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Do Conservation Easements Reduce Land Prices? The Case of South Central Wisconsin

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  • Anderson, Kathryn

    (UNDP)

  • Weinhold, Diana

    (London School of Economics)

Abstract

While theory strongly suggests that restricting development rights should reduce land prices, empirical evidence of this effect has been notoriously hard to obtain. Indeed, largely based on this difficulty a Congressional committee has recently recommended that tax benefits for such restrictions be severely curtailed. We collect data on 131 land transactions in South Central Wisconsin, including 19 cases of developmentrestricted parcels. When we use the whole sample to estimate the impact of conservation easements we replicate the results of Nickerson and Lynch (2001), 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.

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Bibliographic Info

Paper provided by University of Wisconsin, Agricultural and Applied Economics in its series Staff Paper Series with number 484.

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Date of creation: Jun 2005
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Handle: RePEc:ecl:wisagr:484

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Web page: http://www.aae.wisc.edu/pubs/sps/
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  1. Bergstrom, John C. & Dillman, B.L. & Stoll, John R., 1985. "Public Environmental Amenity Benefits Of Private Land: The Case Of Prime Agricultural Land," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(01), July.
  2. Lori Lynch & Wesley N. Musser, 2001. "A Relative Efficiency Analysis of Farmland Preservation Programs," Land Economics, University of Wisconsin Press, vol. 77(4), pages 577-594.
  3. Halstead, John M., 1984. "Measuring the Nonmarket Value of Massachusetts Agricultural Land: A Case Study," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 13(1:), April.
  4. Heimlich, Ralph E. & Anderson, William D., 2001. "Development At The Urban Fringe And Beyond: Impacts On Agriculture And Rural Land," Agricultural Economics Reports 33943, United States Department of Agriculture, Economic Research Service.
  5. Jonathan R. King & Christopher M. Anderson, 2004. "Marginal Property Tax Effects of Conservation Easements: A Vermont Case Study," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 919-932.
  6. Plantinga, Andrew & Lubowski, Ruben & Stavins, Robert, 2002. "The Effects of Potential Land Development on Agricultural Land Prices," Working Paper Series rwp02-012, Harvard University, John F. Kennedy School of Government.
  7. David M. Henneberry & Richard L. Barrows, 1990. "Capitalization of Exclusive Agricultural Zoning into Farmland Prices," Land Economics, University of Wisconsin Press, vol. 66(3), pages 249-258.
  8. Andrew J. Plantinga & Douglas J. Miller, 2001. "Agricultural Land Values and the Value of Rights to Future Land Development," Land Economics, University of Wisconsin Press, vol. 77(1), pages 56-67.
  9. Elena G. Irwin & Nancy E. Bockstael, 2001. "The Problem of Identifying Land Use Spillovers: Measuring the Effects of Open Space on Residential Property Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 698-704.
  10. Boyd, James & Simpson, R. David & Caballero, Kathryn, 1999. "The Law and Economics of Habitat Conservation: Lessons from an Analysis of Easement Acquisitions," Discussion Papers dp-99-32, Resources For the Future.
  11. Cynthia J. Nickerson & Lori Lynch, 2001. "The Effect of Farmland Preservation Programs on Farmland Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 341-351.
  12. Christopher M. Anderson & Jonathan R. King, 2004. "Equilibrium Behavior in the Conservation Easement Game," Land Economics, University of Wisconsin Press, vol. 80(3), pages 355-374.
  13. Bucholtz, Shawn & Geoghegan, Jacqueline & Lynch, Lori, 2003. "Capitalization of Open Spaces into Housing Values and the Residential Property Tax Revenue Impacts of Agricultural Easement Programs," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 32(1), April.
  14. Kline, Jeffrey & Wichelns, Dennis, 1996. "Measuring Public Preferences for the Environmental Amenities Provided by Farmland," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 23(4), pages 421-36.
  15. W. Patrick Beaton, 1991. "The Impact of Regional Land-Use Controls on Property Values: The Case of the New Jersey Pinelands," Land Economics, University of Wisconsin Press, vol. 67(2), pages 172-194.
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Cited by:
  1. Lynch, Lori & Gray, Wayne & Geoghegan, Jacqueline, 2007. "An Evaluation of Working Land and Open Space Preservation Programs in Maryland: Are They Paying Too Much?," Working Papers 6887, University of Maryland, Department of Agricultural and Resource Economics.

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