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The Impact of Parcel Characteristics on the Cost of Development Rights to Farmland

Published online by Cambridge University Press:  15 September 2016

Dennis Wichelns  and
Jeffrey D. Kline
Dennis Wichelns
Affiliation:
Department of Resource Economics, University of Rhode Island
Jeffrey D. Kline
Affiliation:
Department of Resource Economics, University of Rhode Island
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Abstract

This paper examines the economic impact of selected farmland characteristics on the appraised value of development rights. Price elasticities are estimated for the size and location of farmland parcels, the amount of road frontage, the existence of panoramic views, and the distance to urban centers. Estimated elasticities suggest that parcel characteristics have a substantial impact on the cost of preserving farmland. For example, the per-acre cost of development rights is estimated to be 53 percent higher on farmland parcels that have a panoramic view of water than on parcels that have no water view. Similarly, the per-acre cost of development rights on a typical 25-acre farm is estimated to be 90 percent higher than on a typical 150-acre farm. Results suggest that the net social benefits obtained through farmland preservation programs may be enhanced by considering the impact of farmland characteristics on the marginal costs of purchasing development rights, when selecting among a set of candidate farms.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 22 , Issue 2 , October 1993 , pp. 150 - 158
Copyright
Copyright © 1993 Northeastern Agricultural and Resource Economics Association 

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