Farmland Conservation Easement Valuation Using an Attribute-based Choice Survey: Comparing Preferences within the United States, Georgia, Ohio and Maine
Farmland preservation has long been viewed by the public as a worthwhile endeavor. A public program can be set up to bring willing buyers and sellers together to facilitate the transfer of development rights. The farmer is paid for the opportunity cost of forfeiting the development rights to the land, while the general public is taxed the amount of their total benefit created by the existence of farmland. Through the data from an attribute-based choice survey (conducted in four geographic areas) the willingness-to-pay (WTP) of the public to preserve farmland that exhibited certain attributes, was estimated. The attributes included different use (grain, hay, vegetable, pasture, forest), location (near urban), quality (prime), size (varied acreage relative to geographic area sampled), and cost (varied costs from $3 to $50) components.
Selection bias was tested for in order to confirm that the respondents are an unbiased representation of the geographic areas sampled. If selection bias was present, it would need to be corrected for in order to aggregate the survey results to the population of the geographic areas. Selection bias was tested for using a bivariate probit model with sample selection, a variation on the Heckman correction model. Selection bias was not significant, so the choice model was estimated using a probit model. The response was dependent on the use, location, quality, size, and cost components. Based on the parameter estimates, the geographic areas were compared using the scale parameter. A variation of the Swait and Louviere method was used to find the optimal scale parameter ratios between pair-wise geographic areas. Heterogeneity of the parameter estimates as well as heterogeneity of variances was tested. Prime farmland was significant and positive in all geographic areas, suggesting it should be included in the national ranking criteria for a farmland preservation program. WTP by household for each attribute was reported. Additionally, the WTP was aggregated to provide a hypothetical range of the monetary benefit farmland provides for the residents of each geographic area.