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on Agricultural Economics |
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Issue of 2014‒11‒01
28 papers chosen by |
| By: | Mulenga, Brian P.; Wineman, Ayala |
| Abstract: | In Zambia like in many other developing countries, the agricultural sector is highly dependent on rain-fed production and therefore vulnerable to weather shocks. Maize is the primary staple crop in Zambia, and is widely grown by smallholder farmers throughout the country, with a dual cassava-maize regime found only in the northern region. Among the smallholder farmers almost all production is rain-fed with very few farmers using mechanized irrigation. Climate change therefore has the potential to significantly reduce agricultural production and exacerbate poverty and food insecurity. |
| Keywords: | Climate trends, Zambia, Agricultural and Food Policy, Food Security and Poverty, |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midcwp:186605&r=agr |
| By: | Feather, Peter |
| Keywords: | Agricultural and Food Policy, Political Economy, |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iats13:182504&r=agr |
| By: | Benson, Todd; Mogues, Tewodaj; Woldeyohannes, Sileshi |
| Abstract: | What has been the recent performance of the agricultural sector in Mozambique and the progress made thus far toward achieving the objectives established under the Comprehensive Africa Agriculture Development Programme (CAADP) initiative for Mozambique that began in late-2011? |
| Keywords: | Agricultural development, Economic development, Agricultural policies, Poverty, food security, poverty alleviation, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1370&r=agr |
| By: | Langpap, Christian; Wu, JunJie |
| Abstract: | This paper integrates economic and physical models to assess how federal crop revenue insurance programs might affect land use, cropping systems, and environmental quality in the U.S. Corn Belt region. The empirical framework includes econometric models that predict land conversion, crop choices, and crop rotations at the parcel level based on expectation and variance of crop revenues, land quality, climate conditions, and physical characteristics at each site. The predictions are then combined with site-specific environmental production functions to determine the effect of revenue insurance on nitrate runoff and leaching, soil water and wind erosion, and carbon sequestration. Results suggest that crop insurance will have small impacts on conversions of non-cropland to cropland, but more significant impacts on crop choice. These changes in crop mix have moderate impacts on agricultural pollution. |
| Keywords: | Crop Insurance, Revenue Insurance, Crop Choice, Environmental Quality, Agricultural and Food Policy, Land Economics/Use, Risk and Uncertainty, Q18, Q28, |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaeacj:186643&r=agr |
| By: | Sands, Ronald; Jones, Carol; Marshall, Elizabeth |
| Abstract: | Recent volatility in agricultural commodity prices and projections of world population growth raise concerns about the ability of global agricultural production to meet future demand. This report explores the potential for future agricultural production to 2050, using a model-based analysis that incorporates the key drivers of agricultural production, along with the responses of producers and consumers to changes to those drivers. Model results show that for a percentage change in population, global production and consumption of major field crops respond at nearly the same rate. In response to a change in per capita income, the percentage change in crop consumption is much lower, about one-third the percentage change in income. The model also suggests that the global economy absorbs changes in agricultural productivity growth through compensating responses in yield, cropland area, crop prices, and international trade. |
| Keywords: | Agricultural productivity, food demand, population growth, income growth, land use, Crop Production/Industries, Demand and Price Analysis, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:186137&r=agr |
| By: | Cenacchi, Nicola |
| Abstract: | This report is a component of the Research Program on Climate Change, Agriculture, and Food Security (CCAFS)–-funded project “Impacts of Climate Extremes on Future Water and Food Security in South Asia and East Africa.†The goal of the project was to characterize extreme drought events, to improve on a methodology to assess the probability of these events in the future under climate change, to illustrate their impacts, and to provide suggestions on coping strategies. The present report sets the stage for the overall project by undertaking a review of the causes of vulnerability to drought in East Africa and the western Indo-Gangetic Plain (IGP) of South Asia, and discussing the options to increase resilience to drought in the agricultural sector. Agriculture is a high-risk endeavor in both regions, due to a combination of recurrent droughts—which may intensify due to climate change—poor soil fertility, and a host of constraints faced by farmers, especially low access to input and output markets. These factors, combined with farmers’ high aversion to risk, stifle investments in agriculture, resulting in continuous underachieving production, low income, and persisting poverty. |
