Showing papers in "Land Economics in 2019"
TL;DR: In this paper, the authors identify the circumstances under which use of the individual quota should be avoided or approached with particular caution, and the advantages of management by individual quota allocation lie in the elimination of important external diseconomies, both among those associated with open-access fisheries and those peculiar to fisheries subject to limited entry licensing.
Abstract: Economists were sensitized to the common property problems of the fishery by H. Scott Gordon’s seminal article that appeared in 1954. The advice from economists on fisheries management tended to focus on various forms of limited entry licensing. The degree of success achieved overall with limited entry schemes has been sufficiently modest for economists to cast about for an alternative approach to fisheries rationalization. The chapter offers a few generalizations regarding the practical applicability of the individual quota. It aims to identify the circumstances under which use of the individual quota should be avoided or approached with particular caution. The purported advantages of management by individual quota allocation lie in the elimination of important external diseconomies, both among those associated with open-access fisheries and those peculiar to fisheries subject to limited entry licensing. For many fisheries, enforcement is likely to be one of the most difficult problems with an individual quota system.
460 citations
TL;DR: In this article, the authors measured the transaction costs associated with four policies to reduce agricultural phosphorous pollution in the Minnesota River and found that the tax on phosphate fertilizers had the lowest transaction costs, followed by educational programs on best management practices, conservation tillage on all cropped land, and expansion of a permanent conservation easement program.
Abstract: This study measured the magnitude of transaction costs associated with policies to reduce agricultural nonpoint source pollution. Interviews with staff from governmental agencies were conducted to estimate transaction costs associated with four policies to reduce agricultural phosphorous pollution in the Minnesota River. The tax on phosphate fertilizers had the lowest transaction costs ($0.94 million), followed by educational programs on best management practices ($3.11 million), the requirement for conservation tillage on all cropped land ($7.85 million), and expansion of a permanent conservation easement program ($9.37 million). Taxes, thus, may have advantages with respect to transaction costs and abatement costs. (JEL Q15; Q25)
136 citations
TL;DR: In this article, the welfare effects of cropland retirement in addressing U.S. surface water pollution problems were evaluated with a programming model of the agriculture sector and were compared to the water quality benefits from reduced soil erosion.
Abstract: Cropland retirement is one option for reducing agriculturally generated nonpoint source water pollution. This research estimated the welfare effects of cropland retirement in addressing U.S. surface water pollution problems. The social costs of retirement were evaluated with a programming model of the U.S. agriculture sector and were compared to the water quality benefits from reduced soil erosion. Results indicate that land retirement as a primary pollution control tool is expensive, but if appropriately targeted, could generate sufficient benefits to outweigh social costs. The paper also explores shifts in production patterns within and across regions caused by land retirement, and the implications for changes in chemical use and government deficiency payments. (JEL Q24)
64 citations
TL;DR: In this article, the authors use intertemporal variation in smallholders' proximity or intensity of exposure to large farms, while exploring the variation in large farm establishment over time and space, to analyze the presence and magnitude of spillovers between large and small farms.
Abstract: Quantifying the direction and magnitude of spillovers for small holders is an essential part of the policy dialogue surrounding large-scale agricultural investment. We use intertemporal variation in smallholders’ proximity or intensity of exposure to large farms, while exploringthe variation in large farm establishment over time and space, to analyze the presence andmagnitude of spillovers between large and small farms. Findings show that between 2004 and 2014 new formation of commercial farms did not contribute to job creation and provided at best modest benefits for neighboring smallholders in terms of technology and access to inputs. This implies that in Ethiopia a more strategic approach may be required to maximize smallholder benefits from large farm formation. Our methodology has proven to be robust and can be applied to study spillovereffects of large-scale commercial farming more generally. Avenues to do so are outlined.
