The Effect of Farmland Preservation Programs on Farmland Prices |
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Authors: | Cynthia J Nickerson & Lori Lynch |
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Institution: | Resources Division at the Economic Research Service,;Department of Agricultural and Resource Economics, University of Maryland |
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Abstract: | Government agencies in urbanizing areas are increasingly utilizing purchase and transfer of development rights programs to preserve farmland and protect local farm economies. This paper tests the effect of development restrictions imposed by permanent easement sales on farmland sales prices, using Maryland data. We correct for selectivity bias due to the voluntary nature of these programs in estimating hedonic sales equations. Although preserved parcels' actual land values are lower, the effect of the restrictions is not statistically significant. These findings may encourage additional participation in preservation programs or justify reductions in the easement prices paid by agencies. |
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Keywords: | farmland preservation farmland prices hedonic models land values sample selection |
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