginal impacts of parcel characteristics to vary nonlinearly over space with an endogenous smooth transition between urban fringe and rural areas.
Abstract: This study presents an empirical model of the impacts of agricultural and urban returns on farmland value. The model allows the marginal impacts of parcel characteristics to vary nonlinearly over space with an endogenous smooth transition between urban fringe and rural areas. The estimation examines 10,317 parcel-level farmland transactions across the state of Illinois over the period January 2001–December 2009. The results suggest that marginal impacts of both agricultural and urban returns differ between urban fringe and rural areas.
58 citations
TL;DR: In this article, the authors employed unique farm-level panel data and applied the generalized propensity score matching approach to estimate the capitalization of the single payment scheme (SPS) into land values, which suggests a nonlinear and discontinuous relationship between the SPS and land rents.
Abstract: This paper estimates the capitalization of the single payment scheme (SPS) into land values. The theory suggests a nonlinear and discontinuous relationship between the SPS and land rents. In empirical analysis we employ unique farm-level panel data and apply the generalized propensity score matching approach. Our estimates suggest a 6% to 10% SPS capitalization rate. On average in the European Union, the nonfarming landowners’ gains from the SPS are only 4%. However, there is a large variation in the capitalization rate for different SPS levels and between different member states (3% to 94%).
TL;DR: In this paper, the seasonal and annual changes in marginal prices for water to estimate the price elasticity of demand by residential households for water is exploited. But the authors do not consider how responses to price vary with season and drought conditions.
Abstract: This paper exploits the seasonal and annual changes in marginal prices for water to estimate the price elasticity of demand by residential households for water. It uses the changes in distributions of water used at the census block group levels in response to changes in marginal prices of water for matched months across years. This strategy reduces the interaction effects of outdoor use and demographic factors in determining responsiveness to price. By comparing years that vary in overall water availability, the framework can recover measures of how responses to price vary with season and drought conditions. The application is the urban Phoenix metropolitan area. ( JEL H42, Q25 )
TL;DR: The authors used panel vector autoregression models to trace the dynamic response of output growth to flood shocks, using new data on large flood events in 135 countries between 1985 and 2008 Flood shocks tend to have a positive and significant average impact on per capita GDP growth However, this effect is limited to developing countries and to moderate floods.
Abstract: We use panel vector autoregression models to trace the dynamic response of output growth to flood shocks, using new data on large flood events in 135 countries between 1985 and 2008 Flood shocks tend to have a positive and significant average impact on per capita GDP growth However, this effect is limited to developing countries and to moderate floods The positive impact of floods is larger and more significant in the agricultural sector; while floods seem to have a direct effect on agricultural growth rates in developing countries, their effect on nonagricultural growth rates is mainly indirect ( JEL: O11, Q54 )
TL;DR: In this paper, a structural econometric model is used to evaluate the impacts of support from a European Union agri-environmental program designed to reduce nutrient pollution from agricultural land.
Abstract: This study uses a structural econometric model to evaluate the impacts of support from a European Union agri-environmental program designed to reduce nutrient pollution from agricultural land. Drawing on a representative sample of individual grain farms, we first quantify the effects of agri-environmental payments on farms’ decisions on land allocation and on fertilizer use. We then combine the predicted land allocation and fertilizer use with environmental production functions to quantify the impact on nutrient loading. Finally, we assess the monetary value of reduced nutrient pollution, drawing on a recent valuation study.
TL;DR: In this paper, an empirically calibrated structural model of the harvesting process of the Bering Sea crab fishery is embedded into a sector-level model, allowing the authors to experimentally "unravel" the ITQ treatment and show that the magnitude and source of rent generation under ITQs critically depend on the manner and degree of rent dissipation before ITQ.
