Rural Land Use and Land Tenure in New Zealand

Private land-use decisions are critical for a broad spectrum of environmental and social outcomes, ranging from water quality and climate change to rural income distribution. I use a large dataset of the land-use decisions of New Zealand landowners to estimate a cross-sectional multinomial logit model of land use. In this model, the optimal land-use choice depends on geophysical attributes of the land, the cost of access to markets, and on land tenure (Māori freehold title versus general freehold title). I employ the estimated relationship in a counterfactual scenario to assess the overall impact of Māori tenure on the willingness of landowners to supply land for the four most important rural uses in the country: dairying; sheep or beef farming; plantation forestry; and an economically unproductive use, scrub. This allows me to conjecture about the environmental implications of New Zealand’s land-tenure system.