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Structural Agricultural Land Use Modelling

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  • Fezzi, Carlo
  • Bateman, Ian J.

Abstract

This paper develops a structural econometric model of agricultural land use and production based on the joint multi-output technology representation introduced by Chambers and Just (1989). Starting from a flexible specification of the farm profit function we derive land use allocation, input applications, crops yield and livestock number equations in a joint and theoretically consistent framework. We present an empirical application using fine-scale spatial data covering the entirety of England and Wales and including the main economic, policy and environmental drivers of land use change in the past 40 years. To account for the presence of censored observations in this micro-level data we estimate the model as a system of two-limits Tobit equations via Quasi-Maximum Likelihood. We finally compare the forecasting ability of our approach against an established benchmark: the land use share logit model.

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File URL: http://purl.umn.edu/51423
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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51423.

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Date of creation: 2009
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Handle: RePEc:ags:iaae09:51423

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Keywords: Land Use; Structural Econometric Modelling; Agro-Environmental Policy; System of Censored Equations; Multivariate Tobit; Quasi-Maximum Likelihood.; Environmental Economics and Policy; Land Economics/Use; Research Methods/ Statistical Methods; Q15; Q53; C34.;

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  1. Barry T. Coyle, 1999. "Risk Aversion and Yield Uncertainty in Duality Models of Production: A Mean-Variance Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 553-567.
  2. Lubowski, Ruben N. & Plantinga, Andrew J. & Stavins, Robert N., 2005. "Land-Use Change and Carbon Sinks: Econometric Estimation of the Carbon Sequestration Supply Function," Working paper 225, Regulation2point0.
  3. Alessandro Pinto & Gerald C. Nelson, 2009. "Land Use Change with Spatially Explicit Data: A Dynamic Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 43(2), pages 209-229, June.
  4. J. Scott Shonkwiler & Steven T. Yen, 1999. "Two-Step Estimation of a Censored System of Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 972-982.
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  7. Diansheng Dong & Brian W. Gould & Harry M. Kaiser, 2004. "Food Demand in Mexico: An Application of the Amemiya-Tobin Approach to the Estimation of a Censored Food System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1094-1107.
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  10. Douglas J. Miller, 1999. "An Econometric Analysis of the Costs of Sequestering Carbon in Forests," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 812-824.
  11. S. Niggol Seo & Robert Mendelsohn, 2008. "Measuring impacts and adaptations to climate change: a structural Ricardian model of African livestock management-super-1," Agricultural Economics, International Association of Agricultural Economists, vol. 38(2), pages 151-165, 03.
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  13. Wu, JunJie & Adams, Richard M. & Kling, Catherine L. & Tanaka, Katsuya, 2004. "From Microlevel Decisions to Landscape Changes: An Assessment of Agricultural Conservation Policies," Staff General Research Papers 12519, Iowa State University, Department of Economics.
  14. Andrew J. Plantinga, 1996. "The Effect of Agricultural Policies on Land Use and Environmental Quality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 1082-1091.
  15. Guyomard & Baudry & Carpentier, 1996. "Estimating crop supply response in the presence of farm programmes : application to the CAP," Working Papers 153134, Institut National de la Recherche Agronomique, France.
  16. David E. Sahn, 2005. "Consistent Estimation of Censored Demand Systems Using Panel Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 660-672.
  17. Boots, Maroeska & Oude Lansink, Alfons & Peerlings, Jack, 1997. "Efficiency Loss Due to Distortions in Dutch Milk Quota Trade," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 31-46.
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  21. Christian Langpap & Ivan Hascic & JunJie Wu, 2008. "Protecting Watershed Ecosystems through Targeted Local Land Use Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 684-700.
  22. Amemiya, Takeshi, 1973. "Regression Analysis when the Dependent Variable is Truncated Normal," Econometrica, Econometric Society, vol. 41(6), pages 997-1016, November.
  23. Kenneth M. Chomitz & Timothy S. Thomas, 2003. "Determinants of Land Use in Amaz´┐Żnia: A Fine-Scale Spatial Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 1016-1028.
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Cited by:
  1. Ian Bateman & Georgina Mace & Carlo Fezzi & Giles Atkinson & Kerry Turner, 2011. "Economic Analysis for Ecosystem Service Assessments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(2), pages 177-218, February.

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