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Land Market Interactions between Heterogeneous Agents in a Heterogeneous Landscape—Tracing the Macro‐Scale Effects of Individual Trade‐Offs between Environmental Amenities and Disamenities

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  • Tatiana Filatova
  • Anne Van Der Veen
  • Dawn C. Parker

Abstract

Heterogeneity in both the spatial environment and economic agents is a crucial driver of land market dynamics. We present an agent‐based land market model where land from agriculture use is transferred into urban. The model combines the microeconomic demand, supply, and bidding foundations of spatial economics models with the spatial heterogeneity of spatial econometric models in a single methodological platform. Heterogeneous agents exchange heterogeneous spatial goods via simulated bilateral market interactions. We model a coastal city where both coastal amenities and flooding or erosion disamenities drive land market outcomes, facilitating separate analysis of the effects of each driver on land rents and land development patterns. We also analyze the implications of homogeneous versus heterogeneous but unbiased flood risk perceptions. Since buyers with low risk perceptions drive market outcomes, spatial development under heterogeneous risk perceptions differs qualitatively, with more expansion into risky areas. Our results highlight the shortcomings of policy models based on representative agent assumptions and the importance of including agent‐level data in empirical modeling. L'hétérogénéité de l'environnement spatial et des agents économiques constitue un élément moteur crucial de la dynamique du marché foncier. Nous présentons un modèle multi‐agent du marché foncier dans lequel des terres agricoles ont été transférées pour des fins urbaines. Le modèle combine les fondements microéconomiques de la demande, de l'offre et des enchères de modèles de l'économie spatiale avec l'hétérogénéité spatiale des modèles de l'économétrie spatiale dans une plateforme méthodologique unique. Les agents hétérogènes échangent des biens hétérogènes par le biais du jeu des forces du marché bilatéral simulé. Nous avons modélisé une ville côtière où les agréments côtiers et les désagréments causés par les inondations ou l'érosion influent sur le marché foncier, facilitant l'analyse individuelle des effets de chaque élément moteur sur les loyers fonciers et les modèles d'aménagement de terrain. Nous avons également analysé les répercussions des perceptions homogènes et hétérogènes mais non biaisées à l'égard du risque d'inondation. Étant donné que les acquéreurs qui ont de faibles perceptions du risque motivent les effets du marché, le développement spatial selon des perceptions hétérogènes à l'égard du risque varie qualitativement, avec plus d'expansion dans les zones à risque. Nos résultats ont mis en lumière les lacunes des modèles de politiques fondés sur les hypothèses d'un agent représentatif et l'importance d'inclure des données sur l'hétérogénéité des agents dans la modélisation empirique.

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  • Tatiana Filatova & Anne Van Der Veen & Dawn C. Parker, 2009. "Land Market Interactions between Heterogeneous Agents in a Heterogeneous Landscape—Tracing the Macro‐Scale Effects of Individual Trade‐Offs between Environmental Amenities and Disamenities," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(4), pages 431-457, December.
    • Handle: RePEc:bla:canjag:v:57:y:2009:i:4:p:431-457
    DOI: 10.1111/j.1744-7976.2009.01164.x
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    4. Simon Anastasiadis & Suzi Kerr & Wei Zhang & Corey Allan & William Power, 2014. "Land Use in Rural New Zealand: Spatial Land Use, Land-use Change, and Model Validation," Working Papers 14_07, Motu Economic and Public Policy Research.
    5. Trond G. Husby & Elco E. Koks, 2017. "Household migration in disaster impact analysis: incorporating behavioural responses to risk," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 87(1), pages 287-305, May.
    6. Giuseppe Arbia, 2011. "A Lustrum of SEA: Recent Research Trends Following the Creation of the Spatial Econometrics Association (2007--2011)," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(4), pages 377-395, July.
    7. Elena G. Irwin & Andrew M. Isserman & Maureen Kilkenny & Mark D. Partridge, 2010. "A Century of Research on Rural Development and Regional Issues," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(2), pages 522-553.
    8. Handi Chandra‐Putra & Clinton J. Andrews, 2020. "An integrated model of real estate market responses to coastal flooding," Journal of Industrial Ecology, Yale University, vol. 24(2), pages 424-435, April.
    9. Filatova, Tatiana & Parker, Dawn Cassandra & van der Veen, Anne, 2011. "The Implications of Skewed Risk Perception for a Dutch Coastal Land Market: Insights from an Agent-Based Computational Economics Model," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(3), pages 1-19, December.
    10. James R. Meldrum, 2016. "Floodplain Price Impacts by Property Type in Boulder County, Colorado: Condominiums Versus Standalone Properties," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(4), pages 725-750, August.
    11. Di Noia, Jlenia, 2022. "Agent-Based Models for Climate Change Adaptation in Coastal Zones. A Review," FEEM Working Papers 322810, Fondazione Eni Enrico Mattei (FEEM).
    12. Qingxu Huang & Dawn C Parker & Tatiana Filatova & Shipeng Sun, 2014. "A Review of Urban Residential Choice Models Using Agent-Based Modeling," Environment and Planning B, , vol. 41(4), pages 661-689, August.
    13. Chen, Yong & Irwin, Elena G. & Jayaprakash, Ciriyam, 2011. "Incorporating Spatial Complexity into Economic Models of Land Markets and Land Use Change," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(3), pages 1-20, December.
    14. James Nolan & Dawn Parker & G. Cornelis Van Kooten & Thomas Berger, 2009. "An Overview of Computational Modeling in Agricultural and Resource Economics," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(4), pages 417-429, December.
    15. Elena G. Irwin, 2010. "New Directions For Urban Economic Models Of Land Use Change: Incorporating Spatial Dynamics And Heterogeneity," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 65-91, February.
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    17. Emiliano Brancaccio & Mauro Gallegati & Raffaele Giammetti, 2022. "Neoclassical influences in agent‐based literature: A systematic review," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 350-385, April.

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