A Bioeconomic Analysis of the Duration of Conservation Contracts

Conservation and restoration of native vegetation is often a gradual process which may require many years to transform an ecosystem from one vegetative state to a target ecosystem. This process is stochastic, with some changes potentially irreversible. In contrast, contracts with landholders to undertake conservation measures on their property are typically for less than ten years and often make no contingencies for re-contracting at the end of the contract period. The risk to land holders and conservation agencies of contracts not being renewed and the consequent potential loss of previous investment means including covenants in conservation contracts may be attractive to both parties. A model is developed to empirically examine the optimal dynamic conservation contract and the possible role of covenants in the costs and benefits of contracts.POMDP, biodiversity, contracts, monitoring, Resource /Energy Economics and Policy,

Agri-environment Policy Design With Hidden Information and Hidden Action: Input Quotas vs Input Charges

Moxey, White and Ozanne (1999) have shown how transfer payments coupled with input quotas can be used to design optimal truth-telling mechanisms for voluntary agri-environmental schemes under hidden information about compliance costs. Ozanne, Hogan and Colman (2001) adapted the Moxey et al. model to analyze hidden action in such schemes, analyzing the relationships between input abatement, the cost of monitoring compliance and farmers’ risk preferences. White (2002) extended the Moxey et al. model to analyze the design of contracts under both hidden action and hidden information, but used an input charge/transfer payment approach rather than the original input quota/transfer payment one. In addition, he assumed that farmers caught cheating face a variable fine, related to the amount of input they apply in excess of the amount agreed in the contract, rather than a fixed fine as assumed by Ozanne et al. White argues that his results show that an input charge/transfer payment policy is more efficient than a quota when the regulator cannot observe compliance costs of individual farmers. This paper integrates the previous work, developing a model of both hidden action and hidden information in agri-environmental schemes based on the input quota/transfer payment approach of Moxey et al. (1999) and Ozanne et al. (2001), rather than the input charge/transfer payment approach of White (2002), but the variable fine of the latter rather than the fixed fine assumed by Ozanne et al. This integrated model shows that, contrary to White (2002), the input quota and input charges approaches lead to identical outcomes in terms of abatement levels, compensation payments, monitoring costs, probabilities and social welfare.Environmental Economics and Policy,

Hidden action, risk aversion and variable fines in agri-environmental schemes

This note analyses the design of agri-environmental schemes for risk-averse producers whose input usage is only observable by costly monitoring. The scheme penalises producers in proportion to input use in excess of a quota. A striking result is that if the scheme is designed in such a way that producers always comply with the quota, risk aversion is not relevant in determining the level of input use.agri-environmental policy, monitoring, risk aversion, Environmental Economics and Policy, Risk and Uncertainty,

Measuring the Cost-effectiveness of Conservation Auctions Relative to Alternate Policy Mechanisms

The principle motivation for using price-discriminating conservation auctions is that they are expected to be significantly more cost-effective than fixed-price mechanisms. This paper measures cost effectiveness for tenders from two rounds of the Auction for Landscape Recovery in Western Australia relative to counterfactual fixed-price mechanisms. If we assume that the bid equals the compliance cost, the auction gives a significant cost saving over fixed-price mechanisms. If instead we assume that bids include an element of rent, fixed-price mechanisms can be more cost effective than the auction. The significance of these results is that a fixed price scheme may achieve a similar level of cost effectiveness to a conservation auction, when one or more of the following apply: compliance costs do not vary significantly between producers, auction bids have a significant element of rent and the auction incurs a significant additional administrative cost.Auctions, conservation, bio-diversity, Environmental Economics and Policy, Q57,

Deregulation of the Australian Wheat Export Market: What Happened to Wheat Prices?

