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									Role 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
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”,
   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       Economic Modeling
                                        (e.g. Sleuth)

Unit of       Transportation Analysis   Cell in landscape               Privately owned parcel of land
Observation   Zone

Nature of     Accounting procedure      Pattern-based                   Process-based

Nature of     Deterministic process     Stochastic process with         Stochastic model of behavior of
land use      dictated by regulations   transition rules based on:      land owners (choosing optimal
change                                  “slope”, “spread”, “breed”,     timing of development and
process                                 “dispersion”, “road gravity”    optimal density of
                                        coefficients                    development)

“Driving      Current maximum           State of current land cover     Value in undeveloped use,
Forces”       density allowed by        Visible features of landscape   Value in developed uses, and
              zoning                    (location, physical             Conversion costs,
                                        characteristics)                All as functions of:
                                                                         Current land cover
                                                                         Physical, locational features
                                                                         Public goods provision
                                                                         Relevant regulations
                    Build-Out          Geostatistical Simulation              Economic Modeling
                    Analysis           (e.g. Sleuth)
Analytical          GIS overlays       Cellular automata models -             Discrete choice or hazard model
Method                                 simulate observed cell changes by      analysis - tests hypotheses and
                                       calibrating set of 5 transition rule   produces parameter estimates for
                                       coefficients                           forecasting

Treatment of        None               Interactions between cell and          Interactions important if
interactions                           neighboring cell important in          surrounding land use affects
                                       “spread” rule                          value of land in particular use

Treatment of        None               Forecasts are probabilistic            Forecasts are probabilistic
stochastic nature                      (probability cell will be              (probability parcel will be
of problem                             converted)                             converted)

Data used           Current zoning in Landsat data for at least 4 points      Parcel level data including
                    GIS form          in time;                                locations of parcels,
                                      Road networks for 2 points in           GIS data on physical features,
                                      time                                    regulations, public goods, land
                                                                              cover, …

Source of           “Small area”       None, just matches pattern             Economic model of housing
growth pressure     population                                                starts as function of regional
information         forecasts                                                 economic variables
Other modeling approaches fail to
account for the fact that…
   policies do not dictate outcomes; they provide
     incentives/disincentives or constraints on
     individuals’ decisions.

If you don’t know how policies affect
individuals’ decisions…
  you can’t predict future land use outcomes under
    varying policies.
Examples of Growth Control Policies
     “Downzoning” (increasing the min. lot size or
       decreasing the maximum allowable density)

     Imposing open space and clustering

     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 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 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

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