| Keywords: | Climate change, Droughts, Risk, Water availability, Agricultural development, climate adaptation, vulnerability, shocks, environmental shocks, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1372&r=agr |
| By: | Tschirley, David; Myers, Robert; Zavale, Helder |
| Abstract: | This study examines the impact of the World Food Program’s (WFP) Local and Regional Procurement of food aid (LRP) on households and markets. It focuses on four countries and commodities where WFP LRP has had a meaningful share of the market: maize in Uganda and Mozambique, beans in Ethiopia, and High Energy Protein Supplements (HEPS) in Ethiopia and Malawi. The study investigates three specific impacts of LRP: (1) its effect on the level and variability of local market prices, (2) the impacts of resulting price and production changes on the economic welfare of local rural and urban households, and (3) the effect of LRP purchases and related training and inspection activities on the investment decisions and trading practices of traders and processors in the food system, and hence on the development of the food supply chain. |
| Keywords: | Food value chains, Africa, World Food Program, Agricultural and Food Policy, Food Security and Poverty, |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midiwp:184835&r=agr |
| By: | Schroeder, Kateryna G.; Meyers, William H. |
| Keywords: | Agricultural and Food Policy, Production Economics, |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iats13:182496&r=agr |
| By: | Kumcu, Aylin; Okrent, Abigail M . |
| Keywords: | Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uerstb:184292&r=agr |
| By: | von Grebmer, Klaus; Saltzman, Amy; Birol, Ekin; Wiesman, Doris; Prasai, Nilam; Yin, Sandra; Yohannes, Yisehac; Menon, Purnima; Thompson, Jennifer; Sonntag, Andrea |
| Abstract: | The 2014 Global Hunger Index (GHI) report the ninth in an annual series presents a multidimensional measure of national, regional, and global hunger. It shows that the world has made progress in reducing hunger since 1990, but still has far to go, with levels of hunger remaining alarming or extremely alarming in 16 countries. This years report focuses on a critical aspect of hunger that is often overlooked: hidden hunger. Also known as micronutrient deficiency, hidden hunger affects more than an estimated 2 billion people globally. The repercussions of these vitamin and mineral deficiencies are both serious and long lasting. Where hidden hunger has taken root, it not only prevents people from surviving and thriving as productive members of society, it also holds countries back in a cycle of poor nutrition, poor health, lost productivity, persistent poverty, and reduced economic growth. |
| Keywords: | Africa South of Sahara; Caribbean; CIS; Commonwealth of Independent States; South Asia; Southeast Asia; Latin America; Developing countries; Middle East; North Africa; OECD countries; India; East Africa; East Asia; Eastern Europe; Food availability; food crises; food crisis; food prices; food security; Global Hunger Index; GHI; Gross income; indicators; Children; Land; Land degradation; Nutrition; Malnutrition; Undernutrition; Hunger; Micronutrients; Mortality; Natural resources; Climate change; Data; Policies; Poverty; property rights; smallholders; Stress; Sustainable development; sustainable livelihoods; transition economies; Underweight; Water; resilience; natural disasters; disaster relief; environmental disasters; emergencies; environmental shocks; environmental risks; nutritive value; vitamin deficiencies; mineral deficiencies; nutrition security |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:issbrf:9780896298552&r=agr |
| By: | Mareike Lange |
| Abstract: | It is still difficult for biofuel producers to prove the contribution of their biofuels to reducing carbon emissions because the production of biofuel feedstocks can cause land use change (LUC), which in turn causes carbon emissions. A carbon map can serve as a basis to prove such contribution. I show how to calculate a carbon map according to the sustainability requirements for biofuel production adopted by the European Commission (EU-RED) for the Brazilian Cerrado. Based on the carbon map and the carbon balance of the production process I derive maps showing the possible emission savings that would be generated by biofuels based on soy and sugarcane if an area were to be converted to produce feedstock for this biofuel options. I evaluate these maps according to the criterion contained in the EU-RED of 35% minimum emission savings for each biofuel option compared to its fossil alternative. In addition, to avoid indirect LUC effects of the EU-RED that might offset any contribution of biofuels to reducing carbon emissions. I argue that all agricultural production should be subject to a carbon assessment. In this effort, the calculated carbon maps can be the basis for a climate friendly land use planning that is binding for all agricultural production in the Cerrado |
