Advanced Search
MyIDEAS: Login

The role of uncertainty and expectations in modeling (range)land use strategies: An application of dynamic optimization modeling with recursion

Contents:

Author Info

  • Domptail, Stéphanie
  • Nuppenau, Ernst-August
Registered author(s):

    Abstract

    This paper presents a bio-economic optimization modeling approach for the simulation of land use decision making by farmers faced with climatic uncertainties. The approach is applied to the study of land use strategies on commercial ranches in Namibia. First, we compare two models differing in their structure: the first one is an inter-temporal optimization model (forward-looking with perfect foresight) while the second is recursive and it explicitly incorporates uncertainty in the decision making process. Second, we point out the structural advantage of the recursive optimization model in its ability to simulate how decision makers' perceptions on the occurrence of stochastic events alter land use strategies and their economic and ecological outcomes. Both models make use of a State-and-Transition conceptual framework to depict the bio-economic feedback. We found that the incorporation of rainfall uncertainty in decision making is crucial when modeling land use strategies in highly variable ecological-economic systems such as ranches in arid rain-fed areas. Where knowledge of rainfall distribution is inaccurate (due to lack of experience or climate change) both, farmers and rangelands, would be better off by precautiously expecting low rainfalls. Finally, our results show that minimizing herd size adjustment costs would support the establishment of sustainable land use strategies.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/B6VDY-50YFC01-2/2/d72372684ac772724f6e91cec0cf21ba
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 69 (2010)
    Issue (Month): 12 (October)
    Pages: 2475-2485

    as in new window
    Handle: RePEc:eee:ecolec:v:69:y:2010:i:12:p:2475-2485

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/ecolecon

    Related research

    Keywords: Bio-economic model Rangelands Stochastic modeling Recursive modeling State-and-Transition Rainfall expectations;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Michael T. Wallace & Joan E. Moss, 2002. "Farmer Decision-Making with Conflicting Goals: A Recursive Strategic Programming Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(1), pages 82-100.
    2. Charles Perrings & David Stern, 2000. "Modelling Loss of Resilience in Agroecosystems: Rangelands in Botswana," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 16(2), pages 185-210, June.
    3. Janssen, Sander & van Ittersum, Martin K., 2007. "Assessing farm innovations and responses to policies: A review of bio-economic farm models," Agricultural Systems, Elsevier, vol. 94(3), pages 622-636, June.
    4. Finnoff, David & Shogren, Jason F. & Leung, Brian & Lodge, David, 2005. "The importance of bioeconomic feedback in invasive species management," Ecological Economics, Elsevier, vol. 52(3), pages 367-381, February.
    5. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
    6. Janssen, Marco A. & Anderies, John M. & Walker, Brian H., 2004. "Robust strategies for managing rangelands with multiple stable attractors," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 140-162, January.
    7. Nerlove, Marc, 1983. "Expectations, Plans, and Realizations in Theory and Practice," Econometrica, Econometric Society, vol. 51(5), pages 1251-79, September.
    8. Stefan Baumgärtner & Martin F. Quaas, 2007. "Agro-biodiversity as natural insurance and the development of financial insurance markets," Working Paper Series in Economics 61, University of Lüneburg, Institute of Economics.
    9. Stefan Baumgärtner & Martin F. Quaas, 2007. "Ecological-economic viability as a criterion of strong sustainability under uncertainty," Working Paper Series in Economics 67, University of Lüneburg, Institute of Economics.
    10. Batabyal, Amitrajeet A., 1999. "Aspects of the optimal management of cyclical ecological-economic systems," Ecological Economics, Elsevier, vol. 30(2), pages 285-292, August.
    11. Higgins, Steven I. & Kantelhardt, Jochen & Scheiter, Simon & Boerner, Jan, 2007. "Sustainable management of extensively managed savanna rangelands," Ecological Economics, Elsevier, vol. 62(1), pages 102-114, April.
    12. Perrings, Charles & Walker, Brian, 2004. "Conservation in the optimal use of rangelands," Ecological Economics, Elsevier, vol. 49(2), pages 119-128, June.
    13. Babiker, Mustafa & Gurgel, Angelo & Paltsev, Sergey & Reilly, John, 2009. "Forward-looking versus recursive-dynamic modeling in climate policy analysis: A comparison," Economic Modelling, Elsevier, vol. 26(6), pages 1341-1354, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Briner, Simon & Finger, Robert, 2012. "Bio-economic modelling of decisions under yield and price risk for suckler cow farms," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122547, European Association of Agricultural Economists.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:69:y:2010:i:12:p:2475-2485

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.