Nicole Karwowski
About Me
I am an assistant professor at the Montana State University department of Agricultural Economics & Economics. I received my PhD in Agricultural and Applied Economics at the University of Wisconsin Madison.
I use econometric methods and remote sensing data to conduct ecosystem valuations that improve land-use decisions. My research focuses on how communities are affected and adapt to a changing climate. I am especially interested in quantifying the role of conservation and nature-based solutions in mitigating the effects of natural disasters.
My job market paper identifies the causal effects of wetland easements on converted fields and surrounding fields using novel remote sensing yield data. Using a regression discontinuity approach, I compare converted fields with applicant fields to calculate the opportunity cost of foregone yields. I also uncover a significant externality on surrounding lands due to changes in hydrological patterns: I find that easements have a positive spillover effect on corn.
I am originally from the Chicagoland area. I enjoy exploring the natural world through birding, hiking, and rock climbing.
Research
Regression discontinuity: change in yields after easement
The Direct and Indirect Effects of Wetland Easements: Evidence from Fields in Wisconsin
Land conservation can enhance agricultural resiliency by reducing vulnerability to climate-related risks and shocks. Understanding the optimal prices and ecosystem services of conserving land is an important step towards climate-smart agriculture. I evaluate the costs and benefits in terms of agricultural production of a major conservation policy, the Natural Resources Conservation Services Wetland Reserve Program. Novel remote sensing data allows for the identification of wetland easement effects on agricultural yields at the field level. I estimate the opportunity cost of wetland easements by estimating the forgone yields of retiring land from production. Using ranking data and a regression discontinuity framework, I find that easements decrease yields by 83 bushels per acre for corn (56% of average yields) and 31 bushels per acre for soybeans (73% of average yields). Further, using a dynamic difference-in-differences approach that accounts for staggered treatment timing, I find evidence that easements benefit surrounding production within a few kilometers: corn yields increase by 3-4 bushels per acre. Easements have the largest spillover effects in areas with open fields, open water, and during extreme rain events. These results call for attention to the opportunity costs and beneficial externalities of land conservation programs.
Easement area and county-level indemnities for corn
Estimating the Effects of Easements on Agricultural Production
US crops face higher losses as destructive disasters such as droughts and floods become commonplace. The Natural Resources Conservation Service (NRCS) easement programs offer a voluntary adaptation strategy to improving agricultural resilience. Easements impact agricultural production directly by reducing planting on marginal land and indirectly by improving yields on surrounding cropland. I use national USDA data from the past three decades to build a county-level panel. I employ a regression model with two-way fixed effects to quantify how easement land share impacts yields, risk, as well as acres planted, failed, and prevented planted. A 100% increase in land share of wetland easements increases yields by 0.34%, 0.77% and 0.46% for corn, soybeans, and wheat. Easements improve yields by mitigating the effect of excess precipitation and extreme degree days. Wetland easements reduce soybean losses from excess moisture, heat, and disease by $3.59, $6.07, and $11.23 for each dollar of liability. I also find evidence of a slippage effect in which producers reduce soybean and wheat acreage but increase corn production. This work quantifies some of the ecosystem benefits of easement habitats, uncovers program externalities, and has policy implications for future NRCS funding and targeting decisions.
Increase in median rental price after hurricane
Understanding the Effects of Severe Flood Disasters on Rental Markets, Renter Migration and Housing Insecurity with Mythili Vinnakota
Hurricane winds and flooding are responsible for the majority of economic losses from disasters in the United States. In this project, we investigate how hurricanes impact rental prices, rental housing stock, and household adaptation strategies. The effect of hurricane disasters on homeowners has been well documented. However, little is known about how housing costs change for renters, even though renters make up one-third of the US Population. We use American Community Survey data and American Housing Survey data to create a panel at the county and household level. We leverage hyper-specific data about hurricane tracks and wind speeds as a source of exogenous variation, comparing areas that were directly hit with a hurricane to comparable control areas. Our main specifications employ a staggered difference-in-differences and an event study framework. We find that after a hurricane disaster: 1) rental prices increase, 2) supply of rental housing decreases, 3) renters and homeowners migrate at different rates, and 4) insurance attenuates the migratory responses of homeowners more than renters. This research leads to a richer understanding of how a vulnerable population is impacted by and adapts to natural disasters and has implications for policymakers concerned with mitigating the effect of severe weather events exacerbated by climate change.
Ammonia concentrations and wetland easements in the Mississippi Atchafalaya River Basin
Nature's Kidneys: the Role of the Wetland Reserve Easements in Restoring Water Quality with Dr. Marin Skidmore
Non-point source pollution, primarily from agriculture, is a threat to water quality in the United States. Many reduction strategies aim to prevent runoff before it occurs by optimizing nutrient use or changing land use. Wetlands provide an ex-post natural solution by filtering sediments and excess nutrients from the landscape. This ability, one of the many ecological benefits they provide, has earned wetlands the name “Earth’s kidneys.” Quantifying the impact of wetland easements in the Wetland Reserve Program (WRP) and Agricultural Conservation Easement Program (ACEP) on water quality is critical for optimal allocation of funds for non-point source pollution abatement. We causally identify whether newly restored wetlands are effective at reducing nitrogen (ammonia) and phosphorus loads at the subwatershed level in an area spanning 40% of the continental US, the Mississippi/Atchafalaya River Basin. Results suggest that wetland easements reduce ammonia concentrations and that effects are heightened in areas with a higher proportion of vegetation and open water. Effects on phosphorous are complex; wetlands seem to act as both a source and sink for phosphorous nutrients. On average, increasing wetland easement spending by $900,000 in a subwatershed can decrease ammonia levels by 4%.