38 citations
TL;DR: The authors empirically examined whether the Federal Emergency Management Agency's Public Assistance (PA) program, which targets post-disaster cleanup and infrastructure rehabilitation, affects household purchases of flood insurance, and found that increased PA grants reduce a county's flood insurance take-up rates, thereby driving down its total insurance coverage and premiums paid.
Abstract: In this paper, we empirically examine whether the Federal Emergency Management Agency’s Public Assistance (PA) program, which targets postdisaster cleanup and infrastructure rehabilitation, affects household purchases of flood insurance. Using the fixed-effects model with instrumental variables to address the endogeneity of disaster aid, we find that increased PA grants reduce a county’s flood insurance take-up rates, thereby driving down its total insurance coverage and premiums paid. Our findings provide empirical evidence on the crowding-out effect of public disaster programs, and shed light on their implicit social costs and increased federal financial exposure to natural disasters and climate change.
38 citations
TL;DR: In this article, the authors show that the number of Norwegian landing plants has been reduced in recent decades, and that quantity landed, annual plant operation time, and attracting smaller vessels decrease the probability of exit.
Abstract: A vast literature in fisheries economics focuses on drivers of fishers’ behavior with limited attention given to what happens once the fish are landed. This often strongly contrasts with a main policy focus on coastal communities, with fisheries management as an additional instrument in supporting livelihoods. This study shows that the number of Norwegian landing plants has been reduced in recent decades, and that quantity landed, annual plant operation time, and attracting smaller vessels decrease the probability of exit. Interestingly, plants in communities with additional landing locations have lower probabilities of exit, pointing to an industry cluster effect.
34 citations
TL;DR: Results indicate that adaptation structures can have a significant positive impact on waterfront home prices, with the most vulnerable homes seeing the largest impacts.
Abstract: Coastal communities are facing the dual threat of increasing sea level rise (SLR) and swelling populations, causing challenging policy problems. To help inform policy makers, this paper explores the property price impact of structures that help protect against SLR using a novel and spatially explicit dataset of coastal features. Results indicate that adaptation structures can have a significant positive impact on waterfront home prices, with the most vulnerable homes seeing the largest impacts. The Chesapeake Bay is facing increasing pressure from SLR, and this is one of the first papers to report that local property markets are incorporating that threat.
30 citations
TL;DR: This article found that exposure to fine particulate matter concentrations exceeding 15 µg/m3 causes a 2.3% reduction in the quality of MPs' speech, equivalent to a 6.6 month decrease in education.
Abstract: Applying methods of textual analysis to all 119,225 speeches made in the Canadian House of Commons between 2006 and 2011, we establish that air pollution reduces the speech quality of Canadian members of parliament (MPs). Exposure to fine particulate matter concentrations exceeding 15 µg/m3 causes a 2.3% reduction in the quality of MPs’ speech (equivalent to a 2.6 month decrease in education). For more difficult communication tasks the decrement in quality is equivalent to the loss of 6.5 months of schooling. Our design accounts for the potential endogeneity of exposure and controls for many potential confounders including individual fixed effects.
21 citations
TL;DR: The authors test the effect of varying the order of the valuation and consequentiality questions using data from a drinking water reliability survey and find that this ordering has a substantial impact on consequentiality perceptions and suggest these questions may not be a panacea for stated preference validity issues.
Abstract: Although consequentiality has transformed the focus of stated preference research, there are concerns with including elicited consequentiality perceptions in econometric models. We test the effect of varying the order of the valuation and consequentiality questions using data from a drinking water reliability survey. We find that this ordering has a substantial impact on consequentiality perceptions. We address the potential endogeneity of consequentiality perceptions and find that they do not have a significant impact on voting. These results provide caution on the use of consequentiality questions and suggest these questions may not be a panacea for stated preference validity issues.
18 citations
TL;DR: In this article, the authors employ a price diffusion model that combines features of market integration models and spatial econometric models to better understand the spatial and temporal behavior of land prices.