| Keywords: | biofuels, carbon emissions, Renewable Energy directive, carbon map, land use change, Brazil |
| JEL: | Q42 Q58 Q56 Q16 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1966&r=agr |
| By: | Elodie Letort; Michel Pech |
| Abstract: | [paper in French]In France, access to land is heavily regulated by government policies and the status of the tenancy: the counterpart of this restriction of freedom is the relative stability of farmland prices. Unlike in many countries of the European Union the price of land continues to increase in much more problematic proportions. In our paper we describe the functioning of local institutions and legal tools that have a role in the relative stability of prices of agricultural land in France. We illustrate our argument from the Britain example. |
| Keywords: | farmland, land regulation politics, price determination |
| JEL: | Q15 Q18 Q38 K11 K12 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:201406&r=agr |
| By: | Asian Development Bank (ADB); (East Asia Department, ADB); ; |
| Abstract: | Climate change is a threat to Mongolia’s economic growth, sustainable development, and fragile environment. Well-designed actions to mitigate climate change can provide multiple benefits, including socioeconomic development and resilience to climate variability and change. Nationally appropriate mitigation actions (NAMAs) can provide a framework for the identification and implementation of mitigation actions. This publication identifies and assesses technical, institutional, and policy elements needed to develop and implement a NAMA in the grassland and livestock sector. Technical elements include estimates of greenhouse gas (GHG) mitigation potential, economic costs and benefits, GHG measurement options, adaptation benefits, and barriers to adoption and identification of policies and measures. |
| Keywords: | Mongolia, climate change, mitigation, adaptation, greenhouse gas, GHG, carbon dioxide, methane, National Action Program on Climate Change, National Livestock Program, herders livelihoods, development, pasture rotation, pasture management livestock management, nationally appropriate mitigation action; NAMA, carbon finance, carbon market |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt136182&r=agr |
| By: | Cole, Shawn; Gine, Xavier; Vickery, James (Federal Reserve Bank of New York) |
| Abstract: | Weather is a key source of income risk, particularly in emerging market economies. This paper uses a randomized controlled trial involving a sample of Indian farmers to study how an innovative rainfall insurance product affects production decisions. We find that insurance provision induces farmers—particularly educated farmers—to shift production toward higher-return but higher-risk cash crops. Our results support the view that financial innovation can mitigate the real effects of uninsured production risk. Addressing the puzzle of low adoption, we show that payouts improve trust in the product and that farmers shield payouts from claims by relatives. |
| Keywords: | risk management; financial constraints |
| JEL: | G22 G32 |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:692&r=agr |
| By: | Karszes, Jason; Knoblauch, Wayne A.; Dymond, Cathryn |
| Keywords: | Farm Management, Livestock Production/Industries, Production Economics, |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cudaeb:186589&r=agr |
| By: | Anonymous |
| Keywords: | Agribusiness, Agricultural Finance, |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cudaeb:186599&r=agr |
| By: | Matias Ramirez (SPRU - Science Policy Research Unit, University of Sussex, Falmer, Brighton, UK); Paloma Bernal (SPRU - Science Policy Research Unit, University of Sussex, Falmer, Brighton, UK); Ian Clarke (University of Greenwich); Ivan Hernandez (Universidad Nacional, Colombia) |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2014-20&r=agr |
| By: | Bozic, Marin; Wolf, Christopher; Yang, Fanda; Newton, John; Thraen, Cameron S. |
