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Buying Ecological Services: Nature’s Harmonies, Fragmented Reserves and the Agricultural Extensification Debate

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Author Info
Hennessy, David A.
Lapan, Harvey E.

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Abstract

Growing demand for cropland products has placed intense pressure on the ability of land resources to support nature, straining public budgets to purchase environmental goods. Fixing overall agricultural output, two policy options are whether to promote more extensive and nature friendly farming practices or to produce intensively on some land and leave the rest wild. Microeconomic models of the topic have not accommodated widely recognized complementary spatial externalities in providing ecological services. This article does so, identifying also a third policy possibility. This is that environmental services can follow a smoothly varying spatial path characterized by harmonic functions.

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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 13005.

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Date of creation: 20 Nov 2008
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Handle: RePEc:isu:genres:13005

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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Keywords: biofuels; environmental policy; spatial externalities; Wirtinger’s inequality.;

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  1. Long, Ngo Van & Soubeyran, Antoine, 2001. "Cost Manipulation Games in Oligopoly, with Costs of Manipulating," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(2), pages 505-33, May.
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  2. Mitchell, Donald, 2008. "A note on rising food prices," Policy Research Working Paper Series 4682, The World Bank. [Downloadable!]
  3. Bergstrom, Theodore C & Varian, Hal R, 1985. "When Are Nash Equilibria Independent of the Distribution of Agents' Characteristics?," Review of Economic Studies, Blackwell Publishing, vol. 52(4), pages 715-18, October. [Downloadable!] (restricted)
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  4. Albers, Heidi J. & Ando, Amy W. & Chen, Xiaoxuan, 2008. "Spatial-econometric analysis of attraction and repulsion of private conservation by public reserves," Journal of Environmental Economics and Management, Elsevier, vol. 56(1), pages 33-49, July. [Downloadable!] (restricted)
  5. Stephen W. Salant & Greg Shaffer, 1999. "Unequal Treatment of Identical Agents in Cournot Equilibrium," American Economic Review, American Economic Association, vol. 89(3), pages 585-604, June. [Downloadable!] (restricted)
  6. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September. [Downloadable!] (restricted)
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