Native Grassland Conversion: the Roles of Risk Intervention and Switching Costs

We develop a real option model of the irreversible native grassland conversion decision. Upon plowing, native grassland can be followed by either a permanent cropping system or a system in which land is put under cropping (respectively, grazing) whenever crop prices are high (respectively, low). Switching costs are incurred upon alternating between cropping and grazing. The effects of risk intervention in the form of crop insurance subsidies are studied, as are the effects of cropping innovations that reduce switching costs. We calibrate the model by using cropping return data for South Central North Dakota from 1989 to 2012. Simulations show that a risk intervention that offsets 20% of a cropping return shortfall increases the sod-busting cost threshold, below which native sod will be busted, by 41% (or $43.7/acre). Omitting cropping return risk across time underestimates this sod-busting cost threshold by 23% (or $24.35/acre), and hence underestimates the native sod conversion caused by crop production.

Implementation Manual — 3D Engineered Models for Highway Construction: The Iowa Experience; RB33-014, 2015

3D engineered modeling is a relatively new and developing technology that can provide numerous benefits to owners, engineers, contractors, and the general public. This manual is for highway agencies that are considering or are in the process of switching from 2D plan sets to 3D engineered models in their highway construction projects. It will discuss some of the benefits, applications, limitations, and implementation considerations for 3D engineered models used for survey, design, and construction. Note that is not intended to cover all eventualities in all states regarding the deployment of 3D engineered models for highway construction. Rather, it describes how one state—Iowa—uses 3D engineered models for construction of highway projects, from planning and surveying through design and construction.