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Demand-Side Factors in Optimal Land Conservation Choice

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  • Ando, Amy Whritenour
  • Shah, Payal

Abstract

The dominant paradigm of conservation-reserve planning in economics is to optimize the provision of physical conservation benefits (measured in units like species protected) given a budget constraint. Large-scale biology-based priority setting implies that the value we place on biodiversity and ecosystem function is not affected by human proximity to that natural capital. There is significant evidence, however, that human willingness to pay (WTP) for conservation declines with distance (e.g. Loomis 2000) – a phenomenon we refer to as “spatial value decay”. This paper begins a new strand of the conservation planning literature that takes demand-side factors – the location of people in the landscape and the degree to which their willingness to pay for an environmental amenity depends on proximity to that amenity – into account. We use theoretical models of linear abstract landscapes to explore the impact of demand-side factors on two facets of optimal conservation choices: siting of a single reserve when conservation value is greatest near a critical site in the landscape (optimal targeting), and siting of multiple reserves when fragmentation reduces physical conservation services produced (optimal agglomeration). Our results show how optimal conservation planning might differ from straight ecological prescriptions. While minimum fragmentation is often optimal, planners can usefully employ increased fragmentation to capture value when people’s preferences are not very highly localized. In a targeting problem, the ecologically critical site is often the right thing to protect, but optimal policy balances proximity to critical site with proximity to people. In some scenarios, the payoff to using a reserve design approach that considers demand-side factors is large. Finally, we find that spatial value decay reduces the maximum levels of welfare and environmental services that can be gained from any conservation-planning approach. When spatial value decay is present because people are simply unaware of environmental resources farther away from where they live, education campaigns might serve to increase social welfare and environmental services.

Suggested Citation

  • Ando, Amy Whritenour & Shah, Payal, 2009. "Demand-Side Factors in Optimal Land Conservation Choice," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49209, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea09:49209
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    References listed on IDEAS

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    1. Ando, Amy Whritenour, 2001. "Economies of Scope in Endangered-Species Protection: Evidence from Interest-Group Behavior," Journal of Environmental Economics and Management, Elsevier, vol. 41(3), pages 312-332, May.
    2. Horan, Richard D. & Shogren, Jason F. & Gramig, Benjamin M., 2008. "Wildlife conservation payments to address habitat fragmentation and disease risks," Environment and Development Economics, Cambridge University Press, vol. 13(03), pages 415-439, June.
    3. Pate, Jennifer & Loomis, John, 1997. "The effect of distance on willingness to pay values: a case study of wetlands and salmon in California," Ecological Economics, Elsevier, vol. 20(3), pages 199-207, March.
    4. Ronald J. Sutherland & Richard G. Walsh, 1985. "Effect of Distance on the Preservation Value of Water Quality," Land Economics, University of Wisconsin Press, vol. 64(3), pages 281-291.
    5. Philip McCann, 2005. "Transport costs and new economic geography," Journal of Economic Geography, Oxford University Press, vol. 5(3), pages 305-318, June.
    6. Hannon, Bruce, 1994. "Sense of place: geographic discounting by people, animals and plants," Ecological Economics, Elsevier, vol. 10(2), pages 157-174, July.
    7. Costello, Christopher & Polasky, Stephen, 2004. "Dynamic reserve site selection," Resource and Energy Economics, Elsevier, vol. 26(2), pages 157-174, June.
    8. Onal, Hayri & Yanprechaset, Pornchanok, 2007. "Site accessibility and prioritization of nature reserves," Ecological Economics, Elsevier, vol. 60(4), pages 763-773, February.
    9. Nelson, Erik & Uwasu, Michinori & Polasky, Stephen, 2007. "Voting on open space: What explains the appearance and support of municipal-level open space conservation referenda in the United States?," Ecological Economics, Elsevier, vol. 62(3-4), pages 580-593, May.
    10. 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.
    11. Kotchen, Matthew J. & Powers, Shawn M., 2006. "Explaining the appearance and success of voter referenda for open-space conservation," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 373-390, July.
    12. John B. Loomis, 2000. "Vertically Summing Public Good Demand Curves: An Empirical Comparison of Economic versus Political Jurisdictions," Land Economics, University of Wisconsin Press, vol. 76(2), pages 312-321.
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    Cited by:

    1. Bamiére, Laure & David, Maia & Vermont, Bruno, 2011. "Agri-Environmental Policies When the Spatial Pattern of Biodiversity Reserves Matters," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114239, European Association of Agricultural Economists.
    2. Sahan T. M. Dissanayake & Amy W. Ando, 2014. "Valuing Grassland Restoration: Proximity to Substitutes and Trade-offs among Conservation Attributes," Land Economics, University of Wisconsin Press, vol. 90(2), pages 237-259.
    3. Abildtrup, Jens & Garcia, Serge & Olsen, Søren Bøye & Stenger, Anne, 2013. "Spatial preference heterogeneity in forest recreation," Ecological Economics, Elsevier, vol. 92(C), pages 67-77.
    4. Katharine Sims, 2014. "Do Protected Areas Reduce Forest Fragmentation? A Microlandscapes Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(2), pages 303-333, June.
    5. repec:eee:ecomod:v:222:y:2011:i:15:p:2856-2866 is not listed on IDEAS
    6. Wätzold, Frank & Drechsler, Martin, 2014. "Agglomeration payment, agglomeration bonus or homogeneous payment?," Resource and Energy Economics, Elsevier, vol. 37(C), pages 85-101.
    7. Maarten Punt & Hans-Peter Weikard & Ekko Ierland & Jan Stel, 2012. "Large Scale Marine Protected Areas for Biodiversity Conservation Along a Linear Gradient: Cooperation, Strategic Behavior or Conservation Autarky?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(2), pages 203-228, October.

    More about this item

    Keywords

    Environmental Economics and Policy; Resource /Energy Economics and Policy;

    JEL classification:

    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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