Hennessy, David A.; Lapan, Harvey E.

Natural Resource Modeling Vol. 23 no. 2 (May 2010): 176-217.

 Growing demand for cropland products has placed intense pressure on the ability

of land resources to support nature, straining public budgets to purchase environmental goods.

Fixing overall agricultural output, two environmental policy options are whether to a) promote

more agricultural extensification and nature friendly farming practices or b) produce intensively

on some land and leave the rest wild. Microeconomic models of the topic have not accounted for

widely recognized spatial externalities regarding fragmented reserves. This article does so, using

Wirtinger’s inequality to also identify a third policy possibility. This is that ecological services

can follow a smoothly varying spatial path chararacterized by harmonic functions. We use the

results to rationalize the core and periphery National Park structure put in place around the

world, i.e., versions of our third policy possibility have been implemented.

JEL Classification: D62, H40, Q28

Keywords: Environmental policy; Land use; National Park management; Spatial externalities; Wirtinger’s inequality

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