Nicole Karwowski


About Me

I am a PhD candidate 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 love living in Madison and enjoy the outdoor recreational opportunities that Wisconsin has to offer. I enjoy exploring the natural world through birding, hiking, and rock climbing.

I am a 2022-2023 job market candidate.

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Research

Regression discontinuity: change in yields after easement

The Effects of Wetland Easements on Agricultural Yields

Land conservation can mitigate the effects of climate change, and understanding the ecosystem services and optimal prices of conserving land is an important step toward this goal. I evaluate some of the costs and benefits of a major conservation policy, the Natural Resources Conservation Services Wetland Reserve Program. Novel remote sensing data allows for the identification of 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 89 bushels per acre for corn (62% of average yields) and 33 bushels per acre for soybeans (79% of average yields). My results suggest that a reverse auction strategy, based on a more realistic assessment of forgone yield, would increase program cost-effectiveness and ecosystem benefits. Further, using an event study 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

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.

Contact Information

630-802-0741

nkarwowski@wisc.edu

427 Lorch St. Madison, WI 53706