Buyer-Type Effects in Conservation and Preservation Property Values

Posted: 13 Apr 2006

See all articles by Jason A. Winfree

Jason A. Winfree

University of Michigan at Ann Arbor

Jill J. McCluskey

Washington State University

Ron Mittelhammer

Washington State University - Department of Agricultural and Resource Economics

Abstract

Properties can be bought by government agencies, land trusts, or private entities for conservation and preservation purposes, such as farmland preservation, wildlife refuges, other conservation, and cultural and historical preservation. There is variation in the dollars paid per acre across properties and across buyer type. An option value model based on future potential land uses is used to explain much of this variation. The data used in our analysis is sales transactions data for conservation and preservation purposes from throughout the United States. We find that much of the value of conservation properties is derived from future potential land uses, including housing, timber, recreation, and conservation. We confirm that public versus private buyers value options differently, which makes sense from a public good point of view, if markets are thin.

Keywords: conservation and preservation properties, land values, real option values

Suggested Citation

Winfree, Jason A. and McCluskey, Jill and Mittelhammer, Ron C., Buyer-Type Effects in Conservation and Preservation Property Values. Journal of Real Estate Finance and Economics, Vol. 33, No. 2, 2006, Available at SSRN: https://ssrn.com/abstract=895488

Jason A. Winfree (Contact Author)

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States
+1 734 647 5424 (Phone)

Jill McCluskey

Washington State University ( email )

School of Economic Sciences
Pullman, WA 99164
509-335-2835 (Phone)

Ron C. Mittelhammer

Washington State University - Department of Agricultural and Resource Economics ( email )

111E Hulbert Hall
Pullman, WA 99164-4741
United States

HOME PAGE: http://www.arec.wsu.edu/people/mittelha.htm

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