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Essays on Agricultural and Environmental Economics

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Title:Essays on Agricultural and Environmental Economics
Authors:Woodill, Andrew John
Contributors:Roberts, Michael J. (advisor)
Economics (department)
Keywords:Agriculture economics
Environmental economics
climate change
show 3 morecrop-switching
decision analysis
pest management
show less
Date Issued:Dec 2018
Publisher:University of Hawaiʻi at Mānoa
Abstract:This dissertation offers three essays on environmental and agricultural economics. The first chapter examines how climate change adaptation through crop-choice decisions affect agricultural outcomes through a well-known microeconomic principle, the envelope theorem. In short, the envelope theorem suggests that a first-order approximation without adaptation provides a reasonable estimate of nonlinear effects with adaptation. That is, decisions by farmers in the long-run are already optimized, so accounting for adaptation can be safely ignored; thus, adaptation is a second- order effect of extreme events and nonlinearities. A simple model is provided to show that the envelope theorem holds across continuous and discrete crop switching decisions. An empirical analysis is then carried out to show that nonlinear effects without adaptation have a negative impact on revenue-per-acre as temperatures increase, but the effects are slightly reduced when accounting for adaptation. The analysis also shows that a marginal approximation without adaptation provides a reasonable estimate of nonlinear effects with adaptation. The results suggest the effects of climate change on agriculture can be simplified by eliminating the necessity of accounting for adaptation in order to get useful estimates.
The second chapter extends beyond the first chapter by providing a more rigorous analysis of crop choices and agricultural outcomes. A long history of crop choice and productivity outcomes are used to estimate the effects of both weather and climate change on major field crops in the United States. Climates are defined by backward-looking, rolling means of weather measures, with the lag length selected through cross-validation. The effect of climate change on crop revenue- per-acre is estimated from a base level to uniform increases in temperature of +0 to +5 Celsius. The results show that adaptation by crop-switching slightly reduces the impact of climate change relative to estimates that consider weather alone. Therefore, nonlinear responses due to climate change adaptation provide a slight improvement to outcomes but are unable to completely mitigate the effects of climate change.
The final chapter diverges from the theme of the first two chapters and considers optimal decisions Hawaii coffee farmers make to combat damage from a new invasive species, the coffee berry borer. The effect of a decision to spray or not spray a biological insecticide, Beauveria bassiana, is estimated based on the expected damage from not spraying versus the cost to spray. If damages are greater than the cost to spray, then it is beneficial to spray in order to mitigate damage to coffee. A Markov-chain is used to estimate economic damage in each month based on a spray decision. The Markov-chain is incorporated into a dynamic programming model to optimize the net-benefit during a coffee growing season. Results provide an optimal decision path for a coffee growing season and an optimal final net-benefit. Next, the economic model is compared against alternative pest management strategies: IPM, decisions to always spraying or to never spray. Results show our economic model performs best when optimizing net-benefit for a typical farm in Kona Hawaii.
Description:Ph.D. Thesis. University of Hawaiʻi at Mānoa 2018.
Pages/Duration:86 pages
Rights:All UHM dissertations and theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission from the copyright owner.
Appears in Collections: Ph.D. - Economics

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