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To Invest or to Sell? The Impacts of Ontario's Greenbelt on Farm Exit and Investment Decisions

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  • Li, Na
  • Vyn, Richard
  • McEwan, Ken

Abstract

This paper examines the impact of Ontario’s Greenbelt legislation, a land use policy that permanently protects over 1.8 million acres of land from non-agricultural development, on farmers’ exit and investment decisions. A farm-level panel data set for 32,512 farms in Ontario is used to perform two econometric estimations: a correlated random effects Probit model of farm exit and a dynamic unobserved effects Tobit model of farm investment. The Greenbelt policy is found to have influenced both farm exit and farm investment decisions, with the impact varying depending on location within the Greenbelt. In particular, the results indicate evidence of a negative impact on farm investment, which is contrary to one of the objectives of the Greenbelt policy.

Suggested Citation

  • Li, Na & Vyn, Richard & McEwan, Ken, 2015. "To Invest or to Sell? The Impacts of Ontario's Greenbelt on Farm Exit and Investment Decisions," 2015 Conference, August 9-14, 2015, Milan, Italy 212049, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:212049
    DOI: 10.22004/ag.econ.212049
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    1. Frimpong, Eugene & Petrolia, Daniel & Harri, Ardian, 2018. "Does the Community Rating System Work? Evidence from Two Gulf Coast States," Working Papers 273014, Mississippi State University, Department of Agricultural Economics.

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