De Pinto, Alessandro ORCID: https://orcid.org/0000-0003-0327-494X and Nelson, Gerald C. (2008) Land use change with spatially explicit data: a dynamic approach. Environmental and Resource Economics, 43 (2). pp. 209-229. ISSN 0924-6460 (Print), 1573-1502 (Online) (doi:10.1007/s10640-008-9232-x)

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Abstract

Most of the economic literature that uses spatially-explicit data to estimate the determinants of land-use change is limited to static models and cross-sectional data sets. Recent attempts to move to a more dynamic analysis include using panel data sets and survival analysis. In this study, we use a discrete choice dynamic model of land-use where the agent’s choices are regarded as the solution to a dynamic optimization problem. The irreversibility of some decisions, expectations about future prices, and forward-looking behavior of the land operator can all be accounted for. Our results show that a model specification that incorporates some of the complexities of the decision process improves upon results found in the existing literature. First, prediction accuracy of land use change is superior to any of the existing models. Second, we demonstrate that models that do not account for transactions costs tend to overestimate the effects of changes in transportation costs.

Item Type:	Article
Uncontrolled Keywords:	land use, deforestation, discrete choice dynamic optimization, dynamic optimization
Subjects:	S Agriculture > S Agriculture (General)
Faculty / School / Research Centre / Research Group:	Faculty of Engineering & Science Faculty of Engineering & Science > Natural Resources Institute Faculty of Engineering & Science > Natural Resources Institute > Livelihoods & Institutions Department
Last Modified:	24 Aug 2020 11:10
URI:	http://gala.gre.ac.uk/id/eprint/28927

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