Research Accomplishment Reports 2009

Ex-post Evaluations of Environmental Projects that Affect Kentucky Agriculture and Rural Communities

A. Pagoulatos
Department of Agricultural Economics

 

Non-Technical Summary

The complex composition of policies aiming to improve environmental quality in agriculture do not always lead to the desired results. This project evaluates the effectiveness of environmental policies in addressing agricultural pollution in order to identify problems and propose solutions.

2009 Project Description

We investigated what compensation do private landowners require to open their land to the public, whether for consumptive or non-consumptive uses. For the Appalachian region, it was found education and income were associated with a higher willingness to open land. Education impacted the decision more than median income. Older landowners are less likely to open their land to the public. The probability of a landowner accepting the bid increased at an increasing rate to a bid of approximately $40 per acre, and then at a decreasing rate until a bid of approximately $78. Average acres leased for all respondents was 42.12. Results indicate that 212 landowners with complete data, in South Central Appalachian, who controlled 12,413 km2 (30,674 acres), or 4 percent, of non-PRL in SCA were included in the portion of the NPLOS survey that elicited information on lease price. Of this acreage, 59 percent (7,346 km2 or 18,153 acres) were opened to friends and family for recreational purposes, 2 percent (303 km2 or 748 acres) were opened to the public for a fee, and 13 percent (1,575 km2 or 3,892 acres) were opened to the public without a fee. The remaining acreage (26%) was not opened for recreational purposes. Of the 212 individuals, 80 percent (169) were or willing to participate in a leasing program or were already leasing acreage (2 individuals leased 58.27 ha (144 acres), and 20 percent (43) were willing to lease acreage at some price.

The ability of Kentucky's EQIP program to address important natural resource quality problems is investigated by estimating a set of endogenous equations representing total county EQIP applications, resulting EQIP funding, and environmental quality concerns. This system was estimated using 2SLS where the dependent variables follow a Poisson distribution. Only the county animal waste concern ranking was consistent with the actual measure of animal waste for each county, but generated the least applications for cost share funding and received the least funding. Counties with high ranking for water quality concerns had less actual water quality problems. Effectiveness of the EQIP program can be improved by decreasing its reliance on the ranking of local environmental concerns.

2009 Impact

The information generated and mechanisms suggested in this study can be used by policy-makers for a land-opening program or a program designed to increase recreational visitors in rural areas. Such programs could be used to relieve over-use of protected land (such as over-use of a national park), as well as to induce new visitors into areas to improve local revenues.

2009 Publications

Pagoulatos, A. and Fleming, R.A. 2005 The Environmental Quality Incentives Program in Kentucky: Does It Address Environmental Quality Problems Journal of Applied Economics and Policy. 24:33-61.