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Valuing future development rights: the costs of conservation easements

Anderson, K.; Weinhold, D.; (2008) Valuing future development rights: the costs of conservation easements. Ecological Economics , 68 (1-2) pp. 437-446. 10.1016/j.ecolecon.2008.04.015.

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Abstract

While theory strongly suggests that restricting development rights should reduce land prices, empirical evidence of this effect has been hard to obtain. Largely based on this difficulty, legislation governing the tax benefits that easement donors may receive is periodically challenged. We collect data on 131 land transactions in South Central Wisconsin, including 19 cases of development-restricted parcels. When we use the whole sample to estimate the impact of conservation easements, we replicate the results of Nickerson and Lynch [Nickerson, C.J., Lynch, 2001. The effect of farmland preservation programs on farmland prices. American Journal of Agricultural Economics 83(2):341–351], finding a negative but statistically insignificant effect. However we then show that when the sample is appropriately restricted to a more homogenous group of land parcels, our ability to detect an effect increases dramatically. In particular, for vacant agricultural land we find a statistically significant negative impact of conservation easements that ranges up to 50% of land values.

Type: Article
Title: Valuing future development rights: the costs of conservation easements
DOI: 10.1016/j.ecolecon.2008.04.015
Publisher version: http://dx.doi.org/10.1016/j.ecolecon.2008.04.015
Language: English
Keywords: Land use, land price, conservation easements
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of SandHS > Dept of Economics
URI: http://discovery.ucl.ac.uk/id/eprint/18130
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