Research

Abstract.  Payments for ecosystem services (PES) programs can enhance resilience to extreme weather events by establishing natural infrastructure.  I investigate the effectiveness of the Conservation Reserve Enhancement Program (CREP) in the United States in mitigating flooded crop losses through the restoration of riparian buffers and wetlands.  By leveraging variation in the timing of the program’s introduction across counties, I find that CREP reduced the number of flooded crop acres by 39 percent and the extent of damage on those acres by 26 percent during the initial 11 years of program implementation.  The flood mitigation benefits of CREP also generated financial spillover effects on the federal crop insurance program, saving $94 million in indemnity payouts that would have otherwise been paid to insured farmers.  Two-thirds of these benefits resulted from reduced flood damage on cropland in production, while the remaining benefits were attributed to the removal of at-risk cropland from production.  The magnitude of benefits varied spatially and temporally depending on the duration of program availability, the extent of program participation, and the adoption of alternative risk management strategies.  Overall, these findings underscore the critical role of PES programs in facilitating nature-based solutions for climate change adaptation.

Abstract.  Studies of efficient selection of heterogeneous projects in payments for ecosystem services (PES) programs often recommend ranking those projects based on benefit-cost ratio criteria to maximize net environmental benefits.  These analyses assume perfect completion of the selected project contracts, even though projects are conducted under long-term contracts that are sometimes terminated before their expiration dates.  This paper proposes a theoretical model for adjusting benefit-cost ratio criteria to account for the possibility of premature termination of funded projects and investigates how that adjustment affects project rankings.  A numerical policy simulation using features of the Conservation Reserve Enhance Program in the United States shows that project selection using the modified benefit-to-cost ratios reduces rates of contract early termination and increases net environmental benefits.  These improvements generally become more substantial with greater program budgets and optimized structure of penalties for early termination.  Our analysis indicates that refining project selection criteria to account for implementation frictions can improve performance of PES programs globally.

Manuscript in preparation

Abstract.  The United States is a major supplier in the world pecan market. Using grower-level pecan price data from the 2005–2016 seasons, we estimate pecan market integration patterns among Texas, Oklahoma, Georgia, and Louisiana using causality structures identified through cutting-edge machine-learning methods.  Current pecan price received by growers in Texas is a direct cause of those in Oklahoma, Georgia, and Louisiana.  Past-period grower-level pecan price in Georgia either directly or indirectly influences the current price in other states.  These findings are useful for businesses and the government in order to price and promote marketing of pecan.