| Abstract: | In the period leading up to the start of the Margin Protection Program for Dairy Producers (MPP-Dairy), a survey was undertaken to assess dairy farmer knowledge, attitudes, impressions and expected participation decisions. All surveys were collected in July and August 2014. There are six main conclusions of the survey. First, prior to the announcement of USDA rules regarding MPP-Dairy, most dairy producers felt they had ‘some knowledge’ of the program, with close to 30 percent declaring ‘no knowledge’ about the program. Second, about thirty percent of respondents had somewhat or very favorable impressions of MPP-Dairy while similar percent had somewhat or very unfavorable. Top four concerns about the program were too much government involvement, program complexity, lack of supply management and fear that the program would distort market signals to farmers. Third, close to 40 percent of producers indicated they were leaning towards registering for MPP-Dairy, while 30 percent were leaning against participation. Over 30 percent of producers had not decided if they would to participate or not. More knowledge about MPP-Dairy was associated with higher likelihood of participation. Fourth, we asked dairy farmers which coverage level they would choose in most years. Distribution of responses had two pronounced peaks, with $4.00/cwt and $6.00/cwt chosen by 28 and 25 percent of producers respectively. No other coverage choice was chosen by more than 12 percent of producers. Fifth, just under 70 percent of LGM-Dairy users indicated that when faced with a one-time irreversible choice between LGM-Dairy and MPP-Dairy, they would choose MPP-Dairy. Finally, just under 25 percent of producers indicated MPP-Dairy would ‘somewhat’ reduce their use of other risk management tools, while 18 percent replied they expected a ‘strong reduction’ in their use of other risk management instruments. |
| Keywords: | Agricultural and Food Policy, Production Economics, Risk and Uncertainty, |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaeacj:186728&r=agr |
| By: | Takahashi, Kazushi; Ikegami, Munenobu; Sheahan, Megan; Barrett, Christopher B. |
| Abstract: | Microinsurance is widely considered an important tool for sustainable poverty reduction, especially in the face of increasing climate risk. Although index-based microinsurance, which should be free from the classical incentive problems, has attracted considerable attention, uptake rates have generally been weak in low-income rural communities. We explore the purchase patterns of index-based livestock insurance in southern Ethiopia, focusing in particular on the role of accurate product comprehension and price, including the prospective impact of temporary discount coupons on subsequent period demand due to price anchoring effects. We find that randomly distributed learning kits contribute to improving subjects' knowledge of the products; however, we do not find strong evidence that the improved knowledge per se induces greater uptake. We also find that reduced price due to randomly distributed discount coupons has an immediate, positive impact on uptake, without dampening subsequent period demand due to reference-dependence associated with price anchoring effects. |
| Keywords: | Ethiopia, Insurance, Livestock, Rural economy, Poverty, Climate, Index-Based Livestock Insurance, Quasi-Experiment, Uptake |
| JEL: | D12 G22 O12 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper480&r=agr |
| By: | Cororaton, Caesar B.; Knight, David S. |
| Abstract: | This paper seeks to provide evidence on the extent of household vulnerability to exogenous economic shocks in the Pacific region and consider policy options that help to manage this risk. Characteristics of the region such as remoteness, small size, dispersion, and urbanizing populations lead to pronounced vulnerabilities. The paper presents macroeconomic and distributional analysis and complements it with results of a micro-simulation model customized for this work based on a model used previously by the World Bank to analyze the impacts of the Food and Fuel Price Crisis. The results of micro-simulations serve to highlight the very high levels of economic vulnerability faced in the region. Impacts of economic shocks are not confined to well-off individuals, but have major impacts on the poor. Even moderate shocks are likely to push sizeable fractions of the population below the poverty line. The shocks considered are not worst case scenarios, but those that can and have occurred frequently. The results show that households are hard hit by increases in oil prices, especially in remote islands where freight costs are higher, while countries on aggregate, and individual households, are exposed to volatility in the prices of the one or two imported food commodities that they depend on. Livelihoods are also often driven by external demand. In particular, many poor households in countries like Papua New Guinea have livelihood strategies centered on cash crops. The results point to the importance of helping households of the Pacific to manage the risk inherent in their lives while prudently using macroeconomic tools at the disposal of the government. |
