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The Amenity Value of Agricultural Landscape and Rural-Urban Land Allocation

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  • Aliza Fleischer

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  • Yacov Tsur

    ()

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    Abstract

    In this paper we study agricultural-urban land allocation in light of the rising amenity value of agricultural landscape. A given land area is to be allocated between a number of agricultural activities (crops) and urban use. Each activity (crop) area generates private benefits (profit from agricultural produce) and amenity benefits (open space, aesthetic landscape, hiking trails). Land allocated for housing provides only private benefits. Land markets overlook the social (environmental) role of agricultural land and as a result lead to undersupply of farmland. In an empirical study of an Israeli case, we find the undersupply of farmland and the associated deadweight loss to be substantial. Investigating effects of population and income growth processes, we find that, contrary to market outcomes, the socially optimal allocation may call for more farmland preservation under either process.

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    Bibliographic Info

    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p55.

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    Date of creation: Aug 2005
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    Handle: RePEc:wiw:wiwrsa:ersa05p55

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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, Southern Agricultural Economics Association, vol. 17(01), July.
    2. Rigoberto A. Lopez & Farhed A. Shah & Marilyn A. Altobello, 1994. "Amenity Benefits and the Optimal Allocation of Land," Land Economics, University of Wisconsin Press, University of Wisconsin Press, vol. 70(1), pages 53-62.
    3. Drake, Lars, 1992. "The Non-market Value of the Swedish Agricultural Landscape," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 19(3), pages 351-64.
    4. Rolf Jens Brunstad & Ivar Gaasland & Erling Vårdal, 1999. "Agricultural Production and the Optimal Level of Landscape Preservation (," Land Economics, University of Wisconsin Press, University of Wisconsin Press, vol. 75(4), pages 538-546.
    5. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, Econometric Society, vol. 46(6), pages 1251-71, November.
    6. Felix Schläpfer & Nick Hanley, 2003. "Do Local Landscape Patterns Affect the Demand for Landscape Amenities Protection?," Journal of Agricultural Economics, Wiley Blackwell, Wiley Blackwell, vol. 54(1), pages 21-34.
    7. McConnell, Kenneth E., 1989. "The Optimal Quantity Of Land In Agriculture," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 18(2), October.
    8. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195060119, October.
    9. Bowker, James Michael & Didychuk, D.D., 1994. "Estimation Of The Nonmarket Benefits Of Agricultural Land Retention In Eastern Canada," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 23(2), October.
    10. A Fleischer & Y Tsur, 2000. "Measuring the recreational value of agricultural landscape," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 27(3), pages 385-398, September.
    11. Franz Hackl & Gerald Pruckner, 1997. "Towards More Efficient Compensation Programmes for Tourists' Benefits From Agriculture in Europe," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 10(2), pages 189-205, September.
    12. Aliza Fleischer & Yacov Tsur, 2003. "Measuring the Recreational Value of Open Space," Journal of Agricultural Economics, Wiley Blackwell, Wiley Blackwell, vol. 54(2), pages 269-283.
    13. Jeffrey M. Peterson & Richard N. Boisvert & Harry de Gorter, 2002. "Environmental policies for a multifunctional agricultural sector in open economies," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 29(4), pages 423-443, December.
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