Abstract: In the last decade, many parts of the world experienced severe increases in agricultural land prices. This price surge, however, did not take place evenly in space and time. To better understand the spatial and temporal behavior of land prices, we employ a price diffusion model that combines features of market integration models and spatial econometric models. An application of this model to farmland prices in Germany shows that prices on a county-level are cointegrated. Apart from convergence toward a long-run equilibrium, we find that price transmission experiences short-term adjustments caused by neighboring regions.
17 citations
TL;DR: This paper proposed a theoretical framework characterizing the attenuation of flood risks revealed by the flood zone designation in flood insurance rate maps and the asymmetric impacts of adding versus removing flood zone status on property values.
Abstract: We propose a theoretical framework characterizing (1) the attenuation of flood risks revealed by the flood zone designation in flood insurance rate maps and (2) the asymmetric impacts of adding versus removing flood zone status on property values We apply spatial fixed effects models to empirically investigate the impacts of flood zone status and test the proposed theory The results indicate that housing values decrease by more than 11% when a property is assigned into a flood zone However, property values do not rebound when flood zone status is removed
TL;DR: In this article, a partial ban on fire, enforced with fines, is coupled with subsidized tractors, and a discrete choice experiment and contingent valuation were merged into a novel statistical variant of the Hicks-Kaldor test that is robust to preference heterogeneity.
Abstract: Pollution from agricultural fires is a global health issue that is particularly challenging where smallholders depend on burnings for subsistence. In Acre state, Western Amazon, a partial ban on fire, enforced with fines, is coupled with subsidized tractors. To evaluate this policy, a discrete choice experiment and contingent valuation were merged into a novel statistical variant of the Hicks-Kaldor test that is robust to preference heterogeneity. Among 27 ways to extend the ban, 5 could improve both respiratory health and smallholders’ welfare, when compensated with tractors that are available for longer hours and at the right time of the year.
TL;DR: The authors examined the effect of Escherichia coli (E. coli) and harmful algal blooms on recreational behavior using survey data collected from Ohio recreators who visited Lake Erie during the summer of 2016.
Abstract: This paper simultaneously examines the effect of Escherichia coli (E. coli) and harmful algal blooms on recreational behavior using survey data collected from Ohio recreators who visited Lake Erie during the summer of 2016. Using simulation based on latent class models of recreation choice, we find beach-goers and recreational anglers lose in aggregate $7.7 million and $69.1 million respectively each year if water quality conditions were to become so poor that Lake Erie’s western basin were closed. Finally, we recover heterogeneity in recreators’ aversion towards algae and E. coli, with beach-goers more averse to E. coli and anglers more averse to algae.
TL;DR: The authors used a spatial autoregressive model with directional effects to assess the impact of airport noise on housing values in Memphis, Tennessee, home of the busiest cargo airport in the United States.
Abstract: We use a spatial autoregressive model with directional effects to assess the impact of airport noise on housing values in Memphis, Tennessee, home of the busiest cargo airport in the United States. Our model is combined with a spatial dataset that contains information on noise levels, property characteristics, and neighborhood characteristics for 9,606 properties sold between 2011 and 2016. Results of our research suggest that the Memphis International Airport is perceived as a disamenity, with areas of the city affected to different degrees, with a potential average external cost of $4,795 per decibel of noise per household. (JEL C31, D62)
TL;DR: This article used a contingent valuation study and an actual donation request to assess the impact of behavioral factors on hypothetical bias in stated willingness-to-pay estimates and found that the extent of warm glow derived from giving and expectations about other people's behavior increase the bias.
Abstract: This paper uses a contingent valuation study and an actual donation request to assess the impact of behavioral factors on hypothetical bias in stated willingness-to-pay estimates Our findings indicate that both the number of respondents willing to donate and the amount they are willing to donate differ substantially between treatments Behavioral factors play a substantial and significant role; in particular, the extent of warm glow derived from giving and expectations about other people's behavior increase the extent of hypothetical bias in stated willingness-to-pay estimates We suggest ways in which this may be incorporated in future contingent valuation study design
TL;DR: A novel dynamic programming solution approach that is fast and forgoes the simulation method requirement of imposing structure on the policy function is developed and an adaptive management model that incorporates learning about uncertain biological dynamics is investigated.