Abstract: Individual transferable quotas (ITQs) induce changes along both the extensive margin—via consolidation of quota among fewer vessels—and the intensive margin, as harvesters adjust their behavior to ITQ incentives. We use ITQ introduction in the Bering Sea crab fishery to decompose the sources of rent generation across both margins. We embed an empirically calibrated structural model of the harvesting process into a sector-level model, allowing us to experimentally “unravel” the ITQ treatment. We show that the magnitude and source of rent generation under ITQs critically depends on the manner and degree of rent dissipation before ITQs are implemented.
TL;DR: This article found that variance in the elasticity of housing supply can be attributed to differences in land availability and the local fiscal and regulatory environment, which can explain much of the variation in housing price movements and new construction during the most recent boom-bust cycle.
Abstract: Existing studies of the relationship between housing price dynamics and housing supply—which have relied upon questionable proxies for supply elasticity—have yielded highly mixed results. In this paper we provide new evidence on this relationship based on actual estimates of the price elasticity of supply for local markets in Florida. Intermarket differences in housing supply elasticity are found to explain much of the variation in housing price movements and new construction during the most recent boom-bust cycle. Additionally, we find that variance in the elasticity of housing supply can be attributed to differences in land availability and the local fiscal and regulatory environment. ( JEL R14 )
TL;DR: In this article, the authors use a choice experiment survey to estimate willingness to pay (WTP) for different attributes of restored grassland ecosystems, and they find that the presence of nearby grasslands increases a respondent's WTP and that species richness, population density, and the absence of endangered species are all significant factors that contribute to the respondent's willingness-to-pay.
Abstract: We demonstrate how choice experiment survey methods can be used to guide ecosystem restoration efforts. We use a choice experiment survey to estimate willingness to pay (WTP) for different attributes of restored grassland ecosystems. We find that the presence of nearby grasslands increases a respondent’s WTP and that species richness, population density, and the presence of endangered species are all significant factors that contribute to the respondent’s WTP. This implies that all these conservation success measures should be taken into account in planning and in research. To our knowledge this is the first study to calculate the WTP for grasslands.
TL;DR: The authors examined whether local supply constraints from natural or preserved features have influenced the housing market and found that constraints associated with the presence of water bodies and some types of open space preservation have contributed to higher housing prices offsetting local demand for these natural amenities.
Abstract: When local amenities are tied to natural land use features that cannot be developed for physical or regulatory reasons, the corresponding implicit price estimates from a hedonic housing model may reflect local supply constraints and confound estimation of natural amenity values. Using a spatial simultaneous equations model of housing values and migration, we examine whether local supply constraints from natural or preserved features have influenced the housing market. Results indicate that constraints associated with the presence of water bodies and some types of open space preservation have contributed to higher housing prices offsetting local demand for these natural amenities. ( JEL C31, R23 )
TL;DR: In this article, the authors build a real option model that articulates sodbusting incentives arising from risk interventions in the presence of conversion costs and show that risk interventions reduce expected costs of switching land use between cropping and non-cropping activities and, hence, incentivize sodbusters.
Abstract: We build a real option model that articulates sodbusting incentives arising from risk interventions in the presence of conversion costs. The model shows that risk interventions reduce expected costs of switching land use between cropping and noncropping activities and, hence, incentivize sodbusting. Based on data for south-central North Dakota over 1989–2012, our simulations show that offsetting 20% of a cropping-return shortfall by a risk intervention increases the sodbusting cost threshold, below which sodbusting will occur, by 41% (or $43.7/acre). Omitting cropping-return risk across time underestimates the sodbusting cost threshold by 23% (or $24.35/acre) and hence underestimates sodbusting caused by crop production.
TL;DR: In this article, the authors investigate the effectiveness of pollution prevention activities in reducing toxic releases from facilities that reported to the U.S. Environmental Protection Agency's Toxics Release Inventory from 1991-2001, using generalized method of moments dynamic panel data models.
