TY - JOUR
T1 - Amenity driven price effects and conservation reserve site selection
T2 - A dynamic linear integer programming approach
AU - Dissanayake, Sahan T.M.
AU - Önal, Hayri
N1 - Funding Information:
The authors express their gratitude to Richard Brazee, Philip Garcia, and Carl Nelson, Rhett Farrell, three anonymous referees, participants at the 2010 WCERE, 2009 and 2010 AAEA meetings, and the PERE workshop at University of Illinois for comments and suggestions on an earlier draft of this manuscript. This research was partially supported by the ERDC-CERL project No. W81EWF-7204-6330 and the USDA National Institute of Food and Agriculture , Hatch Project No. ILLU 05–0361 .
PY - 2011/10/15
Y1 - 2011/10/15
N2 - Most conservation reserve design models presented in the literature are static and ignore the dynamic economic aspects of site selection. Typically conservation programs operate under time-related (e.g. annual) budgets and purchase land over time in a sequential manner. The uncertainty of land development has been incorporated in a few dynamic reserve selection formulations using stochastic dynamic programming. However, the existing formulations do not explicitly deal with inter-temporal price and location linkages. We address this issue here and present a two-period linear integer programming model for conservation reserve design that incorporates amenity driven price feedback effects inherent in the reserve development problem. In addition, the model includes spatial and ecological criteria. We then use this model to answer the question "How suboptimal is ignoring amenity driven price effects in reserve design models?" We apply the model to artificially generated data sets and compare the results with the results of an iterated static model that considers only one period at a time. We find that the dynamic model with price feedback effects selects sites at a lower per-site cost. The policy implication of this finding is that conservation programs should avoid purchasing land in the same neighborhood over multiple time periods.
AB - Most conservation reserve design models presented in the literature are static and ignore the dynamic economic aspects of site selection. Typically conservation programs operate under time-related (e.g. annual) budgets and purchase land over time in a sequential manner. The uncertainty of land development has been incorporated in a few dynamic reserve selection formulations using stochastic dynamic programming. However, the existing formulations do not explicitly deal with inter-temporal price and location linkages. We address this issue here and present a two-period linear integer programming model for conservation reserve design that incorporates amenity driven price feedback effects inherent in the reserve development problem. In addition, the model includes spatial and ecological criteria. We then use this model to answer the question "How suboptimal is ignoring amenity driven price effects in reserve design models?" We apply the model to artificially generated data sets and compare the results with the results of an iterated static model that considers only one period at a time. We find that the dynamic model with price feedback effects selects sites at a lower per-site cost. The policy implication of this finding is that conservation programs should avoid purchasing land in the same neighborhood over multiple time periods.
KW - Amenity price effects
KW - Biological conservation
KW - Integer programming
KW - Reserve design
KW - Site selection
KW - Uncertainty
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U2 - 10.1016/j.ecolecon.2011.06.015
DO - 10.1016/j.ecolecon.2011.06.015
M3 - Article
AN - SCOPUS:80053324114
SN - 0921-8009
VL - 70
SP - 2225
EP - 2235
JO - Ecological Economics
JF - Ecological Economics
IS - 12
ER -