an econometric analysis of exploration and extraction of oil in the u k continental shelf this paper develops an econometric model for the analysis of exploration and production policies of price taking suppliers and derives theoretically consistent exploration and output equations for oil which explicitly take account of the oil discovery process and the intertemporal nature of exploration and production decision the model is then applied to an empirical analysis of oil exploration and extraction on the united kingdom continental shelf ukcs over the period 1978 1 1986 4 the analysis explicitly takes account of the available engineering information concerning the pressure dynamics of the petroleum reserves and the geological knowledge pertinent to the discovery process and presents formal statistical tests of the significance of these factors for the explanation of output and exploration in the north sea copyright 1990 by royal economic society

habits costly investment and current account dynamics abstract we analyze the current account dynamics for a small country model with habit forming consumers and costly investment the model has several empirical and policy implications i it is consistent with stylized facts regarding the effects of productivity shocks and increases in fiscal spending and regarding the savings investment co movement ii the long run effect of a temporary shock on net foreign assets is often opposite to that of a permanent shock iii under strong habit persistence the welfare dynamics are sluggish so that a beneficial tax financed fiscal policy may have a harmful hangover effect on welfare

evaluating income streams a decision analysis approach most important decision problems virtually all capital investiments and planning situations involve risky cash flows with uncertainties that are resolved over time in most of these problems the decision maker has access to financial markets and may borrow and lend to smooth consumption over time yet because of the difficulty of incorporating these borrowing and lending decisions into the evaluation models these opportunities are rarely explicitly modeled in decision and risk analyses of these investments in this paper we study the errors induced by failing to account for these borrowing and lending decisions and we develop extensions to the standard decision and risk analysis procedures that given certain market and preference assumptions take these borrowing and lending opportunities into account without overburdening the evaluation models

agency relationships in family firms theory and evidence does owner management necessarily eliminate the agency costs of ownership drawing on agency literature and on the economic theory of the household we argue that private ownership and owner management expose privately held owner managed firms to agency threats ignored by jensen s and meckling s 1976 agency model private ownership and owner management not only reduce the effectiveness of external control mechanisms they also expose firms to a self control problem created by incentives that cause owners to take actions which harm themselves as well as those around them jensen 1994 p 43 thus shareholders have incentive to invest resources in curbing both managerialand owner opportunism we extend this thesis to the domain of the family firm after developing hypotheses which describe how family dynamics and specifically altruism exacerbate agency problems experienced by these privately held owner managed firms we use data obtained from a large scale survey of family businesses to field test our hypotheses and find evidence which suggests support for our proposed theory finally we discuss the implications of our theory for research on family and other types of privately held owner managed firms

natural resource economics and conservation contributions of agricultural economics and agricultural economists research by agricultural economists on natural resources has been distinguished by an interdisciplinary emphasis and a dynamic perspective it has recognized technological and institutional constraints has been oriented toward solving concrete resource management and policy problems and has emphasized empirical and quantitative analysis agricultural economists have introduced methods for evaluating natural resource conservation efforts for predicting adoption of resource conservation technologies and for designing efficient and sustainable resource management policies they have identified ways of improving land management and preventing land degradation proposed reforms of institutions governing water allocation and water quality and introduced policies for balancing environmental and efficiency considerations in the management of pests biodiversity and livestock diseases their research has had substantial impacts on the formulation of resource conservation policies

consumer habituation this paper examines how consumers willingness to pay for goods is determined by past patterns of consumption the central result is atheorem of interior maximum which states that willingness to pay for a good is maximized at a moderate level of habitual consumption the theorem is derived from a simple model of adaptive behavior that involves a shifting s shaped value function the detailed analysis of the impact of consumption frequency and intensity on willingness to pay reveals an unsuspected implication of diminishing sensitivity even as it leads to a formalization of consumer habituation patterns including sensitization habituation and response recovery upon withdrawal that matches and integrates the most robust empirical regularities attendant on nonassociative learning in neurobiology and behavioral psychology an examination of the implications for demand dynamics and pricing highlights deterministic recurrent and transient patterns of consumption at higher price points

taxation or regulation looking for a good anti smoking policy abstract this paper investigates the relative ability of two anti smoking policies taxes and regulation in inducing reductions in cigarette consumption and in providing incentives to stop smoking or not to start to our results based on canadian data show that cigarette demand responds to taxes elasticity of 0 28 but not to regulation while the converse is true for the proportion of smokers in the population

