Estimating the Cost of Preserving Private Lands in Florida: An Hedonic Analysis
Larkin, Sherry L., Alavalapati, Janaki R., Shrestha, Ram K., Journal of Agricultural and Applied Economics
Florida's open-space land-acquisition program is one of most aggressive in the country, with $3.7 billion paid for 3.8 million acres since 1972. Using data from the Conservation and Recreational Lands (CARL) program, hedonic analyses found that acquiring private lands with valuable natural resources, habitat for rare species, and important historical sites for public preservation is more costly. Development potential and pressure also increased acquisition costs. The presence of additional endangered natural elements and needing to contract with additional landowners, however, were found to decrease the cost. Results provide a basis for landowners and land-acquisition agencies to negotiate.
Key Words: development pressure, Florida Forever, hedonic prices, implicit land values, land conversion. Preservation 2000
JEL Classification: Q24
Loss of rural farm and forestlands in the face of urban sprawl is a growing concern in the United States. This concern is, perhaps, more serious in Florida because it has the largest net domestic migration in the nation (U.S. Census Bureau). In addition, population growth in Florida during the 1990s (23.5%) and population density (296.4 per square mile) are both well above the national averages of 13.1% and 79.6 per square mile, respectively (U.S. Census Bureau). As human populations expand, water resources can become strained or polluted, crucial wildlife habitats may be threatened, and sensitive ecosystems may become fragmented. One method of limiting urban development, conserving open space, and ensuring ecosystem services is by purchasing private lands.
In Florida, a statewide public land-acquisition program was established by the Florida Legislature in 1972. This program focused on the purchase of environmentally endangered lands and continued through 1978, when it was expanded to include conservation lands. The revised program, the Conservation and Recreational Lands (CARL) program, continues today. Lands are acquired under the CARL program for conservation and protection of open spaces, unique natural areas, endangered species, unusual geologic features, wetlands, and historical sites. Since 1990, the CARL program has funded the purchase of over one million acres. By comparison, the Nature Conservancy has protected 15 million acres nationwide since the 1950s. In 2000, funding for the CARL program was extended until 2010.
The economic value of environmentally sensitive lands and open spaces is difficult to quantify because, in most cases, no active market or comparable sales records are available. Even if such data were available, the private values may not incorporate the public value of the land (Loomis, Rameker, and Seidl). However, the opportunity of cost of preserving environmentally sensitive lands and the effect of land attributes and other environmental features on the cost of preservation can be determined using a hedonic analysis. To date, hedonic price analyses of open-space lands have been conducted using data from individual transactions of undeveloped or nearby lands (e.g., agricultural lands or residential home sales) and with aggregated data from the census (e.g., at the county level) (Mendelsohn, Nordhaus, and Shaw; Plantinga and Miller). This technique estimates the implicit value of land attributes important for farming, environmental amenities, aesthetics, and recreation (Espey and Owusu-Edusei; Irwin; Lansford and Jones; Loomis, Rameker, and Seidl; Mahan, Polasky, and Adams; Nickerson and Lynch; Plantinga and Miller; Poor et al.; Tyrvainen and Miettinen). Many of these studies also estimated the implicit price associated with pressure to develop the land (Lansford and Jones; Mahan, Polasky, and Adams; Nickerson and Lynch; Plantinga and Miller; Tyrvâinen and Miettinen). In general, findings have revealed that the type and size of open space are important determinants of the price paid for the land.
Despite the successful application of the hedonic technique to determine values for open-space environmental amenities based on sales of agricultural lands or nearby residential homes, there is little empirical investigation on the cost of public preservation of private lands. …