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Coupled Modeling of Economic – Hydrological Systems: Examining Spatial Heterogeneity in Water Quality Benefits and Optimal Agricultural Land Use Management in Ohio

Liu, Hongxing
http://rave.ohiolink.edu/etdc/view?acc_num=osu1494006418870902

Abstract Details

2017, Doctor of Philosophy, Ohio State University, Agricultural, Environmental and Developmental Economics.
Water quality within a watershed is strongly linked to human behavior. Economic agents directly and indirectly impact the quality of water resources through land use and land management decisions—often with unintended consequences. Understanding dynamic feedbacks between economic decisions and water resources is essential for long-term policies that balance agricultural management and ecosystem services. In this dissertation, we examine three policy-related questions: 1) What is the impact of water quality change in the Hoover Reservoir, Ohio? 2) Are there welfare gains from targeted policies in a heterogeneous landscape? 3) How do farmers’ agricultural decisions respond to policy incentives and how does that affect water quality? In the second chapter, we use a hedonic pricing model to estimate the impact of water quality change of the Hoover Reservoir capitalized in the surrounding housing market. We work with hydrologists to link the economic data with nutrient flow data they generated using the Soil and Water Assessment Tool (SWAT), and construct water quality indicators that represent the expected algal production of the reservoir. The econometric results indicate the marginal implicit price associated with one gram of algal production per square meters per day in the Hoover Reservoir is $3,071.64 to $3,238.80 for housing properties adjacent to the Hoover Reservoir. We also find that spatial heterogeneity matters, as the impact decreases with distance. In the third chapter, we develop a platform to solve the social planner’s problem of maximizing social welfare on heterogeneous landscapes. We develop a dynamic optimal control model to examine the tradeoffs between agricultural decisions and water quality impacted by nutrient runoff based on spatial characteristics. We derive the optimal fertilizer choice for a representative farm, and the corresponding tax scheme to achieve the social optimal outcome. We find welfare gains from spatially targeted policies increase with increasing level of heterogeneity in soil characteristics compared with uniform fertilizer usage fee. We also show that there is an optimal level of heterogeneity in implementing spatially targeted policies. In the fourth chapter we study farmers’ behavior of best management practice (BMP) adoption in response to policy incentive programs in the Western Lake Erie Watershed. We use ordered logit model to analyze and predict farmers’ adoption decisions under different policy payment scenarios, and link economic behavior model with hydrologic model (SWAT) to analyze the impact of agricultural management practices on water quality in Lake Erie. We find payment programs for subsurface placement adoption reduce total phosphorus (TP) and dissolved reactive phosphorus (DRP) by 4% and 7% compared with the baseline no policy scenario, respectively. Higher payment program leads to higher adoption rate in the Maumee River watershed. Our work develops an empirically grounded model to examine tradeoffs between agricultural decisions and water quality and provides deep insights for management policies that spatially target on heterogeneous socio-economic and physical characteristics. It links economic models with hydrologic model to derive full understanding of the human-ecosystem, and develops policy tools for long-term management decisions.
Sathya Gopalakrishnan (Advisor)
Elena Irwin (Committee Member)
Gajan Sivandran (Committee Member)
Brent Sohngen (Committee Member)
142 p.
Agricultural Economics; Environmental Economics
coupled human-natural system; water quality; non-market valuation; harmful algal bloom; economic-hydrological process model

Recommended Citations

Citations

  • Liu, H. (2017). Coupled Modeling of Economic – Hydrological Systems: Examining Spatial Heterogeneity in Water Quality Benefits and Optimal Agricultural Land Use Management in Ohio [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1494006418870902

    APA Style (7th edition)

  • Liu, Hongxing. Coupled Modeling of Economic – Hydrological Systems: Examining Spatial Heterogeneity in Water Quality Benefits and Optimal Agricultural Land Use Management in Ohio . 2017. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1494006418870902.

    MLA Style (8th edition)

  • Liu, Hongxing. "Coupled Modeling of Economic – Hydrological Systems: Examining Spatial Heterogeneity in Water Quality Benefits and Optimal Agricultural Land Use Management in Ohio ." Doctoral dissertation, Ohio State University, 2017. http://rave.ohiolink.edu/etdc/view?acc_num=osu1494006418870902

    Chicago Manual of Style (17th edition)

osu1494006418870902
403
© 2017, all rights reserved.
This open access ETD is published by The Ohio State University and OhioLINK.