Role of Economics in W&W Project and in Climate Change ProjectsRole of Economics in W&W Project and in Climate Change Projects

Explain how land use patterns evolve over time

Forecast future land use change

Determine how different policies might produce different future land use patterns

How Do Different Approaches to Modeling Land Use Change Compare?How Do Different Approaches to Modeling Land Use Change Compare?

Build-Out Analysis:

Accepts Transportation Analysis Zone Small Area Population Forecasts

Spreads Forecasted Population Change Over Space According to Zoned Densities

Geostatistical Simulation (cellular automata)

Landscape is Divided into Cells Transition Rules are Functions of State and

Location of Cell and State of Neighbor

Economic Modeling

Model is “process-based”, “mechanistic”, “behavioral”

Parcel Owner Chooses Optimal Time and Density of Development

Factors Taken Into Account that Affect Decision are:

• Value of parcel in undeveloped use

• Value of parcel in developed use

• Costs of converting parcel to developed use

• … and how these are changing over time…

Build-Out Analysis Geostatistical Simulation (e.g. Sleuth)

Economic Modeling

Unit of Observation

Transportation Analysis Zone

Cell in landscape Privately owned parcel of land

Nature of Approach

Accounting procedure Pattern-based Process-based

Nature of land use change process

Deterministic process dictated by regulations

Stochastic process with transition rules based on: “slope”, “spread”, “breed”, “dispersion”, “road gravity” coefficients

Stochastic model of behavior of land owners (choosing optimal timing of development and optimal density of development)

“Driving Forces”

Current maximum density allowed by zoning

State of current land coverVisible features of landscape (location, physical characteristics)

Value in undeveloped use, Value in developed uses, and Conversion costs, All as functions of: Current land cover Physical, locational features Public goods provision Relevant regulations …

Build-Out Analysis

Geostatistical Simulation (e.g. Sleuth)

Economic Modeling

Analytical Method

GIS overlays Cellular automata models -simulate observed cell changes by calibrating set of 5 transition rule coefficients

Discrete choice or hazard model analysis - tests hypotheses and produces parameter estimates for forecasting

Treatment of interactions

None Interactions between cell and neighboring cell important in “spread” rule

Interactions important if surrounding land use affects value of land in particular use

Treatment of stochastic nature of problem

None Forecasts are probabilistic(probability cell will be converted)

Forecasts are probabilistic(probability parcel will be converted)

Data used Current zoning in GIS form

Landsat data for at least 4 points in time;Road networks for 2 points in time

Parcel level data including locations of parcels, GIS data on physical features, regulations, public goods, land cover, …

Source of growth pressure information

“Small area” population forecasts

None, just matches patternEconomic model of housing starts as function of regional economic variables

Other modeling approaches fail to account for the fact that…Other modeling approaches fail to account for the fact that…

you can’t predict future land use outcomes under varying policies.

If you don’t know how policies affect individuals’ decisions…If you don’t know how policies affect individuals’ decisions…

policies do not dictate outcomes; they provide incentives/disincentives or constraints on individuals’ decisions.

Examples of Growth Control PoliciesExamples of Growth Control Policies

“Downzoning” (increasing the min. lot size or decreasing the maximum allowable density)

Imposing open space and clustering requirements

Restricting the provision of public utilities

Instituting agricultural preservation programs

Designating “Priority Funding Areas”

Enforcing adequate public facilities moratoria

None can be incorporated in current cellular automata models, but can be incorporated in models of economic decision making.

Tasks for Economics Component in Current Climate Change ProjectTasks for Economics Component in Current Climate Change Project

Produce 20-50 year land use change forecasts:

Using the “build out” analysis approach Using the economic modeling approach –

with and without Smart Growth policies

Devise a means of translating probabilistic outcomes of models into forecast scenarios usable by other PI’s:

Use Monte Carlo simulations to determine variability of resulting pattern due to inherent randomness of process.

Tasks for Economics Component in Proposed Climate Change ProjectTasks for Economics Component in Proposed Climate Change Project

Determine spatially-explicit scenarios, taking into account the following dynamic elements:

growing population and changing demographics;

changing land use policies;

receding coastline due to sea level rise;

adoption of climate change response policies (e.g. taxes on carbon emissions, subsidies for carbon sequestration)