Three Essays in Applied and Resource Economics

Abstract

This dissertation includes three empirical essays in three chapters addressing issues related to Resource Economics, Agricultural Policy, and Recreational demand. I contribute to the literature by adopting nonlinear panel estimation methods, causal inference analysis, and quantile regression to address resource management, environmental resource allocation, and econometric issues.

Chapter 1 uses a nonlinear approach to address the impact of the Conservation Reserve Program rental rates on program enrollment under different crop price environments. High crop prices decrease landowners’ incentives to enroll land in the Conservation Reserve Program (CRP), as returns from crop production become more favorable relatively. We explore how CRP rental rates affect CRP land enrollment decisions under varying crop-price regimes. We use county-level data from 1986 to 2019 and employ a land-use framework estimated empirically with a Panel Smoothing Transition Regression. Our results suggest that the impact of CRP rental rate on CRP land enrollment varies depending on the level of crop prices. When crop prices are low, a 10% increase in CRP rental rates is associated with a 2.7% increase in CRP land enrollment; whereas when crop prices are high, a 10% increase in CRP rental rates causes a 1.9% increase in CRP land enrollment. We conclude that substantial carbon-sequestration and water-quality benefits are foregone under high crop price regimes.

Chapter 2 addresses the effect of the Transition Incentive Program on Beginning farmers and ranchers in the United States. This paper examines the effect of the Transition Incentive Program (TIP) on beginning farmers and ranchers (BFRs) in the midwestern agricultural region. BFRs are important for the agricultural industry in the United States as they have the potential to enhance its productivity and efficiency. The TIP is a federal program that seek to transfer near–expiring Conservation Reserve Program (CRP) lands to a beginner farmer, rancher, veteran, or socially disadvantaged farmer. We evaluate if availability of TIP affected the number of BFRs using quasi–experimental methods and pre and post implementation county–level data for the period 2002-2017. Results provide strong evidence that TIP encourages entry into agriculture that translates into more BFRs in counties with abundant CRP lands. Specifically, we find that TIP stimulates entry by 34 more BFRs per county in the agricultural sector in the region. Similar outcomes were observed for the different subgroups of BFRs. By exploring the effects of TIP, we conclude that landowners in high-CRP counties are willing to transfer CRP lands to BFRs. Although this paper is the first to explore the effectiveness of TIP in achieving its mandate, we suggest future research to examine factors that influence this land transfer program using individual level data.

Chapter 3 addresses the issues of climate variability, socio-demographic factors, and visits to national parks. We analyze the relationship between climate variables, socio–demographic factors, and length of stay to managed natural parks in Utah. We construct an extensive dataset using recreational reservation data from the recreation.gov website to evaluate these relationships. The results provide evidence that length of stay is sensitive to extreme weather conditions. For instance, higher humidity and extremely cold weather reduces the length of stay at a national park. We realize that the socio-demographic indicators greatly influence length of stay as increasing travel cost create a greater opportunity cost for out-of-state visitors. We perform a subsample analysis where we separate the observations into warm and cold seasons and test the robustness of our results with alternative specifications of the main model. Our analysis demonstrate considerable heterogeneity in climate and socio-demographic dynamics when the analysis is conducted based on seasons.