The impact of agri-environmental policy and infrastructure on wildlife and land prices

The thesis contains three essays in the field of environmental policy. In the first paper, we study the relationship between the agri-environmental payments for farmers and wildlife. The effects of EU agri-environmental programs (AEPs) on the environment have been mixed. Spending on AEPs has largely been management-based rather than results-based, and they have been described as having ambiguous and unmeasureable goals. We study the effects of agri-environmental payments on four wildlife species (roe deer, red deer, wild boar, and brown hare) in Austria. First, we develop a theoretical model to explain the relationship between wildlife and AEPs given rational farmer behavior. We then apply the latent class model to disentangle real ecological impacts of AEPs from deadweight losses. Our results suggest that between 22% (brown hare) and 80% (wild boar) of Austrian districts do not have any significant effects from AE payments. If impacts exist, they can be positive or negative, depending on the species. Based on our results, we recommend a regionalization of agri-environmental payments based on regional agro-ecological characteristics and target species. The second paper studies the impact of Natura 2000 designation on land rental prices. Designation of Natura 2000 areas has been a major cornerstone in the EU's biodiversity policy. However, it has also triggered resistance from land users due to increased regulations on land use and related value change. This study first builds up a theoretical model for rent change due to land regulation, and then empirically investigates whether farmland rents in Germany are affected by Natura 2000 designation. Because Natura 2000 designation and rental prices are likely endogenous, we use the matching procedure by Imbens and Hirano (2004) based on a zero-inflated beta generalized propensity score on German district level agricultural census data. Our results suggest that overall, rental prices of grassland, arable land, and on average are affected negatively by Natura 2000 designation. The third paper studies the relationship between highways and wildlife in Austria. Fragmentation and destruction of ecosystems due to highways is a key threat to habitat quality and biodiversity. We develop a theoretical framework and use a dynamic spatial panel data model to estimate how Austrian highway construction after 1968 has impacted the populations of roe deer, red deer and wild boar. The results indicate that a growing highway density leads to decreasing populations of roe deer and wild boar in their local district, contrasted with increasing populations in neighboring districts. Red deer populations were relatively insensitive to highway construction. Positive population effects in neighboring districts can be explained by the reduction of competition, disease transmission, and road kill. The results have important policy implications for Environmental Impact Assessments of infrastructure construction, particularly in the early stages of planning.