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Urbanization and Agricultural Structural Adjustments: Some Lessons from European Cities

Author

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  • Walid Oueslati

    () (Granem - Groupe de Recherche ANgevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut National de l'Horticulture et du Paysage)

  • Julien Salanié

    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

  • Junjie Wu

    (Department of Applied Economics, Oregon State University - OSU - Oregon State University)

Abstract

Urbanization presents both opportunities and challenges to agriculture. This paper analyzes the effect of urbanization on the structure and profitability of agriculture at the rural-urban fringe. We develop a theoretical model accounting for changes in the amount of urban development, the level of fragmentation, and population density associated with urbanization. We show that urbanization not only affects the land allocation between traditional and highvalue crops, but also changes relative input and output prices for the two types of crops. We conduct an empirical analysis to estimate the effect of increasing population density and urban fragmentation on farm returns for a set of European metropolises using a Bayesian averaged model that deals with model uncertainty. Our results show that increasing population density increases farm returns while increasing land fragmentation may have a detrimental effect in the beginning but a positive effect for high levels of fragmentation.

Suggested Citation

  • Walid Oueslati & Julien Salanié & Junjie Wu, 2014. "Urbanization and Agricultural Structural Adjustments: Some Lessons from European Cities," Working Papers halshs-01098773, HAL.
  • Handle: RePEc:hal:wpaper:halshs-01098773
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01098773
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    References listed on IDEAS

    as
    1. Vincent E. Breneman & Richard F. Nehring, 2006. "Urban Sprawl and Farmland Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 915-929.
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    Cited by:

    1. Cárdenas Rodríguez, Miguel & Dupont-Courtade, Laura & Oueslati, Walid, 2016. "Air pollution and urban structure linkages: Evidence from European cities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 1-9.

    More about this item

    Keywords

    urban d evelopment patterns; urban sprawl; farm profitability; Farmland;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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