Abstract: We investigate the effectiveness of voluntary pollution prevention activities in reducing toxic releases from facilities that reported to the U.S. Environmental Protection Agency’s Toxics Release Inventory from 1991–2001, using generalized method of moments dynamic panel data models that recognize the potential endogeneity of the pollution prevention adoption decision on toxic releases. We find that pollution prevention adoption had a negative impact on toxic releases. The estimated coefficients suggest that the effect of pollution prevention adoption is substantial, but short-lived, dissipating within 4 to 5 years. However, a continual adoption of pollution prevention techniques leads to lower steady-state releases, with estimated reductions between 35% and 50%.
TL;DR: In this article, the determinants of local public policies for farmland preservation and urban expansion are outlined and compared in a field study of municipalities in southern France, and the expected effects of certain sociodemographic determinants are confirmed.
Abstract: We outline the determinants of local public policies for farmland preservation and urban expansion. We first rely on the literature and on a purposely designed field study of municipalities in southern France to propose a theoretical framework better suited to the French situation. The model considers aspects of land consumption, includes two interest groups as well as the median voter, and is then econometrically tested. We confirm the expected effects of certain sociodemographic determinants and highlight the impact of municipal budgetary considerations and the role of the agricultural sector. We also find more counterintuitive determinants, like local political regime or unbalanced neighboring relationships.
TL;DR: In this paper, the effects of the New Zealand emissions trading scheme on the value of bareland on which radiata pine is to be planted were investigated. And the authors found that land value increases by about 73%, with the optimal rotation age substantially lengthened.
Abstract: Under the New Zealand Emissions Trading Scheme, forests planted on or after January 1, 1990, earn carbon credits. These credits have to be repaid when the forest is harvested. This paper analyses the effects of this scheme on the value of bareland on which radiata pine is to be planted. A real options method is developed and applied, assuming stochastic carbon and timber prices. We find that land value increases by about 73%, with the optimal rotation age substantially lengthened. The derived optimal harvest price thresholds are useful in deciding whether to harvest or to wait. ( JEL Q23, Q28 )
TL;DR: The authors analyzes empirically the extent to which environmental regulation influences production location in the pig industry and finds that while environmental regulation may not have a measurable effect on the E.U. pig industry location per se, it is a strong influence on the sectoral composition of the industry.
Abstract: This paper analyzes empirically the extent to which environmental regulation influences production location in the pig industry. The analysis is based on a general empirical location model that captures interactions between region and sector characteristics in determining production location, and data on pig production in 43 European regions. We find that while environmental regulation may not have a measurable effect on the E.U. pig industry location per se, it is a strong influence on the sectoral composition of the industry. Relatively highly polluting sectors of the pig industry are attracted to relatively lax jurisdictions, which become pollution havens (hot spots of hog waste).
TL;DR: In this article, the authors examined whether a resettlement project in southern Malawi improved food security in the long term and found that resettled households achieved greater long-term food security, owing to additional land coupled with a more diversified crop portfolio.
Abstract: In several African contexts, households are unable to enhance agricultural production due to land constraints. Few governments have explored the use of resettlement to alleviate land scarcity and facilitate rural-to-rural migration. We examine whether a resettlement project in southern Malawi improved food security in the long term. Our findings indicate resettled households achieved greater long-term food security, owing to additional land coupled with a more diversified crop portfolio. We also find the formalization of property rights improved land security for male and female household heads, but resettlement jeopardized the land security of women in male-headed households.
TL;DR: In this paper, a multilevel mixed model (MMMMM) is proposed to capture heterogeneity in deterministic utility components, instead of simply leaving them to random components. And the results show that individuals' surroundings help to capture the heterogeneity, and that can be controlled by specifying these aspects as predictors for this behavioral model.
Abstract: One of the main issues on the research agenda regarding stated preference methods concerns the heterogeneity of preferences either within or between individuals. We present a multilevel mixed model (MMM) to capture heterogeneity in deterministic utility components, instead of simply leaving them to random components. MMM captures heterogeneity at different levels: individuals, locations, and groups of individuals sharing other characteristics. The results show that individuals’ surroundings help to capture heterogeneity, and that can be controlled by specifying these aspects as predictors for this behavioral model. Therefore, MMM may contribute to the identification of the underlying structure affecting environmental decisions. ( JEL D62, Q51 )
TL;DR: In this paper, the authors explore how a landowner's bid to enroll in the Conservation Reserve Program (CRP) is influenced by his parcel's designation as a Conservation Priority Area (CPA).
