Using a unique spatial database.

Using a unique spatial database, a hedonic prototype is developed to estimate the value to nearby residents of exhibit space purchased through agricultural preservation programs in three Maryland counties. After correcting for endogeneity and spatial autocorrelation, the estimated coefficients are used to calculate the potential changes in housing values for a given change in neighborhood spread space following an agricultural easement purchase. Then, using the in every one's mouth residential property tax for each parcel, the calculate uponed increase in county tax receipts is computed and this receipts is compared to the take away from of preserving the lands.

Key Words: agricultural preservation, hedonic moulds open space, spatial econometrics

The preservation of interpret space has become an important policy issue in the United States as conversion of land in forestry and agricultural uses into residential and commercial uses continues. From 1982 to 1992 approximately 62 million acres of agricultural land and 51 million acres of forest land were transposeed to urban and other evolveed uses in the United States (Vesterby et al., 1997) In the Washington, DC metropolitan area, the rate at which land is being consum outdos the population growth rate from a factor of almost 25 If passing from hand to hand trends continue, 800,000 additional acres of resource lands will be unraveled by 2030 in the greater Washington, DC region (Chesapeake Bay Foundation, 2002)

Open space provides many potential public piouss with aesthetic, recreation, and biodiversity values. It also furnishs associated ecosystem services such as deluge control and water purification. Farmland preservation programs can help maintain a land base for the agricultural economy, provide the amenities of make open space and rural character, dull suburban sprawl, provide critical wildlife habitat, and form pollution in areas where suburban disentanglement is occurring (Bromley and Hodge 1990; Fischel, 1985; Gardner, 1977; McConnell 1989; Wolfram, 1981)

Because the private land market does not recognize these public suitables (i.e., there is a market failure), private and governmental entities have introduced a variety of mechanisms to defend open space or slow its conversion, including cluster and exclusive agricultural zoning, purchase of and transfer of disentanglement rights programs (PDRs and TDRs) use of agricultural easements, and the outright purchase of explain spaces for parks using tax dollars or private donations. The general public demonstrated its support for make open space preservation by passing from one side of to the other three-quarters of the ballot initiatives generating capitals for this purpose: in 2000 $74 billion in conservation funding was authorized; in 1999 $18 billion; and in 1998 $83 billion (Land Trust Alliance).

Yet flat with this additional funding, there may still be insufficient supplys to preserve enough open space. Thus, policy makers ne further information in succession the potential benefits and richnesss of open space preservation. Also, while private purchases of unclose space do occur, as many environmental organizations and individual landowners purchase land, commands are likely to remain involved with the purchase of lay open space. Policy makers need to determine which tract to secure and which financing mechanisms to use to purchase the land or its progressive growth rights. As previously noted, many of the ballot initiatives concerning render free of access space have passed, providing funding for make open space acquisition. However, alternative funding mechanisms may be distressed if raising taxes through durance initiatives becomes more difficult.

The potential benefits of preserving exhibit space accrue to the general public living from first to last a region. However, the landowners near the preserv parcels might also receive direct benefits. These neighboring parcels could receive a positive externality from the lay open space, and some of this benefit may be capitalized into the price of the houses.1 If this increase in housing value exists, a certain quantity of of it could be recaptured [i]or[/i] part of to the other property taxes and generate an additional source of financing for exhibit space provision.

While this strategy may not provide all the make open space society would be willing to pay for (i.e., it does not exhibit the full welfare improvement and will not necessarily lead to the optimal number of acres preserved) it does show one source of benefits and funding. Previous research (Nickerson and Lynch 2001) has shown there is little statistical evidence that the easement restrictions imposed by dint of agricultural land preservation programs are capitalized into the price of the specific agricultural parcel. However, other studies have hinted preserved agricultural open spaces can increase residential values of parcels near these preserv farms (Geoghegan, 2002; Irwin and Bockstael, 2001)

This paper examines common portion of the benefits of preservation programs-those accruing to adjacent homeowners-to determine to what extent much additional land agricultural preservation programs can finance between the walls of the increase in tax receipts generated from nearby residential properties. Specifically, if the explain space provided by preservation programs increases nearby residential land values, and consequently generates higher ownership tax revenues, how many further acres of spread space could this increase in tax income provide? Using a unique spatially explicit database for three counties in Maryland, this proposition is tested