Land Use and Water Quality: an Integrated Econometric Framewok for Agriculture and River Biology

This paper develops an integrated framework to analyze the effects of agricultural land use change drivers (market prices, policy, climate, etc.) upon the ecological quality of rivers. Our approach integrates a land use model with a model of river biology. The agricultural model encompasses land use areas, input application, crop yields and livestock stocking rate equations in a joint econometric framework building upon Chambers and Just (1989) and Arnade and Kelch (2007). Its empirical specification is estimated on a large, spatially referenced, panel database covering the entirety of England and Wales with a time series of observations between 1969 and 2006, integrated with the economic and physical environment determinants of all major agricultural land use types. The influence of land use on the ecological quality of rivers is estimated via spatially-explicit regressions. We illustrate possible applications of our approach by presenting predicted land use and water quality changes in an agriculturally heterogeneous catchment, the Derwent (located in the North of England), simulating a proposed implementation of recent European Union policies to reduce diffuse pollution.