Abstract: We explore how a landowner's bid to enroll in the Conservation Reserve Program (CRP) is influenced by his parcel's designation as a Conservation Priority Area (CPA). A theoretical model of a landowner's optimal bid is presented, and we demonstrate the ambiguity in a landowner's optimal bid response to CPA designations. The bid choice is analyzed using a data set of accepted and unaccepted offers during three CRP sign-up periods. We focus empirically on a subset of offers from the Prairie Pothole CPA to identify whether bid responses to exogenous location factors differ across landowners with varying opportunity costs to enrollment. ( JEL Q15, Q18 )
TL;DR: The authors empirically test whether zip code jurisdictions with effective and well-enforced building codes demonstrate better loss experience from the occurrence of a hail storm than those without, and their results consistently indicate that more favorable building codes do in fact matter in reducing hail damage on the order of 10% to 20%.
Abstract: Implementing strong building codes is touted as a way to reduce natural disaster property damages. However, at the local level not all jurisdictions adopt equally stringent codes nor properly enforce their codes once they have been adopted. We empirically test whether zip code jurisdictions with effective and well-enforced building codes demonstrate better loss experience from the occurrence of a hail storm than those without. We model Missouri hail claim insurance data from 2008 to 2010. Our results consistently indicate that more favorable building codes do in fact matter in reducing hail damage on the order of 10% to 20%.
TL;DR: In this article, a semiparametric local multinomial logit model is developed as an alternative to the Swait and Louviere (1993) test procedure controlling for preference dynamics within and between samples.
Abstract: We contrast the discovered preference hypothesis against the theory of coherent arbitrariness in a split-sample stated choice experiment on flood-risk exposure. A semiparametric local multinomial logit model is developed as an alternative to the Swait and Louviere (1993) test procedure controlling for preference dynamics within and between samples. The proposed model supports the discovered preference hypothesis by means of a decaying starting point bias. The Swait and Louviere (1993) test procedure reaches a different conclusion. It rejects the assumption of stable preferences, but most preference dynamics tend to be smoothed out, causing a more erratic pattern of preference dynamics.
TL;DR: In this paper, the impacts of price-induced yield assumptions on U.S. corn ethanol results were investigated. But the sensitivity of these sensitivity to yield assumption results are not comparable because the ex ante land and production elasticities assumed in these two models were not comparable, and the analysis reveals that the current focus solely on the value of the priceinduced yield elasticity can be misleading.
Abstract: Available estimates of the land use changes and greenhouse gas emissions of biofuels differ significantly across economic models. This paper focuses on the impacts of price-induced yield assumptions on U.S. corn ethanol results. These assumptions have dramatic impacts within the FAPRI modeling framework, but limited ones within the GTAP-BIO model. I show that these sensitivity to yield assumption results are not comparable because the ex ante land and production elasticities assumed in these two models are not comparable. The analysis reveals that the current focus solely on the value of the price-induced yield elasticity can be misleading.
TL;DR: In this article, the authors examined the effect of waste and recycling policy on scrap prices and the importance of scrap price feedbacks as a determinant of policy costs, and found that scrap prices substantially affect the costs of the policies and alter the ranking of instruments.
Abstract: This study examines the effect of waste and recycling policy on scrap prices and the importance of scrap price feedbacks as a determinant of policy costs. Price effects and direct and indirect channels of waste reduction are decomposed for deposit/refund, advance disposal fee, and recycling subsidies. Scrap price feedbacks decrease the cost of advance disposal fees, increase the cost of recycling subsidies, and have an ambiguous effect on the cost of deposit/refund. Simulation analysis finds that scrap price feedbacks substantially affect the costs of the policies and alter the ranking of instruments. ( JEL Q53, Q58 )