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

price knowledge in household demand for utility services a household s decision to acquire price knowledge is endogenous in the demand for utility services and may affect elasticities and consumption levels a simultaneous equation model with endogenous switching is developed to evaluate the effects of price knowledge and other sources of heterogeneity results indicate informed households were more responsive to average and marginal price signals informed households also use less water but this is due to heterogeneity rather than price knowledge controlling for heterogeneity price knowledge actually increases monthly water usage the implications of accounting for differences in price knowledge in utility demand modeling and demand management policy are discussed

the economic functioning of online drugs markets abstract the economic functioning of online drug markets using data scraped from online platforms is studied analysis of over 1 5 million online drugs sales shows online drugs markets tend to function without the significant moral hazard problems that a priori one might think would plague them only a small proportion of online drugs deals receive bad ratings from buyers and online markets suffer less from problems of adulteration and low quality that are a common feature of street sales of illegal drugs furthermore as with legal online markets the market penalizes bad ratings which subsequently lead to significant sales reductions and to market exit the impact of the well known seizure by law enforcement of the original silk road and the shutdown of silk road 2 0 are also studied together with the exit scam of the market leader at the time evolution there is no evidence that these exits deterred buyers or sellers from online drugs trading as new platforms rapidly replaced those taken down with the online market for drugs continuing to grow

rational exuberance at the mall addiction to carrying a credit card balance the becker murphy model of rational addiction is tested with new zealand credit card debt data the results clearly favour the rational addiction model over the myopic backward looking model the estimated short run and long run price elasticities are 0 58 and 2 32 respectively and the estimated rate of time preference is 6 7 per quarter

expo power utility a flexible form for absolute and relative risk aversion a new utility function which i call expo power is proposed that exhibits decreasing constant or increasing absolute risk aversion and decreasing or increasing relative risk aversion depending on parameter values numerical analysis suggests that the expo power function performs well in incorporating these risk preference structures and that arbitrary risk preference specifications may lead to biased risk response estimates

valuing risky projects option pricing theory and decision analysis in the academic literature and professional practice there are a number of alternative and apparently competing methods for valuing risky projects in this paper we compare and contrast three different approaches risk adjusted discount rate analysis option pricing analysis and decision analysis focusing on the last two we show that in contrast to some of the claims made in the real options literature when both option pricing and decision analysis methods are correctly applied they must give consistent results we also explore ways in which option pricing and decision analysis methods can be profitably integrated in particular we show how option pricing techniques can be used to simplify decision analysis when some risks can be hedged by trading and conversely how decision analysis techniques can be used to extend option pricing techniques to problems with incomplete securities markets

motives for private transfers over the life cycle an analytical framework and evidence for peru abstract this paper tests for the motives for private income transfers we consider two motives altruism and exchange the question of private transfer motives is important because such motivation can influence the effects of public income transfers on the distribution of income using a household survey for peru we find that transfer amounts received increase with recipient pre transfer income which contradicts a key prediction of the strong form of the altruism hypothesis but is consistent with exchange we also find that capital market imperfections are likely to be an important cause of private transfers and that social security benefits crowd out the incidence of private transfers

your money or your life a prescriptive model for health safety and consumption decisions in this paper we develop a conceptual framework and model for valuing risks to an individual s health and life and to support decision making about investments in health quality of life and safety our treatment of health risks in the model builds on the popular quality adjusted life year qaly framework that balances health quality and length of life issues we extend this framework to consider financial concerns as well as health quality and length of life our model considers uncertainty in income and health and incorporates the decision maker s ability to adjust consumption over time in response to changes in expectations about health and income we use this model to study the optimal tradeoffs between financial gains or losses and improvements or reductions in health or longevity and apply it in two example medical decision problems

forecasting activity levels in the uk continental shelf the role of perceptions the explicit treatment of the role of perceptions in modelling forecasts is uncommon with respect to future activity levels in the uk continental shelf using the flexibility of add factors in econometric forecasts this article demonstrates that in addition to price variations forecasts are sensitive to perceptions about future resource discovery and recovery rates a medium sized multivariate system reflecting the feedback structure of the petroleum supply process was formulated estimated and used to forecast activity levels

