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.
The Effect of Farmland Preservation Programs on Farmland Prices
American Journal of Agricultural Economics
Cynthia J. Nickerson and Lori Lynch
Ames,IA: American Agricultural Economics Association
May 01, 2001
Conservation Easements, Purchase of Agricultural Conservation Easements, Transfer of Development Rights