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Agricultural Land Retirement and Slippage: Lessons from an Australian Case Study

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  • Iain Fraser
  • Robert Waschik

Abstract

This paper uses a Computable General Equilibrium (CGE) model to examine the economic implications of agricultural land retirement from wool production for conservation in Australia. Employing an innovative specific-factors characterization of production to generate short-run and long-run results, we show that the potential welfare gains from land retirement can be significant. However, in several scenarios examined we find that slippage in agricultural production is significant, resulting in reduced welfare. Our slippage results provide insights into the relationship between the potential causes of slippage and describe how a land retirement policy can be designed to minimize this effect.

Suggested Citation

  • Iain Fraser & Robert Waschik, 2005. "Agricultural Land Retirement and Slippage: Lessons from an Australian Case Study," Land Economics, University of Wisconsin Press, vol. 81(2).
  • Handle: RePEc:uwp:landec:v:81:y:2005:i:2:p206-226
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    Citations

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    Cited by:

    1. Miguel Cantillo, 2015. "Dynamic Investment with Adverse Selection and Moral Hazard," Working Papers 201501, Universidad de Costa Rica, revised Mar 2015.
    2. Alix-Garcia, Jennifer M. & Shapiro, Elizabeth N. & Sims, Katharine R. E., 2010. "Forest Conservation and Slippage: Evidence from Mexico's National Payments for Ecosystem Services Program," Staff Paper Series 548, University of Wisconsin, Agricultural and Applied Economics.
    3. David A. Fleming, 2014. "Slippage effects of land-based policies: Evaluating the Conservation Reserve Program using satellite imagery," Papers in Regional Science, Wiley Blackwell, vol. 93, pages 167-178, November.
    4. Jennifer M. Alix-Garcia & Elizabeth N. Shapiro & Katharine R. E. Sims, 2012. "Forest Conservation and Slippage: Evidence from Mexico’s National Payments for Ecosystem Services Program," Land Economics, University of Wisconsin Press, vol. 88(4), pages 613-638.
    5. Iain Fraser & Robert Waschik, 2010. "The Double Dividend Hypothesis in a CGE Model: Specific Factors and Variable Labour Supply," Working Papers 2010.02, School of Economics, La Trobe University.
    6. Fraser, Iain & Waschik, Robert, 2013. "The Double Dividend hypothesis in a CGE model: Specific factors and the carbon base," Energy Economics, Elsevier, vol. 39(C), pages 283-295.
    7. Juan Robalino & Alexander Pfaff & Laura Villalobos, 2015. "Deforestation spillovers from Costa Rican protected areas," Working Papers 201502, Universidad de Costa Rica, revised Sep 2015.
    8. Matthew Freeman & Christopher Anderson, 2013. "Modeling Effort and Lobbying in a Heterogeneous Common Pool Resource Setting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(3), pages 399-414, November.
    9. repec:oup:apecpp:v:39:y:2017:i:3:p:441-457. is not listed on IDEAS

    More about this item

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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