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The Effect of the Conservation Reserve Program on Land Values

Listed author(s):
  • JunJie Wu
  • Haixia Lin
Registered author(s):

    This paper evaluates the effects of the Conservation Reserve Program (CRP) on land values. A theoretical model is presented to analyze the interaction between farmers’ CRP participation decisions and land values. Empirical models are estimated to evaluate the effects of the CRP on land values. Results suggest that CRP participation had the largest effects in the Mountain, Southern Plains, and Northern Plains regions, where it increased average farmland values by 5% to 14%, 4% to 6%, and 2% to 5%, respectively. The CRP also had a statistically significant effect on developed land values, but the percentage increases were smaller. Implications of the results for the design of conservation programs are discussed.

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    File URL: http://le.uwpress.org/cgi/reprint/86/1/1
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    Article provided by University of Wisconsin Press in its journal Land Economics.

    Volume (Year): 86 (2010)
    Issue (Month): 1 ()
    Pages: 1-21

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    Handle: RePEc:uwp:landec:v:86:y:2010:i:1:p:1-21
    Contact details of provider: Web page: http://le.uwpress.org/

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    1. Richard E. Just & John A. Miranowski, 1993. "Understanding Farmland Price Changes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 156-168.
    2. Kathleen P. Bell & Nancy E. Bockstael, 2000. "Applying the Generalized-Moments Estimation Approach to Spatial Problems Involving Microlevel Data," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 72-82, February.
    3. Uwe Latacz-Lohmann & Carel Van der Hamsvoort, 1997. "Auctioning Conservation Contracts: A Theoretical Analysis and an Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 407-418.
    4. Kelejian, Harry H. & Prucha, Ingmar R., 2004. "Estimation of simultaneous systems of spatially interrelated cross sectional equations," Journal of Econometrics, Elsevier, vol. 118(1-2), pages 27-50.
    5. Yue Jin Shi & Timothy T. Phipps & Dale Colyer, 1997. "Agricultural Land Values under Urbanizing Influences," Land Economics, University of Wisconsin Press, vol. 73(1), pages 90-100.
    6. 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.
    7. Raymond B. Palmquist & Leon E. Danielson, 1989. "A Hedonic Study of the Effects of Erosion Control and Drainage on Farmland Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(1), pages 55-62.
    8. J. Stephen Clark & K. K. Klein & Shelley J. Thompson, 1993. "Are Subsidies Capitalized into Land Values? Some Time Series Evidence from Saskatchewan," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 41(2), pages 155-168, July.
    9. Robbin Shoemaker, 1989. "Agricultural Land Values and Rents under the Conservation Reserve Program," Land Economics, University of Wisconsin Press, vol. 65(2), pages 131-137.
    10. Feather, Peter & Hellerstein, Daniel & Hansen, LeRoy T., 1999. "Economic Valuation of Environmental Benefits and the Targeting of Conservation Programs: The Case of the CRP," Agricultural Economics Reports 34027, United States Department of Agriculture, Economic Research Service.
    11. Charles H. Barnard & Gerald Whittaker & David Westenbarger & Mary Ahearn, 1997. "Evidence of Capitalization of Direct Government Payments into U.S. Cropland Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(5), pages 1642-1650.
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