Progress 04/01/07 to 09/30/12
Outputs
OUTPUTS: Our research helped fill a number of gaps in the scientific literature, particularly with respect to the costs of conserving biodiversity, the effectiveness of urban boundaries, the role of terroir in determining vineyard prices, and the effects of future climate change on land use decisions. Researchers evaluated the effect of urbanization on farm support sectors and on the cost and profitability of agriculture. They also integrated economic and biophysical models to assess how increases in agricultural commodity prices, driven by ethanol poduction and other factors, affect land use and cropping systems in the U.S. and how changes in land use and cropping systems affected environmental quality in the region. They evaluated the effects of the Conservation Reserve Program (CRP) on land prices; CRP had the most impact in the Mountain, Southern Plains, and Northern Plains region, increasing average farmland prices between 2-14%. Implementation of the Northwest Forest Plan appeared to have increased community wealth, as measured in real property value in proximity to affected land, except if they were dependent on logging, which then had a negative effect initially. New software and related training materials related to the economic and environmental impacts of agricultural technologies were made available online; more than 300 researchers globally have downloaded the software, more than 50 researchers from the U.S. and international institutions were trained through in-person workshops, and more than 200 others used self-guided training. Research activities resulted in peer-reviewed publications and complemented the training of graduate students in applied economics. PARTICIPANTS: Joe Kerkvlietm professor emeritusm Oregon State University; Bruce Weberm AREC, Oregon State University; Bill Jaeger, AREC, Oregon State University TARGET AUDIENCES: Policy makers and local landowners. Extension faculty, public officialsm rural scholarsm resource ecomomists, conservationists, general publicm economistsm natural resource managers and land use planners. PROJECT MODIFICATIONS: To incorporate climate change and adaptation and assess economic an environmental impacts of new technologies.
Impacts
Our efforts have made significant contributions to the understanding of agricultural profitability and the economics of endangered species conservation. For example, farmer opportunities and net farm income increased with urbanization to a point, but continuing urban sprawl could threaten agriculture in areas with a high degree of urbanization in place. Researcher peers reported an improved understanding of the effects of incentives for species conservation on private land. One major outcome of OSU's research is a comprehensive emprirical analysis of the effectiveness of conservation plans, providing evidence that they have a significant positive impact on species recovery. However, we found that payments for biodiversity conservation (BC) are relatively ineffective when the conservation agency cannot observe the opportunity costs of landowners; this led to the development of an auction mechanism that would allow the agency to maximize the net benefits of BC. Other project results suggest that increasing commodity prices will result in widespread conversions of non-cropland to cropland. Fifty percent of the region's pasture and range land will be converted to cropland with $6 corn. Rising commodity prices will also result in dramatic changes in crop mix and rotation systems in the Midwest. With $6 corn, the total acreage of corn will increase by 23% and 40% in the Corn Belt and Lake States, respectively; the acreage of continuous corn will increase considerably in both regions as well. These changes in land use and crop mix will have a large impact on agricultural pollution. In another study, we found that projected climate change did not have a large effect on land use change in the U.S., at least for broad land use categories. All of these results provide important insights to policy makers and members of the scientific community.
Publications
- Polasky, S., Johnson, K., Keeler, B., Kovacs, K., Nelson, E., Pennington, D., Plantinga, A.J., and J. Withey. 2012. Are Investments to Promote Biodiversity Conservation and Ecosystem Services Aligned Oxford Review of Economic Policy 28(1): 139-163.
- Withey, J.C., Lawler, J.J., Polasky, S., Plantinga, A.J., Nelson, E.J., Kareiva, P., Wilsey, C.B., Schloss, C.A., Nogeire, T.M., Ruesch, A., Ramos, J., and W. Reid. 2012. Maximising Return on Conservation Investment in the Conterminous USA. Ecology Letters 15: 1249-1256.
- Radeloff, V. C., Nelson, E., Plantinga, A.J., Lewis, D.J., Helmers, D., Lawler, J.J., Withey, J.C., Beaudry, F., Martinuzzi, S., Butsic, V., Lonsdorf, E., White, D., and S. Polasky. 2012. Economic-based Projections of Future Land Use under Alternative Economic Policy Scenarios in the Conterminous U.S. Ecological Applications 22(3):1036-49.
- Radeloff, V. C., Nelson, E., Plantinga, A.J., Lewis, D.J., Helmers, D., Lawler, J.J., Withey, J.C., Beaudry, F., Martinuzzi, S., Butsic, V., Lonsdorf, E., White, D., and S. Polasky. 2012. Economic-based Projections of Future Land Use under Alternative Economic Policy Scenarios in the Conterminous U.S. Ecological Applications 22(3):1036-49.
