Clearing the Air: How Fine Particulate Matter Regulations Reshape Farmland Values in U.S. Corn and Soybean Regions

We investigate the impact of air quality regulations targeting fine particulate matter (PM2.5) on farmland values in corn and soybean producing counties in the United States over the period 1997–2022. Using self‐reported farmland value data from the Agricultural Census and county‐level pollution classifications provided by the Environmental Protection Agency, we employ a difference‐in‐differences event‐study design—incorporating inverse probability weighting and doubly robust estimators—to estimate the causal effect of regulatory interventions. Our primary analysis contrasts ‘non‐attainment’ counties, which failed to meet the National Ambient Air Quality Standards for PM2.5, with those that consistently maintained compliance. We further assess heterogeneous treatment effects by extending our analysis with a triple‐difference specification comparing counties with high versus low fertiliser use. Additionally, we employ the recentered influence function to conduct an unconditional quantile analysis across the entire distribution of farmland values. Our estimates indicate an 8.80%–8.94% decline in farmland values in ‘non‐attainment’ counties in response to the enforcement of PM2.5 standards, suggesting that the economic costs of the prescribed standards were capitalised into farmland values, particularly in regions with higher fertiliser use. However, this impact was not uniform, with more pronounced effects observed among counties at the lower end of the farmland value distribution.