IDEAS home Printed from https://ideas.repec.org/a/wly/apecpp/v47y2025i5p1918-1943.html

Are agricultural conservation easements associated with farm investment?

Author

Listed:
  • Conner J. McCollum
  • Daniel P. Bigelow

Abstract

Conservation easements have become an increasingly popular tool for safeguarding agricultural land from development. To the extent that capitalized future development returns embodied in the value of farmland are illiquid or inaccessible to the landowner for farm financing purposes, easements may also promote on‐farm investment. In this paper, we conduct an observational empirical study of the association between county‐level easement activity and various farm investment outcomes. We first document a robust and negative within‐state correlation between farmland debt‐to‐asset ratio and two measures of urban pressure. This is consistent with our premise that capitalized future net returns to development are illiquid for farm‐related loan collateral purposes. In the primary analysis, we consider the relationships between easement activity and investment outcomes concerning land tenure and ownership, borrowing behavior, machinery use, and labor use. County‐level panel regression results suggest that past easement activity is associated with greater land ownership, tractor use, and, to a lesser extent, labor use. We do not find evidence for easements having a distinguishable relationship with borrowing behavior. Overall, our results provide descriptive evidence suggesting that easements may promote on‐farm investment, a finding that aligns with previous survey work on this topic.

Suggested Citation

  • Conner J. McCollum & Daniel P. Bigelow, 2025. "Are agricultural conservation easements associated with farm investment?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 47(5), pages 1918-1943, December.
    • Handle: RePEc:wly:apecpp:v:47:y:2025:i:5:p:1918-1943
    DOI: 10.1002/aepp.70002
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/aepp.70002
    Download Restriction: no
    File URL: https://libkey.io/10.1002/aepp.70002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Allison Borchers & Jennifer Ifft & Todd Kuethe, 2014. "Linking the Price of Agricultural Land to Use Values and Amenities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1307-1320.
    2. Lori Lynch & Sabrina J. Lovell, 2003. "Combining Spatial and Survey Data to Explain Participation in Agricultural Land reservation Programs," Land Economics, University of Wisconsin Press, vol. 79(2), pages 259-276.
    3. Dominic P. Parker & Walter N. Thurman, 2019. "Private Land Conservation and Public Policy: Land Trusts, Land Owners, and Conservation Easements," Annual Review of Resource Economics, Annual Reviews, vol. 11(1), pages 337-354, October.
    4. Duke, Joshua M., 2004. "Participation in Agricultural Land Preservation Programs: Parcel Quality and a Complex Policy Environment," Agricultural and Resource Economics Review, Cambridge University Press, vol. 33(1), pages 34-49, April.
    5. Bigelow, Daniel & Borchers, Allison & Hubbs, Todd, "undated". "U.S. Farmland Ownership, Tenure, and Transfer," Economic Information Bulletin 262138, United States Department of Agriculture, Economic Research Service.
    6. Dominic P. Parker & Walter N. Thurman, 2018. "Tax Incentives and the Price of Conservation," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(2), pages 331-369.
    7. Anderson, John E. & Giertz, Seth H. & Shimul, Shafiun N., 2022. "Reducing property taxes for agriculture: Diffusion of use-value assessment policy across the United States," Land Use Policy, Elsevier, vol. 120(C).
    8. Capozza, Dennis R. & Helsley, Robert W., 1989. "The fundamentals of land prices and urban growth," Journal of Urban Economics, Elsevier, vol. 26(3), pages 295-306, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ags:aaea22:335832 is not listed on IDEAS
    2. Bigelow, Daniel, 2023. "Do agricultural conservation easements promote farm investment?," 2023 Annual Meeting, July 23-25, Washington D.C. 335832, Agricultural and Applied Economics Association.