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Progress 01/01/11 to 12/31/11
Outputs
OUTPUTS: This study evaluates the effect of urbanization on the viability of farm supporting sectors (i.e., input suppliers, output processors) and on the cost and profitability of agriculture. To achieve this objective, we first develop a theoretical model to analyze the interrelationship between agriculture and its supporting sectors and then examine how the relationship is affected by urbanization. We then conduct an empirical analysis to evaluate the effect of urbanization on local agricultural economies using county-level data from four western states of the United States (Oregon, Washington, Idaho, and California), focusing on the influence on 1) the number of input suppliers, 2) the number of output processors, 3) farmers' production costs, and 4) net farm income. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Farmer organizations, policy makers PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
This study attempts to fill the gaps in the literature by examining the effects of urbanization on the viability of input suppliers and output processors and on the cost and profitability of farming. The number of input suppliers and the number of output processors are found to increase with urbanization initially, but decrease when urbanization reaches a certain level. There are threshold effects for the urbanization variables, which, once reached, are associated with a rapid decline in the number of input suppliers and output processors; but the thresholds are well beyond the ranges of developed land and population density in the four Western States counties. Urbanization is found to be associated with higher farm production cost, which is consistent with the negative externalities that are posited to accompany urbanization. But, the higher costs of production in urban versus rural localities are outweighed by higher prices for agricultural output and increased off-farm job opportunities. As a result, net farm income is found to increase with urbanization. Our results have an important implication. Urbanization is not necessarily a bad thing for struggling rural communities, particularly when the objective is to increase net farm income. Urbanization may increase farmers' production costs, but it also creates new opportunities for farmers (growing high-value crops, off-farm employment opportunities, etc.). Our results suggest that the benefits of urbanization outweigh the costs, and net farm income increases with urbanization. However, in rural communities that have already experienced a high degree of urbanization, continuing urban sprawl may indeed threaten agriculture as a viable way of living. The results of this study can assist policy makers and local agricultural leaders in assessing the likely economic impacts of an increase in the speed at which farmland is converted to urban development and other non-farm uses. Land retirement programs, such as the Conservation Reserve Program (CRP), effectively reduce the amount of harvested cropland or working farmland. Such a program can reduce the number of input suppliers and output processors, particularly in areas experiencing rapid loss of farmland to urbanization. Such a program could also have a significant impact on farm production costs and net returns. In addition to the direct effects on farm production costs and net returns, land retirement programs can also affect farm production costs and net returns through their impacts on agricultural infrastructure. In contrast to the cropland retirement programs, land use policies that aim at slowing down urbanization and farmland loss, such as exclusive farm use zoning and development impact fees, can reduce the degradation of agricultural infrastructure and the cost of farming, although such policies may not necessarily increase net farm income.
Publications
- Langpap, Christian and JunJie Wu. 2011. "Potential Environmental Impacts of Increased Reliance on Corn-Based Bioenergy." Environmental and Resource Economics 49(2):147-171.
- Wu, Jian, JunJie Wu, Xiaoxia Wang, and Zhong Ma. 2012. Securing Water for Wetland Conservation: A Comparative Analysis of Policy Options to Protect a National Nature Reserve in China. Journal of Environmental Management 94:102-111.
- Castle, Emery, JunJie Wu, and Bruce Weber. 2011. Rural-Urban Economic Spatial Relations: A Different Perspective. Applied Economic Perspectives and Policy 33:1-26.
- Wang, Chunhua and JunJie Wu. 2011. Locational Amenities, Increasing Returns, and Urban Development. Journal of Economic Geography 11(4):687-707.
- Wu, JunJie, Monica Fisher, and Unai Pascual. 2011. Urbanization and the Viability of Local Agricultural Economies. Land Economics 87:109-125.
- Grout, C.A., Jaeger, W.K., and A.J. Plantinga. 2011. Land-Use Regulations and Property Values in Portland, Oregon: A Regression Discontinuity Design Approach. Regional Science and Urban Economics 41:98-107.
- Lewis, D.J., Plantinga, A.J., Nelson, E., and S. Polasky. 2011. The Efficiency of Voluntary Incentive Policies for Preventing Biodiversity Loss. Resource and Energy Economics 33(1):192-211.
- Cross, R., Plantinga, A.J., and R.N. Stavins. 2011. What is the Value of Terroir American Economic Review Papers and Proceedings 101(3):152-56.
- Cross, R., Plantinga, A.J., and R.N. Stavins. 2011. The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices. Journal of Wine Economics 6(1):-14.
- Haim, D., Alig, R.J., Plantinga, A.J., and B. Sohngen. 2011. Climate Change and Future Land Use in the United States: An Economic Approach. Climate Change Economics 2(1):27-51.