impact of the oil price and fiscal facilities on offshore mining at the dutch continental shelf abstract the surge in the oil price has raised questions about the magnitude of global reserves of oil according to some analysts the current high oil prices indicate a looming decline in the global production of oil others believe however that the increased level of the oil price encourages exploration and production activities bringing the oil price to a lower equilibrium level in the near future in this paper we assess the impact of the unit profit depending on the oil price as well as fiscal facilities on the level of exploration and development drillings in the dutch continental shelf we conducted an econometric analysis of exploration and development drillings in the dutch continental shelf over the period 1981 2003 except a few fiscal changes the regulatory framework for offshore activities in the netherlands the so called small fields policy was unchanged in this period we find that the expected unit profit based on a moving average of the oil price significantly explains the level of both exploration and development drillings in addition the analysis suggests that fiscal facilities have only a temporary effect on exploration activities but are more important for development activities we conclude that the oil price is a major economic incentive for activities of the mining industry

endogenous transport coefficients implications for improving water quality from multi contaminants in an agricultural watershed the effectiveness of imperfect pollution control instruments is examined for a diffuse source multi contaminant problem in which the transport coefficients for sediment bound residuals are endogenous similar evaluations fix the percentage of sediment deposited and optimize either for a single firm managing the whole watershed or on a firm by firm basis this study shows that ignoring the dependence of the transport coefficients on intervening land uses creates a positive externality the filtering potential of activities conducted by firms close to the receptor permits firms further away to undertake more profitable but erosive practices optimizing management choices and consequently endogenizing the transport coefficients for all firms simultaneously removes the externality an empirical application combines hydrological simulation models with an economic optimization model for nutrient pollution of surface and ground water within an agricultural watershed although firms are homogeneous in abatement costs differences in spatial location leave uniform instruments unable to achieve the water quality goal efficiently an ambient tax subsidy scheme can achieve the water quality goal efficiently but the informational requirements will be excessive in most situations where the transport mechanisms for residuals are dependent upon the practices of independent decision making units

life cycle preferences over consumption and health when is cost effectiveness analysis equivalent to cost benefit analysis this paper studies life cycle preferences over consumption and health status we show that cost effectiveness analysis is consistent with cost benefit analysis if the lifetime utility function is additive over time multiplicative in the utility of consumption and the utility of health status and if the utility of consumption is constant over time we derive the conditions under which the lifetime utility function takes this form both under expected utility theory and under rank dependent utility theory which is currently the most important nonexpected utility theory if cost effectiveness analysis is consistent with cost benefit analysis it is possible to derive tractable expressions for the willingness to pay for quality adjusted life years qalys the willingness to pay for qalys depends on wealth remaining life expectancy health status and the possibilities for intertemporal substitution of consumption

illicit drug use and labour market achievement evidence from the uk this study using data from the british crime survey bcs examines the effect of drug use on occupational achievement it starts by attempting to overcome the identification problem that results from the limited set of drug use questions presented in the bcs taking this into account and allowing for the endogeneity of drug use in equations for unemployment and labour market outcomes that a mild positive association with soft drugs and occupational achievement is observed that diminishes with age this relationship holds for males but not for females in contrast it is also found that past use of hard drugs significantly increases the likelihood of current unemployment although it appears to be unrelated to occupational success conditional on achieving employment

dynamic corrective taxes with time varying salience abstract economies across the globe are becoming increasingly cashless and many payment systems have become automated driving a temporal wedge between consumption and payment and generally making the costs of consumption intermittently salient since this inconsistent price salience alters demand elasticities it is a particular concern for goods that generate externalities and the price based policies deployed to address them this paper derives optimal dynamic corrective taxes for suboptimal and persistent consumption decisions these taxes depend on the agent s ability to commit to a future consumption path we also characterize a second best constant tax and the excess burden from time invariant tax rates when calibrated to u s residential electricity consumption the model shows that the second best constant tax is more than twice the marginal external cost of carbon emissions

