Rural Land Use: Traditional Agriculture or Forestry?
The signing of the Kyoto Protocol and the official recognition of forestry’s capacity to sequester carbon has prompted considerable interest, within the European Union, in forestry as a competing land use application. However, despite large increases in grants to forestry, afforestation rates, in certain EU countries, are below national targets. In this paper, we employ a real options model to theoretically explain why farmers may be slow to switch land from traditional agriculture to forestry. The theoretical model is then used to motivate an empirical dynamic panel data model and both models are applied to Irish data.
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- Andrew J. Plantinga & Douglas J. Miller, 2001. "Agricultural Land Values and the Value of Rights to Future Land Development," Land Economics, University of Wisconsin Press, vol. 77(1), pages 56-67.
- Brent Sohngen & Robert Mendelsohn, 2003. "An Optimal Control Model of Forest Carbon Sequestration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 448-457.
- Abebayehu Tegene & Keith Wiebe & Betsey Kuhn, 1999. "Irreversible Investment Under Uncertainty: Conservation Easements and the Option to Develop Agricultural Land," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 203-219.
- Stavins, Robert N & Jaffe, Adam B, 1990. "Unintended Impacts of Public Investments on Private Decisions: The Depletion of Forested Wetlands," American Economic Review, American Economic Association, vol. 80(3), pages 337-52, June.
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