Abstract: Author(s): Donovan, P; Bair, LS; Yackulic, CB; Springborn, MR | Abstract: We develop a bioeconomic model to identify the cost-effective control of an invasive species (rainbow trout) to achieve a population viability goal for an endangered species (humpback chub) in the Grand Canyon of the U.S. Southwest. Solving the population viability problem is difficult since avoiding a threshold with a given confidence imposes a probabilistic restriction on joint outcomes (survival) over many periods. We develop a novel dynamic programming solution approach that is fast and forgoes the simulation method requirement of imposing structure on the policy function. We also investigate an adaptive management model that incorporates learning about uncertain biological dynamics. (JEL Q22, Q57).
TL;DR: This paper shows how researchers can make incorrect interpretations of models that include heterogeneity in error variance (scale) if they do not recognize the implications of parameter estimates being conflated with scale, potentially leading to erroneous evaluation of models.
Abstract: This paper shows how researchers can make incorrect interpretations of models that include heterogeneity in error variance (scale) if they do not recognize the implications of parameter estimates being conflated with scale. The research contribution is to define best practice management of scale heterogeneity in discrete choice experiments and to empirically demonstrate issues that arise when best practice is ignored. We illustrate the problem using data from two discrete choice experiments, showing that reported parameters vary due to arbitrary normalization decisions. We report examples of papers where authors fall into this trap, potentially leading to erroneous evaluation of models.
TL;DR: In this paper, the authors extend real options analysis of timberland investments to examine a combination of financial and biophysical risk effects on optimal investment strategies in the southeastern United States, and show that despite a slight downward drift in price, expected returns for loblolly pine management fall between entry and exit thresholds, indicating an optimal “hold” strategy.
Abstract: We extend real options analysis of timberland investments to examine a combination of financial and biophysical risk effects on optimal investment strategies in the southeastern United States. Results show that, despite a slight downward drift in price, expected returns for loblolly pine management fall between entry and exit thresholds, indicating an optimal “hold” strategy. This is explained by an offsetting upward trend in biophysical productivity associated with climate changes across a range of modeled futures. Monte Carlo analysis indicates a small positive difference between entry and exit outcomes consistent with observed rates of expansion in timberland investments in the region. (JEL D81, Q23)
TL;DR: In this paper, the economic loss from an aquatic species invasion of a freshwater lake is allocated between users of the lake itself (own-lake effect) and users of neighboring lakes that become invaded because the lake is a new source of the invader.
Abstract: This paper examines how the economic loss from an aquatic species invasion of a freshwater lake is allocated between users of the lake itself (own-lake effect) and users of neighboring lakes that become invaded because the lake is a new source of the invader (spillover effect). The empirical application concerns the Eurasian watermilfoil invasion in the lake-rich landscape of northern Wisconsin. Results suggest that coordinated management across lakes provides its highest economic value in the early years of an invasion, before high-value, high-traffic lakes are invaded, and drops quickly once the invasion claims these lakes.
TL;DR: In this article, the authors analyzed the regional economic impact of back-to-contour surface mining regulations on the dominant coal market and its coal suppliers by means of a nonlinear regional programming model of the steam-electric coal market.
