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Calibration of a Land Cover Supply Function Using Transition Probabilities


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  • Ahmed, Syud Amer
  • Thomas Hertel
  • Ruben Lubowski


An important question that arises frequently in the economic analysis of environmental and energy policies is, how does the supply of land across various uses change in response to policies? The GTAP Modeling framework of Hertel (1997) addresses this question by determining the supply of land across different uses through a Constant Elasticity of Transformation (CET) supply function. In the standard GTAP Model, the only type of land explicitly modeled is agricultural land, and this is distributed across uses with a one-level, CET function. However, in the GTAP-AEZ framework, data are available on a wider range of activities, including forestry (Sohngen et al., forthcoming). Given the recent availability of data on land cover (Ramankutty et al., 2007) and harvested cropland (Monfreda et al., forthcoming) the land supply decision is more naturally divided into the allocation of land cover across forestry, grazing and crops, followed by the allocation of harvested area across cropping activities. In this Research Memorandum, we focus on the former problem, namely the allocation of land cover between these three competing commercial uses. Naturally, the quality of the land cover responses produced by GTAP-based simulations is contingent on the value of the CET parameter. And the value of this parameter is likely to depend on the length of run for the analysis in question. This research memorandum describes the empirically based calibration strategy used to determine the value for the CET parameter, based on recent research in the United States. The following section reviews the theory of the CET parameter and how it is relevant for modeling land supply. Sections 3 and 4 describe the calibration methodology and data, while the final section discusses the calibration results.

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Paper provided by Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University in its series GTAP Research Memoranda with number 2947.

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Date of creation: 2009
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Handle: RePEc:gta:resmem:2947

Note: GTAP Research Memorandum No. 14
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Cited by:
  1. Claassen, Roger & Cooper, Joseph C. & Carriazo, Fernando, 2011. "Crop Insurance, Disaster Payments and Land Use Change: The Effect of Sodsaver on Incentives for Grassland Conversion," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(02), May.
  2. Sobowale, Flakkeh & Dicks, Michael R. & Adam, Brian D. & Campiche, Jody L., 2012. "Impact of United States Corn-Based Ethanol Production on Land Use," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119800, Southern Agricultural Economics Association.
  3. Hertel, Thomas W. & Tyner, Wallace E. & Birur, Dileep K., 2008. "Biofuels for all? Understanding the Global Impacts of Multinational Mandates," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6526, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. Kanlaya J. Barr & Bruce A. Babcock & Miguel Carriquiry & Andre Nasser & Leila Harfuch, 2010. "Agricultural Land Elasticities in the United States and Brazil," Food and Agricultural Policy Research Institute (FAPRI) Publications 10-wp505, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  5. Li, Liang & Taheripour, Farzad & Preckel, Paul V. & Tyner, Wallace E., 2012. "Improvement of GTAP Cropland Constant Elasticity of Transformation Nesting Structure," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124704, Agricultural and Applied Economics Association.
  6. Adenauer, Marcel & Britz, Wolfgang, 2012. "A Land Demand And Supply System With Endogenous Land Prices In The Capri Agricultural Sector Model," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137137, German Association of Agricultural Economists (GEWISOLA).
  7. Golub, Alla A. & Hertel, Thomas W. & Rose, Steven K. & Sohngen, Brent & Avetisyan, Misak, 2009. "The Relative Role of Land in Climate Policy," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49513, Agricultural and Applied Economics Association.
  8. Hertel, Thomas W., 2011. "The Global Supply and Demand for Agricultural Land in 2050: A Perfect Storm in the Making?," 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia 100557, Australian Agricultural and Resource Economics Society.


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