Optimal Allocation of Land for Conservation: A General Equilibrium Analysis
Sahan Dissanayake () and
Hector M. Nunez
No 61820, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association
This paper presents a general equilibrium analysis of the optimal allocation of land to be preserved as natural habitat for conservation and recreation. Following Anas (1988) we model the natural habitat as both a congestible public good due to recreation visits and a pure public good due to option and existence values. Following Fullerton and Kinnaman (1995) we analyze the use of tax instruments to achieve the first best outcome in a private competitive market. First we present the scenario where the public good, the environment, is provided by a government or conservation agency. We show that a per unit lump sum tax on the environment similar to Anas (1988) combined with a recreation tax or a wage subsidy can achieve the first best allocation. Given the difficulty of charging a lump sum tax we next show that combining the wage or recreation tax with a utility maximizing conservation agency achieves the first best outcome. Next we present the scenario where the public good, the environment, is privately provided. We show that a subsidy on the private land set aside for the environment combined with a recreation or wage tax can achieve the first best outcome. Given the growing interest in ecosystem service markets and in providing ecosystem services this analysis highlights that tax instruments can be used to provide the optimal amount of land devoted to the environment.
Keywords: Environmental Economics and Policy; Land Economics/Use (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
https://ageconsearch.umn.edu/record/61820/files/UP ... aea_2010_UPDATED.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:61820
Access Statistics for this paper
More papers in 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().