    3. Bigelow, Daniel P. & Kuethe, Todd, 2023. "The impact of preferential farmland taxation on local public finances," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    4. Kalinin, Alexey V. & Sims, Katharine R.E. & Meyer, Spencer R. & Thompson, Jonathan R., 2023. "Does land conservation raise property taxes? Evidence from New England cities and towns," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    5. Thomas Coisnon & Walid Oueslati & Julien Salanié, 2013. "Spatial targeting of agri-environmental policy and urban development," Post-Print halshs-00949730, HAL.
    6. Pavel Ciaian & Edoardo Baldoni & d'Artis Kancs & Dušan Drabik, 2021. "The Capitalization of Agricultural Subsidies into Land Prices," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 17-38, October.
    7. Allan, Corey & Kerr, Suzi & Owen, Sally, 2020. "Over-valued or over-looked? A theoretical and empirical investigation of agricultural land values against profitability in Aotearoa New Zealand," Working Paper Series 9129, Victoria University of Wellington, School of Economics and Finance.
    8. Mykel R. Taylor & Nathan P. Hendricks & Gabriel S. Sampson & Dillon Garr, 2021. "The Opportunity Cost of the Conservation Reserve Program: A Kansas Land Example," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 849-865, June.
    9. Ariel Ortiz‐Bobea, 2020. "The Role of Nonfarm Influences in Ricardian Estimates of Climate Change Impacts on US Agriculture," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 934-959, May.
    10. Liu, Xiangping & Lynch, Lori, 2006. "Do Agricultural Preservation Programs Affect Farmland Conversion? Evidence from a Propensity Score Matching Estimator," Working Papers 28569, University of Maryland, Department of Agricultural and Resource Economics.
    11. repec:ags:aaea22:335462 is not listed on IDEAS
    12. Coline Perrin & Camille Clément & Romain Melot & Brigitte Nougarèdes, 2020. "Preserving Farmland on the Urban Fringe: A Literature Review on Land Policies in Developed Countries," Land, MDPI, vol. 9(7), pages 1-20, July.
    13. Chun-Chang Lee & Yi-Xin Chen & Yun-Ling Wu & Wen-Chih Yeh & Chih-Min Liang, 2020. "Multilevel Analysis of the Pressure of Agricultural Land Conversion, Degree of Urbanization and Agricultural Land Prices in Taiwan," Land, MDPI, vol. 9(12), pages 1-21, November.
    14. Allan, Corey & Kerr, Suzi & Owen, Sally, 2020. "Over-valued or over-looked? A theoretical and empirical investigation of agricultural land values against profitability in Aotearoa New Zealand," Working Paper Series 21087, Victoria University of Wellington, School of Economics and Finance.
    15. B. James Deaton & Chad Lawley, 2022. "A survey of literature examining farmland prices: A Canadian focus," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(2), pages 95-121, June.
    16. Karwowski, Nicole, 2023. "The Effects of Wetland Easements on Agricultural Yields," 2023 Annual Meeting, July 23-25, Washington D.C. 335462, Agricultural and Applied Economics Association.
    17. Daniel P. Bigelow & Margaret Jodlowski, 2026. "Nonclassical measurement error in farmland markets with implications for Ricardian analysis," American Journal of Agricultural Economics, John Wiley & Sons, vol. 108(2), pages 599-629, March.
    18. Daniele Mozzato & Paola Gatto & Edi Defrancesco & Lucia Bortolini & Francesco Pirotti & Elena Pisani & Luigi Sartori, 2018. "The Role of Factors Affecting the Adoption of Environmentally Friendly Farming Practices: Can Geographical Context and Time Explain the Differences Emerging from Literature?," Sustainability, MDPI, vol. 10(9), pages 1-23, August.
    19. Thomas Coisnon & Walid Oueslati & Julien Salanié, 2012. "Agri-environmental policy and urban sprawl patterns: A general equilibrium analysis," Working Papers halshs-00753221, HAL.
    20. Marlene Kionka & Martin Odening & Jana Plogmann & Matthias Ritter, 2021. "Measuring liquidity in agricultural land markets," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 82(4), pages 690-713, September.
    21. Chuan Yang & Mingfeng Li & Ziqi Wang, 2022. "A Bibliometric Analysis on Conservation Land Trust and Implication for China," IJERPH, MDPI, vol. 19(19), pages 1-18, October.
    22. Ghimire, Ramesh & Green, Gary T. & Poudyal, Neelam C. & Cordell, H. Ken, 2014. "Do Outdoor Recreation Participants Place their Lands in Conservation Easements?," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162451, Southern Agricultural Economics Association.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:apecpp:v:47:y:2025:i:5:p:1918-1943. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2040-5804 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.