preferences for consumption streams scale invariance correlation aversion and delay aversion under mortality risk lifetime financial decisions often require a decision analyst to elicit a decision maker s preferences for consumption streams in assessing such preferences the analyst might look for a set of reasonable conditions to check when selecting a utility form we provide such a set of conditions and show that they lead to the multiplicative expo power mep utility form some of our conditions involve trade offs under certainty and others relate to choices under uncertainty in the deterministic setting we invoke increasingness continuous differentiability mutual preferential independence and preferential scale invariance in the uncertainty setting we invoke componentwise risk aversion a utility independence condition and correlation aversion we apply the mep utility in a life cycle consumption planning problem under mortality risk in this context we find that the correlation averse mep utility is more realistic than and as tractable as the popular correlation neutral additive power and additive exponential utilities we show that the correlation averse decision maker prefers to consume more in life and leave less behind in death in addition we demonstrate that the correlation averse decision maker is more averse to delaying consumption in the face of mortality risk

survival versus consumption we develop an indirect method to estimate utility and willingness to pay wtp for reductions in the risk of death at various ages using a life cycle model of consumption we assume that an individual sets his consumption level each year so as to maximize his expected lifetime utility alternative assumptions about opportunities for borrowing and annuities characterize two polar types of societies in our robinson crusoe case an individual must be entirely self sufficient and annuities are not available in our perfect markets case an individual can borrow against future earnings and purchase actuarially fair annuities we show that under these assumptions wtp is the sum of livelihood discounted expected future earnings and consumer surplus to illustrate our methods we derive wtp for an average financially independent american man under plausible assumptions the model is calibrated to 1978 earnings e g 18 000 per year for men aged 45 54 with at least some income in the robinson crusoe case wtp increases from 500 000 at age 20 to a peak of 1 250 000 at age 40 and declines to 630 000 at age 60 in the perfect markets case age variations are less pronounced wtp is 1 050 000 at age 20 peaks at 1 070 000 at age 25 and declines to 600 000 at age 60 these results suggest that individuals value risks to their lives at several times the pro rata share of their future earnings

rational habit formation abstract this paper discusses consumer demand under rational habit formation if consumer tastes change endogenously through habit stocks depending on past consumption the rational consumer will make allowance of the future habit forming effects of current consumption a model with rational habit formation is made formally equivalent to an intertemporal consumer model without habit formation by redefining the cost of consumption and wealth the cost of consumption is obtained by adding the cost of future induced consumption to the rental price of the commodity the extended wealth concept is obtained by subtracting the cost of the initial stocks of habits and the cost of future physically necessary consumption from wealth the paper also investigates the implication of rational habit formation for constructing one period cost of living indices

the duration of the smoking habit i introduction most smokers smoke out of habit once the habit is ended many of smoking s most harmful effects decline rather quickly preventing and ending cigarette addiction is therefore the straightest path toward preventing the health damage done by cigarette smoking consequently the related questions of why people start smoking and why they quit are central to formulating and evaluating effective antismoking policies duration or hazard models are designed to measure the probability of transition between states and are thus ideal for investigating the structural determinants of the transition between addiction and non addiction nevertheless most previous work in the economics literature uses the aggregate smoking participation rate defined as the percentage of people who currently smoke or an individual s probability of participation rather than a hazard rate to measure the attractiveness of habitual smoking this paper models the hazard rates of both starting and quitting the cigarette smoking habit the starting hazard rate is the probability that an individual will start smoking in a given time period conditional on being a nonsmoker until then the quitting hazard rate is the probability of quitting smoking in a given time period conditional on being a smoker since the starting date both of these rates should rise and fall in response to changes in the attractiveness of smoking the two rates will respond differently to different stimuli since the starting hazard reflects the point of view of nonsmokers and the quitting hazard reflects the point of view of smokers hazard or duration models possess several advantages over smoking participation models most obviously smoking participation rates cannot directly distinguish between increased starting rates and decreased quitting rates but the hazard models can also in a participation rate model it is difficult to control for the effect of the duration of the habit whereas duration models are designed specifically to allow for and measure the dependence of the hazard rate on duration another advantage is that the participation rate at any one time will oversample the number of long term smokers relative to those who had a short term habit whereas a duration model is designed to avoid this source of bias one drawback however is that because of their inherent panel nature the data requirements of duration models are somewhat more difficult to satisfy as shall be seen the only previous work in the economics literature that estimates the hazard rate of starting smoking is douglas and hariharan 1994 my paper improves upon douglas and hariharan in at least three important ways first it estimates the hazard rate of quitting smoking as well as that of starting second it takes into account variation in state level regulation third its time varying covariate model allows hazard rates to respond dynamically to changes in cigarette price regulation and information variables the use of time varying covariates is important because it brings the empirical model into much closer accord with theory the decision whether or not to start or quit smoking is an ongoing decision made one day at a time on the basis of current information the hazard of starting is greatest when the cost of the habit appears lowest and its benefit appears highest this comparison of cost and benefit changes through time as price information income and life cycle variables change while douglas and hariharan 1994 used price information from the potential smoker s most vulnerable age on the theory that its marginal effect is greatest at that time the model used in this paper allows each individual s hazard rate to respond to changes in price and public information as they occur the leading theoretical model of the decision to smoke is the rational addiction model of becker and murphy 1988 which assumes that consumers of addictive goods begin smoking only after fully weighing the costs and benefits of the habit