- Jaeger, W.K., Plantinga, A.J., and C. Grout. 2011. How has Oregon's Land Use Planning System Affected Property Values Land Use Policy 29:62-72.
- Huang, Biao, Christian Langpap, and Richard Adams. 2011. "Using In-stream Water Temperature Forecasts for Fisheries Management: An Application in the Pacific Northwest." Journal of the American Water Resources Association 47(4):861-876.
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Progress 01/01/10 to 12/31/10
Outputs
OUTPUTS: This project deals with the economics of land and water resources on private and public lands. Within this objective, a key activity has been examining the use of in-stream water temperature forecasts for management of steelhead trout in the North Fork of the John Day River in Oregon and to Chinook salmon in the Klamath River in Northern California, which is part of a watershed that extends to southern Oregon. Water temperature is an important factor affecting cold water species, such as salmonids, which are particularly susceptible to elevated water temperatures. Two papers have been submitted and revised for publication. One of the papers estimates the net benefits of managing fisheries by using stream temperature forecasts by calculating benefits to recreational fisheries and opportunity costs of stream flow management. The second paper has a more interdisciplinary focus and emphasizes the potential effects of management decisions based on stream temperature forecasts on fish populations and opportunity costs of stream flow management. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
Simulation results indicate that use of the forecasts results in increased fish production and, importantly, exhibit a pattern of increasing net benefits as forecast accuracy increases. This suggests that provision and use of such stream temperature forecasts would have potential value for fisheries management in Oregon and more broadly in the Pacific Northwest. The conclusions and policy implications from these papers are directly relevant to the state and its citizens, as well as to the broader Pacific Northwest region, where salmonid management remains a key environmental policy issue. Additionally, since endangered species issues and the implementation of the Endangered Species Act (ESA) remain relevant to Oregon and the Pacific Northwest, research on the effectiveness of Habitat Conservation Plans is relevant to the state and the region. Habitat Conservation Plans (HCPs) are one of the key approaches proposed to overcome the perverse incentives created by the Endangered Species Act, and they have become the main instrument for implementation of the Act on private land. However, there is no systematic analysis of the effectiveness of HCPs in promoting endangered species recovery. As part of this project, we combine information on HCPs with data on species recovery and use econometric techniques to provide a comprehensive analysis of the impact of HCPs on species recovery status. We find evidence that HCPs have a significant positive impact on species recovery and that the recovery benefits are larger when species have relatively larger plans. These results could help guide local, state, and federal policy for implementation of Habitat Conservation Plans.
Publications
- Langpap, Christian and Joe Kerkvliet. 2010. "Allocating Conservation Resources Under the Endangered Species Act." American Journal of Agricultural Economics 92(1):110-124.
- Langpap, Christian and Jay Shimshack. 2010. "Public and Private Environmental Enforcement: Substitutes or Complements" Journal of Environmental Economics and Management 59(3):235-249.
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Progress 01/01/09 to 12/31/09
Outputs
OUTPUTS: Activities included surveys, data collection and analysis. Information was disseminated through peer-reviewed publications and the popular press. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: policy makers, research community PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
Researchers found that a business is more likely to "over-comply" with environmental regulations if its senior management believes in protecting the environment and that it makes financial sense in the long term. Among key findings: 1) Pressures from consumers, investors and interest groups have no statistically significant impact on a firm's decision to violate or comply with environmental regulations. However, facilities that make products that are sold directly to consumers or offer services directly to them are less likely to violate the regulations. 2) Competitive market forces are significant factors in deterring environmental violations. These forces include investing in cleaner products to differentiate them from another company's, improving environmental performance to keep up with competitors, and being environmentally responsible to reduce employee turnover and increase productivity. 3) Costs and risks associated with environmentally friendly practices increase the probability of environmental violations and decrease the likelihood of environmental over-compliance. These costs and risks include high upfront investments, high day-to-day costs, uncertain future benefits, and downtime and delivery interruptions during implementation. 4)Smaller firms (ones with annual revenue of no more than $5 million) and publicly traded companies are more likely to violate environmental standards than companies that are bigger and privately owned. 5) Upper management's environmental values were one of the leading factors affecting a firm's decision about whether to over-comply with environmental standards.
Publications
- Wu, JunJie. 2009. Environmental Compliance: The Good, the Bad, and the Super Green. Journal of Environmental Management 90(2009): 3363-3381.
- Lewis, David, Andrew Plantinga, and JunJie. Wu. 2009. Targeting Incentives to Reduce Habitat Fragmentation. American Journal of Agricultural Economics 91(November 2009): 1080-1096.
