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Use of positive mathematical programming invalidates the application of the NZFARM model

Use of positive mathematical programming invalidates the application of the NZFARM model NZFARM is a mathematical programming model that has been broadly applied throughout New Zealand to investigate different environmental issues (Daigneault et al . ). It uses optimisation methods to determine how land use and land management could be expected to change under different circumstances, such as when alternative targets for reducing nutrient outflows from agricultural land are simulated. The various regions and issues to which it has been applied are detailed in Daigneault et al . ( ), hereafter DG&S. Doole and Marsh ( ) have recently highlighted how this framework produces arbitrary and biased predictions due to its reliance on positive mathematical programming (PMP) (Howitt ) for calibrating the baseline land‐use allocation. Throughout this document, in line with the literature, the term PMP is used to refer to the use of shadow prices from calibration constraints to help calibrate a land‐use optimisation model to a reported baseline. Their concern rests around five key issues (Doole and Marsh ): There is an infinite number of sets of calibration function parameters that can generate the observed baseline land use (Heckelei and Wolff ). Calibration does not use any information on how the relative value of land uses changes as http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Australian Journal of Agricultural Resource Economics Wiley

Use of positive mathematical programming invalidates the application of the NZFARM model

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References (1)

Publisher
Wiley
Copyright
Copyright © 2014 Australian Agricultural and Resource Economics Society Inc.
ISSN
1364-985X
eISSN
1467-8489
DOI
10.1111/1467-8489.12052
Publisher site
See Article on Publisher Site

Abstract

NZFARM is a mathematical programming model that has been broadly applied throughout New Zealand to investigate different environmental issues (Daigneault et al . ). It uses optimisation methods to determine how land use and land management could be expected to change under different circumstances, such as when alternative targets for reducing nutrient outflows from agricultural land are simulated. The various regions and issues to which it has been applied are detailed in Daigneault et al . ( ), hereafter DG&S. Doole and Marsh ( ) have recently highlighted how this framework produces arbitrary and biased predictions due to its reliance on positive mathematical programming (PMP) (Howitt ) for calibrating the baseline land‐use allocation. Throughout this document, in line with the literature, the term PMP is used to refer to the use of shadow prices from calibration constraints to help calibrate a land‐use optimisation model to a reported baseline. Their concern rests around five key issues (Doole and Marsh ): There is an infinite number of sets of calibration function parameters that can generate the observed baseline land use (Heckelei and Wolff ). Calibration does not use any information on how the relative value of land uses changes as

Journal

The Australian Journal of Agricultural Resource Economics – Wiley

Published: Apr 1, 2014

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