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Estimation Of A Discrete-Choice Model With Spatial Interactions The Case Of Deforestation In Western Attica Between 1990 And 2000

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  • Elpianna Emmanouilidi

    () (Athens University of Economics and Business, Dept. of Economic Science.)

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    Abstract

    This paper presents an environmental application, investigating land use changes of forests and semi-natural areas in the Greek region of Western Attica. Its objective is to estimate the spatial equilibrium distribution of individual deforestation actions and determine the degree of coordination in individual behaviour. For this purpose, the paper starts by creating a virtual economic network of 156 agents, by laying an ad hoc square grid over the region. Next, the dominant forest land use changes have been determined for each land parcel, using CORINE land cover maps for the years 1990 and 2000. The economic model used is a discrete choice model, with endogenous spatial interactions. Even though spatial interactions produce multiple equilibria, the present research proposes a two-stage fixed point estimator, yielding a unique solution. Empirical findings suggest that equilibrium deforestation actions are strategic substitutes for the environment and complements for agriculture, and are characterized by a relative lack of coordination in individual behaviour.

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    Bibliographic Info

    Article provided by Hellenic Association of Regional Scientists in its journal Regional Science Inquiry.

    Volume (Year): IV (2012)
    Issue (Month): 3 (December)
    Pages: 69-83

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    Handle: RePEc:hrs:journl::y:2012:v:4:i:3:p:69-83

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    Related research

    Keywords: land use change; spatial interaction; discrete choice modeling; deforestation;

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    1. Aguirregabiria, Victor, 2004. "Pseudo maximum likelihood estimation of structural models involving fixed-point problems," Economics Letters, Elsevier, vol. 84(3), pages 335-340, September.
    2. Blume, Lawrence E. & Brock, William A. & Durlauf, Steven N. & Ioannides, Yannis M., 2010. "Identification of Social Interactions," Economics Series 260, Institute for Advanced Studies.
    3. Yannis Ioannides, 2006. "Topologies of social interactions," Economic Theory, Springer, vol. 28(3), pages 559-584, 08.
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