Ruhr Economic Papers

Ruhr Economic Papers #182

Land Conversion and Market Equilibrium – Insights from a Simulated Landscape

by Rich Iovanna and Colin Vance

RWI, 04/2010, 24 S./p., 8 Euro, ISBN 978-3-86788-204-0



We specify a system of equations that fully reflects the supply and demand sides of the market for agricultural open space at equilibrium. Although simple, the system is exceedingly flexible and allows for household and parcel heterogeneity. We derive an empirical model directly from the structural equations and contrast this using a simulated landscape with the econometric specification most often found in the literature. We then show how the model can be used to project land-use change into the future and for policy simulation. Finally, we use the model to examine the impact of common land conservation policies in Europe.

JEL-Classification: R15, Q24

Keywords: Land-use change; urban sprawl; simulation

Published as:

Iovanna, R. and C. Vance (2013), Land Conversion and Market Equilibrium: Insights from a Simulated Landscape. Annals of Regional Science 50 (1): 169-184.