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Effectiveness of Use-value Assessment in Preserving Farmland: A Search-theoretic Approach

Published online by Cambridge University Press:  28 April 2015

Edmund M. Tavernier  and
Farong Li
Edmund M. Tavernier
Affiliation:
Department of Agricultural Economics and Marketing, Rutgers University
Farong Li
Affiliation:
Johnson and Johnson, Health Care Systems Inc., New Brunswick, New Jersey
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Abstract

Search theory is used to present a theoretically defensible model to examine the effectiveness of use value assessment (UVA) in preserving farmland. The model is empirically tractable and supports the findings of past research. The analysis considers the impact of farm income, uncertainty, and the distribution of the offer price on the effectiveness of UVA in preserving farmland and shows, through the effect on the reservation price, that for a given distribution of the offer price, property-tax rate, and the difference between market-value and use-value of land, the preservation of agricultural land only takes place within a relevant range.

Keywords

farmland preservationoffer pricereservation pricesearch theoryuncertaintyuse-value assessment
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 27 , Issue 2 , December 1995 , pp. 626 - 635
Copyright
Copyright © Southern Agricultural Economics Association 1995

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