Gradual Land-Use Change in New Zealand: Results from a Dynamic Econometric Model

Abstract

Rural land use is important for New Zealand's economic and environmental outcomes. Using a dynamic econometric model and recent New Zealand data, we estimate the response of land use to changing economic returns as proxied by relevant commodity prices. Because New Zealand is small, export prices are credibly exogenous. We show that land use responses can be slow. Our result implies that policy-induced land-use change is likely to be slow or costly. JEL codesQ15, Q24

Assessing the impact of price changes and extreme climatic events on sediment loads in a large river catchment near the Great Barrier Reef

“…Beef prices and wages impact sediment indirectly (and with a lag) by altering cattle numbers. The lagged positive effect of beef prices on cattle numbers is consistent with other research that has found long‐run own‐price elasticities in beef and sheep farming to be positive (Kerr and Olssen, ), so too is the lagged negative effect of wages (leading to a reduction in cattle numbers).…”

A response to Doole and Marsh () article: methodological limitations in the evaluation of policies to reduce nitrate leaching from New Zealand agriculture

“…The large land-management elasticity indicates that landowners are more likely to change management practices on their existing enterprise than to change land use. This finding mirrors the slow rate of land-use change in New Zealand estimated econometrically by Kerr and Olssen (2012) and Dake (2011). The CET elasticity parameter for soil (r S ) is set at 0 as the area of a particular soil type is fixed.…”

Agricultural Emissions Mitigation in New Zealand: Answers to Questions from the Parliamentary Commisioner for the Environment

“…Zealand to move out of livestock agriculture where we can find profitable alternatives. In the short term, land use is sticky -it does not change fast (Kerr and Olssen 2012). As Warwick Murray and Anders Crofoot stress, farmers, for good reasons, are conservative and make changes slowly.…”

“…It would be important to check that substitution of N fertiliser with other supplementary feed did not lead to an increase in emissions.22 This is a rough and possibly optimistic estimate Kerr et al (2012). estimate around a 1 megatonne reduction in net emissions in 2024 from land-use change in response to a constant $25 carbon price applied to agriculture (on top of the existing forestry component of the ETS) with no output-based allocation from 2008.…”