Date of Graduation

2015

Document Type

Dissertation

Degree Type

PhD

College

Davis College of Agriculture, Natural Resources and Design

Department

Agricultural and Resource Economics

Committee Chair

Gerard D'Souza

Committee Co-Chair

Xiaoli Etienne

Committee Member

Joshua Hall

Committee Member

Donald Lacombe

Committee Member

Inocencio Rodriguez

Committee Member

Michael Strager

Abstract

This dissertation is a discussion on the dynamics of energy and agricultural policy in the United States. The landscape for policy creation, innovation, and the role of government is ever changing as a new energy mix emerges. This study contributes to the academic literature by providing three independent narratives on various aspects of the changing relationship. Each of the three studies provides a unique insight into a narrowly defined aspect of the economics and policy of energy and/or agriculture in the United States.;First, consideration is made into the process of policy creation. This is accomplished through a review and synthesis of the literature on the determinants of legislator voting behavior and an econometric regression model. Using a series of legislator-specific, constituent specific and agricultural finance indicators, voting behavior on the 2014 Farm Bill is analyzed through the use of a simple binary logit regression model. Results indicate (along with the results of many other studies) that policy makers do not always act in a way that supports the desires of their constituency, and are often influenced significantly by campaign finance and lobbying. To be more specific, legislators did vote in favor of their constituency, but campaign finance and the state of the agricultural sector played the largest role in their decision making. This has implications for energy policy in general, and the agricultural-energy nexus in particular. Results are compared to those from prior studies which analyze the Farm Bill and similarities are defined.;The second study provides a unique look at one type of externality that may occur as a result of the changing energy mix. As a result of the push toward renewables, wind is the fastest growing energy source in the United States. However, wind energy development has faced multiple forms of resistance with opponents citing issues such as bird deaths, noise, and aesthetics. Many studies have been published which examine the potential impact of wind turbines on surrounding residential land values and show that wind turbines can significantly reduce the value of homes nearby. While the literature with regard to residential land is abundant, very little work has been done in regard to agricultural land values. Given that agricultural landowners' portfolios are comprised heavily of land assets (accounting for approx. 80% of farm asset values on average), a significant reduction in value due to wind energy development is of significant concern. Using a hedonic regression model on the relatively small study area of Somerset County, PA, this study compares assessed land value to a series of land characteristics and other variables which represent the proximity and intensity of surrounding wind turbines. Results indicate that no significant relationship exists between the value of agricultural land and the presence of wind turbines nearby. Thus, policy makers are free to pursue the wind energy option relatively unencumbered by its impact on agricultural land. Based on previous research, the same cannot be said for residential land.;Finally, the third study uses agricultural production statistics at the county level for the entire United States to consider the role of spatial heterogeneity in agricultural productivity levels across the U.S. This impact is analyzed by estimating a spatially explicit production function for U.S. agriculture. Results indicate that significant spatial heterogeneity is present which in turn impacts productivity in the form of reduced (and sometimes increased) return to inputs. Clustering of productivity areas is apparent, with high productivity areas concentrated in the Midwest and Southeast, and low productivity areas concentrated in the Northeast and Southwest. This is quite likely due to factors such as land use, geographic characteristics and water availability. No significant spillovers from one region's input use on the net income of neighboring regions are observed. Despite this, the presence of a spatial lag is clear. From a policy standpoint, consideration should be made toward the costs and benefits of subsidy activity given that productivity levels are not uniform across space.

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