Climate Change, Vegetation, and Welfare: Estimating the Welfare Loss to Landowners of Marginal Shifts in Blue Oak Habitat
AbstractScientists predict that climate change will cause suitable habitat ranges to shift for many plant species. To the extent that proximity to particular vegetation types increases residents’ utility and/or these shifts affect services valued by all of society, such geographic shifts in ecosystems may significantly affect societal welfare. In this paper, I estimate the possible welfare change from the marginal loss of blue oak due to development and climate change in the Tulare Lake Basin (Fresno, Kern, and Tulare Counties) in California. Using a hedonic pricing model, the marginal values of blue oaks and the land cover types most likely to replace them (herbaceous, urban, and crop land) are estimated at multiple spatial scales, using 1997-2003 sales of single family residences for the Tulare Lake Basin. In addition to the common identification problems of specification error, omitted variable bias, and multicollinearity, the variables measuring the degree of proximity of a property to land cover types are endogenous. To identify the marginal values of land cover types at multiple spatial scales using two-stage least squares, instrumental variables are developed using soil data. Cluster robust standard errors are calculated due to spatial autocorrelation within neighborhoods. Results indicate that households do not differentiate between vegetation land cover types; there is no indirect cost of climate change resulting from marginal shifts in land cover types. The results also indicate that Tulare Lake Basin households are unlikely to be negatively affected by, and may actually benefit from, marginal losses of blue oak woodlands to agriculture and urban land use. These results highlight the importance of non-use and ecosystem services values, and the importance of coordinating land use policies at spatial scales above the municipality level.
Download InfoIf 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.
Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 124744.
Date of creation: 2012
Date of revision:
Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
Environmental Economics and Policy; Land Economics/Use;
This paper has been announced in the following NEP Reports:
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.:
- Elena G. Irwin & Nancy E. Bockstael, 2001. "The Problem of Identifying Land Use Spillovers: Measuring the Effects of Open Space on Residential Property Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 698-704.
- Ekeland, Ivar & Heckman, James J. & Nesheim, Lars, 2003.
"Identification and Estimation of Hedonic Models,"
IZA Discussion Papers
853, Institute for the Study of Labor (IZA).
- Ivar Ekeland & James J. Heckman & Lars P. Nesheim, 2003. "Identification and Estimation of Hedonic Models," NBER Working Papers 9910, National Bureau of Economic Research, Inc.
- Ivar Ekeland & James Heckman & Lars Nesheim, 2002. "Identification and estimation of hedonic models," CeMMAP working papers CWP07/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Ekeland, Ivar & Heckman, James J. & Nesheim, Lars, 2004. "Identification and Estimation of Hedonic Models," Economics Papers from University Paris Dauphine 123456789/6486, Paris Dauphine University.
- Ivar Ekeland & James J. Heckman & Lars Nesheim, 2003. "Identification and Estimation of Hedonic Models," CESifo Working Paper Series 1031, CESifo Group Munich.
- Abbott, Joshua K. & Klaiber, H. Allen, 2010. "Is all space created equal? Uncovering the relationship between competing land uses in subdivisions," Ecological Economics, Elsevier, vol. 70(2), pages 296-307, December.
- Cropper, Maureen L & Deck, Leland B & McConnell, Kenneth E, 1988. "On the Choice of Functional Form for Hedonic Price Functions," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 668-75, November.
- Brown, James N & Rosen, Harvey S, 1982.
"On the Estimation of Structural Hedonic Price Models,"
Econometric Society, vol. 50(3), pages 765-68, May.
- James N. Brown & Harvey S. Rosen, 1982. "On the Estimation of Structural Hedonic Price Models," NBER Technical Working Papers 0018, National Bureau of Economic Research, Inc.
- Patrick Bajari & C. Lanier Benkard, 2005. "Demand Estimation with Heterogeneous Consumers and Unobserved Product Characteristics: A Hedonic Approach," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1239-1276, December.
- Katrin Rehdanz, 2002. "Hedonic Pricing Of Climate Change Impacts To Households In Great Britain," Working Papers FNU-13, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2002.
- H. Allen Klaiber & Daniel J. Phaneuf, 2009. "Do Sorting and Heterogeneity Matter for Open Space Policy Analysis? An Empirical Comparison of Hedonic and Sorting Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1312-1318.
- Sudip Chattopadhyay, 1999. "Estimating the Demand for Air Quality: New Evidence Based on the Chicago Housing Market," Land Economics, University of Wisconsin Press, vol. 75(1), pages 22-38.
- Elena G. Irwin, 2002. "The Effects of Open Space on Residential Property Values," Land Economics, University of Wisconsin Press, vol. 78(4), pages 465-480.
- Aline Chiabai & C. M. Travisi & H. Ding & A. Markandya & P.A.L.D Nunes, 2009. "Economic Valuation of Forest Ecosystem Services: Methodology and Monetary Estimates," Working Papers 2009.12, Fondazione Eni Enrico Mattei.
- Tyrvainen, Liisa & Miettinen, Antti, 2000. "Property Prices and Urban Forest Amenities," Journal of Environmental Economics and Management, Elsevier, vol. 39(2), pages 205-223, March.
- Maddison, David & Bigano, Andrea, 2003. "The amenity value of the Italian climate," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 319-332, March.
- Heckman, James J. & Matzkin, Rosa & Nesheim, Lars, 2003.
"Simulation and Estimation of Hedonic Models,"
IZA Discussion Papers
843, Institute for the Study of Labor (IZA).
- Geoghegan, Jacqueline & Wainger, Lisa A. & Bockstael, Nancy E., 1997. "Spatial landscape indices in a hedonic framework: an ecological economics analysis using GIS," Ecological Economics, Elsevier, vol. 23(3), pages 251-264, December.
- David J. Maddison & Katrin Rehdanz, 2004.
"The Amenity Value Of Climate To Households In Germany,"
FNU-39, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2005.
- Katrin Rehdanz & David Maddison, 2009. "The amenity value of climate to households in Germany," Oxford Economic Papers, Oxford University Press, vol. 61(1), pages 150-167, January.
- Cragg, Michael & Kahn, Matthew, 1997.
"New Estimates of Climate Demand: Evidence from Location Choice,"
Journal of Urban Economics,
Elsevier, vol. 42(2), pages 261-284, September.
- Cragg, M. & Kahn, M., 1995. "New Estimates on Climate Demand: Evidence from Location Choice," Discussion Papers 1995_34, Columbia University, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.