Public Economic Benefits of Agricultural Conservation: Evidence from Housing Markets

Conservation on working agricultural lands provides many ecosystem services, and public funding for conservation programs has increased substantially over the past two decades. This study estimates the public economic benefits of agricultural conservation through its capitalization in US housing markets. We spatially link USDA Environmental Quality Incentives Program (EQIP) data with individual property transactions to estimate residents’ valuation of environmental amenities provided by conservation practices. Using a repeat-sales model, we find that agricultural conservation increases local housing prices, with benefits capitalized up to 20 miles. In addition, we show that conservation payments made two years ago have larger impacts than those made in the previous year, suggesting the importance of accounting for the temporal dynamics of conservation impacts. We also examine the heterogeneous impacts across practices targeting different resource concerns or with different design lifespans. Our results highlight the positive impact of agricultural conservation on nearby communities.