José L. Oviedo

Would You Choose Your Preferred Option? Comparing Choice and Recoded Ranking Experiments

Previous research has shown that results from a choice experiment are statistically different from those obtained from a ranking experiment that is recoded and treated as a choice experiment using only the first rank. By avoiding some of the shortcomings of previous comparisons, we obtain the opposite results using data from the valuation of a cork oak reforestation program in the south of Spain. Structural models and welfare estimations are statistically indistinguishable irrespective of the use of parametric or bootstrapping tests. Further, we employ follow-up questions and subsample analysis to test whether divergences appear when potential effects are isolated. Copyright 2008, Oxford University Press.

Contingent Valuation of Woodland-Owner Private Amenities in Spain, Portugal, and California

Abstract Most of the Mediterranean woodlands in Spain, Portugal, and California are managed as agrosilvopastoral enterprises, producing some combination of livestock, wood, cork products, and crops, as well as wildlife habitat and diverse environmental services. Private amenity benefits to landowners have been suggested as an explanation for high land prices and the persistence of such rangeland enterprises despite apparently marginal cash returns. In this study, private amenity values are estimated using a contingent valuation technique in surveys of private woodland owners as part of five case studies, using a design developed to separate landowner amenity income and capital values. Nonindustrial private landowners were asked about the maximum amount of money that they were willing to give up (to pay) before selling their property to invest in more commercially profitable assets, and the proportion of the market price of their woodland that they think is explained by privately consumed amenities. Amenity values were found to be relevant because, in all cases, landowners were willing to pay > €120 · ha−1 · yr−1, at 2002 prices, and attributed > 30% of land market price to amenities. These values represent an amenity profitability rate > 2% in all case studies. The data analysis shows some similarities, but mostly divergences, in the different land-simulated and amenity-simulated markets.

Comparing payment-vehicle effects in contingent valuation studies for recreational use in two protected Spanish forests.

We compare two alternative payment-vehicles for contingent valuation studies to estimate economic recreational values. We analyze the potential effects of each wording to determine the most appropriate vehicle. Four contingent valuation surveys, carried out in two different protected Spanish forests, are compared. In each forest, one contingent valuation survey used entrance-fees and the other used an increase in trip-expenditures as payment-vehicles. As expected, results show statistically significant differences and great divergences between estimations, some three times higher in the second type. These differences remain, regardless of the format and the estimation technique used. The tests suggest that the second type approximates better welfare values for recreation.

Accounting for carbon in avoided degradation and reforestation programmes in Mediterranean forests

After reviewing the Kyoto Protocol rules for carbon sequestration accounting and the different carbon accounting methods proposed in the literature for forest management, for reforestation and, more recently, for avoided deforestation or degradation, we discuss possible carbon accounting rules for a post-Kyoto world. We then apply the results of this discussion to micro-applications in an Annex I country (Spain) and in a non-Annex I country (Tunisia), comparing avoided degradation with reforestation alternatives. In both areas we focus on Mediterranean forest, one of the worlds hotspots of biodiversity. We calculate CO 2 break-even prices, including in the analysis not only commercial values, but also, where these are relevant, existing subsidies. We also investigate social preferences for avoided degradation and reforestation using stated preference methods. Our results support the convenience of a change in focus for European Union subsidies from reforestation to avoided degradation.

Economics of Ecosystem Services

A better appreciation of the value of ecosystem services produced on private lands opens the door to programs that offer incentives to landowners and managers for specific conservation and production practices. This chapter reviews studies of ecosystem services provided by oak woodlands in California and Spain, focusing on those that may be difficult to quantify and value, and therefore are often undervalued in decision-making processes drawing on economic analysis. We first examine how ecosystem services are defined and valued, and then review research done from an economic perspective in California ranch and Spanish dehesa oak woodlands. We conclude with a brief exploration of differences in institutions and policies that bear on oak woodland ecosystem services in these two regions. The next step in ecosystem service valuation and use in policy is to extend case studies and to undertake analyses at the regional, state, and nation-wide scales. Despite scientific advances, the need for preservation of the natural capital of oak woodlands and the many ecosystem services the woodlands provide is far from fully recognized by society. An important future policy task will be incorporating payments for provision of biodiversity and ecosystem services into agricultural, water, energy, and other policies.

