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Valuing future development rights and the costs of conservation easements

Anderson, Kathryn and Weinhold, Diana (2009) Valuing future development rights and the costs of conservation easements. Ecological Economics, 68 (1-2). pp. 437-446. ISSN 0921-8009

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Abstract

While theory strongly suggests that restricting development rights should reduce land prices, empirical evidence of this effect has been hard to obtain. Largely based on this difficulty, legislation governing the tax benefits that easement donors may receive is periodically challenged. We collect data on 131 land transactions in South Central Wisconsin, including 19 cases of development-restricted parcels. When we use the whole sample to estimate the impact of conservation easements, we replicate the results of Nickerson and Lynch [Nickerson, C.J., Lynch, 2001. The effect of farmland preservation programs on farmland prices. American Journal of Agricultural Economics 83(2):341–351], finding a negative but statistically insignificant effect. However we then show that when the sample is appropriately restricted to a more homogenous group of land parcels, our ability to detect an effect increases dramatically. In particular, for vacant agricultural land we find a statistically significant negative impact of conservation easements that ranges up to 50% of land values.

Item Type: Article
Official URL: http://www.sciencedirect.com/science/journal/09218...
Additional Information: © 2009 Elsevier
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q24 - Land
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q51 - Valuation of Environmental Effects
R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations
Sets: Departments > International Development
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 27 Feb 2009 13:35
URL: http://eprints.lse.ac.uk/22994/

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