EFFICIENT POLICIES FOR ENVIRONMENTAL PROTECTION: AN ECONOMETRIC ANALYSIS OF INCENTIVES FOR LAND CONVERSION AND RETENTION

This study investigates the costs of subsidies for land retention and conversion, in addition to a policy that combines the incentives. A Markov model of forest and agricultural land use is estimated for the U.S. South Central region and used to simulate retention and conversion policies. Results suggest a conversion policy is less costly for increasing forest area, and a retention policy is less costly for increasing agricultural land area. The costs of separate subsidies can be up to 300% higher than the costs of combined incentives. However, when administrative costs are taken into account, conversion policies are likely to be less costly.
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Plantinga, Andrew J.; Ahn, Soeun, EFFICIENT POLICIES FOR ENVIRONMENTAL PROTECTION: AN ECONOMETRIC ANALYSIS OF INCENTIVES FOR LAND CONVERSION AND RETENTION, Journal of Agricultural and Resource Economics, Volume 27, Issue 1, July 2002, Pages 128–145

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