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Amenity driven price effects and conservation reserve site selection: A dynamic linear integer programming approach

  • Dissanayake, Sahan T.M.
  • Önal, Hayri

Most conservation reserve design models presented in the literature are static and ignore the dynamic economic aspects of site selection. Typically conservation programs operate under time-related (e.g. annual) budgets and purchase land over time in a sequential manner. The uncertainty of land development has been incorporated in a few dynamic reserve selection formulations using stochastic dynamic programming. However, the existing formulations do not explicitly deal with inter-temporal price and location linkages. We address this issue here and present a two-period linear integer programming model for conservation reserve design that incorporates amenity driven price feedback effects inherent in the reserve development problem. In addition, the model includes spatial and ecological criteria. We then use this model to answer the question “How suboptimal is ignoring amenity driven price effects in reserve design models?” We apply the model to artificially generated data sets and compare the results with the results of an iterated static model that considers only one period at a time. We find that the dynamic model with price feedback effects selects sites at a lower per-site cost. The policy implication of this finding is that conservation programs should avoid purchasing land in the same neighborhood over multiple time periods.

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Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 70 (2011)
Issue (Month): 12 ()
Pages: 2225-2235

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Handle: RePEc:eee:ecolec:v:70:y:2011:i:12:p:2225-2235
DOI: 10.1016/j.ecolecon.2011.06.015
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  1. JunJie Wu & Elena G. Irwin, 2008. "Optimal Land Development with Endogenous Environmental Amenities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 232-248.
  2. Williams, Justin C. & ReVelle, Charles S., 1998. "Reserve assemblage of critical areas: A zero-one programming approach," European Journal of Operational Research, Elsevier, vol. 104(3), pages 497-509, February.
  3. J C Williams & C S ReVefle, 1996. "A 0 - 1 programming approach to delineating protected reserves," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 23(5), pages 607-624, September.
  4. Adina M. Merenlender, 2006. "Habitat and Open Space at Risk of Land-Use Conversion: Targeting Strategies for Land Conservation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 28-42.
  5. 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.
  6. JunJie Wu & Richard M. Adams & Andrew J. Plantinga, 2004. "Amenities in an Urban Equilibrium Model: Residential Development in Portland, Oregon," Land Economics, University of Wisconsin Press, vol. 80(1), pages 19-32.
  7. J C Williams & C S ReVelle, 1996. "A 0–1 Programming Approach to Delineating Protected Reserves," Environment and Planning B, SAGE Publishing, vol. 23(5), pages 607-624, October.
  8. Tajibaeva, Liaila & Haight, Robert G. & Polasky, Stephen, 2003. "A Discrete Space Urban Model With Environmental Amenities," 2003 Annual meeting, July 27-30, Montreal, Canada 21907, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  9. JunJie Wu, 2001. "Environmental Amenities and the Spatial Pattern of Urban Sprawl," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 691-697.
  10. Costello, Christopher & Polasky, Stephen, 2004. "Dynamic reserve site selection," Resource and Energy Economics, Elsevier, vol. 26(2), pages 157-174, June.
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