Essays on Agricultural Land Use : Tradeoffs, Information, and Incentives in Precision Agriculture and Wind Energy
Agricultural land plays a critical role not only in food production, but also in advancing environmental sustainability and renewable energy goals. Given these diverse functions, landowners face complex decisions that require balancing agricultural productivity with environmental objectives. Their decisions can be shaped by the quality of information guiding expected returns and varying policy and market incentives. This dissertation investigates how agricultural landowners make land use and management decisions when faced with tradeoffs, imperfect information, and differing incentives. The first chapter examines the tradeoff that landowners’ face between farming and conservation. It focuses on estimating the opportunity cost of precision conservation, a practice that converts low-yielding areas into conservation area while minimizing foregone revenue. Using fine-scale yield maps from Michigan corn and soybean fields from 2020 to 2024, we calculate the opportunity costs of foregone yields, yield effects on adjacent cropland, and input cost savings. Assuming a 10-year conservation period under a corn-soybean rotation, results show that precision conservation improves profitability in 19 of 29 fields, with an average annualized profit increase of $74/ac. Compared to whole-field conservation, precision conservation substantially reduces costs of conservation. On average, the opportunity costs of whole-field conservation is $235/ac higher than that of precision conservation, with differences ranging from $135/acre lower to $349/acre higher. The second chapter evaluates how different sources of information affect the profitability of variable rate nitrogen (VRN) application. Utilizing 17 field-years data from 13 Midwest fields during 2021-2023, it compares VRN prescriptions based on remotely-sensed early-season vegetative vigor (NDVI) and historical yield maps. Applying linear regression and spatial discontinuity analysis, the study finds a heterogeneous treatment effect, with profitability gains from NDVI compared to yield history prescriptions ranging from $-410 ha-1 to $350 ha-1. NDVI-based prescriptions were more profitable when weather conditions diverged from historical trends and remained stable throughout the season (e.g., 2021), while yield history outperformed when early-season signals failed to persist and conditions ultimately reverted to historical norms (e.g., 2023). These results highlight the value of adapting nitrogen management to seasonal weather conditions by combining long-term yield patterns with real-time crop vigor signals. The third chapter examines the effects of two overlapping policy interventions on wind energy development in Michigan: the revision of Public Act 116, which eased land-use restrictions on preserved farmland, and the Wind Energy Resource Zone designation under Public Act 295, which supported infrastructure development in areas with high wind potential. Employing a difference-in-differences framework, the analysis spans townships and cities in Michigan, Minnesota, and Wisconsin from 2000 to 2023. The findings indicate that the PA116 revision had no statistically significant effect, whereas the Wind Zone designation led to an additional 90 megawatts (MW) of installed electrical generation capacity. These results underscore the varying effectiveness of land-use policies. Because the farmland preservation program offered limited economic incentives to begin with, loosening its restrictions had minimal impact. In contrast, the proactive designation of Wind Zones with clear development signals and coordinated infrastructure planning significantly accelerated wind turbine deployment in Michigan.
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- In Collections
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Electronic Theses & Dissertations
- Copyright Status
- Attribution-NonCommercial 4.0 International
- Material Type
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Theses
- Authors
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Lee, Seo Woo
- Thesis Advisors
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Swinton, Scott M.
- Committee Members
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Sears, Molly
Carpenter, Criag W.
Basso, Bruno
- Date Published
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2025
- Subjects
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Agriculture--Economic aspects
- Program of Study
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Agricultural, Food and Resource Economics - Doctor of Philosophy
- Degree Level
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Doctoral
- Language
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English
- Pages
- 142 pages
- Permalink
- https://doi.org/doi:10.25335/mrsz-y509