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GTAP Resources: Resource Display

GTAP Resource #7027

"Labor market rigidities mediate the effectiveness and distributional impacts of conservation policies"
by Ray, Srabashi and Thomas Hertel

The drawbacks of ignoring labor markets when assessing the effectiveness and impacts of conservation policies are highlighted in a recent paper by Ray et al. (2023), who published the SIMPLE-G-CZ model that incorporates spatially explicit labor markets in the analysis of conservation policies. In this paper, we develop the underlying theoretical framework for the evaluation of conservation policies under contrasting assumptions about labor markets. We use a stylized two-input framework to identify key parameters that determine the success (in terms of resources conserved) and distributional effects of a conservation policy (amongst consumers, resource owners and farmworkers) depending on the representation of agricultural labor markets. Using this framework, we identify several important new propositions pertaining to the interplay between labor market functioning and the consequences of conservation policies at the national and local levels. Next, we propose a novel ‘bridging’ methodology, that maps the multi-input production function underlying the SIMPLE-G-CZ model to the 2-input analytical framework. This allows us to leverage our theoretical framework, to investigate the impacts of a conservation policy (sustainable groundwater use in the Western US) at a high spatial resolution of 75,000+ grid-cells. We further decompose the impacts of the policy on resource use, employment and production, into extensive and intensive margin producer responses, at the grid cell level. This rigor is currently missing in IAM (Integrated Assessment Model) style policy evaluation, where the model generated results are typically displayed in maps of potential impacts of the policy but lack clarity in terms of the underlying economic and bio-physical processes contributing to those results.

Resource Details (Export Citation) GTAP Keywords
Category: Other CGE Application
Status: Not published
Date: 2023
Created: Ray, S. (4/16/2023)
Updated: Batta, G. (5/17/2023)
Visits: 317
- Advances in quantitative methods
- Water availability
- North America

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