alcoholism work and income this article reports on an empirical analysis of the relationships between alcoholism and income and working we show that the relationships between alcoholism and labor market success have important age or life cycle dimensions we present evidence that alcoholism may affect income more by restricting labor market participation than by affecting the wages of workers finally we demonstrate that the effects of alcoholism on earnings depend on the extent to which one controls for other covariates associated with alcoholism as such we suggest that there may be important indirect as well as direct effects of alcoholism on labor market success

farm level economic analysis incorporating stochastic environmental risk assessment a farm level risk programming framework is presented which evaluates income environmental risk tradeoffs this framework uses a time series of environmental risk indices to incorporate the stochastic multiattribute characteristics of environmental outcomes associated with agricultural production practices the model is applied to a representative farm in the oklahoma panhandle region of the central high plains results indicate that expected income is sensitive to nitrate loading restrictions and relatively less sensitive to pesticide loading restrictions results also indicate that prescriptions derived using deterministic environmental risk measures may ignore significant probabilities of exceeding an environmental standard

tax incidence with strategic firms in the soft drink market abstract because soft drink sd consumption is considered to be a contributor to the epidemic of obesity there is a growing interest in evaluating the impact on sd consumption of alternative tax policies in this paper we propose a methodology to evaluate the impact of taxation of a food market taking into account the strategic price response of both manufacturers and retailers we apply this methodology to the french sd market and simulate the impacts of ad valorem and excise taxes we find that firms behave differently when facing an ad valorem tax or an excise tax an excise tax is overshifted to consumer prices while an ad valorem tax is undershifted to consumer prices we find that an excise tax based on the sugar content of sd is the most effective at reducing sd consumption our results also indicate that ignoring strategic pricing by firms leads to misestimations of the impact of taxation by between 15 and 40 depending on the products and the tax implemented in the short term that is ignoring positive long term health effects a 9 cents l excise tax has a small negative welfare effect about 1 person year

employment wages and alcohol consumption in russia 1 introductionconcerns regarding the relationship between alcohol consumption and labor market productivity are well grounded if problem drinking or alcoholism is considered a disease then it may have depressant effects on labor market productivity causing reductions in employment earnings and other labor market outcomes mullahy and sindelar 1993 1996 kenkel and ribar 1994 however there is a medical literature that documents a u shaped relationship between alcohol consumption and the risk of cardiovascular disease according to this literature moderate drinkers have a lower risk of cardiovascular disease than do either abstainers or heavy drinkers beaglehole and jackson 1992 doll et al 1994 consistent with this evidence several economists have found a positive association between moderate drinking and earnings berger and leigh 1988 french and zarkin 1995 heien 1996 hamilton and hamilton 1997 zarkin et al 1998 macdonald and shields 2001 this article investigates the impact of alcohol consumption on employment and wages in russia the primary contributions of the article are twofold first it enhances the economic literature on the relationship between alcohol consumption and labor market behavior by using data from a longitudinal survey the use of a longitudinal data set enables the estimation of a fixed effects model which helps avoid the potential bias caused by unobserved individual factors not captured in cross sectional models the use of a fixed effects model is an important extension to the literature because the data sets used in previous studies are cross sectional and usually lack adequate variables that could serve as identifying instruments to control for the endogeneity of alcohol consumption 1 furthermore the richness of the data set used in this article allows for the application of three alternative measures of alcohol consumption in the empirical analysis this is important because the relationship between alcohol consumption and labor market outcomes may be sensitive to the alcohol measure that is used the second notable contribution of this article is that it provides the first empirical evidence on the association between alcohol consumption and labor market outcomes in russia excessive alcohol consumption is a widespread problem in russia where per capita alcohol consumption is around 14 liters per year the world health organization who considers 8 liters to be a sign that a country has a critical consumption level for health problems quinn judge 1997 furthermore the dramatic fluctuations in mortality rates experienced in russia over the past 15 years have generated considerable attention to the potential effect of alcohol consumption on the overall health of the russian population it is important to investigate how labor market outcomes would be affected by alcohol consumption in a country which demonstrates such dramatic fluctuations in alcohol consumption and mortality consistent with the previous studies cross sectional results generally support the hypothesis of an inverse u shaped relationship between alcohol consumption and wages and employment results from the fixed effect models are found to be quite different from those of cross sectional models the positive effect of alcohol consumption on employment disappears for both males and females once the individual fixed effects are controlled for the results of the wage model lend support to a small and linear return to alcohol consumption but the effects are significant only at the 10 level the fixed effects estimates are smaller in magnitude and estimated with less precision compared with cross sectional estimates section 2 reviews the previous literature section 3 discusses the conceptual issues and empirical strategy section 4 introduces the data set section 5 provides a discussion of the results and sensitivity analyses section 6 concludes the article