This paper investigates whether deregulation of the Australian wheat export market induced a structural change in the price data generation process. We examine the unit root properties of Western Australian wheat prices by testing for the possibility of single and double structural breaks in the price series. Daily prices for the period 20th of May 2003 to 14th of September 2010 are used. We find that the wheat price series has a unit root with two structural breaks but neither break coincided with the time when the Wheat Export Marketing Act 2008 came into effect on 1 July 2008. We conclude that change in local market behaviour would have started prior to actual deregulation with subsequent effect on local price.deregulation, unit root, structural breaks, wheat price, Agribusiness, Demand and Price Analysis, Marketing, Q13, Q18,

Efficiency Policies for Salinity Management: Preliminary Research from a Spatial and Dynamic Metamodel

Dryland salinity, as an externality, has an impact on various public assets, including roads, biodiversity and public water supplies. This has been seen as an important justification for government to take action and internalise the pollution. Economic policy instruments have been identified as a potential solution to the problem, as they may achieve environmental goals at least cost to society. This paper presents a spatial and dynamic model which aims to compare economic instruments for land use change to abate the off-site impacts of salinity on public assets. Preliminary research is presented, along with a discussion of the model’s structure.dryland salinity, economic modelling, meta-modelling, policy, Agricultural and Food Policy, Land Economics/Use,

Estimating Urban Residential Water-Demand With Increasing Block Prices: The Case of Perth, Western Australia

This study uses panel data at suburb level to estimates the elasticity water demands in Perth, Australia from 1995 to 2005. After deriving the consumer’s water demand under a non-linear budget constraint, we estimate the water demand model, which accounts for how water (and other purchased goods) is used to satisfy fundamental desires of the household. We have applied the specification of price that provided the correctly estimated marginal price from the block tariff structure, and employed a maximum likelihood estimation technique to tackle the endogeneity and heteroskedasticity issues. Our estimation of water demand price elasticities are slightly higher (more elastic) than previous study in Perth, but broadly in line with other estimates in the literature.water demand, water pricing, block pricing, water resource management, household model, Demand and Price Analysis, Resource /Energy Economics and Policy, Q21, Q25 and Q23,

Agri-environmental Regulation on the Back of a Data Envelopment Analysis

A land retirement policy whereby land is taken out of agriculture and converted to natural vegetation or forestry has the potential to reduce environmental damage related to dryland salinity in Western Australia. This paper uses some recent results in the theory of directional distance functions (Chambers and Fare, 2004) to analyse alternative policy designs for a land retirement scheme. The results indicate that a fixed price scheme is inefficient compared with a first-best solution, but performs adequately. A scheme requiring a fixed proportion of area retired by all producers is inefficient. A separating solution, based on mechanism design, gives a small but significant increase in welfare compared to a fixed price scheme.Agri-environmental policy, distance functions, efficiency, mechanism design, Environmental Economics and Policy, Q12,

Monitoring of Compliance in Western Australian Conservation Contracts

Contracting with private landholders for labor towards production of environmental services (payment for actions) or the environmental services themselves (payment for outcomes) is reliant on the environmental organization’s ability to monitor and assess the environmental outcomes provided. Inaccurate and costly assessment reduces the cost effectiveness of the contract. Different assessment technologies will have different impacts on the cost effectiveness and optimal contracting choice of the environmental organization. The paper compares the influence of field assessment by a local expert, and remote assessment via satellite imagery, on the optimal contracting decision for the Western Australian wheat belt.conservation, environmental, compliance, monitoring, enforcement, environmental regulation, Crop Production/Industries, Environmental Economics and Policy,

Giving Back Not Giving Up: Generativity Among Older Female Inmates

Extensive research has been conducted to understand the experience of incarceration, with the focus on hardships inflicted on inmates via incarceration. In addition, the current graying of America‟s prisons has gained some attention from both policymakers and the general public. However, despite the recent upsurge in concern and interest in matters pertaining to prison inmates, the focus by and large remains on young males. Meanwhile, studies addressing the experience of incarceration for older females are virtually non-existent. Generativity, defined as the desire to give back and execution of that desire, is regarded as a universal life stage first occurring sometime during middle age. Yet, generativity among older female inmates has not been specifically researched. This research project explores the experience of incarceration as well as the presence and practice of generativity among older female inmates. Participants in this study were 29 female inmates housed at the Kentucky Correctional Institution for Women in Pewee Valley, Kentucky. Data were collected through low-structure interviews, which allowed the participants to discuss issues that were important to them. The findings suggest that older women experience motherhood and incarceration in unique ways. Generativity was indicated to exist among older women inmates. Furthermore, the participants reported engaging in generative behaviors in prison and expressed desires to continue to be generative upon their release. A number of policy implications are suggested, as are a number of areas that may be of interest to researchers in future