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The impact of agricultural conservation easement on nearby house prices: Incorporating spatial autocorrelation and spatial heterogeneity

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  • Yoo, James
  • Ready, Richard

Abstract

The impact of farmland under agricultural conservation easement (ACE) contract on the values of nearby residential properties is investigated using housing sales data in two Pennsylvania counties. ACE-protected farmland had a positive impact on nearby property values in one study county but a negative impact in the other. The paper also looks at the impact of forest land use, and discovers that preserved forest land had a positive impact on the nearby property values in both counties. House prices showed strong spatial correlation in both counties, and a spatial error components (SEC) model fit the data better than the OLS model, a spatial-lag model (SLM), or a spatial autoregressive error model (SEM). Geographically weighted regression (GWR) showed that the impact of ACE-protected farmland on nearby property values varied within one of the two study counties, with positive impacts in some parts of the county and negative impacts in other parts. The impact of forest cover on property values also varied, with positive impacts within both counties. A new hybrid GWR-SEC model is introduced that incorporates both spatial correlation in prices and spatial heterogeneity in the model parameters. Statistical goodness of fit measures showed that the GWR-SEC model fit better than the GWR model or a hybrid GWR-SEM model.

Suggested Citation

  • Yoo, James & Ready, Richard, 2016. "The impact of agricultural conservation easement on nearby house prices: Incorporating spatial autocorrelation and spatial heterogeneity," Journal of Forest Economics, Elsevier, vol. 25(C), pages 78-93.
    • Handle: RePEc:eee:foreco:v:25:y:2016:i:c:p:78-93
    DOI: 10.1016/j.jfe.2016.09.001
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    Cited by:

    1. Osseni, Abdel & Bareille, Francois & DUPRAZ, Pierre, 2018. "Decoupling Values Of Agricultural Externalities According To Scale: A Spatial Hedonic Approach In Brittany," 2018 Annual Meeting, August 5-7, Washington, D.C. 273998, Agricultural and Applied Economics Association.
    2. Dupraz, P. & Osseni, A. & Bareille, F., 2018. "Assessing the direct and indirect impacts of breeding activities on residential values: a spatial hedonic approach in Brittany," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276994, International Association of Agricultural Economists.
    3. Joseph Hiebert & Karen Allen, 2019. "Valuing Environmental Amenities across Space: A Geographically Weighted Regression of Housing Preferences in Greenville County, SC," Land, MDPI, vol. 8(10), pages 1-16, October.
    4. Wang, Haoluan, 2017. "Land Conservation for Open Space: The Impact of Neighbors and the Natural Environment," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258125, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Spatial econometric model; Developed and undeveloped land use; Agricultural conservation easement; Forest land use; Hedonic price method;
    All these keywords.

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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