Three Essays in Environmental and Land Economics

What farmers do matters. Even as the world’s population is increasingly urbanized, almost a billion people make their living in agriculture (World Bank, 2018) and 5 billion acres (38%) of the world’s land area is farmland (FAO, 2020). Moreover, agriculture accounts for a significant portion of global deforestation, forest fragmentation, and habitat loss (Defries, Rudel, Uriarte, & Hansen, 2010; Rudel, Defries, Asner, & Laurance, 2009), while consuming 70% of global freshwater and contributing substantially to water pollution (FAO, 2011). The sheer size of the land mass managed by smallholders means that interventions intended to improve environmental quality, sequester carbon, or foster economic development must reckon with the preferences and responses of rural landholders if they hope to meet their goals. Development economics is home to a rich literature modeling the actions and reactions of farmers, motivated by a desire to boost agricultural productivity and reduce rural poverty rates. Environmental economists have also contributed to an understanding of rural preferences and incentives as conservationists have increasingly seen the value of enlisting private land to increase wildlife habitat, sequester carbon, and provide ecosystem services. This dissertation examines farmer’s incentives, preferences, and interactions in relation to three policies in three different settings, with an eye to improving program design for agro-environmental policy in rural developing countries. Chapter 1 examines a change in water quality due to the expansion of a water treatment facility upstream of the Jordan Valley—the country of Jordan’s major agricultural region. I examine the substitutability of recycled water for freshwater, examining farmers’ water use and production using a model of agricultural production and exploiting the quasi-experiment to see how water use changes in the affected area. While I find no evidence that farm production was significantly impacted by the change—good news for urban water consumers whose water supply was increased by this substitution of recycled water in the agricultural sector—I do find that elements of water governance could improve the acceptability of the policy change from the farmers’ perspective. Chapter 2 examines farmer interactions when faced with a Payment for Ecosystem Services (PES) program in Central India. Specifically, it asks if program targeting should change if farmers’ acceptance of the program depends’ on their neighbors’ actions. Using the results of a choice experiment, I simulate private interactions of farmers’ across the landscape surrounding Pench national park, and place zones in priority order by total welfare both with and without private interactions. Consideration of private interactions changes both the priority order of the zones and the number of zones which pass a cost/benefit analysis. Chapter 3 asks the question, does land tenure registration cause, or prevent deforestation? Utilizing the implementation of a land registry called a DUAT in norther Mozambique, I observe land parcels before and after registration and estimate the effect on tree cover loss as measured by the Hansen et al. forest cover loss dataset (Hansen et al., 2013). I also show the results of a tree crown detection algorithm intended to estimate the presence of individual trees in agricultural mosaic landscapes. Findings indicate a modest increase in tree cover loss on parcels that are registered communally, whereas there is a modest decrease for parcels registered to individuals. The impact of DUAT registration also varies by pre-existing tree cover and population. These findings recommend caution regarding the possible environmental benefits of land registration and tenure reform, highlighting heterogeneity by both tenure type and pre-existing land cover.