- Irwin, E., K.P. Bell, N.E. Bockstael, D. Newburn, M.D. Partridge, and J. Wu. 2009. The Economic of Urban-Rural Space. Annual Review of Resource Economics 1(October 2009): 1-26.
- Wu, JunJie, and Teresa M. Wirkkala. 2009. Firms' Motivations for Environmental Overcompliance. Review of Law and Economics 5(2009): 399-433.
- McGough, B., Plantinga, A.J., and C. Costello. 2009. Optimally Managing a Stochastic Renewable Resource under General Economic Conditions. B.E. Journal of Economic Analysis and Policy (Contributions), forthcoming.
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Progress 01/01/08 to 12/31/08
Outputs
OUTPUTS: The research team created economic and marketing models and analyses to inform decision-makers, industry and peers. PARTICIPANTS: Wy'East, NRCS, OSU Extension Service. Cooperating farmers in Central Oregon include Bonnie Craig, Rex Barber, John McElheren, Bob Miller. TARGET AUDIENCES: Managers of land and water resources, policymakers, farm operators, communities, research and extension peers PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
A project was completed in cooperation with Wy'east Resource and Conservation Area to develop a series of analytical tools to reduce irrigation water use. The proejct involved local NRCS and extension personnel in local counties, as well as four farming operations from the area. These tools included field monitoring equipment to track soil moisture, water applications and weather data. These data were coupled with the Oregon Irrigation Scheduling Online (OSO) sofware program to predict water use and availability. To this was added an economic model to calculate profitability of alternative irrigation strategies. The OISO software is now available to any farmer in the state and includes an economic component to the analysis. This project will educate farmers about approaching irrigation applications from a profit maximizing rather than yield maximizing standpoint.
Publications
- Christian Langpap, Ivan Hascic and JunJie Wu. 2008. Protecting Watershed Ecosystems through Targeted Local Land Use Policies. American Journal of Agricultural Economics 90(3): 684-700
- Christian Langpap and JunJie Wu. 2008. Predicting the Effect of Land Use Policies on Wildlife Habitat Abundance. Canadian Journal of Agricultural Economics 56(2): 195-218.
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Progress 01/01/07 to 12/31/07
Outputs
OUTPUTS: This program is designed to use economics to identify the reasons why normal market incentives do not achieve socially desirable outcomes and then suggest ways in which policymakers can change these incentives to achieve desired outcomes. Investigators will also evaluate various policies to determine how individuals are likely to react. Specifically, program investigators examined how national and state (Oregon) land use policies impact the viability of local agricultural economies and environmental resources. Activities include development of theoretical and econometric models, databases, and web survey methods. Results were disseminated through scholarly and non-technical publications, and presented at national and community meetings. PARTICIPANTS: Lesser, V., Wu, J., B. Weber, H. Lin, P. Barkley. TARGET AUDIENCES: Extension faculty around the nation. Individual farmers, farm organizations, public officials, rural scholars, resource economists, conservationists, general public, economists, natural resource managers, and land use planners. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
The research projects in this program are focused on some of the most pressing policy issues regarding how land and water are and will be managed in the coming decades. Research on land use policies has increased the understanding of impacts on the viability of local agricultural economics. Specifically, research on the effect of Conservation Reserve Program on land values provides information for the design of permanent easement programs. Investigators have developed a new method for reductions in property values due to regulations adopted under a statewide initiative. Research on survey methods will provide scientists assistance for designing, administering and analyzing all aspects of research surveys. The design and conduct of surveys is s a major need of many scientists, who depend upon this data for successful research and publication. The procedures developed and tested for reducing nonresponse error in data collection are now being used in many surveys conducted annually by many academic scientists.
Publications
- Dillman, D.A., V.M. Lesser, J. Carlson, R. Mason, R. Roberson, and F. Willits. 2007. Personalization: Does it Improve Response in Mail Surveys Rural Sociology, Vol. 72, Issue 4.
- Lubowski, R.N., A.J. Plantinga, and R.N. Stavins. 2007. What Drives Land-Use Changes in the United States A National Analysis of Landowner Decisions. Land Economics, forthcoming.
- Munoz-Hernandez, B., V.M. Lesser, and F. Ramsey. 2007. Design-based empirical orthogonal function model for environmental monitoring data analysis. Environmetrics, 18 1-13.
- Wu, J., P. Barkley, B. Weber. 2007. Frontiers in Resource and Rural Economics. Washington, D.C: RFF Press.
- Wu, J. and S. Cho. 2007. The Effect of Local Land use Regulations on Urban Development in the Western United States. Regional Science nad Urban Economics 37: 69-86.
- Wu, J. 2007. How Does Suburbanization Affect Local Public Finance and Communities Review of Agricultural Economics 29: 564-571.
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