Abstract: The primary purpose of this paper is to analyze the regional economic impact of back-to-contour surface mining regulations on the dominant coal market (the use of ''steam-electric'' coal by electric utilities) and its coal suppliers Analysis is accomplished by means of a nonlinear regional programming model of the steam-electric coal market developed to provide quantitative information concerning alternative energy-environmental policy combinations The effects of alternative policies such as reclamation standards cannot be reduced to a single dimension There is an impact on total production, but given an emphasis, particularly in recent years, on the importance of Federal policy as a source of differential regional effects, the diverse regional output effects are also important Each consuming and producing region will be affected not only by public policy towards coal in its own area but also by policies applied to mining elsewhere Thus, regional interaction is explicitly considered As public policy alters the private cost of mining and use, there will be regional effects on the delivered price of energy derived from coal A second purpose of this analysis is to consider the effects of the surface mining regulations on the regional competitive position of underground mining As L Hines has written,more » ''the use of strip mining and auger mining in the coal fields has reduced mining costs well below those of underground operations--if the wide-spread degradation and property loss in areas where these practices are employed is disregarded'' The explicit purpose of some sponsors of ''original contour'' legislation is to stimulate underground production« less
TL;DR: The authors explore an approach to choice experiments that tailors attributes to empirically identified population groups, finding that different endpoints are relevant to different groups, and that one-size-fits-all scenarios common in the literature may not enable valid welfare estimation for all groups.
Abstract: Obtaining valid stated preference welfare estimates for changes in biophysical systems requires identification of the ecological endpoints valued by respondents. Challenges for scenario design can occur if endpoints differ across respondents, because it may be infeasible to provide scenario information on all possible endpoints. We explore an approach to choice experiments that tailors attributes to empirically identified population groups. Results suggest that different endpoints are relevant to different groups, and that one-size-fits-all scenarios common in the literature may not enable valid welfare estimation for all groups. These findings suggest that endpoint heterogeneity should be considered when designing valuation studies.
TL;DR: In this article, a door-to-door survey of 981 participants in a drought-prone region elicits preferences for alternative sources of municipal water, conditional on water price and quality.
Abstract: Incentivized experiments and stated preference methods are commonly viewed as substitutes in preference elicitation. We leverage the distinct strengths of each approach by combining a fully incentivized risk experiment with a stated preference survey to model utility for intrinsically risky attributes. A door-to-door survey of 981 participants in a drought-prone region elicits preferences for alternative sources of municipal water, conditional on water price and quality. Participants’ observed and imputed risk attitudes are incorporated into preference estimation. Our results are consistent with the hypothesis that participants are concerned about water supply risk, but not about new technology risk.
TL;DR: In this article, the authors used evidence from property values in New York City to evaluate the benefits and costs of state-funded voluntary cleanup programs, and found that the benefits stem from program participation and cleanup, but not from site redevelopment.
Abstract: This paper contributes to the debate over public benefits and costs of state-funded voluntary cleanup programs, using evidence from property values in New York City. We value site redevelopment separately from cleanup and examine time to capitalization. Using property fixed effects and controlling for time-varying shocks, New York’s Brownfield Cleanup Program added 4% to property values. Off-site gains averaged 5.6% for properties with three units or less and 1.2% for multifamily residences, producing a $579.3 million tax gain that does not exceed the $667.9 million in program spending. Benefits stem from program participation and cleanup, but not from site redevelopment. (JEL Q51, Q58)
TL;DR: In this paper, the authors examine the interaction between water export restrictions and the facilitation of water trading during droughts using panel data on cropland values, and find that land subject to restrictions experienced a relative decline of 34% ($2,057/acre, roughly half of foregone potential water sales revenue) during the drought immediately following implementation of the policies.
Abstract: Policies that seek to reduce groundwater open-access externalities may be in conflict with the facilitation of water trading during droughts. Using panel data on cropland values, we examine this interaction in the context of groundwater export restrictions. We find that land subject to restrictions experienced a relative decline of 34% ($2,057/acre, roughly half of foregone potential water sales revenue) during the drought immediately following implementation of the policies. During a later, more severe drought, there is no difference in value. Our empirical approach also provides novel estimates of the value of changes in groundwater stock. (JEL Q15, Q18)
TL;DR: In this paper, the authors exploit unique data on the use of rehabilitative tax credits (RTCs) in Virginia to estimate the extent to which historic property investment generates market externalities for nearby non-historic properties.
