Academic journal article Agricultural and Resource Economics Review

Modeling Migration Effects on Agricultural Lands: A Growth Equilibrium Model

Academic journal article Agricultural and Resource Economics Review

Modeling Migration Effects on Agricultural Lands: A Growth Equilibrium Model

Article excerpt

We estimate a system-of-equations model designed to measure the interaction between intertemporal patterns of changes in population, employment, and agricultural land densities. The model is applied to West Virginia for the 1990-1999 period. Consistent with recent findings on migration patterns, the results show that jobs followed people. New jobs were captured by commuters, while agricultural land losses were occurring in the commuters' counties of origin or bedroom communities. However, counties with relatively more profitable and concentrated agricultural enterprises were less susceptible to alternative land use pressure than counties with less productive or fragmented agricultural land. Elasticities indicate population change is elastic, whereas employment and agricultural land density changes are inelastic to factors affecting them. Growth management, when combined with agricultural land retention programs, may be most effective at preserving agricultural land in high growth or potential growth areas.

Key Words: agricultural land, growth equilibrium modeling, land use change, population and employment growth

Urban and rural economic structure in the United States has changed significantly over the past two decades. Previous studies have found that regional growth patterns are in part determined by "rural renaissance" and "urban flight," a shifting economic base, and a change in employment opportunities (Dissart and Deller, 2000; Power, 1996; Lewis, Hunt, and Plantinga, 2002). "Rural renaissance" and "urban flight" may be a result of the interplay between two significant forces-urban growth and externalities associated with urban residence, and amenity benefits of suburban and rural environments.

Negative externalities of urban residences resulting from fiscal and social problems (push factors) create incentives to migrate to areas where these negative externalities are lower (Mieszkowski and Mills, 1993). Other factors, such as population growth, household income, agricultural land rents, and commuting costs, determine sprawl and urban growth at the fringe (Brueckner and Pansier, 1983). Underlying forces of land use change at the urban fringe have become significant, as evidenced by a 40% increase in defined urban land between 1982 and 1997, with 70% of cropland being converted to urban uses (Vesterby and Krupa, 1997).

Agricultural land in the rural environment may provide scenic views, recreational opportunities, and other nonmarket environmental benefits that attract new development (Irwin and Bockstael, 2001; Dissart and Deller, 2000). These rural qualities and endowments (pull factors) affect urban migration decisions, as households are drawn to areas with higher quality-of-life or amenity factors (Dissart and Deller, 2000). Gradual changes in spatial residential preference and decentralization of residential places are followed by decentralization of employment growth (Mieszkowski and Mills, 1993). Consequently, suburban places might eventually become centers of economic activity exerting new influences on surrounding suburban and rural land use and creating further incentives for suburban expansion (Isackson and Ecker, 2001).

Complex urban-rural intertemporal economic interactions and growth affect rural agricultural activity in general and agricultural land use in particular. Sprawl and its attendant social infrastructure demand land from existing sectors in the suburban and rural economies. In a competitive land market, the price for land equals the discounted present value of the stream of future rents.1 Thus, it is expected that if rents from development exceed agricultural rents in the future, the higher rents from development will be capitalized into the current price of agricultural land (Plantinga and Miller, 2001). As development pressure intensifies following the out-migration of population and businesses to suburban areas, more land may be allocated for housing and development purposes because these economic activities might provide a better bid than competing agricultural and other rural economic activities (Isackson and Ecker, 2001). …

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