on the existence of balanced growth equilibrium the authors characterize the class of dynamic models that allow for the most commonly used types of sustained economic growth balanced and asymptotically balanced they show that under a constant returns to scale technology asymptotically constant discount rate and asymptotically constant elasticity of marginal felicity are not only necessary but also sufficient conditions for the existence of a n asymptotically balanced growth equilibrium path the authors provide examples of recursive utility models that accept a n asymptotically balanced growth equilibrium and discuss their implications on cross country differences in growth rates as well as on savings behavior and wealth distribution copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

price cost and exploration sensitivities of prospective activity levels in the ukcs an application of the monte carlo technique abstract building on previous work this paper develops a probabilistic economic model using the monte carlo technique to project activity levels in the uk continental shelf the modelling emphasises the importance of oil and gas prices the investor s hurdle rate of return changing prospectivity and the exploration effort activity in the medium term is found to be highly sensitive to oil and gas prices development costs and exploration effort field investment may fall very substantially and the oil production decline rate could be fast from 2000 to sustain higher activity levels further technological advances and their widespread adoption are essential

habit formation from correlation aversion making plans about how much to consume and how much to invest in risky assets over an uncertain lifetime is a fundamental economic challenge the leading models of this planning problem use either additive or habit forming preferences for the most part these models assume an individual is either correlation neutral or correlation seeking in consumption respectively in this paper we introduce two habit forming correlation averse preference models with these preferences we find closed form solutions to the classic consumption and portfolio planning problem our solutions recommend that a correlation averse decision maker follow a habit in their consumption plans while such habits traditionally have been associated with correlation seeking preferences our model leads to consumption habits from correlation averse preferences

stochastic economic assessment of afforestation on marginal land in irrigated farming system we analysed the economic viability of afforestation on marginal irrigated croplands in irrigated drylands of uzbekistan the revenues derived from a combination of diversified agricultural production carbon sequestration nitrogen fixation and avoided irrigation water use were analysed considering uncertainty associated with on farm activities such as crop production and short rotation forestry at the per hectare scale variability in land use revenues would necessitate substantial increases in carbon prices for afforestation to be as profitable as crop cultivation on marginal lands assuming an abundant irrigation water supply in contrast at the farm scale the analysis results revealed that afforestation can be attractive financially even without carbon payments due to farm production constraints variable land use returns and the benefits of land use diversification increased carbon prices would promote carbon sequestration by motivating farmers to plant high biomass producing tree species but would have an ecosystem service trade off by reducing the appeal of nitrogen fixing species that are essential for nitrogen self sufficiency of afforestation efforts given the modest irrigation needs of afforestation efforts compared to the cultivation of annual crops tree plantations could become a primary income source for farms during periods of drought irrigation water saved from replacing crops with trees on marginal farmland would enhance the cultivation of commercial crops on productive lands thus increasing farm income