| Keywords: | Markets and Market Access,Rural Poverty Reduction,Transport Economics Policy&Planning,Emerging Markets,Food&Beverage Industry |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7046&r=agr |
| By: | Key, Nigel; Sneeringer, Stacy; Marquardt, David |
| Abstract: | In the United States, climate change is likely to increase average daily temperatures and the frequency of heat waves, which can reduce meat and milk production in animals. Methods that livestock producers use to mitigate thermal stress—including modifications to animal management or housing—tend to increase production costs and capital expenditures. Dairy cows are particularly sensitive to heat stress, and the dairy sector has been estimated to bear over half of the costs of current heat stress to the livestock industry. In this report, we use operation-level economic data coupled with finely scaled climate data to estimate how the local thermal environment affects U.S. dairies’ effectiveness at producing outputs with a given level of inputs. We use this information to estimate the potential decline in milk production in 2030 resulting from climate change-induced heat stress. For four climate model scenarios, the results indicate modest heat stress-related production declines over the next 20 years, with the largest declines occurring in the South. |
| Keywords: | Climate change, dairy, heat stress, productivity, stochastic frontier, technical efficiency, Environmental Economics and Policy, Livestock Production/Industries, |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:186731&r=agr |
| By: | Michael R. CARTER (University of Wisconsin); Alain de JANVRY (FERDI); Elisabeth SADOULET (University of California - Berkeley); Alexandros SARRIS (University of Athens) |
| Abstract: | Index-based weather insurance is a major institutional innovation that could revolutionize access to formal insurance for millions of smallholder farmers and related individuals. It has been introduced in pilot or experimental form in many countries at the individual or institutional level. Significant efforts have been made in research to assess its impacts on shock coping and risk management, and to contribute to improvements in design and implementation. While impacts have typically been positive where uptake has occurred, uptake has generally been low and in most cases under conditions that were not sustainable. This paper addresses the reasons for this current discrepancy between promise and reality. We conclude on perspectives for improvements in product design, complementary interventions to boost uptake, and strategies for sustainable scaling up of uptake. Specific recommendations include: (1) The first-order importance of reducing basis risk, pursuing for this multiple technological, contractual, and institutional innovations. (2) The need to use risk layering, combining the use of insurance, credit, savings, and risk-reducing investments to optimally address different categories of risk. For this, these various financial products should be offered in a coordinated fashion. (3) Calling on a role for state intervention on two fronts. One is the implementation of public certification standards for maximum basis risk of insurance contracts; the other is “smart” subsidies for learning, data accumulation, initial re-insurance, and catastrophic risks. (4) Using twin-track institutional-level index insurance contracts combined with intra-institution distribution of payouts to reduce basis risk and improve the quality of insurance. For this, credible intra-institutional rules for idiosyncratic transfers must be carefully designed. Finally (5), the need for further research on the determinants of behavior toward risk and insurance, the design of index-based insurance products combined with others risk handling financial instruments, and rigorous impact analyses of on-going programs and experiments. |
| JEL: | O16 Q12 Q14 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:1800&r=agr |
| By: | Gavin Parker (School of Real Estate & Planning, Henley Business School, University of Reading); |
| Abstract: | The working paper depicts two innovative examples from Japan of the direct supply of food, which involves the development of closer producer-consumer relations, as well as closer producer-producer networks. Choku-bai-jo and Teikei networks are considered as examples of practices implicated in alternative food networks (AFNs). One example has become a quasi-public endeavour and is seen by the Japanese state as a legitimate part of rural development and is promoted in support of small producers. The other is borne from consumer concern over food quality and, despite its long-lived status, this arrangement remains marginal and with little institutional or governmental support. A model which blends the organization and aims of both examples holds potential for a more sustainable eco-economic future. |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:repxwp:rep-wp2014-08&r=agr |
