Land Conversion and Market Equilibrium - Insights from a Simulated Landscape
26 Pages Posted: 21 Apr 2010 Last revised: 1 May 2010
Date Written: April 21, 2010
We specify a system of equations that fully reflects the supply and demand sides of the market for agricultural open space at equilibrium. Although simple, the system is exceedingly flexible and allows for household and parcel heterogeneity. We derive an empirical model directly from the structural equations and contrast this using a simulated landscape with the econometric specification most often found in the literature. We then show how the model can be used to project land-use change into the future and for policy simulation. Finally, we use the model to examine the impact of common land conservation policies in Europe.
Keywords: Land-use change, urban sprawl, simulation
JEL Classification: R15, Q24
Suggested Citation: Suggested Citation