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Analizing Water Framework Directive Impacts Using A Multinomial Logit Land Use Model

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  • Fezzi, Carlo
  • Bateman, Ian J.
  • Day, Brett H.
  • Posen, Paulette
  • Rigby, Dan

Abstract

We develop a two-stage, multinomial logit model of UK land use to investigate the impact of policy changes upon agriculture. The model utilizes a large panel database covering the entirety of England and Wales for 14 years between 1969 and 2004 integrated with the economic and physical environment determinants of all major agricultural land use types. Our model performs well in out-of-sample prediction of current land use and we use it to assess a proposed implementation of the Water Framework Directive via a tax on fertilizer. Results indicate that such policy change would generate substantial switching from arable to grassland systems, reducing significantly the amount of nitrate leaching into UK water-bodies.

Suggested Citation

  • Fezzi, Carlo & Bateman, Ian J. & Day, Brett H. & Posen, Paulette & Rigby, Dan, 2008. "Analizing Water Framework Directive Impacts Using A Multinomial Logit Land Use Model," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6666, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa107:6666
    DOI: 10.22004/ag.econ.6666
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    References listed on IDEAS

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    1. Lubowski, Ruben N. & Plantinga, Andrew J. & Stavins, Robert N., 2006. "Land-use change and carbon sinks: Econometric estimation of the carbon sequestration supply function," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 135-152, March.
    2. Chomitz, Kenneth M & Gray, David A, 1996. "Roads, Land Use, and Deforestation: A Spatial Model Applied to Belize," The World Bank Economic Review, World Bank, vol. 10(3), pages 487-512, September.
    3. Kenneth M. Chomitz & Timothy S. Thomas, 2003. "Determinants of Land Use in Amazônia: A Fine-Scale Spatial Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 1016-1028.
    4. Carlo Fezzi & Dan Rigby & Ian J. Bateman & David Hadley & Paulette Posen, 2008. "Estimating the range of economic impacts on farms of nutrient leaching reduction policies," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 197-205, September.
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    Keywords

    Agricultural and Food Policy; Land Economics/Use; Research Methods/ Statistical Methods; Resource /Energy Economics and Policy;
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