ESSAYS ON CLIMATE ADAPTATION AND ENVIRONMENTAL VALUATION

Risk is an important component of the decision-making process. Often time, risk assessment is associated with either space or time. How agents perceive risk and how they respond to risk can have significant policy implications, especially when government programs are designed to either incentivize the provision of environmental amenities or reduce the production of environmental disamenities. This dissertation features three chapters that examine the role of risk, time, and space in evaluating environmental disamenities and amenities in the context of climate adaptation and ecosystem goods and services. The first chapter studies the spillover effects of levee building in response to rising flood risks in the U.S. Mississippi. Using newly digitized data on levee locations and elevations with the Great Mississippi Flood of 2011 as a natural experiment, I show that a 1% increase in the upstream levee elevation increased the downstream levee elevation by 0.7%. A back-of-the-envelope calculation suggests the external costs due to upstream levee building are at least $0.2 billion, reducing the net benefits of heightened levees by 55%. The results highlight the importance of regional coordination to manage large-scale natural disasters while mitigating inter-jurisdictional spillovers. The second chapter uses a discrete choice experiment implemented in a farmer survey to elicit landowners’ willingness to enroll in long-term payments for ecosystem services programs in Maryland. We address the issue of serial non-participation (SNP) when landowners always choose the status quo option and examine the role of time and risk preferences in landowners’ enrollment decisions. We find that ceiling on program participation is evident when SNP is accounted for, pointing to an inherent limitation in voluntary programs. Failing to account for SNP can also lead to quantitatively different welfare measures. Landowners are responsive to program payments with low discount rates consistent with market interest rates. Risk-averse landowners are less likely to enroll in programs, suggesting that they perceive participation to increase income risk. The third chapter proposes a novel extension of existing semi-parametric approaches to examine spatial patterns of willingness to pay (WTP) and status quo effects, including tests for global spatial autocorrelation, spatial interpolation techniques, and local hotspot analysis. We incorporate the statistical precision of WTP values into the spatial analyses using a two-step methodology and demonstrate this method using data from a stated preference survey that elicited values for improvements in water quality in the Chesapeake Bay and lakes in the surrounding watershed. Our proposed methodology offers a flexible way to identify potential spatial patterns of welfare impacts and facilitates more accurate benefit-cost and distributional analyses

Neighborhoods' Food Environments Revisited: Food Deserts or Food Swamps?

This study uses service area-based coverage method and Poisson regression models to assess neighborhood healthy and unhealthy food environments in the City of Edmonton, Canada. We correlate food availability with different neighborhood socio-economic status (SES). Based on different food environments, we further identify three types of vulnerable neighborhoods that can be considered food deserts, food swamps and food tundras. Results from this study can provide policy makers with tailored strategies to effectively improve food environments with limited resources. Key findings include: (1) Neighborhoods with higher rates of deprived population such as unemployed, minority and low income groups have better access to healthy foods in general; (2) Children populations are negatively associated with both healthy and unhealthy food availability; and (3) Good access to public transportation is associated with good coverage of all types of food stores

Investigating the Spatial Effects of Agricultural Land Abandonment and Expansion

This study investigates the agricultural land abandonment and agricultural land expansion in the case of the Edmonton-Calgary Corridor, Canada. Using remote sensing data from 2000 to 2012, we include environmental and socio-economic factors to explore the drivers of land use conversions between agriculture and natural land. This research also adopts spatial techniques to allow for spatial effects from neighboring areas’ land-use activities. Key results from this study include: (1) higher land suitability for agriculture is negatively associated with agricultural land abandonment; (2) road density contributes to land use conversions between agriculture and natural land; and (3) land-use activities and decisions have strong spatial effects on neighboring regions, and the incorporation of spatial interactions can result in less biased results. In addition, an investigation of bidirectional land transitions helps in better understanding the associated gains and losses of agriculture and natural land

Using a Choice Experiment to Assess the Multiple Values of Land in Agricultural Uses in a Peri-urban Area: An Application to Edmonton, Canada