Spatial Valuation of Forests’ Environmental Assets: An Application to Andalusian Silvopastoral Farms

We develop a model that estimates spatially allocated environmental asset values for the simultaneous provision of seven ecosystem services. We examine the effect of heterogeneous spatial and economic factors on asset figures, and identify potential forestry abandonment problems when continuing with forestry activity becomes unprofitable for the landowner. Our results show a relevant spatial variability according to forest species distribution and structure. We examine potential trade-offs among silvopastoral provisioning services, water, and carbon sequestration services. Results forecast the abandonment of forestry activity and quantify the significant impact of discount rates and prices on asset values. (JEL Q23, Q51)

Economics of Multiple Use Cork Oak Woodlands: Two Case Studies of Agroforestry Systems

Jerez (Spain) and Iteimia (Tunisia) cork oak agroforestry systems have close natural environments but they differ in land property rights, labour market and economic development contexts. These human induced differences result in similarities and dissimilarities on natural resources multiple use management. In this study we apply a simplified agroforestry accounting system (AAS) in two publicly owned cork oak agroforestry systems (COAS) for an average year, assuming steady state situation, without considering both environmental outputs (private and public) and government expenditures. The study objectives are to analyse the multiple Jerez and Iteimia agroforestry system activities intra-relationships taking into account intermediate outputs and to estimate a set of on-site cork oak agroforestry economic indicators related to single activity and the COAS as whole aggregated activities. In addition, in order to estimate separately the Iteimia open access grazing resource rent and the households self-employed labour cost, we propose a simulated pricing approach trade-off as an alternative to close substitute goods pricing method. The study results show that Jerez generates a commercial capital income loss and employees receive competitive wage rate, while undertakes a significant investment on agroforestry natural resources conservation and improvements. Opposite to Jerez, Iteimia actual management offers a positive capital income and a high household self-employed labour income on hectare basis, mainly from livestock and, in a less extent, other agroforestry land uses carried out in the local subsistence-economy. The noteworthy dependence of Iteimia households on cork oak multiple use, with a current negative impact on that resources conservation, make household subsistence-economy highly sensitive to nature conservationist policies and measures.

Historical Forage Productivity and Cost of Capital for Cow-Calf Production in California

Abstract Exposure of livestock grazing to forage productivity variation and to market fluctuations affects the risk of investment and returns from cow-calf operations, but little work has been done to empirically compare these returns to the returns that would be demanded by financial markets from assets with similar risk and return characteristics. This study uses historical forage production data from three rangeland locations in California, and cattle and hay prices, to simulate financial statements for three hypothetical cow-calf producers in the period 1988–2007. Return on investment from year to year incorporates the variability and risk associated with dependence on natural forage production. Performance is then compared to the actual performance of a diversified portfolio of assets using the Capital Asset Pricing Model, from which the theoretical cost of capital for these hypothetical grazing enterprises is derived. Much like other agricultural enterprises, cow-calf production in California has low market risk and a low theoretical cost of capital. This theoretical cost of capital is still greater than the historical return from livestock production (excluding land appreciation) in the western United States, adding further backing to the point often made in the literature that ranchers who engage in cow-calf production are receiving benefits beyond the commercial returns from livestock production alone.

The Private Economy of Dehesas and Ranches: Case Studies

This chapter’s objective is to measure and analyze total private income and profitability for five case study privately-owned dehesas and oak woodland ranches. The Agroforestry Accounting System is applied at the farm scale. Results are estimated for individual forestry, game, livestock, crop, and service activities, and for activities aggregated as a whole. The case study application incorporates landowner consumption of private amenities as part of the total income from the dehesa or ranch, showing that these private amenities are the most important contributor to total income, while the contribution from livestock production is low or even negative. Hunting activities show low revenues. Dehesas with a high stocking rate are significantly supported by European Union livestock subsidies, while livestock production and other activities on California ranches are more sensitive to market conditions. Both in Spain and California, real profitability is competitive with alternative non-agricultural investments when amenity consumption and increases in land value are considered. These results are relevant to understanding current and future trends in landowner motivations for land and enterprise investment, and should be considered in conservation policy development.

Working Landscapes of the Spanish Dehesa and the California Oak Woodlands: An Introduction

Oak woodlands have offered a welcoming environment for human activities for tens of thousands of years, but how that history has unfolded has many variations. The long-time collaboration that led to this book ran into complications arising from the different meanings attached to many a term, including struggles over the most appropriate title, settling on common units of measurement and area, quantifying the woodland’s extent in Spain and California, and even in deciding how many oaks constitute a woodland. Defining with anything approaching international precision such terms as oak woodlands, oak woodland ranches, and wooded dehesas is nuanced, and is compounded by distinctions in culture and language. But our efforts to dovetail one inscrutable system with another may offer insight into the relationship of humans with environments long occupied and modified, as further shaped by location, history, and opportunity. In 15 chapters we offer a comparison of conservation and management on California oak woodland ranches and in the dehesas of Spain, including economic, institutional, ecological, spatial, and geographical aspects, from how to raise an Iberian pig to what we can learn about oak woodlands with remote sensing.