The impact of production network economies on spatially-contiguous conservation– Theoretical model with evidence from the U.S. Prairie Pothole Region

This paper examines the impact of production network economies on designing cost-effective conservation targeting strategies. We first develop a theoretical model to study the decision to convert land from an extensive (or biodiversity-friendly) use to an intensive use (e.g., crop agriculture) in the presence of network economies in land use returns. The model supports the possibility of multiple land use equilibria due to network economies and identifies policy outcomes that increase welfare. Bandwagon effects can occur whereby spatial production spillovers from lands under intensive use can prompt further conversions on proximate lands under extensive use. Conversely, conservation sites can be placed strategically to block conversion [...]