Land supply curves
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In the coupled application of the agro-economic GTAP model and IMAGE, land-supply curves play a crucial role in establishing agricultural demands, production and trade flows. Derived from biophysical properties in IMAGE, land-supply curves are used in GTAP to find solutions of equilibrium for agricultural land volumes and the associated land rental rate. To test the sensitivity, simulation experiments were run with the asymptote 2.5% lower and 2.5% higher than the central estimate; the impacts on model results for land supply, the real land rental rate and production changes were investigated (Tabeau et al., 2006). Analyses show that changing the asymptote of the land supply function leads to significant changes of land supply for countries where agricultural land is relatively scarce. However, the induced production changes are rather low. The aggregated agricultural production elasticity with respect to the asymptote change varies from 0.1 for countries where agricultural land is abundant to 0.5 for countries where the agricultural land is scarce. This means that the simulation results for production development are rather robust with regard to the estimated land supply-curve parameters. |