| By: | Mohamed El Hedi Arouri (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans); Adel Ben Youssef (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Cuong Nguyen-Viet (Chercheur Indépendant - Aucune) |
| Abstract: | Urbanization and poverty have a two-way relationship. Using fixed-effects regression andpanel data from household surveys, we estimate the effect of urbanization on welfare andpoverty of rural households in Vietnam. We find that urbanization tends to increaselandlessness of rural households and to reduce their farm income. However, urbanizationhelps rural households increase their wages and non-farm incomes. As a result, totalincome and consumption expenditure of rural households tend to be increased withurbanization. Then we find that urbanization also helps rural households decrease theexpenditure poverty rate, albeit at a small magnitude. |
| Keywords: | urbanization; household welfare; rural poverty; impact evaluation; household surveys; Vietnam, Asia |
| Date: | 2014–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01068266&r=agr |
| By: | Kimberly Burnett (UHERO, University of Hawai‘i at Manoa); James Roumasset (University of Hawai‘i at Manoa, UHERO); Sittidaj Pongkijvorasin; Christopher Wada (UHERO, University of Hawai‘i at Manoa) |
| Abstract: | Managing water resources independently may result in substantial economic losses when those resources are interdependent with each other and with other environmental resources. We first develop general principles for using resources with spillovers, including corrective taxes (subsidies) for incentivizing private resource users. We then analyze specific cases of managing water resources, in particular the interaction of groundwater with upstream or downstream resource systems. |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:hae:wpaper:2014-9&r=agr |
| By: | Marianne Grunell (Amsterdams Instituut voor ArbeidsStudies/Arbeidsrecht, Universiteit van Amsterdam) |
| Abstract: | The rationalisation of production and the export of production have a significant effect on the industrial relations in the Food and Drink sector. In collective bargaining both at multi- employer and at company level, the role of the social partners is evident. Among employees the organisational density of 25% is around the national average. Employees are represented through unions of the three main national organisations FNV, CNV and De Unie. The employer organisation FNLI organises around 80% of the sector’s employers. The FNLI concerns itself primarily and with success (also at European level) with the commercial interests of the sector, its employers and their organisations. However, employers are much harder to organise around collective bargaining issues. Employers are organised in many different associations, organisations which sign the collective agreements. Both consultation between the social partners and the authorities and bi-partite social partner initiatives are common. |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:aia:indrnl:2014-07&r=agr |
| By: | World Bank Group |
| Keywords: | Insurance and Risk Mitigation Macroeconomics and Economic Growth - Climate Change Economics Finance and Financial Sector Development - Debt Markets Urban Development - Hazard Risk Management Law and Development - Insurance Law |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:18940&r=agr |
| By: | Kimberly Burnett (UHERO, University of Hawai‘i at Manoa); James Roumasset (University of Hawai‘i at Manoa, UHERO); Christopher Wada (UHERO, University of Hawai‘i at Manoa) |
| Abstract: | Efficient management of groundwater resource systems requires careful consideration of relationships — both positive and negative — with the surrounding environment. The removal of and protection against “bad” and "ugly" natural capital such as invasive plants and feral animals and the enhancement of “good” capital (e.g. protective fencing) are often viewed as distinct management problems. Yet environmental linkages to a common groundwater resource suggest that watershed management decisions should be informed by an integrated framework. We develop such a framework and derive principles that govern optimal investment in the management of two types of natural capital — those that increase recharge and those that decrease recharge — as well as groundwater extraction itself. Depending on the initial conditions of the system and the characteristics of each type of natural capital, it may make sense to remove bad capital exclusively, enhance good capital exclusively, or invest in both activities simultaneously until their marginal benefits are equal. |
| Keywords: | Watershed management, natural capital, invasive species, groundwater economics |
| JEL: | Q24 Q25 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:hae:wpaper:2014-7&r=agr |