Landscape Outcomes in a Model of Edge Effect Externalities: A Computational Economics Approach
This paper examines the impact of distance-dependent spatial externalities, referred to as "edge-effect externalities," on free-market equilibrium land use patterns. Under edge-effect externalities, maximization of production possibilities will depend on minimization of landscape fragmentation, implying that both the correct allocation and the correct arrangement of land uses will be necessary conditions for an economically efficient outcome. Using an agent-based cellular automaton model, this paper deminstrates that in an unregulated free-market without bargaining, both Pareto-efficient and inefficient equilibrium landscape patterns are possible. Initial configurations of firms, permanent geographic features, and transportation costs will impact final outcomes. Further, edge-effect externalities can produce economic landscapes which are more dispersed and fragmented than the pure Von Thunen outcome.
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- Helfand Gloria E. & Rubin Jonathan, 1994. "Spreading versus Concentrating Damages: Environmental Policy in the Presence of Nonconvexities," Journal of Environmental Economics and Management, Elsevier, vol. 27(1), pages 84-91, July.
- Freeman, A. III, 1984. "Depletable externalities and pigouvian taxation," Journal of Environmental Economics and Management, Elsevier, vol. 11(2), pages 173-179, June.
- Tietenberg, T. H., 1974. "Derived decision rules for pollution control in a general equilibrium space economy," Journal of Environmental Economics and Management, Elsevier, vol. 1(1), pages 3-16, May.
- Albers, Heidi J., 1996. "Modeling Ecological Constraints on Tropical Forest Management: Spatial Interdependence, Irreversibility, and Uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 73-94, January.
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