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Measuring the effects of preservation on farm profits in a continuous treatment setting

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  • Witsanu Attavanich
  • Brian J. Schilling
  • Kevin P. Sullivan

Abstract

Despite billions of dollars of public appropriations to state purchase of development rights (PDR) programmes, there has been limited evaluation of the effects of these investments on the economic performance of preserved farms. This article estimates dose-response functions to evaluate the effects of enrolment in New Jersey’s PDR programme on farm profitability. The generalized propensity score method in a continuous treatment setting is used to address selection bias arising from voluntary programme participation. Treatment effects are measured across treatment levels to determine whether farm profitability is affected differently across levels of programme participation. Our findings reveal that, relative to unpreserved farms, profit per acre tends to increase along lower treatment levels. The profit per acre of preserved farms in the 1–40% treatment range is, on average, $407 higher than that of unpreserved farms in the full sample. Positive profit differentials averaging between $317 and $472 per acre are also observed in the 1–20%, 1–40% and 1–60% treatment quintiles in the farming occupation sample. We do not observe statistically significant profitability differentials when treatment effects are averaged across all positive treatment values.

Suggested Citation

  • Witsanu Attavanich & Brian J. Schilling & Kevin P. Sullivan, 2016. "Measuring the effects of preservation on farm profits in a continuous treatment setting," Applied Economics, Taylor & Francis Journals, vol. 48(60), pages 5850-5865, December.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:60:p:5850-5865
    DOI: 10.1080/00036846.2016.1186795
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    1. Hellerstein, Daniel & Nickerson, Cynthia J. & Cooper, Joseph C. & Feather, Peter & Gadsby, Dwight M. & Mullarkey, Daniel J. & Tegene, Abebayehu & Barnard, Charles H., 2002. "Farmland Protection: The Role Of Public Preferences For Rural Amenities," Agricultural Economic Reports 33963, United States Department of Agriculture, Economic Research Service.
    2. Duke, Joshua M. & Ilvento, Thomas W., 2004. "Supplying Preservation: Landowner Behavior And The Delaware Agricultural Lands Preservation Program," Research Reports 15817, University of Delaware, Department of Food and Resource Economics.
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    1. Siwabhorn Pipitpukdee & Witsanu Attavanich & Somskaow Bejranonda, 2020. "Impact of Climate Change on Land Use, Yield and Production of Cassava in Thailand," Agriculture, MDPI, vol. 10(9), pages 1-14, September.
    2. Duke, Joshua M. & Bernard, John C. & Vitz, Gregory, 2021. "A new food label to aid farmland preservation programs: Evidence from a field experiment," Food Policy, Elsevier, vol. 99(C).

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