Over the last 30 years, the Alberta Capital Region (the City of Edmonton and 23 surrounding cities, towns, villages and municipal districts) has experienced rapid population growth, economic development, and conversion of agricultural land into alternative land uses. As a result, some of the province’s most productive farmland has been converted into residential and industrial development. Between 2000 and 2012, growth rates for population and developed areas in Alberta Capital Region are approximately 30% and 50%, respectively. For all newly added developed areas, almost 90% were converted from agricultural land (Haarsma, 2014). Concerns about the pace and pattern of development and conversion have thus led to the creation of the Capital Region Board in 2009 and the provincial Land Use Framework in 2008. Despite the historical rates of conversion and the policy attention it has prompted, little research has been conducted to examine what values are being lost as a result of agricultural land conversion. This research has thus been undertaken to assess the multiple values of land in agricultural uses in the Alberta Capital Region, Canada. Some values (e.g., the market value of agricultural commodities) accrue mainly to private individuals and firms, while others (e.g., biodiversity conservation values) accrue to society in general. Values of some agricultural uses, such as those associated with the production of “local food”, regulation of water and air quality, or maintenance of peri-urban green spaces, may be weighed very differently by different interest groups. Based on existing literature, we extend the valuation with an application of ecosystem goods and services that Millennium Ecosystem Assessment (2005) proposes. The objectives of the study are three-fold: (1) Estimate values that residents in the region place on conserving land in different agricultural uses; (2) Explore the links between those values and residents’ affinity with different ecosystem goods and services; and (3) Identify areas and strategies that are of particular interest to the public for conservation in agricultural uses. The study began with a series of focus groups. Three focus group discussions were held with selected experts to define the context, scope and objectives of the empirical study, and one focus group with a random selection of study area residents to pre-test the survey. The second part of the study involved an internet-based survey with a panel of Alberta Capital Region residents recruited by the survey firm, Qualtrics. The survey instrument includes background information on the respondents’ attitudes toward conservation, and an attribute-based choice experiment. This method defines non-market valuation such as the values of environmental goods or services in terms of various attributes including price, and then assesses the respondents’ Willingness To Pay (WTP) for specific bundles of attributes (Grafton et al. 2003). The choice experiments ask respondents to consider an alternative conservation strategy for land in a specific agricultural use, in a specific type of area, with a specific cost, as opposed to the status quo that would result in no policy change. The conceptual model is derived from the standard random utility specification in which utility is divided into observable and unobservable components (Hanemann 1984). In the model, utility contains a deterministic component that consists of the observable attributes (In our case, that is, type of agricultural use, acres conserved, adjacent area, location proximity, and one-time cost), and a random unobservable component. The empirical estimation starts with a simple Multinomial Logit Model. We also use a Multinominal Logit Model with interaction terms to evaluate the effects of individual characteristics such as gender, residence, shopping behaviors, and attitudes towards government policies. More advanced models, such as Latent Class Model and Random Parameter Model, are also estimated to provide further insight into heterogeneity. This research contributes to identifying agricultural regions of outstanding conservation values so that they can be protected against future land conversion. The results indicate that relative to land adjacent to primary highways, land adjacent to conservation buffers is generally preferred for conservation in agricultural uses. Additionally, residents place higher values on land within a 10-kilometer buffer to currently developed areas over land within city limits. Regarding agricultural uses, livestock grazing on native pasture has the highest values, with hay land ranking second. Values for vegetable farms vary from group to group, and residents who do not typically get food from farmers’ markets, community gardens or farms have the lowest WTP for vegetable farms. Women generally place considerably higher value on farmland conservation than men. Residence, whether the respondents are from Edmonton or surrounding counties, does not seem to make a difference on values of land in agricultural uses. Furthermore, concerns for local food production, water purification and air quality are the top reasons for conserving land in agricultural uses. Further research in this study will use the welfare measure from the WTP estimation in cost-benefit analyses to inform decisions on land use changes, including the creation, restoration and compensation of agricultural or natural areas. The non-market values of ecosystem goods and services associated with different agricultural uses can also be compared to the financial costs of such projects. Local governments have already expressed interest in those analyses

Investigating the Spatial Effects of Agricultural Land Abandonment and Expansion

This study investigates the agricultural land abandonment and agricultural land expansion in the case of the Edmonton-Calgary Corridor, Canada. Using remote sensing data from 2000 to 2012, we include environmental and socio-economic factors to explore the drivers of land use conversions between agriculture and natural land. This research also adopts spatial techniques to allow for spatial effects from neighboring areas’ land-use activities. Key results from this study include: (1) higher land suitability for agriculture is negatively associated with agricultural land abandonment; (2) road density contributes to land use conversions between agriculture and natural land; and (3) land-use activities and decisions have strong spatial effects on neighboring regions, and the incorporation of spatial interactions can result in less biased results. In addition, an investigation of bidirectional land transitions helps in better understanding the associated gains and losses of agriculture and natural land

Status-Dependent Impacts of Multiple Drivers on Agricultural Land Conversion

This article adopts a quantile regression model to assess the impacts of multiple drivers on agricultural land conversion. The key findings include that (1) the significance and magnitude of influences vary by the current conversion status; overall, drivers have larger effects in the higher quantile ranges (corresponding to areas that have experienced more extensive conversions); (2) Land suitability for agricultural uses is significant only in the mature cities and their surrounding areas; and (3) Road construction is a main determinant for farmland conversion. Results from this study contribute to a better understanding of the agricultural land conversion issue and have important implications for designing tailored policies for specific municipalities under different levels of conversion pressure and at different locations