Abstract: Property markets do not fully price the public’s value for historic homes to correct the intergenerational externality associated with historical preservation. While preservation for future generations often provides the primary motivation for Pigovian subsidies, historical preservation or restoration policies may also have significant contemporary amenity effects. This study exploits unique data on the use of rehabilitative tax credits (RTCs) in Virginia to estimate the extent to which historic property investment generates market externalities for nearby nonhistoric properties. Using a difference-in-differences approach, the results indicate that homes in close proximity to RTCs sell at a premium, with only modest liquidity effects.
TL;DR: In this paper, the authors investigate the impact of gender and generation gaps in productivity on the allocation of resources in West African farming systems where food is produced by extended family farms on multiple plots managed by different members.
Abstract: Inefficient allocation of resources has been documented in West African farming systems where food is produced by extended family farms on multiple plots managed by different members We revisit this question in Mali by testing fertilizer use and productivity differentials, while introducing soil nutrient measurements as indicators of land quality In contrast with previous studies, we find little evidence that intrahousehold allocation of fertilizer is inefficient Gender and generation gaps in productivity persist but lessen as we control for land quality Findings suggest that women’s fields may be less fertile but may also reflect distinctive objectives and modes of production
TL;DR: In this paper, a previously unused instrumental variable was introduced to estimate the elasticity of commercial water demand for firms served by a large municipal utility, and the authors found that firms are more responsive to one-period lagged average price than marginal price.
Abstract: In this paper, we introduce a previously unused instrumental variable to estimate the elasticity of commercial water demand for firms served by a large municipal utility. We then present evidence that firms are more responsive to one-period lagged average price than marginal price. Finally, we find notable differences in elasticity among different categories of businesses. The findings in this paper are particularly important as water utilities consider how to maintain revenue while coping with limited water supplies and increasing commercial demand.
TL;DR: This article examined the impact of China's land leasing policy on housing decentralization from 1990 to 2000, exploiting exogenous variation arising from a pilot phase and addressing potential selection bias with a matched difference-in-differences estimator.
Abstract: A key policy instrument fueling China’s rapid urban growth has been the urban land lease, which generates municipal revenue through the sale of land rights to developers. By linking local infrastructure investment to farmland development, the policy creates the potential for shifts in urban form. This paper examines the impact of China’s leasing policy on housing decentralization from 1990 to 2000, exploiting exogenous variation arising from a pilot phase and addressing potential selection bias with a matched difference-in-differences estimator. I find the land leasing policy resulted in a 19.1% decline in construction in the urban core and a 26.2% increase in peri-urban areas.
TL;DR: In this paper, the authors explored the sources of preference heterogeneity for landslide protection, with a special focus on spatial determinants, including geographical characteristics, spatial error components, and landslide locational effects.
Abstract: This paper explores the sources of preference heterogeneity for landslide protection, with a special focus on spatial determinants. The data were collected using a stated preference survey of landslide hazards in an Italian mountain valley, using a best-worst ranking approach, in-person interviews, and site-specific choice sets. Preference heterogeneity is analyzed using individual and spatial variables with a focus on the importance of geographical characteristics, spatial error components, and landslide locational effects. Results from spatial choice models reveal the importance of accounting for spatial heterogeneity at different levels, given that taste variations were present at both individual and municipality levels.
Abstract: An ongoing debate in the food security literature focuses on a definition of food security that is operational and generalizable. In this paper, we suggest that food security is related to the implicit prices paid by households in urban residential markets for food access. Using the hedonic property value model, we examine the distribution of implicit prices across socioeconomic characteristics for access to local food sources. Using land use and residential transaction data from Milwaukee, Wisconsin, we find evidence of higher implicit access prices in neighborhoods with a larger proportion of African American and Latino American households. (JEL Q18, R21)