Journal Article

Option Values to Conservation and Agricultural Price Policy: Application to Terrace Construction in Kenya

Alex Winter-Nelson and Koffi Amegbeto

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 80, issue 2, pages 409-418
Published in print May 1998 | ISSN: 0002-9092
Published online May 1998 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/1244512
Option Values to Conservation and Agricultural Price Policy: Application to Terrace Construction in Kenya

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  • Renewable Resources and Conservation
  • Agricultural Economics
  • Economic Development

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Policy reforms to liberalize agricultural markets in developing countries are likely to influence both the level and the variability of prices. While considerable attention has been given to the impact of changes in price level on soil and water conservation, there has been relatively little analysis of the role of price variability in conservation decisions. We present a model of investment under uncertainty to analyze the effect of both level and variability of prices on the decision to invest in conservation. The model is applied to adoption of fanya juu terraces in eastern Kenya.

Keywords: conservation; investment; liberalization; uncertainty; O130; Q150; Q180; Q240

Journal Article.  0 words. 

Subjects: Renewable Resources and Conservation ; Agricultural Economics ; Economic Development

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